Bill Text: IL HB3394 | 2019-2020 | 101st General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Business Corporation Act of 1983. Provides that corporations shall report to the Secretary of State: (1) whether the corporation is a publicly held domestic or foreign corporation with its principal executive office located in Illinois; (2) data on specific qualifications, skills, and experience that the corporation considers for its board of directors, nominees for the board of directors, and executive officers; (3) whether each member of the corporation's board of directors self-identifies as a minority person and, if so, which race or ethnicity to which the member belongs; and (4) other information. Requires the Secretary to State to make the information public. Requires the University of Illinois System to review the reported information and publish on its website a report that provides aggregate data on the demographic characteristics of the boards of directors and executive officers of corporations filing an annual report for the preceding year along with an individualized rating for each corporation. Requires the establishment of a rating system assessing the representation of women and minorities on corporate boards. Provides that the report shall also identify strategies for promoting diversity and inclusion among boards of directors and corporate executive officers. Effective immediately.
Spectrum: Partisan Bill (Democrat 29-0)
Status: (Passed) 2019-08-28 - Added Co-Sponsor Rep. Nicholas K. Smith [HB3394 Detail]
Download: Illinois-2019-HB3394-Enrolled.html
Bill Title: Amends the Business Corporation Act of 1983. Provides that corporations shall report to the Secretary of State: (1) whether the corporation is a publicly held domestic or foreign corporation with its principal executive office located in Illinois; (2) data on specific qualifications, skills, and experience that the corporation considers for its board of directors, nominees for the board of directors, and executive officers; (3) whether each member of the corporation's board of directors self-identifies as a minority person and, if so, which race or ethnicity to which the member belongs; and (4) other information. Requires the Secretary to State to make the information public. Requires the University of Illinois System to review the reported information and publish on its website a report that provides aggregate data on the demographic characteristics of the boards of directors and executive officers of corporations filing an annual report for the preceding year along with an individualized rating for each corporation. Requires the establishment of a rating system assessing the representation of women and minorities on corporate boards. Provides that the report shall also identify strategies for promoting diversity and inclusion among boards of directors and corporate executive officers. Effective immediately.
Spectrum: Partisan Bill (Democrat 29-0)
Status: (Passed) 2019-08-28 - Added Co-Sponsor Rep. Nicholas K. Smith [HB3394 Detail]
Download: Illinois-2019-HB3394-Enrolled.html
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1 | AN ACT concerning business.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Business Corporation Act of 1983 is amended | ||||||
5 | by changing Section 14.05 and adding Section 8.12 as follows:
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6 | (805 ILCS 5/8.12 new) | ||||||
7 | Sec. 8.12. Female and minority directors. | ||||||
8 | (a) Findings and purpose. The General Assembly finds that | ||||||
9 | women and minorities are still largely underrepresented | ||||||
10 | nationally in positions of corporate authority, such as serving | ||||||
11 | as a director on a corporation's board of directors. This low | ||||||
12 | representation could be contributing to the disparity seen in | ||||||
13 | wages made by females and minorities versus their white male | ||||||
14 | counterparts. Increased representation of these individuals as | ||||||
15 | directors on boards of directors for corporations may boost the | ||||||
16 | Illinois economy, improve opportunities for women and | ||||||
17 | minorities in the workplace, and foster an environment in | ||||||
18 | Illinois where the business community is representative of our | ||||||
19 | residents. Therefore, it is the intent of the General Assembly | ||||||
20 | to gather more data and study this issue within the State so | ||||||
21 | that effective policy changes may be implemented to eliminate | ||||||
22 | this disparity. | ||||||
23 | (b) As used in this Section: |
