Full Text of SB1761 99th General Assembly
SB1761 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 SB1761 Introduced 2/20/2015, by Sen. Ira I. Silverstein SYNOPSIS AS INTRODUCED: |
| 30 ILCS 500/50-36.5 new | | 40 ILCS 5/1-110.16 new | |
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Amends the Illinois Procurement Code. Prohibits a State agency from entering into a contract subject to the Code with a business that boycotts Israel. Amends the General Provisions Article of the Illinois Pension Code. Requires each of the 5 State-funded retirement systems (or the Illinois State Board of Investment where applicable) to make its best efforts to identify all companies that boycott Israel in which it has direct or indirect holdings and, under certain circumstances, to divest itself of holdings in those companies.
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| | FISCAL NOTE ACT MAY APPLY | | PENSION IMPACT NOTE ACT MAY APPLY |
| | A BILL FOR |
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| | | SB1761 | | LRB099 10953 RPS 31300 b |
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| 1 | | AN ACT concerning finance.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Procurement Code is amended by | 5 | | adding Section 50-36.5 as follows: | 6 | | (30 ILCS 500/50-36.5 new) | 7 | | Sec. 50-36.5. Prohibition on contracts with businesses | 8 | | that boycott Israel. Notwithstanding any other provision of | 9 | | this Code, on and after the effective date of this amendatory | 10 | | Act of the 99th General Assembly, a State agency shall not | 11 | | enter into a contract subject to this Code with a business that | 12 | | boycotts Israel. For the purposes of this Section, "boycott | 13 | | Israel" means engaging in actions that are politically | 14 | | motivated and are intended to penalize, inflict economic harm | 15 | | on, or otherwise limit commercial relations with the State of | 16 | | Israel or businesses based in the State of Israel or in | 17 | | territories controlled by the State of Israel. | 18 | | Section 10. The Illinois Pension Code is amended by adding | 19 | | Section 1-110.16 as follows: | 20 | | (40 ILCS 5/1-110.16 new) | 21 | | Sec. 1-110.16. Transactions prohibited by retirement |
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| 1 | | systems; companies that boycott Israel. | 2 | | (a) As used in this Section: | 3 | | "Boycott Israel" means engaging in actions that are | 4 | | politically motivated and are intended to penalize, inflict | 5 | | economic harm on, or otherwise limit commercial relations with | 6 | | the State of Israel or companies based in the State of Israel | 7 | | or in territories controlled by the State of Israel. | 8 | | "Company" means any sole proprietorship,
organization, | 9 | | association, corporation, partnership, joint
venture, limited | 10 | | partnership, limited liability partnership,
limited liability | 11 | | company, or other entity or business
association, including all | 12 | | wholly owned subsidiaries,
majority-owned subsidiaries, parent | 13 | | companies, or affiliates
of those entities or business | 14 | | associations, that exists for
the purpose of making profit. | 15 | | "Direct holdings" in a company means all
securities of that | 16 | | company that are held directly by the
retirement system or in | 17 | | an account or fund in which the retirement system
owns all | 18 | | shares or interests. | 19 | | "Indirect holdings" in a company means all
securities of | 20 | | that company that are held in an account or
fund, such as a | 21 | | mutual fund, managed by one or more persons
not employed by the | 22 | | retirement system, in which the retirement system owns
shares | 23 | | or interests together with other investors not subject
to the | 24 | | provisions of this Section. | 25 | | "Private market fund" means any private equity fund, | 26 | | private equity fund of funds, venture capital fund, hedge fund, |
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| 1 | | hedge fund of funds, real estate fund, or other investment | 2 | | vehicle that is not publicly traded.
