Illinois General Assembly - Full Text of HB1296
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Full Text of HB1296  98th General Assembly




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1    AN ACT concerning public employee benefits.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Pension Code is amended by adding
5Section 1-110.16 as follows:
6    (40 ILCS 5/1-110.16 new)
7    Sec. 1-110.16. Transactions prohibited by retirement
8systems; manufacturers of firearms and ammunition.
9    (a) As used in this Section:
10    "Company" means any sole proprietorship, organization,
11association, corporation, partnership, joint venture, limited
12partnership, limited liability partnership, limited liability
13company, or other entity or business association, including all
14wholly owned subsidiaries, majority-owned subsidiaries, parent
15companies, or affiliates of those entities or business
16associations, that exists for the purpose of making profit.
17    "Direct holdings" in a company means all securities of that
18company that are held directly by the retirement system or in
19an account or fund in which the retirement system owns all
20shares or interests.
21    "Firearm manufacturing company" means a company that is
22licensed pursuant to 27 C.F.R. 478.41 as a manufacturer of
23destructive devices, ammunition for destructive devices, armor



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1piercing ammunition, firearms other than destructive devices,
2or ammunition for firearms other than destructive devices or
3armor piercing ammunition but does not include either a company
4that manufactures only ceremonial weapons or a company that
5manufactures only unassembled component parts for any of the
6following: destructive devices, ammunition for destructive
7devices, armor piercing ammunition, firearms other than
8destructive devices, or ammunition for firearms other than
9destructive devices or armor piercing ammunition.
10    "Indirect holdings" in a company means all securities of
11that company that are held in an account or fund, such as a
12mutual fund, managed by one or more persons not employed by the
13retirement system, in which the retirement system owns shares
14or interests together with other investors not subject to the
15provisions of this Section.
16    "Private market fund" means any private equity fund,
17private equity fund of funds, venture capital fund, hedge fund,
18hedge fund of funds, real estate fund, or other investment
19vehicle that is not publicly traded.
20    "Retirement system" means any pension fund or retirement
21system established under this Code.
22    (b) Within 90 days after the effective date of this
23Section, each retirement system shall make its best efforts to
24identify all firearm manufacturing companies in which the
25retirement system has direct or indirect holdings.
26    These efforts shall include the following, as appropriate



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1in the retirement system's judgment:
2        (1) reviewing and relying on publicly available
3    information regarding firearm manufacturing companies,
4    including information provided by nonprofit organizations,
5    research firms, and government entities;
6        (2) contacting asset managers contracted by the
7    retirement system that invest in firearm manufacturing
8    companies; and
9        (3) contacting other institutional investors that have
10    divested from or engaged with firearm manufacturing
11    companies.
12    The retirement system may retain an independent research
13firm to identify firearm manufacturing companies in which the
14retirement system has direct or indirect holdings. By the first
15meeting of the retirement system following the 90-day period
16described in this subsection (b), the retirement system shall
17assemble all identified firearm manufacturing companies into a
18firearm manufacturing companies list.
19    The retirement system shall update the firearm
20manufacturing companies list annually based on evolving
21information from, among other sources, those listed in this
22subsection (b).
23    (c) The retirement system shall adhere to the following
24procedures for companies on the firearm manufacturing
25companies list:
26        (1) The retirement system shall determine the firearm



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1    manufacturing companies on the firearm manufacturing
2    companies list in which the retirement system owns direct
3    or indirect holdings.
4        (2) For each company newly identified in item (1) of
5    this subsection (c), the retirement system shall send a
6    written notice informing the firearm manufacturing company
7    of its status and that it may become subject to divestment
8    by the retirement system.
9        (3) If, within 90 days after the retirement system's
10    first engagement with a firearm manufacturing company
11    pursuant to this subsection (c), that company ceases to
12    manufacture firearms, the company shall be removed from the
13    firearm manufacturing companies list and the provisions of
14    this Section shall cease to apply to it unless it resumes
15    manufacturing firearms.
16    (d) If, after 90 days following the retirement system's
17first engagement with a firearm manufacturing company pursuant
18to subsection (c), the company continues to manufacture
19firearms, the retirement system shall sell, redeem, divest, or
20withdraw all publicly traded securities of the company from the
21retirement system's assets under management within 12 months
22after the company's most recent appearance on the firearm
23manufacturing companies list.
24    (e) The retirement system may not acquire securities of
25firearm manufacturing companies on the firearm manufacturing
26companies list.



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1    (f) Each retirement system shall file a report with the
2Public Pension Division of the Department of Financial and
3Professional Regulation that includes the firearm
4manufacturing companies list within 30 days after the list is
5created. This report shall be made available to the public.
6    Each retirement system shall file an annual report with the
7Public Pension Division, which shall be made available to the
8public, that includes all of the following:
9        (1) a summary of correspondence with companies engaged
10    by the retirement system under items (2) and (3) of
11    subsection (c);
12        (2) all investments sold, redeemed, divested, or
13    withdrawn in compliance with subsection (d); and
14        (3) all prohibited investments under subsection (e).
15    (g) With respect to actions taken in compliance with this
16Act, including all good-faith determinations regarding
17companies as required by this Act, the retirement system is
18exempt from any conflicting statutory or common law
19obligations, including any fiduciary duties under this Article
20and any obligations with respect to choice of asset managers,
21investment funds, or investments for the retirement system's
22securities portfolios.
23    (h) If any provision of this Section or its application to
24any person or circumstance is held invalid, the invalidity of
25that provision or application does not affect other provisions
26or applications of this Section that can be given effect



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1without the invalid provision or application.
2    Section 99. Effective date. This Act takes effect upon
3becoming law.