Bill Text: IL HB5201 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Repeals the Illinois Sustainable Investing Act. Amends the Public Funds Investment Act and the Illinois Pension Code to make conforming changes, including removal of sustainability factors from investment policies.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2025-01-07 - Session Sine Die [HB5201 Detail]

Download: Illinois-2023-HB5201-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5201 Introduced , by Rep. Brad Halbrook SYNOPSIS AS INTRODUCED:
30 ILCS 238/Act rep.
30 ILCS 235/2.5
40 ILCS 5/1-113.6
40 ILCS 5/1-113.17
40 ILCS 5/15-177.6
40 ILCS 5/16-189
40 ILCS 5/22A-113.5
Repeals the Illinois Sustainable Investing Act. Amends the Public Funds Investment Act and the Illinois Pension Code to make conforming changes, including removal of sustainability factors from investment policies.
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A BILL FOR
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AN ACT concerning finance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
(30 ILCS 238/Act rep.)
Section 5. The Illinois Sustainable Investing Act is
repealed.
Section 10. The Public Funds Investment Act is amended by
changing Section 2.5 as follows:
(30 ILCS 235/2.5)
Sec. 2.5. Investment policy.
(a) Investment of public funds by a public agency shall be
governed by a written investment policy adopted by the public
agency. The level of detail and complexity of the investment
policy shall be appropriate to the nature of the funds, the
purpose for the funds, and the amount of the public funds
within the investment portfolio. The policy shall address
safety of principal, liquidity of funds, and return on
investment and shall require that the investment portfolio be
structured in such manner as to provide sufficient liquidity
to pay obligations as they come due. In addition, the
investment policy shall include or address the following:
(1) a listing of authorized investments;

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(2) a rule, such as the "prudent person rule",
establishing the standard of care that must be maintained
by the persons investing the public funds;
(3) investment guidelines that are appropriate to the
nature of the funds, the purpose for the funds, and the
amount of the public funds within the investment
portfolio;
(4) a policy regarding diversification of the
investment portfolio that is appropriate to the nature of
the funds, the purpose for the funds, and the amount of the
public funds within the investment portfolio;
(5) guidelines regarding collateral requirements, if
any, for the deposit of public funds in a financial
institution made pursuant to this Act, and, if applicable,
guidelines for contractual arrangements for the custody
and safekeeping of that collateral;
(6) a policy regarding the establishment of a system
of internal controls and written operational procedures
designed to prevent losses of funds that might arise from
fraud, employee error, misrepresentation by third parties,
or imprudent actions by employees of the entity;
(7) identification of the chief investment officer who
is responsible for establishing the internal controls and
written procedures for the operation of the investment
program;
(8) performance measures that are appropriate to the

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nature of the funds, the purpose for the funds, and the
amount of the public funds within the investment
portfolio;
(9) a policy regarding appropriate periodic review of
the investment portfolio, its effectiveness in meeting the
public agency's needs for safety, liquidity, rate of
return, and diversification, and its general performance;
(10) a policy establishing at least quarterly written
reports of investment activities by the public agency's
chief financial officer for submission to the governing
body and chief executive officer of the public agency. The
reports shall include information regarding securities in
the portfolio by class or type, book value, income earned,
and market value as of the report date;
(11) a policy regarding the selection of investment
advisors, money managers, and financial institutions; and
(12) a policy regarding ethics and conflicts of
interest.
(a-5) (Blank). The investment policy shall include a
statement that material, relevant, and decision-useful
sustainability factors have been or are regularly considered
by the agency, within the bounds of financial and fiduciary
prudence, in evaluating investment decisions. Such factors
include, but are not limited to: (i) corporate governance and
leadership factors; (ii) environmental factors; (iii) social
capital factors; (iv) human capital factors; and (v) business

