Public Act 096-0753
 		





HB2557 Enrolled
LRB096 09754 AMC 19917 b






    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 
Sections 1-113.20 and  1A-108.5 and by changing Section 15-167 
as follows:
 
    (40 ILCS 5/1-113.20  new)
    Sec. 1-113.20. Investment strategies; explicit and 
implicit costs. Every pension fund, retirement system, and 
investment board created under this Code, except those whose 
investments are restricted by Section 1-113.2 of this Code, 
shall instruct the fund's, system's, or board's investment 
advisors to utilize investment strategies designed to ensure 
that all securities transactions are executed in such a manner 
that the total explicit and implicit costs and total proceeds 
in every transaction are the most favorable under the 
circumstances.
 
    (40 ILCS 5/1A-108.5  new)
    Sec. 1A-108.5. Economic opportunity investments.

    (a) For the purposes of this Section:
    "Economic opportunity investment" means a qualified 
investment, managed passively or actively by the pension fund, 
that promotes economic development within the State of Illinois 
by providing financially prudent investment opportunities in 
or through the use of (a) Illinois businesses or (b) 
Illinois-based projects that promote the economy of the State 
or a region of the State, including without limitation 
promotion of venture capital programs, coal and other natural 
resource development, tourism development, infrastructure 
development, real estate development, and job development 
within the State of Illinois, while producing a competitive 
rate of return commensurate with the risk of investment.
    "Illinois business" means a business, including an 
investment adviser, that is headquartered in Illinois.
    "Illinois-based project" means an individual project of a 
business, including the provision of products and investment 
and other services to the pension fund, that will result in the 
conduct of business within the State, the employment of 
individuals within the State, or the acquisition of real 
property located within the State.

    (b) It is the public policy of the State of Illinois to 
encourage the pension funds, and any State entity investing 
funds on behalf of pension funds, to promote the economy of 
Illinois through the use of economic opportunity investments to 
the greatest extent feasible within the bounds of financial and 
fiduciary prudence.

    (c) Each pension fund, except pension funds created under 
Articles 3 and 4 of this Code, shall submit a report to the 
Governor and the General Assembly by September 1 of each year, 
beginning in 2009, that identifies the economic opportunity 
investments made by the fund, the primary location of the 
business or project, the percentage of the fund's assets in 
economic opportunity investments, and the actions that the fund 
has undertaken to increase the use of economic opportunity 
investments.
    (d) Pension funds created under Articles 2, 14, 15, 16, and 
18 of this Act, and any State agency investing funds on behalf 
of those pension funds, must make reasonable efforts to invest 
in economic opportunity investments.
    (e) In making economic opportunity investments, trustees 
and fiduciaries must comply with the relevant requirements and 
restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 
1-110, and 1-111 of this Code. Economic opportunity investments 
that otherwise comply with this Code shall not be deemed 
imprudent solely because they are investments in an Illinois 
business or Illinois-based project.

 



    (40 ILCS 5/15-167)  (from Ch. 108 1/2, par. 15-167)


    Sec. 15-167. To invest money. To invest the funds of the 
system, subject
to the requirements and restrictions set forth 
in Sections 1A-108.5, 1-109, 1-109.1,
1-109.2, 1-110, 1-111, 
1-114, 1-115, and 15-158.2(d) of this
Code and to invest in 
real estate acquired by
purchase, gift, condemnation or 
otherwise, and any office building or buildings
existing or to 
be constructed thereon, including any additions thereto or

expansions thereof, for the use of the system.  The board may 
lease surplus
space in any of the buildings and use rental 
proceeds for operation,
maintenance, improving, expanding and 
furnishing of the buildings or for any
other lawful system 
purpose.

    No bank or savings and loan association shall receive 
investment funds
as permitted by this Section, unless it has 
complied with the requirements
established pursuant to Section 
6 of "An Act relating to certain investments
of public funds by 
public agencies", approved July 23, 1943, as now or
hereafter 
amended.  The limitations set forth in such Section 6 shall be

applicable only at the time of investment and shall not require 
the liquidation
of any investment at any time.

    The board shall have the authority to enter into such 
agreements and to
execute such documents as it determines to be 
necessary to complete any
investment transaction.

    All investments shall be clearly held and accounted for to 
indicate ownership
by the board. The board may direct the 
registration of securities in its
own name or in the name of a 
nominee created for the express purpose of
registration of 
securities by a national or state bank or trust company

authorized to conduct a trust business in the State of 
Illinois.

    Investments shall be carried at cost or at a value 
determined in
accordance with generally accepted accounting 
principles and accounting
procedures approved by the Board. 

    All additions to assets from income, interest, and 
dividends
from investments shall be used to pay benefits,

operating and administrative expenses of the system, debt 
service,
including any redemption premium, on any bonds issued 
by the board,
expenses incurred or deposits required in 
connection with such bonds, and
such other costs as may be 
provided in accordance with this
Article.

(Source: P.A. 90-19, eff. 6-20-97; 90-766, eff. 8-14-98.)


 

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