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1 | "Annual report" means the report submitted annually to the | ||||||
2 | Secretary of State pursuant to this Act. | ||||||
3 | "Female" means a person who is a citizen or
lawful | ||||||
4 | permanent resident of the United States and who self-identifies | ||||||
5 | as a woman, without regard to the individual's designated sex | ||||||
6 | at birth. | ||||||
7 | "Minority person" means a person who is a
citizen or lawful | ||||||
8 | permanent resident of the United States and who is any of the | ||||||
9 | following races or ethnicities: | ||||||
10 | (1) American Indian or Alaska Native (a person
having | ||||||
11 | origins in any of the original peoples of North and South | ||||||
12 | America, including Central America, and who maintains | ||||||
13 | tribal affiliation or community attachment). | ||||||
14 | (2) Asian (a person having origins in any of the
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15 | original peoples of the Far East, Southeast Asia, or the | ||||||
16 | Indian subcontinent, including, but not limited to, | ||||||
17 | Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, | ||||||
18 | the Philippine Islands, Thailand, and Vietnam). | ||||||
19 | (3) Black or African American (a person having
origins | ||||||
20 | in any of the black racial groups of Africa). Terms such as | ||||||
21 | "Haitian" or "Negro" can be used in addition to "Black" or | ||||||
22 | "African American". | ||||||
23 | (4) Hispanic or Latino (a person of Cuban,
Mexican, | ||||||
24 | Puerto Rican, South or Central American, or other Spanish | ||||||
25 | culture or origin, regardless of race). | ||||||
26 | (5) Native Hawaiian or Other Pacific Islander (a
person |
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1 | having origins in any of the original peoples of Hawaii, | ||||||
2 | Guam, Samoa, or other Pacific Islands). | ||||||
3 | (6) "Publicly held domestic or foreign corporation" | ||||||
4 | means a corporation with outstanding shares listed on a | ||||||
5 | major United States stock exchange. | ||||||
6 | (c) Reporting to the Secretary of State. As soon as | ||||||
7 | practical after the effective date of this amendatory Act of | ||||||
8 | the 101st General Assembly, but no later than January 1, 2021, | ||||||
9 | the following information shall be provided in a corporation's | ||||||
10 | annual report submitted to the Secretary of State under this | ||||||
11 | Act and made available by the Secretary of State to the public | ||||||
12 | online as it is received: | ||||||
13 | (1) Whether the corporation is a publicly held domestic | ||||||
14 | or foreign corporation with its principal executive office | ||||||
15 | located in Illinois. | ||||||
16 | (2) Where the corporation is a publicly held domestic | ||||||
17 | or foreign corporation with its principal executive office | ||||||
18 | located in Illinois, data on specific qualifications, | ||||||
19 | skills, and experience that the corporation considers for | ||||||
20 | its board of directors, nominees for the board of | ||||||
21 | directors, and executive officers. | ||||||
22 | (3) Where the corporation is a publicly held domestic | ||||||
23 | or foreign corporation with its principal executive office | ||||||
24 | located in Illinois, the self-identified gender of each | ||||||
25 | member of its board of directors. | ||||||
26 | (4) Where the corporation is a publicly held domestic |
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1 | or foreign corporation with its principal executive office | ||||||
2 | located in Illinois, whether each member of its board of | ||||||
3 | directors self-identifies as a minority person and, if so, | ||||||
4 | which race or ethnicity to which the member belongs. | ||||||
5 | (5) Where the corporation is a publicly held domestic | ||||||
6 | or foreign corporation with its principal executive office | ||||||
7 | located in Illinois, a description of the corporation's | ||||||
8 | process for identifying and evaluating nominees for the | ||||||
9 | board of directors, including whether and, if so, how | ||||||
10 | demographic diversity is considered. | ||||||
11 | (6) Where the corporation is a publicly held domestic | ||||||
12 | or foreign corporation with its principal executive office | ||||||
13 | located in Illinois, a description of the corporation's | ||||||
14 | process for identifying and appointing executive officers, | ||||||
15 | including whether and, if so, how demographic diversity is | ||||||
16 | considered. | ||||||
