Public Act 096-0006
 
SB0364 Enrolled LRB096 06397 RCE 16481 b

    AN ACT concerning State government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Governmental Ethics Act is amended
by changing Sections 4A-101, 4A-102, 4A-106, and 4A-107 as
follows:
 
    (5 ILCS 420/4A-101)  (from Ch. 127, par. 604A-101)
    Sec. 4A-101. Persons required to file. The following
persons shall file verified written statements of economic
interests, as provided in this Article:
        (a) Members of the General Assembly and candidates for
    nomination or election to the General Assembly.
        (b) Persons holding an elected office in the Executive
    Branch of this State, and candidates for nomination or
    election to these offices.
        (c) Members of a Commission or Board created by the
    Illinois Constitution, and candidates for nomination or
    election to such Commission or Board.
        (d) Persons whose appointment to office is subject to
    confirmation by the Senate.
        (e) Holders of, and candidates for nomination or
    election to, the office of judge or associate judge of the
    Circuit Court and the office of judge of the Appellate or
    Supreme Court.
        (f) Persons who are employed by any branch, agency,
    authority or board of the government of this State,
    including but not limited to, the Illinois State Toll
    Highway Authority, the Illinois Housing Development
    Authority, the Illinois Community College Board, and
    institutions under the jurisdiction of the Board of
    Trustees of the University of Illinois, Board of Trustees
    of Southern Illinois University, Board of Trustees of
    Chicago State University, Board of Trustees of Eastern
    Illinois University, Board of Trustees of Governor's State
    University, Board of Trustees of Illinois State
    University, Board of Trustees of Northeastern Illinois
    University, Board of Trustees of Northern Illinois
    University, Board of Trustees of Western Illinois
    University, or Board of Trustees of the Illinois
    Mathematics and Science Academy, and are compensated for
    services as employees and not as independent contractors
    and who:
            (1) are, or function as, the head of a department,
        commission, board, division, bureau, authority or
        other administrative unit within the government of
        this State, or who exercise similar authority within
        the government of this State;
            (2) have direct supervisory authority over, or
        direct responsibility for the formulation,
        negotiation, issuance or execution of contracts
        entered into by the State in the amount of $5,000 or
        more;
            (3) have authority for the issuance or
        promulgation of rules and regulations within areas
        under the authority of the State;
            (4) have authority for the approval of
        professional licenses;
            (5) have responsibility with respect to the
        financial inspection of regulated nongovernmental
        entities;
            (6) adjudicate, arbitrate, or decide any judicial
        or administrative proceeding, or review the
        adjudication, arbitration or decision of any judicial
        or administrative proceeding within the authority of
        the State;
            (7) have supervisory responsibility for 20 or more
        employees of the State; or
            (8) negotiate, assign, authorize, or grant naming
        rights or sponsorship rights regarding any property or
        asset of the State, whether real, personal, tangible,
        or intangible.
        (g) Persons who are elected to office in a unit of
    local government, and candidates for nomination or
    election to that office, including regional
    superintendents of school districts.
        (h) Persons appointed to the governing board of a unit
    of local government, or of a special district, and persons
    appointed to a zoning board, or zoning board of appeals, or
    to a regional, county, or municipal plan commission, or to
    a board of review of any county, and persons appointed to
    the Board of the Metropolitan Pier and Exposition Authority
    and any Trustee appointed under Section 22 of the
    Metropolitan Pier and Exposition Authority Act, and
    persons appointed to a board or commission of a unit of
    local government who have authority to authorize the
    expenditure of public funds. This subsection does not apply
    to members of boards or commissions who function in an
    advisory capacity.
        (i) Persons who are employed by a unit of local
    government and are compensated for services as employees
    and not as independent contractors and who:
            (1) are, or function as, the head of a department,
        division, bureau, authority or other administrative
        unit within the unit of local government, or who
        exercise similar authority within the unit of local
        government;
            (2) have direct supervisory authority over, or
        direct responsibility for the formulation,
        negotiation, issuance or execution of contracts
        entered into by the unit of local government in the
        amount of $1,000 or greater;
            (3) have authority to approve licenses and permits
        by the unit of local government; this item does not
        include employees who function in a ministerial
        capacity;
            (4) adjudicate, arbitrate, or decide any judicial
        or administrative proceeding, or review the
        adjudication, arbitration or decision of any judicial
        or administrative proceeding within the authority of
        the unit of local government;
            (5) have authority to issue or promulgate rules and
        regulations within areas under the authority of the
        unit of local government; or
            (6) have supervisory responsibility for 20 or more
        employees of the unit of local government.
        (j) Persons on the Board of Trustees of the Illinois
    Mathematics and Science Academy.
        (k) Persons employed by a school district in positions
    that require that person to hold an administrative or a
    chief school business official endorsement.
        (l) Special government agents. A "special government
    agent" is a person who is directed, retained, designated,
    appointed, or employed, with or without compensation, by or
    on behalf of a statewide executive branch constitutional
    officer to make an ex parte communication under Section
    5-50 of the State Officials and Employees Ethics Act or
    Section 5-165 of the Illinois Administrative Procedure
    Act.
        (m) Members of the board of commissioners of any flood
    prevention district.
        (n) Members of the board of any retirement system or
    investment board established under the Illinois Pension
    Code, if not required to file under any other provision of
    this Section.
        (o) Members of the board of any pension fund
    established under the Illinois Pension Code, if not
    required to file under any other provision of this Section.
    This Section shall not be construed to prevent any unit of
local government from enacting financial disclosure
requirements that mandate more information than required by
this Act.
(Source: P.A. 95-719, eff. 5-21-08.)
 
    (5 ILCS 420/4A-102)  (from Ch. 127, par. 604A-102)
    Sec. 4A-102. The statement of economic interests required
by this Article shall include the economic interests of the
person making the statement as provided in this Section. The
interest (if constructively controlled by the person making the
statement) of a spouse or any other party, shall be considered
to be the same as the interest of the person making the
statement. Campaign receipts shall not be included in this
statement.
        (a) The following interests shall be listed by all
    persons required to file:
            (1) The name, address and type of practice of any
        professional organization or individual professional
        practice in which the person making the statement was
        an officer, director, associate, partner or
        proprietor, or served in any advisory capacity, from
        which income in excess of $1200 was derived during the
        preceding calendar year;
            (2) The nature of professional services (other
        than services rendered to the unit or units of
        government in relation to which the person is required
        to file) and the nature of the entity to which they
        were rendered if fees exceeding $5,000 were received
        during the preceding calendar year from the entity for
        professional services rendered by the person making
        the statement.
            (3) The identity (including the address or legal
        description of real estate) of any capital asset from
        which a capital gain of $5,000 or more was realized in
        the preceding calendar year.
            (4) The name of any unit of government which has
        employed the person making the statement during the
        preceding calendar year other than the unit or units of
        government in relation to which the person is required
        to file.
            (5) The name of any entity from which a gift or
        gifts, or honorarium or honoraria, valued singly or in
        the aggregate in excess of $500, was received during
        the preceding calendar year.
        (b) The following interests shall also be listed by
    persons listed in items (a) through (f), and item (l), and
    item (n) of Section 4A-101:
            (1) The name and instrument of ownership in any
        entity doing business in the State of Illinois, in
        which an ownership interest held by the person at the
        date of filing is in excess of $5,000 fair market value
        or from which dividends of in excess of $1,200 were
        derived during the preceding calendar year. (In the
        case of real estate, location thereof shall be listed
        by street address, or if none, then by legal
        description). No time or demand deposit in a financial
        institution, nor any debt instrument need be listed;
            (2) Except for professional service entities, the
        name of any entity and any position held therein from
        which income of in excess of $1,200 was derived during
        the preceding calendar year, if the entity does
        business in the State of Illinois. No time or demand
        deposit in a financial institution, nor any debt
        instrument need be listed.
            (3) The identity of any compensated lobbyist with
        whom the person making the statement maintains a close
        economic association, including the name of the
        lobbyist and specifying the legislative matter or
        matters which are the object of the lobbying activity,
        and describing the general type of economic activity of
        the client or principal on whose behalf that person is
        lobbying.
        (c) The following interests shall also be listed by
    persons listed in items (g), (h), and (i), and (o) of
    Section 4A-101:
            (1) The name and instrument of ownership in any
        entity doing business with a unit of local government
        in relation to which the person is required to file if
        the ownership interest of the person filing is greater
        than $5,000 fair market value as of the date of filing
        or if dividends in excess of $1,200 were received from
        the entity during the preceding calendar year. (In the
        case of real estate, location thereof shall be listed
        by street address, or if none, then by legal
        description). No time or demand deposit in a financial
        institution, nor any debt instrument need be listed.
            (2) Except for professional service entities, the
        name of any entity and any position held therein from
        which income in excess of $1,200 was derived during the
        preceding calendar year if the entity does business
        with a unit of local government in relation to which
        the person is required to file. No time or demand
        deposit in a financial institution, nor any debt
        instrument need be listed.
            (3) The name of any entity and the nature of the
        governmental action requested by any entity which has
        applied to a unit of local government in relation to
        which the person must file for any license, franchise
        or permit for annexation, zoning or rezoning of real
        estate during the preceding calendar year if the
        ownership interest of the person filing is in excess of
        $5,000 fair market value at the time of filing or if
        income or dividends in excess of $1,200 were received
        by the person filing from the entity during the
        preceding calendar year.
    For the purposes of this Section, the unit of local
government in relation to which a person required to file under
item (o) of Section 4A-101 shall be the unit of local
government that contributes to the pension fund of which such
person is a member of the board.
(Source: P.A. 92-101, eff. 1-1-02; 93-617, eff. 12-9-03.)
 
