HB 280 amends the General Provisions Article of the Illinois Pension Code to prohibit the state-funded retirement systems from investing in companies that contract to build a border wall. The term “contract to build a border wall” means entering into a contract with the federal government for construction pursuant to Section 4 of Executive Order 13767 of the President of the United States.
Specifically, HB 280 requires the Illinois Investment Policy Board to make its best efforts to identify all companies that contract to build a border wall and include those companies in the list of restricted companies distributed to each retirement system within six months after the effective date of the legislation. These efforts must include the following, as appropriate in the Illinois Investment Policy Board’s judgment: (1) reviewing and relying on publicly available information regarding companies that contract to build a border wall, including information provided by nonprofit organizations, research firms, and government entities; (2) contacting asset managers contracted by the retirement systems that invest in companies that contract to build a border wall; (3) contacting other institutional investors that have divested from or engaged with companies that contract to build a border wall; and (4) retaining an independent research firm to identify companies that contract to build a border wall.
Generally, each retirement system must sell, redeem, divest, or withdraw all direct holdings of restricted companies from its assets under management in an orderly and fiduciarily responsible manner within 12 months after the company’s most recent appearance on the list of restricted companies, and the retirement system cannot acquire securities of the restricted companies. These provisions do not apply to the retirement system’s indirect holdings or private market funds. For those investments, the Illinois Investment Policy Board must submit letters to the managers requesting that they consider removing the companies from the fund or create a similar actively managed fund having indirect holdings devoid of the companies. If the manager creates a similar fund, the retirement system must replace all applicable investments with investments in the similar fund in an expedited timeframe consistent with prudent investing standards. A retirement system may cease divesting from companies if clear and convincing evidence shows that the value of investments in such companies becomes equal to or less than 0.5% of the market value of all assets under management by the retirement system, upon providing a written notice to the Illinois Investment Policy Board in advance of the cessation of the divestment.
HB 280 takes effect immediately upon becoming law.