17 | (7) Where the corporation is a publicly held domestic | ||||||
18 | or foreign corporation with its principal executive office | ||||||
19 | located in Illinois, a description of the corporation's | ||||||
20 | policies and practices for promoting diversity, equity, | ||||||
21 | and inclusion among its board of directors and executive | ||||||
22 | officers. | ||||||
23 | Information reported under this subsection shall be | ||||||
24 | updated in each annual report filed with the Secretary of State | ||||||
25 | thereafter. | ||||||
26 | (d) Beginning no later than March 1, 2021, and every March |
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1 | 1 thereafter, the University of Illinois Systems shall review | ||||||
2 | the information reported and published under subsection (c) and | ||||||
3 | shall publish on its website a report that provides aggregate | ||||||
4 | data on the demographic characteristics of the boards of | ||||||
5 | directors and executive officers of corporations filing an | ||||||
6 | annual report for the preceding year along with an | ||||||
7 | individualized rating for each corporation. The report shall | ||||||
8 | also identify strategies for promoting diversity and inclusion | ||||||
9 | among boards of directors and corporate executive officers. | ||||||
10 | (e) The University of Illinois System shall establish a | ||||||
11 | rating system assessing the representation of women and | ||||||
12 | minorities on corporate boards of directors of those | ||||||
13 | corporations that are publicly held domestic or foreign | ||||||
14 | corporations with their principal executive office located in | ||||||
15 | Illinois based on the information gathered under this Section. | ||||||
16 | The rating system shall consider, among other things: | ||||||
17 | compliance with the demographic reporting obligations in | ||||||
18 | subsection (c); the corporation's policies and practices for | ||||||
19 | encouraging diversity in recruitment, board membership, and | ||||||
20 | executive appointments; and the demographic diversity of board | ||||||
21 | seats and executive positions.
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22 | (805 ILCS 5/14.05) (from Ch. 32, par. 14.05)
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23 | Sec. 14.05. Annual report of domestic or foreign | ||||||
24 | corporation. Each domestic corporation organized under any | ||||||
25 | general law or
special act of this State authorizing the |
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1 | corporation to issue shares,
other than homestead | ||||||
2 | associations, building and loan associations, banks
and | ||||||
3 | insurance companies (which includes a syndicate or limited | ||||||
4 | syndicate
regulated under Article V 1/2 of the Illinois | ||||||
5 | Insurance Code or member of a
group of underwriters regulated | ||||||
6 | under Article V of that Code), and each
foreign corporation | ||||||
7 | (except members of a group of underwriters regulated
under | ||||||
8 | Article V of the Illinois Insurance Code) authorized to | ||||||
9 | transact
business in this State, shall file, within the time | ||||||
10 | prescribed by this
Act, an annual report setting forth:
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11 | (a) The name of the corporation.
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12 | (b) The address, including street and number, or rural | ||||||
13 | route number, of
its registered office in this State, and | ||||||
14 | the name of its registered agent
at that address.
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15 | (c) The address, including street and number, or rural | ||||||
16 | route number, of
its principal office.
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17 | (d) The names and respective addresses, including | ||||||
18 | street and
number, or rural route number, of its directors | ||||||
19 | and officers.
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20 | (e) A statement of the aggregate number of shares which | ||||||
21 | the corporation
has authority to issue, itemized by classes | ||||||
22 | and series, if any, within a class.
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23 | (f) A statement of the aggregate number of issued | ||||||
24 | shares, itemized by
classes, and series, if any, within a | ||||||
25 | class.
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26 | (g) A statement, expressed in dollars, of the amount of |
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1 | paid-in capital
of the corporation as defined in this Act.