    (5 ILCS 420/4A-106)  (from Ch. 127, par. 604A-106)
    Sec. 4A-106. The statements of economic interests required
of persons listed in items (a) through (f), item (j), and item
(l), and item (n) of Section 4A-101 shall be filed with the
Secretary of State. The statements of economic interests
required of persons listed in items (g), (h), (i), and (k), and
(o) of Section 4A-101 shall be filed with the county clerk of
the county in which the principal office of the unit of local
government with which the person is associated is located. If
it is not apparent which county the principal office of a unit
of local government is located, the chief administrative
officer, or his or her designee, has the authority, for
purposes of this Act, to determine the county in which the
principal office is located. On or before February 1 annually,
(1) the chief administrative officer of any State agency in the
executive, legislative, or judicial branch employing persons
required to file under item (f) or item (l) of Section 4A-101
and the chief administrative officer of a board described in
item (n) of Section 4A-101 shall certify to the Secretary of
State the names and mailing addresses of those persons, and (2)
the chief administrative officer, or his or her designee, of
each unit of local government with persons described in items
(h), (i) and (k) and a board described in item (o) of Section
4A-101 shall certify to the appropriate county clerk a list of
names and addresses of persons described in items (h), (i), and
(k), and (o) of Section 4A-101 that are required to file. In
preparing the lists, each chief administrative officer, or his
or her designee, shall set out the names in alphabetical order.
    On or before April 1 annually, the Secretary of State shall
notify (1) all persons whose names have been certified to him
under items (f), and (l), and (n) of Section 4A-101, and (2)
all persons described in items (a) through (e) and item (j) of
Section 4A-101, other than candidates for office who have filed
their statements with their nominating petitions, of the
requirements for filing statements of economic interests. A
person required to file with the Secretary of State by virtue
of more than one item among items (a) through (f) and items
(j), and (l), and (n) shall be notified of and is required to
file only one statement of economic interests relating to all
items under which the person is required to file with the
Secretary of State.
    On or before April 1 annually, the county clerk of each
county shall notify all persons whose names have been certified
to him under items (g), (h), (i), and (k), and (o) of Section
4A-101, other than candidates for office who have filed their
statements with their nominating petitions, of the
requirements for filing statements of economic interests. A
person required to file with a county clerk by virtue of more
than one item among items (g), (h), (i), and (k), and (o) shall
be notified of and is required to file only one statement of
economic interests relating to all items under which the person
is required to file with that county clerk.
    Except as provided in Section 4A-106.1, the notices
provided for in this Section shall be in writing and deposited
in the U.S. Mail, properly addressed, first class postage
prepaid, on or before the day required by this Section for the
sending of the notice. A certificate executed by the Secretary
of State or county clerk attesting that he has mailed the
notice constitutes prima facie evidence thereof.
    From the lists certified to him under this Section of
persons described in items (g), (h), (i), and (k), and (o) of
Section 4A-101, the clerk of each county shall compile an
alphabetical listing of persons required to file statements of
economic interests in his office under any of those items. As
the statements are filed in his office, the county clerk shall
cause the fact of that filing to be indicated on the
alphabetical listing of persons who are required to file
statements. Within 30 days after the due dates, the county
clerk shall mail to the State Board of Elections a true copy of
that listing showing those who have filed statements.
    The county clerk of each county shall note upon the
alphabetical listing the names of all persons required to file
a statement of economic interests who failed to file a
statement on or before May 1. It shall be the duty of the
several county clerks to give notice as provided in Section
4A-105 to any person who has failed to file his or her
statement with the clerk on or before May 1.
    Any person who files or has filed a statement of economic
interest under this Act is entitled to receive from the
Secretary of State or county clerk, as the case may be, a
receipt indicating that the person has filed such a statement,
the date of such filing, and the identity of the governmental
unit or units in relation to which the filing is required.
    The Secretary of State may employ such employees and
consultants as he considers necessary to carry out his duties
hereunder, and may prescribe their duties, fix their
compensation, and provide for reimbursement of their expenses.
    All statements of economic interests filed under this
Section shall be available for examination and copying by the
public at all reasonable times. Not later than 12 months after
the effective date of this amendatory Act of the 93rd General
Assembly, beginning with statements filed in calendar year
2004, the Secretary of State shall make statements of economic
interests filed with the Secretary available for inspection and
copying via the Secretary's website.
(Source: P.A. 93-617, eff. 12-9-03; 94-603, eff. 8-16-05.)
 
    (5 ILCS 420/4A-107)  (from Ch. 127, par. 604A-107)
    Sec. 4A-107. Any person required to file a statement of
economic interests under this Article who willfully files a
false or incomplete statement shall be guilty of a Class A
misdemeanor.
    Failure to file a statement within the time prescribed
shall result in ineligibility for, or forfeiture of, office or
position of employment, as the case may be; provided, however,
that if the notice of failure to file a statement of economic
interests provided in Section 4A-105 of this Act is not given
by the Secretary of State or the county clerk, as the case may
be, no forfeiture shall result if a statement is filed within
30 days of actual notice of the failure to file. The Secretary
of State shall provide the Attorney General with the names of
persons who failed to file a statement. The county clerk shall
provide the State's Attorney of the county of the entity for
which the filing of statement of economic interest is required
with the name of persons who failed to file a statement.
    The Attorney General, with respect to offices or positions
described in items (a) through (f) and items (j), and (l), and
(n) of Section 4A-101 of this Act, or the State's Attorney of
the county of the entity for which the filing of statements of
economic interests is required, with respect to offices or
positions described in items (g) through (i), and item (k), and
item (o) of Section 4A-101 of this Act, shall bring an action
in quo warranto against any person who has failed to file by
either May 31 or June 30 of any given year.
(Source: P.A. 93-617, eff. 12-9-03.)
 
    Section 10. The State Officials and Employees Ethics Act is
amended by changing Section 1-5 as follows:
 
