Bill Text: IL HB3037 | 2023-2024 | 103rd General Assembly | Introduced

---

Bill Title: Amends the General Provisions Article of the Illinois Pension Code. Provides that the amendatory Act may be referred to as the Fossil Fuel Divestment Act. With regard to the pension funds and retirement systems established under the General Assembly, Chicago Police, Chicago Firefighter, Illinois Municipal Retirement Fund (IMRF), Chicago Municipal, Chicago Laborers', State Employees, State Universities, Downstate Teachers, or Judges Article of the Code, prohibits investment of pension system assets in fossil fuel companies. Requires pension systems to adopt an update to its written investment policies if necessary. Requires pension systems to divest any holdings of stocks, securities, or other obligations of a fossil fuel company. Provides that, beginning one year after the effective date of the amendatory Act, the board of trustees of a pension system shall ensure that the pension system does not invest in any indirect investment vehicle unless the board of trustees is satisfied that the investment vehicle is unlikely to have more than 2% of its assets invested in coal, oil, or gas producers. Requires pension systems to post on its publicly accessible website information detailing all its holdings in the public market and private equity investments. Requires pension systems to annually issue a report reviewing its environmental, social, and governance investment policy. Sets forth definitions and other provisions. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced) 2024-04-29 - Added Co-Sponsor Rep. Margaret Croke [HB3037 Detail]

Download: Illinois-2023-HB3037-Introduced.html

---

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3037 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-110.18 new
30 ILCS 805/8.47 new
Amends the General Provisions Article of the Illinois Pension Code. Provides that the amendatory Act may be referred to as the Fossil Fuel Divestment Act. With regard to the pension funds and retirement systems established under the General Assembly, Chicago Police, Chicago Firefighter, Illinois Municipal Retirement Fund (IMRF), Chicago Municipal, Chicago Laborers', State Employees, State Universities, Downstate Teachers, or Judges Article of the Code, prohibits investment of pension system assets in fossil fuel companies. Requires pension systems to adopt an update to its written investment policies if necessary. Requires pension systems to divest any holdings of stocks, securities, or other obligations of a fossil fuel company. Provides that, beginning one year after the effective date of the amendatory Act, the board of trustees of a pension system shall ensure that the pension system does not invest in any indirect investment vehicle unless the board of trustees is satisfied that the investment vehicle is unlikely to have more than 2% of its assets invested in coal, oil, or gas producers. Requires pension systems to post on its publicly accessible website information detailing all its holdings in the public market and private equity investments. Requires pension systems to annually issue a report reviewing its environmental, social, and governance investment policy. Sets forth definitions and other provisions. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB103 30175 RPS 56603 b
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY
A BILL FOR
HB3037 LRB103 30175 RPS 56603 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. This Act may be referred to as the Fossil Fuel
Divestment Act.
Section 5. Findings; purpose. The General Assembly finds
that:
(1) Climate change is a real and serious threat to the
health, welfare, and prosperity of all Illinoisans, now
and in the future. Maintaining the status quo of fossil
fuel energy production could lead to catastrophic results.
(2) The threat of climate change and the necessary
transformation of the global energy system to mitigate it
will have a serious negative impact on investors whose
assets are not aligned with a 1.5-degree Celsius
trajectory.
(3) Continued investment in fossil fuel producers
poses unacceptable risk to the long-term sustainability of
the 5 Illinois State pension funds, the General Assembly
Retirement System (GARS), the State Employees' Retirement
System of Illinois (SERS), the State Universities
Retirement System (SURS), the Teachers' Retirement System
of the State of Illinois (TRS), and the Judges' Retirement

HB3037 - 2 - LRB103 30175 RPS 56603 b
System of Illinois (JRS); the Illinois Municipal
Retirement Fund (IMRF); and the 4 Chicago pension funds,
the Municipal Employees', Officers', and Officials'
Annuity and Benefit Fund of Chicago (MEABF), the Laborers'
and Retirement Board Employees' Annuity and Benefit Fund
of Chicago (LABF), the Policemen's Annuity and Benefit
Fund of Chicago, and the Firemen's Annuity and Benefit
Fund of Chicago.
(4) Continued investment in fossil fuel producers
poses unacceptable risk to the long-term sustainability of
$26,000,000,000 of the State's investments;
$17,000,000,000 in the programs established pursuant to
Section 529 of the Internal Revenue Code; $12,000,000,000
of the Illinois Funds; $80,000,000 of the Secure Choice
Retirement Savings Program; and $30,000,000 in the ABLE
Account Program.
(5) Continued investment in fossil fuel producers
poses unacceptable risk to the long-term sustainability of
the City of Chicago's pension funds.
(6) Because the continued investment in fossil fuel
producers poses unacceptable risk to these pension systems
and State investments, those who hold investment authority
over these systems should divest from fossil fuel
companies and fossil fuel infrastructure.
Section 10. The Illinois Pension Code is amended by adding