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2 | (h) Either a statement that (1) all the property of the | ||||||
3 | corporation is
located in this State and all of its | ||||||
4 | business is transacted at or from places
of business in | ||||||
5 | this State, or the corporation elects to pay the annual
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6 | franchise tax on the basis of its entire paid-in capital, | ||||||
7 | or (2) a
statement, expressed in dollars, of the value of | ||||||
8 | all the property owned by
the corporation, wherever | ||||||
9 | located, and the value of the property located
within this | ||||||
10 | State, and a statement, expressed in dollars, of the gross
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11 | amount of business transacted by the corporation and the | ||||||
12 | gross amount thereof
transacted by the corporation at or | ||||||
13 | from places of business in this State
as of the close of | ||||||
14 | its fiscal year on or immediately preceding the last day of
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15 | the third month prior to the anniversary month or in the | ||||||
16 | case of a
corporation which has established an extended | ||||||
17 | filing month, as of the close
of its fiscal year on or | ||||||
18 | immediately preceding the last day of the third month
prior | ||||||
19 | to the extended filing month; however, in the case of a | ||||||
20 | domestic
corporation that has not completed its first | ||||||
21 | fiscal year, the statement with
respect to property owned | ||||||
22 | shall be as of the last day of the third month
preceding | ||||||
23 | the anniversary month and the statement with respect to | ||||||
24 | business
transacted shall be furnished for the period | ||||||
25 | between the date
of incorporation and the last day of the | ||||||
26 | third month preceding the
anniversary month. In the case of |
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1 | a foreign corporation that has not been
authorized to | ||||||
2 | transact business in this State for a period of 12 months | ||||||
3 | and
has not commenced transacting business prior to | ||||||
4 | obtaining
authority, the statement with respect to | ||||||
5 | property owned shall be as of the
last day of the third | ||||||
6 | month preceding the anniversary month and the
statement | ||||||
7 | with respect to business transacted shall be furnished for | ||||||
8 | the
period between the date of its authorization to | ||||||
9 | transact business in this
State and the last day of the | ||||||
10 | third month preceding the anniversary month.
If the data | ||||||
11 | referenced in item (2) of this subsection is not completed,
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12 | the franchise tax provided for in this Act shall be | ||||||
13 | computed on the basis of
the entire paid-in capital.
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14 | (i) A statement, including the basis therefor, of | ||||||
15 | status as a
"minority-owned business" or as a "women-owned | ||||||
16 | business" as those terms
are defined in the Business | ||||||
17 | Enterprise for
Minorities, Women, and Persons with | ||||||
18 | Disabilities Act.
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19 | (j) Additional information as may be necessary or | ||||||
20 | appropriate in
order to enable the Secretary of State to | ||||||
21 | administer this Act and to verify
the proper amount of fees | ||||||
22 | and franchise taxes payable by the corporation.
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23 | (k) A statement of whether the corporation or foreign | ||||||
24 | corporation has outstanding shares listed on a major United | ||||||
25 | States stock exchange and is thereby subject to the | ||||||
26 | reporting requirements of Section 8.12. |
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1 | (l) For those corporations subject to Section 8.12, a | ||||||
2 | statement providing the information required under Section | ||||||
3 | 8.12. | ||||||
4 | The annual report shall be made on forms prescribed and | ||||||
5 | furnished by
the Secretary of State, and the information | ||||||
6 | therein required by paragraphs
(a) through (d), both inclusive, | ||||||
7 | of this Section, shall be given as of the date
of the execution | ||||||
8 | of the annual report and the information therein required
by | ||||||
9 | paragraphs (e), (f), and (g) of this Section shall be given as | ||||||
10 | of the
last day of the third month preceding the anniversary | ||||||
11 | month, except that
the information required by paragraphs (e), | ||||||
12 | (f), and (g) shall, in the case
of a corporation which has | ||||||
13 | established an extended filing month, be given
in its final | ||||||
14 | transition annual report and each subsequent annual report as
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15 | of the close of its fiscal year on or immediately preceding the | ||||||
16 | last day of the third month prior to its extended filing
month. | ||||||
17 | It shall be executed by the corporation by its president, a
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18 | vice-president, secretary, assistant secretary, treasurer or | ||||||
19 | other officer
duly authorized by the board of directors of the | ||||||
20 | corporation to execute
those reports, and verified by him or | ||||||
21 | her, or, if the corporation is in the
hands of a receiver or | ||||||
22 | trustee, it shall be executed on behalf of the
corporation and | ||||||
23 | verified by the receiver or trustee.
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24 | (Source: P.A. 100-391, eff. 8-25-17; 100-486, eff. 1-1-18; | ||||||
25 | 100-863, eff. 8-14-18.)
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26 | Section 99. Effective date. This Act takes effect upon |
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1 | becoming law.
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