    (5 ILCS 430/1-5)
    Sec. 1-5. Definitions. As used in this Act:
    "Appointee" means a person appointed to a position in or
with a State agency, regardless of whether the position is
compensated.
    "Campaign for elective office" means any activity in
furtherance of an effort to influence the selection,
nomination, election, or appointment of any individual to any
federal, State, or local public office or office in a political
organization, or the selection, nomination, or election of
Presidential or Vice-Presidential electors, but does not
include activities (i) relating to the support or opposition of
any executive, legislative, or administrative action (as those
terms are defined in Section 2 of the Lobbyist Registration
Act), (ii) relating to collective bargaining, or (iii) that are
otherwise in furtherance of the person's official State duties.
    "Candidate" means a person who has filed nominating papers
or petitions for nomination or election to an elected State
office, or who has been appointed to fill a vacancy in
nomination, and who remains eligible for placement on the
ballot at either a general primary election or general
election.
    "Collective bargaining" has the same meaning as that term
is defined in Section 3 of the Illinois Public Labor Relations
Act.
    "Commission" means an ethics commission created by this
Act.
    "Compensated time" means any time worked by or credited to
a State employee that counts toward any minimum work time
requirement imposed as a condition of employment with a State
agency, but does not include any designated State holidays or
any period when the employee is on a leave of absence.
    "Compensatory time off" means authorized time off earned by
or awarded to a State employee to compensate in whole or in
part for time worked in excess of the minimum work time
required of that employee as a condition of employment with a
State agency.
    "Contribution" has the same meaning as that term is defined
in Section 9-1.4 of the Election Code.
    "Employee" means (i) any person employed full-time,
part-time, or pursuant to a contract and whose employment
duties are subject to the direction and control of an employer
with regard to the material details of how the work is to be
performed or (ii) any appointed or elected commissioner,
trustee, director, or board member of a board of a State
agency, including any retirement system or investment board
subject to the Illinois Pension Code or (iii) any other
appointee.
    "Executive branch constitutional officer" means the
Governor, Lieutenant Governor, Attorney General, Secretary of
State, Comptroller, and Treasurer.
    "Gift" means any gratuity, discount, entertainment,
hospitality, loan, forbearance, or other tangible or
intangible item having monetary value including, but not
limited to, cash, food and drink, and honoraria for speaking
engagements related to or attributable to government
employment or the official position of an employee, member, or
officer.
    "Governmental entity" means a unit of local government
(including a community college district) or a school district
but not a State agency.
    "Leave of absence" means any period during which a State
employee does not receive (i) compensation for State
employment, (ii) service credit towards State pension
benefits, and (iii) health insurance benefits paid for by the
State.
    "Legislative branch constitutional officer" means a member
of the General Assembly and the Auditor General.
    "Legislative leader" means the President and Minority
Leader of the Senate and the Speaker and Minority Leader of the
House of Representatives.
    "Member" means a member of the General Assembly.
    "Officer" means an executive branch constitutional officer
or a legislative branch constitutional officer.
    "Political" means any activity in support of or in
connection with any campaign for elective office or any
political organization, but does not include activities (i)
relating to the support or opposition of any executive,
legislative, or administrative action (as those terms are
defined in Section 2 of the Lobbyist Registration Act), (ii)
relating to collective bargaining, or (iii) that are otherwise
in furtherance of the person's official State duties or
governmental and public service functions.
    "Political organization" means a party, committee,
association, fund, or other organization (whether or not
incorporated) that is required to file a statement of
organization with the State Board of Elections or a county
clerk under Section 9-3 of the Election Code, but only with
regard to those activities that require filing with the State
Board of Elections or a county clerk.
    "Prohibited political activity" means:
        (1) Preparing for, organizing, or participating in any
    political meeting, political rally, political
    demonstration, or other political event.
        (2) Soliciting contributions, including but not
    limited to the purchase of, selling, distributing, or
    receiving payment for tickets for any political
    fundraiser, political meeting, or other political event.
        (3) Soliciting, planning the solicitation of, or
    preparing any document or report regarding any thing of
    value intended as a campaign contribution.
        (4) Planning, conducting, or participating in a public
    opinion poll in connection with a campaign for elective
    office or on behalf of a political organization for
    political purposes or for or against any referendum
    question.
        (5) Surveying or gathering information from potential
    or actual voters in an election to determine probable vote
    outcome in connection with a campaign for elective office
    or on behalf of a political organization for political
    purposes or for or against any referendum question.
        (6) Assisting at the polls on election day on behalf of
    any political organization or candidate for elective
    office or for or against any referendum question.
        (7) Soliciting votes on behalf of a candidate for
    elective office or a political organization or for or
    against any referendum question or helping in an effort to
    get voters to the polls.
        (8) Initiating for circulation, preparing,
    circulating, reviewing, or filing any petition on behalf of
    a candidate for elective office or for or against any
    referendum question.
        (9) Making contributions on behalf of any candidate for
    elective office in that capacity or in connection with a
    campaign for elective office.
        (10) Preparing or reviewing responses to candidate
    questionnaires in connection with a campaign for elective
    office or on behalf of a political organization for
    political purposes.
        (11) Distributing, preparing for distribution, or
    mailing campaign literature, campaign signs, or other
    campaign material on behalf of any candidate for elective
    office or for or against any referendum question.
        (12) Campaigning for any elective office or for or
    against any referendum question.
        (13) Managing or working on a campaign for elective
    office or for or against any referendum question.
        (14) Serving as a delegate, alternate, or proxy to a
    political party convention.
        (15) Participating in any recount or challenge to the
    outcome of any election, except to the extent that under
    subsection (d) of Section 6 of Article IV of the Illinois
    Constitution each house of the General Assembly shall judge
    the elections, returns, and qualifications of its members.
    "Prohibited source" means any person or entity who:
        (1) is seeking official action (i) by the member or
    officer or (ii) in the case of an employee, by the employee
    or by the member, officer, State agency, or other employee
    directing the employee;
        (2) does business or seeks to do business (i) with the
    member or officer or (ii) in the case of an employee, with
    the employee or with the member, officer, State agency, or
    other employee directing the employee;
        (3) conducts activities regulated (i) by the member or
    officer or (ii) in the case of an employee, by the employee
    or by the member, officer, State agency, or other employee
    directing the employee;
        (4) has interests that may be substantially affected by
    the performance or non-performance of the official duties
    of the member, officer, or employee; or
        (5) is registered or required to be registered with the
    Secretary of State under the Lobbyist Registration Act,
    except that an entity not otherwise a prohibited source
    does not become a prohibited source merely because a
    registered lobbyist is one of its members or serves on its
    board of directors.
    "State agency" includes all officers, boards, commissions
and agencies created by the Constitution, whether in the
executive or legislative branch; all officers, departments,
boards, commissions, agencies, institutions, authorities,
public institutions of higher learning as defined in Section 2
of the Higher Education Cooperation Act (except community
colleges), and bodies politic and corporate of the State; and
administrative units or corporate outgrowths of the State
government which are created by or pursuant to statute, other
than units of local government (including community college
districts) and their officers, school districts, and boards of
election commissioners; and all administrative units and
corporate outgrowths of the above and as may be created by
executive order of the Governor. "State agency" includes the
General Assembly, the Senate, the House of Representatives, the
President and Minority Leader of the Senate, the Speaker and
Minority Leader of the House of Representatives, the Senate
Operations Commission, and the legislative support services
agencies. "State agency" includes the Office of the Auditor
General. "State agency" does not include the judicial branch.
    "State employee" means any employee of a State agency.
    "Ultimate jurisdictional authority" means the following:
        (1) For members, legislative partisan staff, and
    legislative secretaries, the appropriate legislative
    leader: President of the Senate, Minority Leader of the
    Senate, Speaker of the House of Representatives, or
    Minority Leader of the House of Representatives.
        (2) For State employees who are professional staff or
    employees of the Senate and not covered under item (1), the
    Senate Operations Commission.
        (3) For State employees who are professional staff or
    employees of the House of Representatives and not covered
    under item (1), the Speaker of the House of
    Representatives.
        (4) For State employees who are employees of the
    legislative support services agencies, the Joint Committee
    on Legislative Support Services.
        (5) For State employees of the Auditor General, the
    Auditor General.
        (6) For State employees of public institutions of
    higher learning as defined in Section 2 of the Higher
    Education Cooperation Act (except community colleges), the
    board of trustees of the appropriate public institution of
    higher learning.
        (7) For State employees of an executive branch
    constitutional officer other than those described in
    paragraph (6), the appropriate executive branch
    constitutional officer.
        (8) For State employees not under the jurisdiction of
    paragraph (1), (2), (3), (4), (5), (6), or (7), the
    Governor.
(Source: P.A. 95-880, eff. 8-19-08.)
 
    Section 12. The State Treasurer Act is amended by adding
Section 16.10 as follows:
 
    (15 ILCS 505/16.10 new)
    (Section scheduled to be repealed on June 30, 2011)
    Sec. 16.10. Working group; peer cost comparison. The
Treasurer shall convene a working group consisting of
representatives from the retirement systems, pension funds,
and investment board created under the Illinois Pension Code,
persons that provide investment services, and members of the
financial industry. The working group shall review the
performance of investment managers and consultants providing
investment services for the retirement systems, pension funds,
and investment board created under the Illinois Pension Code.
The group shall develop uniform standards for comparing the
costs of investment services and make recommendations to the
retirement systems, pension funds, and investment board. In
performing its functions under this Section, the working group
shall work in coordination with the Commission on Government
Forecasting and Accountability. The Office of the State
Treasurer shall provide administrative assistance to the
working group as the group deems necessary and appropriate. The
working group shall draft a report, and the Treasurer must
submit such report, to the Governor and the General Assembly by
January 1, 2011.
    This Section is repealed on June 30, 2011.
 
    Section 15. The Illinois Pension Code is amended by
changing Sections 1-101.2, 1-109.1, 1-110, 1-113.5, 1-125,
14-134, 14-134.1, 15-159, 16-163, 16-164, 16-169, and 22A-109
and by adding Sections 1-101.5, 1-113.14, 1-113.16, 1-113.18,
1-130, 1-135, 1-145, and 1-150 as follows:
 
    (40 ILCS 5/1-101.2)
    Sec. 1-101.2. Fiduciary. A person is a "fiduciary" with
respect to a pension fund or retirement system established
under this Code to the extent that the person:
        (1) exercises any discretionary authority or
    discretionary control respecting management of the pension
    fund or retirement system, or exercises any authority or
    control respecting management or disposition of its
    assets;
        (2) renders investment advice or renders advice on the
    selection of fiduciaries for a fee or other compensation,
    direct or indirect, with respect to any moneys or other
    property of the pension fund or retirement system, or has
    any authority or responsibility to do so; or
        (3) has any discretionary authority or discretionary
    responsibility in the administration of the pension fund or
    retirement system.
(Source: P.A. 90-507, eff. 8-22-97.)
 
    (40 ILCS 5/1-101.5 new)
    Sec. 1-101.5. Consultant. "Consultant" means any person or
entity retained or employed by the board of a retirement
system, pension fund, or investment board to make
recommendations in developing an investment strategy, assist
with finding appropriate investment advisers, or monitor the
board's investments. "Consultant" does not include
non-investment related professionals or professionals offering
services that are not directly related to the investment of
assets, such as legal counsel, actuary, proxy-voting services,
services used to track compliance with legal standards, and
investment fund of funds where the board has no direct
contractual relationship with the investment advisers or
partnerships. "Investment adviser" has the meaning ascribed to
it in Section 1-101.4.
 