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model and innovation factors, as provided under the Illinois
Sustainable Investing Act.
(b) For purposes of the State or a county, the investment
policy shall be adopted by the elected treasurer and presented
to the chief executive officer and the governing body. For
purposes of any other public agency, the investment policy
shall be adopted by the governing body of the public agency.
(c) The investment policy shall be made available to the
public at the main administrative office of the public agency.
(d) The written investment policy required under this
Section shall be developed and implemented by January 1, 2000.
(Source: P.A. 101-473, eff. 1-1-20.)
Section 15. The Illinois Pension Code is amended by
changing Sections 1-113.6, 1-113.17, 15-177.6, 16-189, and
22A-113.5 as follows:
(40 ILCS 5/1-113.6)
Sec. 1-113.6. Investment policies. Every board of trustees
of a pension fund shall adopt a written investment policy and
file a copy of that policy with the Department of Insurance
within 30 days after its adoption. Whenever a board changes
its investment policy, it shall file a copy of the new policy
with the Department within 30 days.
The investment policy shall include a statement that
material, relevant, and decision-useful sustainability factors

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have been or are regularly considered by the board, within the
bounds of financial and fiduciary prudence, in evaluating
investment decisions. Such factors include, but are not
limited to: (1) corporate governance and leadership factors;
(2) environmental factors; (3) social capital factors; (4)
human capital factors; and (5) business model and innovation
factors, as provided under the Illinois Sustainable Investing
Act.
(Source: P.A. 101-473, eff. 1-1-20.)
(40 ILCS 5/1-113.17)
Sec. 1-113.17. Investment policies sustainability. Every
retirement system, pension fund, or investment board subject
to this Code shall adopt a written investment policy and file a
copy of that policy with the Department of Insurance within 30
days after its adoption. Whenever a board changes its
investment policy, it shall file a copy of the new policy with
the Department within 30 days.
The investment policy shall include material, relevant,
and decision-useful sustainability factors to be considered by
the board, within the bounds of financial and fiduciary
prudence, in evaluating investment decisions. Such factors
shall include, but are not limited to: (1) corporate
governance and leadership factors; (2) environmental factors;
(3) social capital factors; (4) human capital factors; and (5)
business model and innovation factors, as provided under the

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Illinois Sustainable Investing Act.
(Source: P.A. 101-473, eff. 1-1-20.)
(40 ILCS 5/15-177.6)
Sec. 15-177.6. Voting proxy ballots Fiduciary report. On
or before September 1, 2023, and annually thereafter, the
Board shall publish its guidelines for voting proxy ballots.
and a detailed report on its website describing how the Board
is considering sustainability factors as defined in the
Illinois Sustainable Investing Act. The report shall:
(1) describe the Board's strategy as it relates to the
consideration of sustainable investment factors;
(2) outline the process for regular assessment across
the total portfolio of potential effects from systemic and
regulatory risks and opportunities, including, but not
limited to, sustainability factors on the assets of the
plan;
(3) disclose how each investment manager serving as a
fiduciary to the Board integrates sustainability factors
into the investment manager's investment decision-making
process;
(4) provide a comprehensive proxy voting report;
(5) provide an overview of all corporate engagement
and stewardship activities; and
(6) include any other information the Board deems
necessary.

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(Source: P.A. 103-468, eff. 8-4-23.)
(40 ILCS 5/16-189)
Sec. 16-189. Voting proxy ballots Fiduciary report. On or
before September 1, 2023, and annually thereafter, the Board
shall publish its guidelines for voting proxy ballots. and a
detailed report on its website describing how the Board is
considering sustainability factors as defined in the Illinois
Sustainable Investing Act. The report shall:
(1) describe the Board's strategy as it relates to the
consideration of sustainable investment factors;
(2) outline the process for regular assessment across
the total portfolio of potential effects from systemic and
regulatory risks and opportunities, including, but not
limited to, sustainability factors on the assets of the
plan;
(3) disclose how each investment manager serving as a
fiduciary to the Board integrates sustainability factors
into the investment manager's investment decision-making
process;
(4) provide a comprehensive proxy voting report;
(5) provide an overview of all corporate engagement
and stewardship activities; and
(6) include any other information the Board deems
necessary.
(Source: P.A. 103-468, eff. 8-4-23.)

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