Illinois General Assembly - Full Text of HB2248
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Full Text of HB2248  98th General Assembly




State of Illinois
2013 and 2014


Introduced , by Rep. Kathleen Willis


40 ILCS 5/1-110.16 new

    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 firearm manufacturing companies in which it has direct or indirect holdings and, under certain circumstances, to divest itself of holdings in those companies.

LRB098 07732 EFG 37810 b






HB2248LRB098 07732 EFG 37810 b

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.
4    "Indirect holdings" in a company means all securities of
5that company that are held in an account or fund, such as a
6mutual fund, managed by one or more persons not employed by the
7retirement system, in which the retirement system owns shares
8or interests together with other investors not subject to the
9provisions of this Section.
10    "Private market fund" means any private equity fund,
11private equity fund of funds, venture capital fund, hedge fund,
12hedge fund of funds, real estate fund, or other investment
13vehicle that is not publicly traded.
14    "Retirement system" means a retirement system established
15under Article 2, 14, 15, 16, or 18 of this Code, or the
16Illinois State Board of Investment with respect to investments
17of the assets of any of those retirement systems under its
19    (b) Within 90 days after the effective date of this
20Section, each retirement system shall make its best efforts to
21identify all firearm manufacturing companies in which the
22retirement system has direct or indirect holdings.
23    These efforts shall include the following, as appropriate
24in the retirement system's judgment:
25        (1) reviewing and relying on publicly available
26    information regarding firearm manufacturing companies,



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



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



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1manufacturing companies list within 30 days after the list is
2created. This report shall be made available to the public.
3    Each retirement system shall file an annual report with the
4Public Pension Division, which shall be made available to the
5public, that includes all of the following:
6        (1) a summary of correspondence with companies engaged
7    by the retirement system under items (2) and (3) of
8    subsection (c);
9        (2) all investments sold, redeemed, divested, or
10    withdrawn in compliance with subsection (d); and
11        (3) all prohibited investments under subsection (e).
12    (g) With respect to actions taken in compliance with this
13Act, including all good-faith determinations regarding
14companies as required by this Act, the retirement system is
15exempt from any conflicting statutory or common law
16obligations, including any fiduciary duties under this Article
17and any obligations with respect to choice of asset managers,
18investment funds, or investments for the retirement system's
19securities portfolios.
20    (h) If any provision of this Section or its application to
21any person or circumstance is held invalid, the invalidity of
22that provision or application does not affect other provisions
23or applications of this Section that can be given effect
24without the invalid provision or application.