    (40 ILCS 5/1-109.1)  (from Ch. 108 1/2, par. 1-109.1)
    Sec. 1-109.1. Allocation and Delegation of Fiduciary
Duties.
    (1) Subject to the provisions of Section 22A-113 of this
Code and subsections (2) and (3) of this Section, the board of
trustees of a retirement system or pension fund established
under this Code may:
        (a) Appoint one or more investment managers as
    fiduciaries to manage (including the power to acquire and
    dispose of) any assets of the retirement system or pension
    fund; and
        (b) Allocate duties among themselves and designate
    others as fiduciaries to carry out specific fiduciary
    activities other than the management of the assets of the
    retirement system or pension fund.
    (2) The board of trustees of a pension fund established
under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code may not
transfer its investment authority, nor transfer the assets of
the fund to any other person or entity for the purpose of
consolidating or merging its assets and management with any
other pension fund or public investment authority, unless the
board resolution authorizing such transfer is submitted for
approval to the contributors and pensioners of the fund at
elections held not less than 30 days after the adoption of such
resolution by the board, and such resolution is approved by a
majority of the votes cast on the question in both the
contributors election and the pensioners election. The
election procedures and qualifications governing the election
of trustees shall govern the submission of resolutions for
approval under this paragraph, insofar as they may be made
applicable.
    (3) Pursuant to subsections (h) and (i) of Section 6 of
Article VII of the Illinois Constitution, the investment
authority of boards of trustees of retirement systems and
pension funds established under this Code is declared to be a
subject of exclusive State jurisdiction, and the concurrent
exercise by a home rule unit of any power affecting such
investment authority is hereby specifically denied and
preempted.
    (4) For the purposes of this Code, "emerging investment
manager" means a qualified investment adviser that manages an
investment portfolio of at least $10,000,000 but less than
$10,000,000,000 $2,000,000,000 and is a "minority owned
business", or "female owned business" or "business owned by a
person with a disability" as those terms are defined in the
Business Enterprise for Minorities, Females, and Persons with
Disabilities Act.
    It is hereby declared to be the public policy of the State
of Illinois to encourage the trustees of public employee
retirement systems, pension funds, and investment boards to use
emerging investment managers in managing their system's
assets, encompassing all asset classes, and increase the
racial, ethnic, and gender diversity of its fiduciaries, to the
greatest extent feasible within the bounds of financial and
fiduciary prudence, and to take affirmative steps to remove any
barriers to the full participation of emerging investment
managers in investment opportunities afforded by those
retirement systems, pension funds, and investment boards.
    On or before January 1, 2010, a retirement system, pension
fund, or investment board subject to this Code, except those
whose investments are restricted by Section 1-113.2 of this
Code, shall adopt a policy that sets forth goals for
utilization of emerging investment managers. This policy shall
include quantifiable goals for the management of assets in
specific asset classes by emerging investment managers. The
retirement system, pension fund, or investment board shall
establish 3 separate goals for: (i) emerging investment
managers that are minority owned businesses; (ii) emerging
investment managers that are female owned businesses; and (iii)
emerging investment managers that are businesses owned by a
person with a disability. The goals established shall be based
on the percentage of total dollar amount of investment service
contracts let to minority owned businesses, female owned
businesses, and businesses owned by a person with a disability,
as those terms are defined in the Business Enterprise for
Minorities, Females, and Persons with Disabilities Act. The
retirement system, pension fund, or investment board shall
annually review the goals established under this subsection.
    If in any case an emerging investment manager meets the
criteria established by a board for a specific search and meets
the criteria established by a consultant for that search, then
that emerging investment manager shall receive an invitation by
the board of trustees, or an investment committee of the board
of trustees, to present his or her firm for final consideration
of a contract. In the case where multiple emerging investment
managers meet the criteria of this Section, the staff may
choose the most qualified firm or firms to present to the
board.
    Each retirement system subject to this Code shall prepare a
report to be submitted to the Governor and the General Assembly
by September 1 of each year. The report shall identify the
emerging investment managers used by the system, the percentage
of the system's assets under the investment control of emerging
investment managers, and the actions it has undertaken to
increase the use of emerging investment managers, including
encouraging other investment managers to use emerging
investment managers as subcontractors when the opportunity
arises.
    The use of an emerging investment manager does not
constitute a transfer of investment authority for the purposes
of subsection (2) of this Section.
    (5) Each retirement system, pension fund, or investment
board subject to this Code, except those whose investments are
restricted by Section 1-113.2 of this Code, shall establish a
policy that sets forth goals for increasing the racial, ethnic,
and gender diversity of its fiduciaries, including its
consultants and senior staff. Each system, fund, and investment
board shall annually review the goals established under this
subsection.
    (6) On or before January 1, 2010, a retirement system,
pension fund, or investment board subject to this Code, except
those whose investments are restricted by Section 1-113.2 of
this Code, shall adopt a policy that sets forth goals for
utilization of businesses owned by minorities, females, and
persons with disabilities for all contracts and services. The
goals established shall be based on the percentage of total
dollar amount of all contracts let to minority owned
businesses, female owned businesses, and businesses owned by a
person with a disability, as those terms are defined in the
Business Enterprise for Minorities, Females, and Persons with
Disabilities Act. The retirement system, pension fund, or
investment board shall annually review the goals established
under this subsection.
    (7) On or before January 1, 2010, a retirement system,
pension fund, or investment board subject to this Code, except
those whose investments are restricted by Section 1-113.2 of
this Code, shall adopt a policy that sets forth goals for
increasing the utilization of minority broker-dealers. For the
purposes of this Code, "minority broker-dealer" means a
qualified broker-dealer who meets the definition of "minority
owned business", "female owned business", or "business owned by
a person with a disability", as those terms are defined in the
Business Enterprise for Minorities, Females, and Persons with
Disabilities Act. The retirement system, pension fund, or
investment board shall annually review the goals established
under this Section.
    (8) Each retirement system, pension fund, and investment
board subject to this Code, except those whose investments are
restricted by Section 1-113.2 of this Code, shall submit a
report to the Governor and the General Assembly by January 1 of
each year that includes the following: (i) the policy adopted
under subsection (4) of this Section, including the names and
addresses of the emerging investment managers used, percentage
of the assets under the investment control of emerging
investment managers for the 3 separate goals, and the actions
it has undertaken to increase the use of emerging investment
managers, including encouraging other investment managers to
use emerging investment managers as subcontractors when the
opportunity arises; (ii) the policy adopted under subsection
(5) of this Section; (iii) the policy adopted under subsection
(6) of this Section; and (iv) the policy adopted under
subsection (7) of this Section, including specific actions
undertaken to increase the use of minority broker-dealers.
(Source: P.A. 94-471, eff. 8-4-05.)
 
    (40 ILCS 5/1-110)  (from Ch. 108 1/2, par. 1-110)
    Sec. 1-110. Prohibited Transactions.
    (a) A fiduciary with respect to a retirement system, or
pension fund, or investment board shall not cause the
retirement system or pension fund to engage in a transaction if
he or she knows or should know that such transaction
constitutes a direct or indirect:
        (1) Sale or exchange, or leasing of any property from
    the retirement system or pension fund to a party in
    interest for less than adequate consideration, or from a
    party in interest to a retirement system or pension fund
    for more than adequate consideration.
        (2) Lending of money or other extension of credit from
    the retirement system or pension fund to a party in
    interest without the receipt of adequate security and a
    reasonable rate of interest, or from a party in interest to
    a retirement system or pension fund with the provision of
    excessive security or an unreasonably high rate of
    interest.
        (3) Furnishing of goods, services or facilities from
    the retirement system or pension fund to a party in
    interest for less than adequate consideration, or from a
    party in interest to a retirement system or pension fund
    for more than adequate consideration.
        (4) Transfer to, or use by or for the benefit of, a
    party in interest of any assets of a retirement system or
    pension fund for less than adequate consideration.
    (b) A fiduciary with respect to a retirement system or
pension fund established under this Code shall not:
        (1) Deal with the assets of the retirement system or
    pension fund in his own interest or for his own account;
        (2) In his individual or any other capacity act in any
    transaction involving the retirement system or pension
    fund on behalf of a party whose interests are adverse to
    the interests of the retirement system or pension fund or
    the interests of its participants or beneficiaries; or
        (3) Receive any consideration for his own personal
    account from any party dealing with the retirement system
    or pension fund in connection with a transaction involving
    the assets of the retirement system or pension fund.
    (c) Nothing in this Section shall be construed to prohibit
any trustee from:
        (1) Receiving any benefit to which he may be entitled
    as a participant or beneficiary in the retirement system or
    pension fund.
        (2) Receiving any reimbursement of expenses properly
    and actually incurred in the performance of his duties with
    the retirement system or pension fund.
        (3) Serving as a trustee in addition to being an
    officer, employee, agent or other representative of a party
    in interest.
    (d) A fiduciary of a pension fund established under Article
3 or 4 shall not knowingly cause or advise the pension fund to
engage in an investment transaction when the fiduciary (i) has
any direct interest in the income, gains, or profits of the
investment adviser advisor through which the investment
transaction is made or (ii) has a business relationship with
that investment adviser advisor that would result in a
pecuniary benefit to the fiduciary as a result of the
investment transaction.
    Violation of this subsection (d) is a Class 4 felony.
    (e) A board member, employee, or consultant with respect to
a retirement system, pension fund, or investment board subject
to this Code, except those whose investments are restricted by
Section 1-113.2, shall not knowingly cause or advise the
retirement system, pension fund, or investment board to engage
in an investment transaction with an investment adviser when
the board member, employee, consultant, or their spouse (i) has
any direct interest in the income, gains, or profits of the
investment adviser through which the investment transaction is
made or (ii) has a relationship with that investment adviser
that would result in a pecuniary benefit to the board member,
employee, or consultant or spouse of such board member,
employee, or consultant as a result of the investment
transaction. For purposes of this subsection (e), a consultant
includes an employee or agent of a consulting firm who has
greater than 7.5% ownership of the consulting firm.
    Violation of this subsection (e) is a Class 4 felony.
(Source: P.A. 95-950, eff. 8-29-08.)
 
