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SB 3342
Illinois Senate•Introduced
Summary
SB 3342, “DIVEST PRIVATE PRISONS”, was introduced in the Senate on Feb 4, 2026 by Sen. Graciela Guzman (D) with 1 co-sponsor. It was referred to Assignments, and last saw action on Feb 6, 2026: Added as Chief Co-Sponsor Sen. Robert Peters.
Record
Text
SB 3342 has 1 co-sponsor.
sb3342/introduced.txtSelect Language×The Illinois General Assembly offers the Google Translate™ service for visitor convenience. 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Graciela GuzmánSYNOPSIS AS INTRODUCED:30 ILCS 235/2.4 new40 ILCS 5/1-110.16Amends the General Provisions Article of the Illinois Pension Code. Requires the Illinois Investment Policy Board to make its best efforts to identify all for-profit companies that contract to shelter incarcerated or detained persons and to include those companies in the list of restricted companies for purposes of investment distributed to each retirement system and the Illinois State Board of Investment. Provides that an exception to divestment requirements for investments that are equal to or less than 0.5% of the market value of all assets under management by the retirement does not apply to investments in for-profit companies that contract to shelter incarcerated or detained persons. Makes conforming changes. Amends the Public Funds Investment Act. Provides that a municipality with a population of 500,000 or more or a county with a population of 3,000,000 or more shall not invest public funds in an investment instrument issued by for-profit companies that contract to shelter incarcerated or detained persons. Requires such a municipality or county to instruct its investment advisors to sell, redeem, divest, or withdraw all holdings of a for-profit company that enters into a contract to shelter incarcerated or detained persons from the local government's 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 published by the Illinois Investment Policy Board. Effective immediately.LRB104 19095 RPS 32540 bSTATE MANDATES ACT MAY REQUIRE REIMBURSEMENTMAY APPLYA BILL FORSB3342 LRB104 19095 RPS 32540 b1 AN ACT concerning government.2 Be it enacted by the People of the State of Illinois,3represented in the General Assembly:4 Section 5. The Public Funds Investment Act is amended by5adding Section 2.4 as follows:6 (30 ILCS 235/2.4 new)7 Sec. 2.4. Transactions with for-profit companies that8contract to shelter incarcerated or detained persons9prohibited.10 (a) In this Section:11 "Contract to shelter incarcerated or detained persons" has12the meaning given to that term in subsection (a) of Section131-110.16 of the Illinois Pension Code.14 "Local government" means a municipality with a population15of 500,000 or more or a county with a population of 3,000,00016or more.17 (b) Notwithstanding any provision of law to the contrary,18a local government shall not invest public funds in any19investment instrument issued by a for-profit company that20contracts to shelter incarcerated or detained persons.21 (c) No later than 6 months after the effective date of this22amendatory Act of the 104th General Assembly, a local23government shall identify those companies in which the localSB3342 - 2 - LRB104 19095 RPS 32540 b1government owns direct holdings and indirect holdings of2for-profit companies that contract to shelter incarcerated or3detained persons that are on the list of restricted companies4published by the Illinois Investment Policy Board under5Section 1-110.16 of the Illinois Pension Code.6 (d) A local government shall instruct its investment7advisors to sell, redeem, divest, or withdraw all holdings of8a for-profit company that enters into a contract to shelter9incarcerated or detained persons from the local government's10assets under management in an orderly and fiduciarily11responsible manner within 12 months after the company's most12recent appearance on the list of restricted companies13published by the Illinois Investment Policy Board list of14restricted companies under subsection (d) of Section 1-110.1615of the Pension Code.16 (e) With respect to actions taken in compliance with this17Section, including all good-faith determinations regarding18companies as required by this Section, a local government is19exempt from any conflicting statutory or common law20obligations, including any fiduciary duties under this Act and21any obligations with respect to choice of asset managers,22investment funds, or investments for the local government's23securities portfolios.24 Section 10. The Illinois Pension Code is amended by25changing Section 1-110.16 as follows:SB3342 - 3 - LRB104 19095 RPS 32540 b1 (40 ILCS 5/1-110.16)2 Sec. 1-110.16. Transactions prohibited by retirement3systems; certain companies [that boycott Israel, for-profit ]4[companies that contract to shelter migrant children, ]5[Iran-restricted companies, Sudan-restricted companies, ]6[expatriated entities, companies that are domiciled or have ]7[their principal place of business in Russia or Belarus, and ]8[companies that are subject to Russian Harmful Foreign ]9[Activities Sanctions].10 (a) As used in this Section:11 "Boycott Israel" means engaging in actions that are12 politically motivated and are intended to penalize,13 inflict economic harm on, or otherwise limit commercial14 relations with the State of Israel or companies based in15 the State of Israel or in territories controlled by the16 State of Israel.17 "Company" means any sole proprietorship, organization,18 association, corporation, partnership, joint venture,19 limited partnership, limited liability partnership,20 limited liability company, or other entity or business21 association, including all wholly owned subsidiaries,22 majority-owned subsidiaries, parent companies, or23 affiliates of those entities or business associations,24 that exist for the purpose of making profit.25 "Company that is subject to Russian Harmful ForeignSB3342 - 4 - LRB104 19095 RPS 32540 b1 Activities Sanctions" means a company that is subject to2 sanctions under the Russian Harmful Foreign Activities3 Sanctions Regulations (31 CFR Part 587), any Presidential4 Executive Order imposing sanctions against Russia, or any5 federal directive issued pursuant to any such Executive6 Order.7 "Contract to shelter incarcerated