Bill Text: IL HB1296 | 2013-2014 | 98th General Assembly | Engrossed

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Bill Title: Amends the General Provisions Article of the Illinois Pension Code. Requires each pension fund and retirement system established under the Code 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. Effective immediately.

Spectrum: Partisan Bill (Democrat 23-0)

Status: (Introduced - Dead) 2013-04-18 - Added Co-Sponsor Rep. Natalie A. Manley [HB1296 Detail]

Download: Illinois-2013-HB1296-Engrossed.html

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

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

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

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

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

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