    (40 ILCS 5/1-113.5)
    Sec. 1-113.5. Investment advisers and investment services
for all Article 3 or 4 pension funds.
    (a) The board of trustees of a pension fund may appoint
investment advisers as defined in Section 1-101.4. The board of
any pension fund investing in common or preferred stock under
Section 1-113.4 shall appoint an investment adviser before
making such investments.
    The investment adviser shall be a fiduciary, as defined in
Section 1-101.2, with respect to the pension fund and shall be
one of the following:
        (1) an investment adviser registered under the federal
    Investment Advisers Act of 1940 and the Illinois Securities
    Law of 1953;
        (2) a bank or trust company authorized to conduct a
    trust business in Illinois;
        (3) a life insurance company authorized to transact
    business in Illinois; or
        (4) an investment company as defined and registered
    under the federal Investment Company Act of 1940 and
    registered under the Illinois Securities Law of 1953.
    (a-5) Notwithstanding any other provision of law, a person
or entity that provides consulting services (referred to as a
"consultant" in this Section) to a pension fund with respect to
the selection of fiduciaries may not be awarded a contract to
provide those consulting services that is more than 5 years in
duration. No contract to provide such consulting services may
be renewed or extended. At the end of the term of a contract,
however, the contractor is eligible to compete for a new
contract. No person shall attempt to avoid or contravene the
restrictions of this subsection by any means. All offers from
responsive offerors shall be accompanied by disclosure of the
names and addresses of the following:
        (1) The offeror.
        (2) Any entity that is a parent of, or owns a
    controlling interest in, the offeror.
        (3) Any entity that is a subsidiary of, or in which a
    controlling interest is owned by, the offeror.
    Beginning on July 1, 2008, a person, other than a trustee
or an employee of a pension fund or retirement system, may not
act as a consultant under this Section unless that person is at
least one of the following: (i) registered as an investment
adviser under the federal Investment Advisers Act of 1940 (15
U.S.C. 80b-1, et seq.); (ii) registered as an investment
adviser under the Illinois Securities Law of 1953; (iii) a
bank, as defined in the Investment Advisers Act of 1940; or
(iv) an insurance company authorized to transact business in
this State.
    (b) All investment advice and services provided by an
investment adviser or a consultant appointed under this Section
shall be rendered pursuant to a written contract between the
investment adviser and the board, and in accordance with the
board's investment policy.
    The contract shall include all of the following:
        (1) acknowledgement in writing by the investment
    adviser that he or she is a fiduciary with respect to the
    pension fund;
        (2) the board's investment policy;
        (3) full disclosure of direct and indirect fees,
    commissions, penalties, and any other compensation that
    may be received by the investment adviser, including
    reimbursement for expenses; and
        (4) a requirement that the investment adviser submit
    periodic written reports, on at least a quarterly basis,
    for the board's review at its regularly scheduled meetings.
    All returns on investment shall be reported as net returns
    after payment of all fees, commissions, and any other
    compensation.
    (b-5) Each contract described in subsection (b) shall also
include (i) full disclosure of direct and indirect fees,
commissions, penalties, and other compensation, including
reimbursement for expenses, that may be paid by or on behalf of
the investment adviser or consultant in connection with the
provision of services to the pension fund and (ii) a
requirement that the investment adviser or consultant update
the disclosure promptly after a modification of those payments
or an additional payment.
    Within 30 days after the effective date of this amendatory
Act of the 95th General Assembly, each investment adviser and
consultant providing services on the effective date or subject
to an existing contract for the provision of services must
disclose to the board of trustees all direct and indirect fees,
commissions, penalties, and other compensation paid by or on
behalf of the investment adviser or consultant in connection
with the provision of those services and shall update that
disclosure promptly after a modification of those payments or
an additional payment.
    A person required to make a disclosure under subsection (d)
is also required to disclose direct and indirect fees,
commissions, penalties, or other compensation that shall or may
be paid by or on behalf of the person in connection with the
rendering of those services. The person shall update the
disclosure promptly after a modification of those payments or
an additional payment.
    The disclosures required by this subsection shall be in
writing and shall include the date and amount of each payment
and the name and address of each recipient of a payment.
    (c) Within 30 days after appointing an investment adviser
or consultant, the board shall submit a copy of the contract to
the Division of Insurance of the Department of Financial and
Professional Regulation.
    (d) Investment services provided by a person other than an
investment adviser appointed under this Section, including but
not limited to services provided by the kinds of persons listed
in items (1) through (4) of subsection (a), shall be rendered
only after full written disclosure of direct and indirect fees,
commissions, penalties, and any other compensation that shall
or may be received by the person rendering those services.
    (e) The board of trustees of each pension fund shall retain
records of investment transactions in accordance with the rules
of the Department of Financial and Professional Regulation.
(Source: P.A. 95-950, eff. 8-29-08.)
 
    (40 ILCS 5/1-113.14 new)
    Sec. 1-113.14. Investment services for retirement systems,
pension funds, and investment boards, except those funds
established under Articles 3 and 4.
    (a) For the purposes of this Section, "investment services"
means services provided by an investment adviser or a
consultant.
    (b) The selection and appointment of an investment adviser
or consultant for investment services by the board of a
retirement system, pension fund, or investment board subject to
this Code, except those whose investments are restricted by
Section 1-113.2, shall be made and awarded in accordance with
this Section. All contracts for investment services shall be
awarded by the board using a competitive process that is
substantially similar to the process required for the
procurement of professional and artistic services under
Article 35 of the Illinois Procurement Code. Each board of
trustees shall adopt a policy in accordance with this
subsection (b) within 60 days after the effective date of this
amendatory Act of the 96th General Assembly. The policy shall
be posted on its web site and filed with the Illinois
Procurement Policy Board. Exceptions to this Section are
allowed for (i) sole source procurements, (ii) emergency
procurements, and (iii) at the discretion of the pension fund,
retirement system, or board of investment, contracts that are
nonrenewable and one year or less in duration, so long as the
contract has a value of less than $20,000. All exceptions
granted under this Section must be published on the system's,
fund's, or board's web site, shall name the person authorizing
the procurement, and shall include a brief explanation of the
reason for the exception.
    A person, other than a trustee or an employee of a
retirement system, pension fund, or investment board, may not
act as a consultant or investment adviser under this Section
unless that person is registered as an investment adviser under
the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1,
et seq.) or a bank, as defined in the federal Investment
Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.).
    (c) Investment services provided by an investment adviser
or a consultant appointed under this Section shall be rendered
pursuant to a written contract between the investment adviser
or consultant and the board.
    The contract shall include all of the following:
        (1) Acknowledgement in writing by the investment
    adviser or consultant that he or she is a fiduciary with
    respect to the pension fund or retirement system.
        (2) The description of the board's investment policy
    and notice that the policy is subject to change.
        (3) (i) Full disclosure of direct and indirect fees,
    commissions, penalties, and other compensation, including
    reimbursement for expenses, that may be paid by or on
    behalf of the consultant in connection with the provision
    of services to the pension fund or retirement system and
    (ii) a requirement that the consultant update the
    disclosure promptly after a modification of those payments
    or an additional payment.
        (4) A requirement that the investment adviser or
    consultant, in conjunction with the board's staff, submit
    periodic written reports, on at least a quarterly basis,
    for the board's review at its regularly scheduled meetings.
    All returns on investment shall be reported as net returns
    after payment of all fees, commissions, and any other
    compensation.
        (5) Disclosure of the names and addresses of (i) the
    consultant or investment adviser; (ii) any entity that is a
    parent of, or owns a controlling interest in, the
    consultant or investment adviser; (iii) any entity that is
    a subsidiary of, or in which a controlling interest is
    owned by, the consultant or investment adviser; (iv) any
    persons who have an ownership or distributive income share
    in the consultant or investment adviser that is in excess
    of 7.5%; or (v) serves as an executive officer of the
    consultant or investment adviser.
        (6) A disclosure of the names and addresses of all
    subcontractors, if applicable, and the expected amount of
    money each will receive under the contract, including an
    acknowledgment that the contractor must promptly make
    notification, in writing, if at any time during the term of
    the contract a contractor adds or changes any
    subcontractors. For purposes of this subparagraph (6),
    "subcontractor" does not include non-investment related
    professionals or professionals offering services that are
    not directly related to the investment of assets, such as
    legal counsel, actuary, proxy-voting services, services
    used to track compliance with legal standards, and
    investment fund of funds where the board has no direct
    contractual relationship with the investment advisers or
    partnerships.
        (7) A description of service to be performed.
        (8) A description of the need for the service.
        (9) A description of the plan for post-performance
    review.
        (10) A description of the qualifications necessary.
        (11) The duration of the contract.
        (12) The method for charging and measuring cost.
    (d) Notwithstanding any other provision of law, a
retirement system, pension fund, or investment board subject to
this Code, except those whose investments are restricted by
Section 1-113.2 of this Code, shall not enter into a contract
with a consultant that exceeds 5 years in duration. No contract
to provide consulting services may be renewed or extended. At
the end of the term of a contract, however, the consultant is
eligible to compete for a new contract as provided in this
Section. No retirement system, pension fund, or investment
board shall attempt to avoid or contravene the restrictions of
this subsection (d) by any means.
    (e) Within 60 days after the effective date of this
amendatory Act of the 96th General Assembly, each investment
adviser or consultant currently providing services or subject
to an existing contract for the provision of services must
disclose to the board of trustees all direct and indirect fees,
commissions, penalties, and other compensation paid by or on
behalf of the investment adviser or consultant in connection
with the provision of those services and shall update that
disclosure promptly after a modification of those payments or
an additional payment. The person shall update the disclosure
promptly after a modification of those payments or an
additional payment. The disclosures required by this
subsection (e) shall be in writing and shall include the date
and amount of each payment and the name and address of each
recipient of a payment.
    (f) The retirement system, pension fund, or board of
investment shall develop uniform documents that shall be used
for the solicitation, review, and acceptance of all investment
services. The form shall include the terms contained in
subsection (c) of this Section. All such uniform documents
shall be posted on the retirement system's, pension fund's, or
investment board's web site.
    (g) A description of every contract for investment services
shall be posted in a conspicuous manner on the web site of the
retirement system, pension fund, or investment board. The
description must include the name of the person or entity
awarded a contract, the total amount applicable to the
contract, the total fees paid or to be paid, and a disclosure
approved by the board describing the factors that contributed
to the selection of an investment adviser or consultant.
 
