99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB2808
 
Introduced , by Rep. Christian L. Mitchell
 
SYNOPSIS AS INTRODUCED:



40 ILCS 5/1-110.16 new

 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.



LRB099 04086 RPS 24105 b


FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
 
 
A BILL FOR
 


HB2808LRB099 04086 RPS 24105 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 
 
 
HB2808- 2 -LRB099 04086 RPS 24105 b


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 
 
 
HB2808- 3 -LRB099 04086 RPS 24105 b


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 
 
 
HB2808- 4 -LRB099 04086 RPS 24105 b


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. 
 
 
HB2808- 5 -LRB099 04086 RPS 24105 b


1 (f) Each retirement system shall file a report with the 
2Public Pension Division of the Department of Insurance that 
3includes the firearm manufacturing companies list
within 30 
4days after the list is created. This report shall be
made 
5available 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 
 
 
HB2808- 6 -LRB099 04086 RPS 24105 b


1without the invalid provision or application. 


2 Section 99. Effective date. This Act takes effect upon 
3becoming law.