Full Text of SB1761 99th General Assembly
SB1761sam002 99TH GENERAL ASSEMBLY | Sen. Ira I. Silverstein Filed: 4/17/2015
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| 1 | | AMENDMENT TO SENATE BILL 1761
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1761, AS AMENDED, | 3 | | by replacing everything after the enacting clause with the | 4 | | following:
| 5 | | "Section 5. The Illinois Procurement Code is amended by | 6 | | adding Section 50-36.5 as follows: | 7 | | (30 ILCS 500/50-36.5 new) | 8 | | Sec. 50-36.5. Prohibition on contracts with businesses | 9 | | that boycott Israel. Notwithstanding any other provision of | 10 | | this Code, on and after the effective date of this amendatory | 11 | | Act of the 99th General Assembly, a State agency shall not | 12 | | enter into a contract subject to this Code with a business that | 13 | | boycotts Israel. In determining whether a business boycotts | 14 | | Israel, a State agency shall consult the list of restricted | 15 | | companies developed by the Illinois Investment Policy Board in | 16 | | accordance with Section 1-110.16 of the Illinois Pension Code. |
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| 1 | | For the purposes of this Section, "boycott Israel" means | 2 | | engaging in actions that are politically motivated and are | 3 | | intended to penalize, inflict economic harm on, or otherwise | 4 | | limit commercial relations with the State of Israel or | 5 | | businesses based in the State of Israel or in territories | 6 | | controlled by the State of Israel. | 7 | | Section 10. The Illinois Pension Code is amended by adding | 8 | | Section 1-110.16 as follows: | 9 | | (40 ILCS 5/1-110.16 new) | 10 | | Sec. 1-110.16. Transactions prohibited by retirement | 11 | | systems; companies that boycott Israel, Iran-restricted | 12 | | companies, and Sudan-restricted companies. | 13 | | (a) As used in this Section: | 14 | | "Boycott Israel" means engaging in actions that are | 15 | | politically motivated and are intended to penalize, | 16 | | inflict economic harm on, or otherwise limit commercial | 17 | | relations with the State of Israel or companies based in | 18 | | the State of Israel or in territories controlled by the | 19 | | State of Israel. | 20 | | "Company" means any sole proprietorship, organization, | 21 | | association, corporation, partnership, joint venture, | 22 | | limited partnership, limited liability partnership, | 23 | | limited liability company, or other entity or business | 24 | | association, including all wholly owned subsidiaries, |
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| 1 | | majority-owned subsidiaries, parent companies, or | 2 | | affiliates of those entities or business associations, | 3 | | that exist for the purpose of making profit. | 4 | | "Illinois Investment Policy Board" means the board | 5 | | established under subsection (b) of this Section. | 6 | | "Direct holdings" in a company means all publicly | 7 | | traded securities of that company that are held directly by | 8 | | the retirement system in an actively managed account or | 9 | | fund in which the retirement system owns all shares or | 10 | | interests. | 11 | | "Indirect holdings" in a company means all securities | 12 | | of that company that are held in an account or fund, such | 13 | | as a mutual fund, managed by one or more persons not | 14 | | employed by the retirement system, in which the retirement | 15 | | system owns shares or interests together with other | 16 | | investors not subject to the provisions of this Section or | 17 | | that are held in an index fund. | 18 | | "Iran-restricted company" means a company that meets | 19 | | the qualifications under Section 1-110.15 of this Code. | 20 | | "Private market fund" means any private equity fund, | 21 | | private equity funds of funds, venture capital fund, hedge | 22 | | fund, hedge fund of funds, real estate fund, or other | 23 | | investment vehicle that is not publicly traded. | 24 | | "Restricted companies" means companies that boycott | 25 | | Israel, Iran-restricted companies, and Sudan-restricted | 26 | | companies. |
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| 1 | | "Retirement system" means a retirement system | 2 | | established under Article 2, 14, 15, 16, or 18 of this Code | 3 | | or the Illinois State Board of Investment. | 4 | | "Sudan-restricted company" means a company that meets | 5 | | the qualifications under Section 1-110.6 of this Code. | 6 | | (b) There shall be established an Illinois Investment | 7 | | Policy Board. The Illinois Investment Policy Board shall | 8 | | consist of 7 members. Each board of a pension fund or | 9 | | investment board created under Article 15, 16, or 22A of this | 10 | | Code shall appoint one member, and the Governor shall appoint 4 | 11 | | members. | 12 | | (c) Notwithstanding any provision of law to the contrary, | 13 | | beginning January 1, 2016, Sections 110.15 and 1-110.6 of this | 14 | | Code shall be administered in accordance with this Section. | 15 | | (d) By April 1, 2016, the Illinois Investment Policy Board | 16 | | shall make its best efforts to identify all Iran-restricted | 17 | | companies, Sudan-restricted companies, and companies that | 18 | | boycott Israel and assemble those identified companies into a | 19 | | list of restricted companies, to be distributed to each | 20 | | retirement system. | 21 | | These efforts shall include the following, as appropriate | 22 | | in the Illinois Investment Policy Board's judgment: | 23 | | (1) reviewing and relying on publicly available | 24 | | information regarding Iran-restricted companies, | 25 | | Sudan-restricted companies, and companies that boycott | 26 | | Israel, including information provided by nonprofit |