    (40 ILCS 5/1-113.16 new)
    Sec. 1-113.16. Investment transparency.
    (a) The purpose of this Section is to provide for
transparency in the investment of retirement or pension funds
and require the reporting of full and complete information
regarding the investments by pension funds, retirement
systems, and investment boards.
    (b) A retirement system, pension fund, or investment board
subject to this Code and any committees established by such
system, fund, or board must comply with the Open Meetings Act.
    (c) Any retirement system, pension fund, or investment
board subject to this Code that establishes a committee shall
ensure that the majority of the members on such committee are
board members. If any member of a committee is not a member of
the board for the system, fund, or board, then that committee
member shall be a fiduciary.
    (d) A retirement system, pension fund, or investment board
subject to this Code, except those whose investments are
restricted by Section 1-113.2, shall maintain an official web
site and make available in a clear and conspicuous manner, and
update at least quarterly, all of the following information
concerning the investment of funds:
        (1) The total amount of funds held by the pension fund,
    retirement system, or investment board.
        (2) The asset allocation for the investments made by
    the pension fund, retirement system, or investment board.
        (3) Current and historic return information.
        (4) A detailed listing of the investment advisers for
    all asset classes.
        (5) Performance of investments compared against
    established benchmarks.
        (6) A detailed list of all consultants doing business
    with the retirement system, pension fund, or investment
    board.
        (7) A detailed list of all contractors, other than
    investment advisers and consultants, doing business with
    the retirement system, pension fund, or investment board.
        (8) Any requests for investment services.
        (9) The names and email addresses of all board members,
    directors, and senior staff.
        (10) The report required under Section 1-109.1 of this
    Code, if applicable.
        (11) The description of each contract required under
    subsection (g) of Section 1-113.14 of this Code, if
    applicable.
    (e) A pension fund whose investments are restricted by
Section 1-113.2 of this Code shall make the information
required in subsection (d) of this Section available on its web
site or in a location that allows the information to be
available for inspection by the public.
    (f) Nothing in this Section requires the pension fund,
retirement system, or investment board to make information
available on the Internet that is exempt from inspection and
copying under the Freedom of Information Act.
 
    (40 ILCS 5/1-113.18 new)
    Sec. 1-113.18. Ethics training. All board members of a
retirement system, pension fund, or investment board created
under this Code must attend ethics training of at least 8 hours
per year. The training required under this Section shall
include training on ethics, fiduciary duty, and investment
issues and any other curriculum that the board of the
retirement system, pension fund, or investment board
establishes as being important for the administration of the
retirement system, pension fund, or investment board. The
Supreme Court of Illinois shall be responsible for ethics
training and curriculum for judges designated by the Court to
serve as members of a retirement system, pension fund, or
investment board. Each board shall annually certify its
members' compliance with this Section and submit an annual
certification to the Division of Insurance of the Department of
Financial and Professional Regulation. Judges shall annually
certify compliance with the ethics training requirement and
shall submit an annual certification to the Chief Justice of
the Supreme Court of Illinois.
 
    (40 ILCS 5/1-125)
    Sec. 1-125. Prohibition on gifts.
    (a) For the purposes of this Section:
    "Gift" means a gift as defined in Section 1-5 of the State
Officials and Employees Ethics Act.
    "Prohibited source" means a person or entity who:
        (i) is seeking official action (A) by the board or (B)
    by a board member;
        (ii) does business or seeks to do business (A) with the
    board or (B) with a board member;
        (iii) has interests that may be substantially affected
    by the performance or non-performance of the official
    duties of the board member; or
        (iv) is registered or required to be registered with
    the Secretary of State under the Lobbyist Registration Act,
    except that an entity not otherwise a prohibited source
    does not become a prohibited source merely because a
    registered lobbyist is one of its members or serves on its
    board of directors.
    (b) No trustee or employee of a retirement system, pension
fund, or investment board created under board created under
Article 3 or 4 of this Code shall intentionally solicit or
accept any gift from any prohibited source as prescribed in
Article 10 of the State Officials and Employees Ethics Act.
The , including the exceptions contained in Section 10-15 of
that Act, other than paragraphs (4) and (5) of that Section
shall apply to trustees and employees of a retirement system,
pension fund, or investment board created under this Code.
Solicitation or acceptance of educational materials, however,
is not prohibited. For the purposes of this Section, references
to "State employee" and "employee" in Article 10 of the State
Officials and Employees Ethics Act shall include a trustee or
employee of a retirement system, pension fund, or investment
board created under a board created under Article 3 or 4 of
this Code.
    (c) A municipality may adopt or maintain policies or
ordinances that are more restrictive than those set forth in
this Section and may continue to follow any existing policies
or ordinances that are more restrictive or are in addition to
those set forth in this Section.
    (d) To the extent that the provisions of this Section
conflict with the provisions of the State Officials and
Employees Ethics Act, the provisions of this Section control.
    (e) (d) Violation of this Section is a Class A misdemeanor.
(Source: P.A. 95-950, eff. 8-29-08.)
 
    (40 ILCS 5/1-130 new)
    Sec. 1-130. No monetary gain on investments. No member or
employee of the board of trustees of any retirement system,
pension fund, or investment board created under this Code nor
any spouse of such member or employee shall knowingly have any
direct interest in the income, gains, or profits of any
investments made on behalf of a retirement system, pension
fund, or investment board created under this Code for which
such person is a member or employee, nor receive any pay or
emolument for services in connection with any investment. No
member or employee of the board of trustees of any retirement
system, pension fund, or investment board created under this
Code shall become an endorser or surety, or in any manner an
obligor for money loaned or borrowed from any retirement system
or pension fund created under this Code or the Illinois State
Board of Investment. For the purposes of this Section, an
annuity otherwise provided in accordance with this Code or any
income, gains, or profits related to any non-controlling
interest in any public securities, mutual fund, or other
passive investment is not considered monetary gain on
investments.
    Violation of this Section is a Class 3 felony.
 
    (40 ILCS 5/1-135 new)
    Sec. 1-135. Fraud. Any person who knowingly makes any false
statement or falsifies or permits to be falsified any record of
a retirement system or pension fund created under this Code or
the Illinois State Board of Investment in an attempt to defraud
the retirement system or pension fund created under this Code
or the Illinois State Board of Investment is guilty of a Class
3 felony.
 
    (40 ILCS 5/1-145 new)
    Sec. 1-145. Contingent and placement fees prohibited. No
person or entity shall retain a person or entity to attempt to
influence the outcome of an investment decision of or the
procurement of investment advice or services of a retirement
system, pension fund, or investment board of this Code for
compensation, contingent in whole or in part upon the decision
or procurement. Any person who violates this Section is guilty
of a business offense and shall be fined not more than $10,000.
In addition, any person convicted of a violation of this
Section is prohibited for a period of 3 years from conducting
such activities.
 
    (40 ILCS 5/1-150 new)
    Sec. 1-150. Approval of travel or educational mission. The
expenses for travel or educational missions of a board member
of a retirement system, pension fund, or investment board
created under this Code, except those whose investments are
restricted by Section 1-113.2 of this Code, must be approved by
a majority of the board prior to the travel or educational
mission.
 