HB3037 - 3 - LRB103 30175 RPS 56603 b
Section 1-110.18 as follows:
(40 ILCS 5/1-110.18 new)
Sec. 1-110.18. Fossil fuel investment prohibited.
(a) In this Section:
"Fossil fuel" means coal, petroleum, natural gas, or any
derivative of coal, petroleum, or natural gas that is used for
fuel.
"Fossil fuel company" means any company that: (1) is among
the 200 publicly traded companies with the largest fossil fuel
reserves in the world; (2) is among the 30 largest public
company owners in the world of coal-fired power plants; (3)
has as its core business the construction or operation of
fossil fuel infrastructure; (4) has as its core business the
exploration, extraction, refining, processing, or distribution
of fossil fuels; or (5) that receives more than 20% of its
gross revenue from companies that meet the definition under
item (1), (2), (3), or (4) of this definition.
"Fossil fuel infrastructure" means oil or gas wells; oil
or gas pipelines and refineries; oil, coal, or gas-fired power
plants; oil and gas storage tanks; fossil fuel export
terminals; and any other infrastructure used exclusively for
fossil fuels.
"Indirect investment" means a holding in an investment
vehicle that directly or indirectly owns a more than 1%
interest in one or more individual fossil fuel companies.

HB3037 - 4 - LRB103 30175 RPS 56603 b
"Pension system" means a pension fund or retirement system
established under Article 2, 5, 6, 7, 8, 11, 14, 15, 16, or 18.
(b) A pension system, in accordance with sound investment
criteria and consistent with fiduciary obligations, shall not
invest the assets of the pension system in the stocks,
securities, or other obligations of any fossil fuel company or
any subsidiary, affiliate, or parent of any fossil fuel
company. Nothing in this subsection precludes de minimis
exposure of any funds held by a pension system to the stocks,
securities, or other obligations of any fossil fuel company or
any subsidiary, affiliate, or parent of any fossil fuel
company. The board of trustees of a pension system shall not
invest in any prime commercial paper or corporate bonds issued
by a fossil fuel company.
(c) Each board of trustees of a pension system that has
adopted a written investment policy under Section 1-113.6
shall adopt an update of its written investment policies, if
necessary, to meet the requirements of this Section and file a
copy of that updated policy with the Department of Insurance
within 30 days after its adoption.
(d) Beginning one year after the effective date of this
amendatory Act of the 103rd General Assembly, subject to an
affirmative determination of prudence, and in accordance with
sound investment criteria and consistent with its fiduciary
obligations, each board of trustees of a pension system shall
ensure that the pension system does not invest in any indirect

HB3037 - 5 - LRB103 30175 RPS 56603 b
investment vehicle unless the board of trustees is satisfied
that the investment vehicle is unlikely to have more than 2% of
its assets invested in coal, oil, or gas producers.
(e) Each pension system shall review the extent to which
the assets of the pension system are invested in the stocks,
securities, or other obligations of any fossil fuel company or
any subsidiary, affiliate, or parent of any fossil fuel
company. The board of trustees of a pension system shall, in
accordance with sound investment criteria and consistent with
fiduciary obligations, divest any such holdings. Divestment
pursuant to this subsection must be completed by January 1,
2028. Nothing in this subsection precludes de minimis exposure
of any funds held by the board to the stocks, securities, or
other obligations of any fossil fuel company or any
subsidiary, affiliate, or parent of any fossil fuel company.
(f) The board of trustees of a pension system may not
invest in any prime commercial paper or corporate bonds issued
by a fossil fuel company.
(g) On a quarterly basis, each pension system shall post
on its publicly accessible website information detailing all
its holdings in the public market and private equity
investments.
(h) Beginning January 1, 2024 and annually thereafter,
each pension system shall issue a report reviewing its
environmental, social, and governance investment policy. The
report must disclose commonly available environmental

HB3037 - 6 - LRB103 30175 RPS 56603 b
performance metrics on the environmental effects of the
pension system's investments.
Section 90. The State Mandates Act is amended by adding
Section 8.47 as follows:
(30 ILCS 805/8.47 new)
Sec. 8.47. Exempt mandate. Notwithstanding Sections 6 and
8 of this Act, no reimbursement by the State is required for
the implementation of any mandate created by this amendatory
Act of the 103rd General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.