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| 1 | | organizations, research firms, and government entities; | 2 | | (2) contacting asset managers contracted by the | 3 | | retirement systems that invest in Iran-restricted | 4 | | companies, Sudan-restricted companies, and companies that | 5 | | boycott Israel; | 6 | | (3) contacting other institutional investors that have | 7 | | divested from or engaged with Iran-restricted companies, | 8 | | Sudan-restricted companies, and companies that boycott | 9 | | Israel; and | 10 | | (4) retaining an independent research firm to identify | 11 | | Iran-restricted companies, Sudan-restricted companies, and | 12 | | companies that boycott Israel. | 13 | | The Illinois Investment Policy Board shall review the list | 14 | | of restricted companies on a quarterly basis based on evolving | 15 | | information from, among other sources, those listed in this | 16 | | subsection (d) and distribute any updates to the list of | 17 | | restricted companies to the retirement systems. | 18 | | (e) The Illinois Investment Policy Board shall adhere to | 19 | | the following procedures for companies on the list of | 20 | | restricted companies: | 21 | | (1) For each company newly identified in subsection | 22 | | (d), the Illinois Investment Policy Board shall send a | 23 | | written notice informing the company of its status and that | 24 | | it may become subject to divestment by the retirement | 25 | | systems. | 26 | | (2) If, following the Illinois Investment Policy |
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| 1 | | Board's engagement pursuant to this subsection (e) with a | 2 | | restricted company, that company ceases activity that | 3 | | designates the company to be an Iran-restricted company, a | 4 | | Sudan-restricted company, or a company that boycotts | 5 | | Israel, the company shall be removed from the list of | 6 | | restricted companies and the provisions of this Section | 7 | | shall cease to apply to it unless it resumes such | 8 | | activities. | 9 | | (f) The retirement system shall adhere to the following | 10 | | procedures for companies on the list of restricted companies: | 11 | | (1) The retirement system shall identify those | 12 | | companies on the list of restricted companies in which the | 13 | | retirement system owns direct holdings and indirect | 14 | | holdings. | 15 | | (2) The retirement system shall instruct its | 16 | | investment advisors to sell, redeem, divest, or withdraw | 17 | | all direct holdings of restricted companies from the | 18 | | retirement system's assets under management in an orderly | 19 | | and fiduciarily responsible manner within 12 months after | 20 | | the company's most recent appearance on the list of | 21 | | restricted companies. | 22 | | (3) The retirement system may not acquire securities of | 23 | | restricted companies. | 24 | | (4) The provisions of this subsection (f) do not apply | 25 | | to the retirement system's indirect holdings or private | 26 | | market funds. The Illinois Investment Policy Board shall |
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| 1 | | submit letters to the managers of those investment funds | 2 | | containing restricted companies requesting that they | 3 | | consider removing the companies from the fund or create a | 4 | | similar actively managed fund having indirect holdings | 5 | | devoid of the companies. If the manager creates a similar | 6 | | fund, the retirement system shall replace all applicable | 7 | | investments with investments in the similar fund in an | 8 | | expedited timeframe consistent with prudent investing | 9 | | standards. | 10 | | (g) Upon request, and at least annually, each retirement | 11 | | system shall provide the Illinois Investment Policy Board with | 12 | | information regarding investments sold, redeemed, divested, or | 13 | | withdrawn in compliance with this Section. | 14 | | (h) Notwithstanding any provision of this Section to the | 15 | | contrary, a retirement system may cease divesting from | 16 | | companies pursuant to subsection (f) if clear and convincing | 17 | | evidence shows that the value of investments in such companies | 18 | | becomes equal to or less than 0.5% of the market value of all | 19 | | assets under management by the retirement system. For any | 20 | | cessation of divestment authorized by this subsection (h), the | 21 | | retirement system shall provide a written notice to the | 22 | | Illinois Investment Policy Board in advance of the cessation of | 23 | | divestment, setting forth the reasons and justification, | 24 | | supported by clear and convincing evidence, for its decision to | 25 | | cease divestment under subsection (f). | 26 | | (i) The cost associated with the activities of the Illinois |
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| 1 | | Investment Policy Board shall be borne by the boards of each | 2 | | pension fund or investment board created under Article 15, 16, | 3 | | or 22A of this Code. | 4 | | (j) With respect to actions taken in compliance with this | 5 | | Section, including all good-faith determinations regarding | 6 | | companies as required by this Section, the retirement system | 7 | | and Illinois Investment Policy Board are exempt from any | 8 | | conflicting statutory or common law obligations, including any | 9 | | fiduciary duties under this Article and any obligations with | 10 | | respect to choice of asset managers, investment funds, or | 11 | | investments for the retirement system's securities portfolios. | 12 | | (k) It is not the intent of the General Assembly in | 13 | | enacting this amendatory Act of the 99th General Assembly to | 14 | | cause divestiture from any company based in the United States | 15 | | of America. The Illinois Investment Policy Board shall consider | 16 | | this intent when developing or reviewing the list of restricted | 17 | | companies. | 18 | | (l) If any provision of this amendatory Act of the 99th | 19 | | General Assembly or its application to any person or | 20 | | circumstance is held invalid, the invalidity of that provision | 21 | | or application does not affect other provisions or applications | 22 | | of this amendatory Act of the 99th General Assembly that can be | 23 | | given effect without the invalid provision or application.
| 24 | | Section 99. Effective date. This Act takes effect upon | 25 | | becoming law.".
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