    (40 ILCS 5/14-134)  (from Ch. 108 1/2, par. 14-134)
    Sec. 14-134. Board created. The retirement system created
by this Article shall be a trust, separate and distinct from
all other entities. The responsibility for the operation of the
system and for making effective this Article is vested in a
board of trustees.
    The board shall consist of 7 trustees, as follows:
    (a) the Director of the Governor's Office of Management and
Budget; (b) the Comptroller; (c) one trustee, not a State
employee, who shall be Chairman, to be appointed by the
Governor for a 5 year term; (d) two members of the system, one
of whom shall be an annuitant age 60 or over, having at least 8
years of creditable service, to be appointed by the Governor
for terms of 5 years; (e) one member of the system having at
least 8 years of creditable service, to be elected from the
contributing membership of the system by the contributing
members as provided in Section 14-134.1; (f) one annuitant of
the system who has been an annuitant for at least one full
year, to be elected from and by the annuitants of the system,
as provided in Section 14-134.1. The Director of the Governor's
Office of Management and Budget and the Comptroller shall be
ex-officio members and shall serve as trustees during their
respective terms of office, except that each of them may
designate another officer or employee from the same agency to
serve in his or her place. However, no ex-officio member may
designate a different proxy within one year after designating a
proxy unless the person last so designated has become
ineligible to serve in that capacity. Except for the elected
trustees, any vacancy in the office of trustee shall be filled
in the same manner as the office was filled previously.
    A trustee shall serve until a successor qualifies, except
that a trustee who is a member of the system shall be
disqualified as a trustee immediately upon terminating service
with the State.
    Notwithstanding any provision of this Section to the
contrary, the term of office of each trustee of the board
appointed by the Governor who is sitting on the board on the
effective date of this amendatory Act of the 96th General
Assembly is terminated on that effective date.
    Beginning on the 90th day after the effective date of this
amendatory Act of the 96th General Assembly, the board shall
consist of 13 trustees as follows:
        (1) the Comptroller, who shall be the Chairperson;
        (2) six persons appointed by the Governor with the
    advice and consent of the Senate who may not be members of
    the system or hold an elective State office and who shall
    serve for a term of 5 years, except that the terms of the
    initial appointees under this amendatory Act of the 96th
    General Assembly shall be as follows: 3 for a term of 3
    years and 3 for a term of 5 years;
        (3) four active participants of the system having at
    least 8 years of creditable service, to be elected from the
    contributing members of the system by the contribution
    members as provided in Section 14-134.1; and
        (4) two annuitants of the system who have been
    annuitants for at least one full year, to be elected from
    and by the annuitants of the system, as provided in Section
    14-134.1.
    For the purposes of this Section, the Governor may make a
nomination and the Senate may confirm the nominee in advance of
the commencement of the nominee's term of office. The Governor
shall make nominations for appointment to the board under this
Section within 60 days after the effective date of this
amendatory Act of the 96th General Assembly. A trustee sitting
on the board on the effective date of this amendatory Act of
the 96th General Assembly may not hold over in office for more
than 90 days after the effective date of this amendatory Act of
the 96th General Assembly. Nothing in this Section shall
prevent the Governor from making a temporary appointment or
nominating a trustee holding office on the day before the
effective date of this amendatory Act of the 96th General
Assembly.
    Each trustee is entitled to one vote on the board, and 4
trustees shall constitute a quorum for the transaction of
business. The affirmative votes of a majority of the trustees
present, but at least 3 trustees, shall be necessary for action
by the board at any meeting. On the 90th day after the
effective date of this amendatory Act of the 96th General
Assembly, 7 trustees shall constitute a quorum for the
transaction of business and the affirmative vote of a majority
of the trustees present, but at least 7 trustees, shall be
necessary for action by the board at any meeting. The board's
action of July 22, 1986, by which it amended the bylaws of the
system to increase the number of affirmative votes required for
board action from 3 to 4 (in response to Public Act 84-1028,
which increased the number of trustees from 5 to 7), and the
board's rejection, between that date and the effective date of
this amendatory Act of 1993, of proposed actions not receiving
at least 4 affirmative votes, are hereby validated.
    The trustees shall serve without compensation, but shall be
reimbursed from the funds of the system for all necessary
expenses incurred through service on the board.
    Each trustee shall take an oath of office that he or she
will diligently and honestly administer the affairs of the
system, and will not knowingly violate or willfully permit the
violation of any of the provisions of law applicable to the
system. The oath shall be subscribed to by the trustee making
it, certified by the officer before whom it is taken, and filed
with the Secretary of State. A trustee shall qualify for
membership on the board when the oath has been approved by the
board.
(Source: P.A. 94-793, eff. 5-19-06.)
 
    (40 ILCS 5/14-134.1)  (from Ch. 108 1/2, par. 14-134.1)
    Sec. 14-134.1. Board-elected members-vacancies. The 2
elected trustees shall be elected, beginning in 1986 and every
5 years thereafter, for a term of 5 years beginning July 15
next following their election. The trustees to be elected under
Section 14-134 of this Code in accordance with this amendatory
Act of the 96th General Assembly shall be elected within 90
days after the effective date of this amendatory Act of the
96th General Assembly for a term of 5 years after the effective
date of this amendatory Act. Trustees shall be elected every 5
years thereafter for a term of 5 years beginning July 15 next
following their election. Elections shall be held on May 1, or
on May 2 when May 1 falls on Sunday. Candidates for the
contributing trustee shall be nominated by petitions in
writing, signed by not less than 400 contributors with their
addresses shown opposite their names. Candidates for the
annuitant trustee shall be nominated by petitions in writing,
signed by not less than 100 annuitants with their addresses
shown opposite their names.
    If there is more than one qualified nominee for either
elected trustee, the board shall conduct a secret ballot
election by mail for that trustee, in accordance with rules as
established by the board.
    If there is only one qualified person nominated by petition
for either trustee, the election as required by this Section
shall not be conducted for that trustee and the board shall
declare such nominee duly elected.
    A vacancy occurring in the elective membership of the board
shall be filled for the unexpired term by the board.
(Source: P.A. 84-1028.)
 
    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
    Sec. 15-159. Board created. A board of trustees constituted
as provided in this Section shall administer this System. The
board shall be known as the Board of Trustees of the State
Universities Retirement System.
    (b) Until July 1, 1995, the Board of Trustees shall be
constituted as follows:
    Two trustees shall be members of the Board of Trustees of
the University of Illinois, one shall be a member of the Board
of Trustees of Southern Illinois University, one shall be a
member of the Board of Trustees of Chicago State University,
one shall be a member of the Board of Trustees of Eastern
Illinois University, one shall be a member of the Board of
Trustees of Governors State University, one shall be a member
of the Board of Trustees of Illinois State University, one
shall be a member of the Board of Trustees of Northeastern
Illinois University, one shall be a member of the Board of
Trustees of Northern Illinois University, one shall be a member
of the Board of Trustees of Western Illinois University, and
one shall be a member of the Illinois Community College Board,
selected in each case by their respective boards, and 2 shall
be participants of the system appointed by the Governor for a 6
year term with the first appointment made pursuant to this
amendatory Act of 1984 to be effective September 1, 1985, and
one shall be a participant appointed by the Illinois Community
College Board for a 6 year term, and one shall be a participant
appointed by the Board of Trustees of the University of
Illinois for a 6 year term, and one shall be a participant or
annuitant of the system who is a senior citizen age 60 or older
appointed by the Governor for a 6 year term with the first
appointment to be effective September 1, 1985.
    The terms of all trustees holding office under this
subsection (b) on June 30, 1995 shall terminate at the end of
that day and the Board shall thereafter be constituted as
provided in subsection (c).
    (c) Beginning July 1, 1995, the Board of Trustees shall be
constituted as follows:
    The Board shall consist of 9 trustees appointed by the
Governor. Two of the trustees, designated at the time of
appointment, shall be participants of the System. Two of the
trustees, designated at the time of appointment, shall be
annuitants of the System who are receiving retirement annuities
under this Article. The 5 remaining trustees may, but need not,
be participants or annuitants of the System.
    The term of office of trustees appointed under this
subsection (c) shall be 6 years, beginning on July 1. However,
of the initial trustees appointed under this subsection (c), 3
shall be appointed for terms of 2 years, 3 shall be appointed
for terms of 4 years, and 3 shall be appointed for terms of 6
years, to be designated by the Governor at the time of
appointment.
    The terms of all trustees holding office under this
subsection (c) on the effective date of this amendatory Act of
the 96th General Assembly shall terminate on that effective
date. The Governor shall make nominations for appointment under
this Section within 60 days after the effective date of this
amendatory Act of the 96th General Assembly. A trustee sitting
on the board on the effective date of this amendatory Act of
the 96th General Assembly may not hold over in office for more
than 90 days after the effective date of this amendatory Act of
the 96th General Assembly. Nothing in this Section shall
prevent the Governor from making a temporary appointment or
nominating a trustee holding office on the day before the
effective date of this amendatory Act of the 96th General
Assembly.
    (d) Beginning on the 90th day after the effective date of
this amendatory Act of the 96th General Assembly, the Board of
Trustees shall be constituted as follows:
        (1) The Chairperson of the Board of Higher Education,
    who shall act as chairperson of this Board.
        (2) Four trustees appointed by the Governor with the
    advice and consent of the Senate who may not be members of
    the system or hold an elective State office and who shall
    serve for a term of 6 years, except that the terms of the
    initial appointees under this subsection (d) shall be as
    follows: 2 for a term of 3 years and 2 for a term of 6
    years.
        (3) Four active participants of the system to be
    elected from the contributing membership of the system by
    the contributing members, no more than 2 of which may be
    from any of the University of Illinois campuses, who shall
    serve for a term of 6 years, except that the terms of the
    initial electees shall be as follows: 2 for a term of 3
    years and 2 for a term of 6 years.
        (4) Two annuitants of the system who have been
    annuitants for at least one full year, to be elected from
    and by the annuitants of the system, no more than one of
    which may be from any of the University of Illinois
    campuses, who shall serve for a term of 6 years, except
    that the terms of the initial electees shall be as follows:
    one for a term of 3 years and one for a term of 6 years.
    For the purposes of this Section, the Governor may make a
nomination and the Senate may confirm the nominee in advance of
the commencement of the nominee's term of office.
    (e) The 6 elected trustees shall be elected within 90 days
after the effective date of this amendatory Act of the 96th
General Assembly for a term beginning on the 90th day after the
effective date of this amendatory Act. Trustees shall be
elected thereafter as terms expire for a 6-year term beginning
July 15 next following their election, and such election shall
be held on May 1, or on May 2 when May 1 falls on a Sunday. The
board may establish rules for the election of trustees to
implement the provisions of this amendatory Act of the 96th
General Assembly and for future elections. Candidates for the
participating trustee shall be nominated by petitions in
writing, signed by not less than 400 participants with their
addresses shown opposite their names. Candidates for the
annuitant trustee shall be nominated by petitions in writing,
signed by not less than 100 annuitants with their addresses
shown opposite their names. If there is more than one qualified
nominee for each elected trustee, then the board shall conduct
a secret ballot election by mail for that trustee, in
accordance with rules as established by the board. If there is
only one qualified person nominated by petition for each
elected trustee, then the election as required by this Section
shall not be conducted for that trustee and the board shall
declare such nominee duly elected. A vacancy occurring in the
elective membership of the board shall be filled for the
unexpired term by the elected trustees serving on the board for
the remainder of the term.
    (f) A vacancy on the board of trustees caused by
resignation, death, expiration of term of office, or other
reason shall be filled by a qualified person appointed by the
Governor for the remainder of the unexpired term.
    (g) Trustees (other than the trustees incumbent on June 30,
1995 or as provided in subsection (c) of this Section) shall
continue in office until their respective successors are
appointed and have qualified, except that a trustee appointed
to one of the participant positions shall be disqualified
immediately upon the termination of his or her status as a
participant and a trustee appointed to one of the annuitant
positions shall be disqualified immediately upon the
termination of his or her status as an annuitant receiving a
retirement annuity.
    (h) (d) Each trustee must take an oath of office before a
notary public of this State and shall qualify as a trustee upon
the presentation to the board of a certified copy of the oath.
The oath must state that the person will diligently and
honestly administer the affairs of the retirement system, and
will not knowingly violate or wilfully permit to be violated
any provisions of this Article.
    Each trustee shall serve without compensation but shall be
reimbursed for expenses necessarily incurred in attending
board meetings and carrying out his or her duties as a trustee
or officer of the system.
    (i) (e) This amendatory Act of 1995 is intended to
supersede the changes made to this Section by Public Act 89-4.
(Source: P.A. 89-4, eff. 1-1-96; 89-196, eff. 7-21-95.)
 