| 3 | | "Retirement system" means a retirement system established | 4 | | under Article 2, 14, 15, 16, or 18 of this Code, or the | 5 | | Illinois State Board of Investment with respect to investments | 6 | | of the assets of any of those retirement systems under its | 7 | | management. | 8 | | (b) Within 90 days after the effective date of this
| 9 | | Section, each retirement system shall make its best efforts to | 10 | | identify all companies that boycott Israel in which the | 11 | | retirement system has direct or indirect holdings. | 12 | | These efforts shall include the following, as appropriate | 13 | | in the retirement system's judgment: | 14 | | (1) reviewing and relying on publicly available | 15 | | information regarding companies that boycott Israel, | 16 | | including
information provided by nonprofit organizations, | 17 | | research
firms, and government entities; | 18 | | (2) contacting asset managers contracted by the | 19 | | retirement system that invest in companies that boycott | 20 | | Israel; and | 21 | | (3) contacting other institutional investors that have
| 22 | | divested from or engaged with companies that boycott | 23 | | Israel. | 24 | | The retirement system may retain an independent research | 25 | | firm to identify companies that boycott Israel in which the | 26 | | retirement system has direct or indirect holdings. By the first |
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| 1 | | meeting of the retirement system following
the 90-day period | 2 | | described in this subsection (b), the retirement system
shall | 3 | | assemble all of those identified companies into a list of
| 4 | | companies that boycott Israel. | 5 | | The retirement system shall annually update the list of | 6 | | companies that boycott Israel based on evolving information | 7 | | from,
among other sources, those listed in this subsection (b). | 8 | | (c) The retirement system shall adhere to
the following | 9 | | procedures for companies on the list of companies that boycott | 10 | | Israel: | 11 | | (1) The retirement system shall identify those
| 12 | | companies on the list of companies that boycott Israel in | 13 | | which the
retirement system owns direct or indirect | 14 | | holdings. | 15 | | (2) For each company newly identified in item (1) of | 16 | | this subsection (c), the retirement system shall send a | 17 | | written notice informing that company of its status and | 18 | | that it may become subject to
divestment by the retirement | 19 | | system. | 20 | | (3) If, within 90 days after the retirement system's | 21 | | first
engagement pursuant to this subsection (c) with a | 22 | | company that boycotts Israel, that
company ceases to | 23 | | boycott Israel, the company
shall be removed from the list | 24 | | of companies that boycott Israel and the
provisions of this | 25 | | Section shall cease to apply to it unless it
resumes its | 26 | | boycott of Israel. |
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| 1 | | (d) If, after 90 days following the retirement system's | 2 | | first
engagement pursuant to subsection (c) with a company that | 3 | | boycotts Israel, the
company continues to boycott Israel, the | 4 | | retirement system shall
sell, redeem, divest, or withdraw all | 5 | | publicly traded
securities of the company from the retirement | 6 | | system's assets under management within 12
months after the | 7 | | company's most recent appearance on the list of
companies that | 8 | | boycott Israel. | 9 | | (e) The retirement system may not acquire
securities of | 10 | | companies that boycott Israel on the list of companies that | 11 | | boycott Israel. | 12 | | (f) Each retirement system shall file a report with the | 13 | | Public Pension Division of the Department of Financial and | 14 | | Professional Regulation that includes the list of companies | 15 | | that boycott Israel
within 30 days after the list is created. | 16 | | This report shall be
made available to the public. | 17 | | Each retirement system shall file an annual report with the | 18 | | Public Pension Division, which shall be made available to the | 19 | | public, that includes all of the following: | 20 | | (1) a summary of correspondence with companies engaged
| 21 | | by the retirement system under items (2) and (3) of | 22 | | subsection (c); | 23 | | (2) all investments sold, redeemed, divested, or
| 24 | | withdrawn in compliance with subsection (d); and | 25 | | (3) all prohibited investments under subsection (e). | 26 | | (g) With respect to actions
taken in compliance with this |
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| 1 | | Act, including all good-faith
determinations regarding | 2 | | companies as required by this Act,
the retirement system is | 3 | | exempt from any conflicting statutory or
common law | 4 | | obligations, including any fiduciary duties under this Article | 5 | | and any obligations with
respect to choice of asset managers, | 6 | | investment funds, or
investments for the retirement system's | 7 | | securities portfolios. | 8 | | (h) If any provision of this Section or its application to | 9 | | any person or circumstance is held invalid, the invalidity of | 10 | | that provision or application does not affect other provisions | 11 | | or applications of this Section that can be given effect | 12 | | without the invalid provision or application.
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