    (40 ILCS 5/16-163)  (from Ch. 108 1/2, par. 16-163)
    Sec. 16-163. Board created. A board of 13 11 members
constitutes the board of trustees authorized to carry out the
provisions of this Article and is responsible for the general
administration of the System. The board shall be known as the
Board of Trustees of the Teachers' Retirement System of the
State of Illinois. The board shall be composed of the
Superintendent of Education, ex officio, who shall be the
president of the board; 6 4 persons, not members of the System,
to be appointed by the Governor, who shall hold no elected
State office; 4 persons who, at the time of their election, are
teachers as defined in Section 16-106, elected by the
contributing members; and 2 annuitant members elected by the
annuitants of the System, as provided in Section 16-165.
(Source: P.A. 94-423, eff. 8-2-05.)
 
    (40 ILCS 5/16-164)  (from Ch. 108 1/2, par. 16-164)
    Sec. 16-164. Board - appointed members - vacancies. Terms
of office for the appointed members shall begin on July 15 of
an even-numbered year, except that the terms of office for
members appointed pursuant to this amendatory Act of the 96th
General Assembly shall begin upon being confirmed by the
Senate. The Governor shall appoint 3 2 members as trustees with
the advice and consent of the Senate in each even-numbered year
who shall hold office for a term of 4 years, except that, of
the members appointed pursuant to this amendatory Act of the
96th General Assembly, 3 members shall be appointed for a term
ending July 14, 2012 and 3 members shall be appointed for a
term ending July 14, 2014. Each such appointee shall reside in
and be a taxpayer in the territory covered by this system,
shall be interested in public school welfare, and experienced
and competent in financial and business management. A vacancy
in the term of an appointed trustee shall be filled for the
unexpired term by appointment of the Governor.
    Notwithstanding any provision of this Section to the
contrary, the term of office of each member of the Board
appointed by the Governor who is sitting on the Board on the
effective date of this amendatory Act of the 96th General
Assembly is terminated on that effective date. A trustee
sitting on the Board on the effective date of this amendatory
Act of the 96th General Assembly may not hold over in office
for more than 60 days after the effective date of this
amendatory Act of the 96th General Assembly. Nothing in this
Section shall prevent the Governor from making a temporary
appointment or nominating a trustee holding office on the day
before the effective date of this amendatory Act of the 96th
General Assembly.
(Source: P.A. 83-1440.)
 
    (40 ILCS 5/16-169)  (from Ch. 108 1/2, par. 16-169)
    Sec. 16-169. Board - secretary and other employees. The
board, by a majority vote of all its members, shall appoint a
secretary who shall not be a member of the board and who shall
serve as the chief executive officer responsible for the
detailed administration of the system.
    The secretary and chief executive officer of the system,
known as the Executive Director, holding that position on April
1, 2009 is terminated on July 1, 2009, by operation of law, and
shall thereafter no longer hold those positions or any other
employment position with the system. The board is directed to
take whatever action is necessary to effectuate this
termination.
(Source: P.A. 83-1440.)
 
    (40 ILCS 5/22A-109)  (from Ch. 108 1/2, par. 22A-109)
    Sec. 22A-109. Membership of board. The board shall consist
of the following members:
        (1) Five trustees appointed by the Governor with the
    advice and consent of the Senate who may not hold an
    elective State office.
        (2) The Treasurer.
        (3) The Comptroller, who shall represent the State
    Employees' Retirement System of Illinois.
        (4) The Chairperson of the General Assembly Retirement
    System.
        (5) The Chairperson of the Judges Retirement System of
    Illinois.
(a) ex-officio members consisting of the State Treasurer and
the Chairman of the board of trustees of each pension fund or
retirement system, other than pension funds covered by Articles
3 and 4 of this Code, whose investment functions have been
transferred to the jurisdiction of this board; and (b) 5
members appointed by the Governor with the approval of the
Senate, one of whom shall be a senior citizen age 60 or over.
The appointive members shall serve for terms of 4 years except
that the terms of office of the original appointive members
pursuant to this amendatory Act of the 96th General Assembly
shall be as follows: One member for a term of 1 year; 1 member
for a term of 2 years; 1 member for a term of 3 years; and 2
members 1 member for a term of 4 years. The member first
appointed under this amendatory Act of 1984 shall serve for a
term of 4 years. Vacancies among the appointive members shall
be filled for unexpired terms by appointment in like manner as
for original appointments, and appointive members shall
continue in office until their successors have been appointed
and have qualified. Ex-officio members who cannot attend
meetings of the board or its committees may respectively
designate one appropriate proxy from within the office of the
State Treasurer or the trustees of the pension fund or
retirement system, which proxy shall have the same powers and
authority as the ex-officio member being represented, but no
member may designate a different proxy within one year after
his last designation of a proxy unless the person last so
designated has become ineligible to serve in that capacity.
    Notwithstanding any provision of this Section to the
contrary, the term of office of each trustee of the Board
appointed by the Governor who is sitting on the Board on the
effective date of this amendatory Act of the 96th General
Assembly is terminated on that effective date. A trustee
sitting on the board on the effective date of this amendatory
Act of the 96th General Assembly may not hold over in office
for more than 60 days after the effective date of this
amendatory Act of the 96th General Assembly. Nothing in this
Section shall prevent the Governor from making a temporary
appointment or nominating a trustee holding office on the day
before the effective date of this amendatory Act of the 96th
General Assembly.
    Each person appointed to membership shall qualify by taking
an oath of office before the Secretary of State stating that he
will diligently and honestly administer the affairs of the
board and will not violate or knowingly permit the violation of
any provisions of this Article.
    Members of the board shall receive no salary for service on
the board but shall be reimbursed for travel expenses incurred
while on business for the board according to the standards in
effect for members of the Illinois Legislative Research Unit.
    A majority of the members of the board shall constitute a
quorum. The board shall elect from its membership, biennially,
a Chairman, Vice Chairman and a Recording Secretary. These
officers, together with one other member elected by the board,
shall constitute the executive committee. During the interim
between regular meetings of the board, the executive committee
shall have authority to conduct all business of the board and
shall report such business conducted at the next following
meeting of the board for ratification.
    No member of the board shall have any interest in any
brokerage fee, commission or other profit or gain arising out
of any investment made by the board. This paragraph does not
preclude ownership by any member of any minority interest in
any common stock or any corporate obligation in which
investment is made by the board.
    The board shall contract for a blanket fidelity bond in the
penal sum of not less than $1,000,000.00 to cover members of
the board, the director and all other employees of the board
conditioned for the faithful performance of the duties of their
respective offices, the premium on which shall be paid by the
board. The bond shall be filed with the State Treasurer for
safekeeping.
(Source: P.A. 87-1265.)
 
    Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.