or detained persons"8 means contracting with a local government, a state9 government, or the federal government to shelter10 individuals for the provision of services relating to11 community correctional supervision, the operation of a12 correctional facility, or the incarceration of persons for13 violations of local, state, or federal criminal law or to14 shelter individuals detained for federal civil immigration15 violations under the federal Immigration and Nationality16 Act. "Contract to shelter incarcerated or detained17 persons" does not include a private contractor or private18 vendor under item (1) or (2) of Section 3 of the Private19 Correctional Facility Moratorium Act.20 "Contract to shelter migrant children" means entering21 into a contract with the federal government to shelter22 migrant children under the federal Unaccompanied Alien23 Children Program or a substantially similar federal24 program.25 "Direct holdings" in a company means all publicly26 traded securities of that company that are held directlySB3342 - 5 - LRB104 19095 RPS 32540 b1 by the retirement system in an actively managed account or2 fund in which the retirement system owns all shares or3 interests.4 "Expatriated entity" has the meaning ascribed to it in5 Section 1-15.120 of the Illinois Procurement Code.6 "Illinois Investment Policy Board" means the board7 established under subsection (b) of this Section.8 "Indirect holdings" in a company means all securities9 of that company that are held in an account or fund, such10 as a mutual fund, managed by one or more persons not11 employed by the retirement system, in which the retirement12 system owns shares or interests together with other13 investors not subject to the provisions of this Section or14 that are held in an index fund.15 "Iran-restricted company" means a company that meets16 the qualifications under Section 1-110.15 of this Code.17 "Private market fund" means any private equity fund,18 private equity funds of funds, venture capital fund, hedge19 fund, hedge fund of funds, real estate fund, or other20 investment vehicle that is not publicly traded.21 "Restricted companies" means companies that boycott22 Israel, for-profit companies that contract to shelter23 migrant children, for-profit companies that contract to24 shelter incarcerated or detained persons, Iran-restricted25 companies, Sudan-restricted companies, expatriated26 entities, companies that are domiciled or have theirSB3342 - 6 - LRB104 19095 RPS 32540 b1 principal place of business in Russia or Belarus, and2 companies that are subject to Russian Harmful Foreign3 Activities Sanctions.4 "Retirement system" means a retirement system5 established under Article 2, 14, 15, 16, or 18 of this Code6 or the Illinois State Board of Investment.7 "Sudan-restricted company" means a company that meets8 the qualifications under Section 1-110.6 of this Code.9 (b) There shall be established an Illinois Investment10Policy Board. The Illinois Investment Policy Board shall11consist of 7 members. Each board of a pension fund or12investment board created under Article 15, 16, or 22A of this13Code shall appoint one member, and the Governor shall appoint144 members. The Governor shall designate one member of the15Board as the Chairperson.16 (b-5) The term of office of each member appointed by the17Governor, who is serving on the Board on June 30, 2022, is18abolished on that date. The terms of office of members19appointed by the Governor after June 30, 2022 shall be as20follows: 2 initial members shall be appointed for terms of 221years, and 2 initial members shall be appointed for terms of 422years. Thereafter, the members appointed by the Governor shall23hold office for 4 years, except that any member chosen to fill24a vacancy occurring otherwise than by expiration of a term25shall be appointed only for the unexpired term of the member26whom he or she shall succeed. Board members may beSB3342 - 7 - LRB104 19095 RPS 32540 b1reappointed. The Governor may remove a Governor's appointee to2the Board for incompetence, neglect of duty, malfeasance, or3inability to serve.4 (c) Notwithstanding any provision of law to the contrary,5beginning January 1, 2016, Sections 1-110.15 and 1-110.6 of6this Code shall be administered in accordance with this7Section.8 (d) By April 1, 2016, the Illinois Investment Policy Board9shall make its best efforts to identify all Iran-restricted10companies, Sudan-restricted companies, and companies that11boycott Israel and assemble those identified companies into a12list of restricted companies, to be distributed to each13retirement system.14 These efforts shall include the following, as appropriate15in the Illinois Investment Policy Board's judgment:16 (1) reviewing and relying on publicly available17 information regarding Iran-restricted companies,18 Sudan-restricted companies, and companies that boycott19 Israel, including information provided by nonprofit20 organizations, research firms, and government entities;21 (2) contacting asset managers contracted by the22 retirement systems that invest in Iran-restricted23 companies, Sudan-restricted companies, and companies that24 boycott Israel;25 (3) contacting other institutional investors that have26 divested from or engaged with Iran-restricted companies,SB3342 - 8 - LRB104 19095 RPS 32540 b1 Sudan-restricted companies, and companies that boycott2 Israel; and3 (4) retaining an independent research firm to identify4 Iran-restricted companies, Sudan-restricted companies,5 and companies that boycott Israel.6 The Illinois Investment Policy Board shall review the list7of restricted companies on a quarterly basis based on evolving8information from, among other sources, those listed in this9subsection (d) and distribute any updates to the list of10restricted companies to the retirement systems and the State11Treasurer.12 By April 1, 2018, the Illinois Investment Policy Board13shall make its best efforts to identify all expatriated14entities and include those companies in the list of restricted15companies distributed to each retirement system and the State16Treasurer. These efforts shall include the following, as17appropriate in the Illinois Investment Policy Board's18judgment:19 (1) reviewing and relying on publicly available20 information regarding expatriated entities, including21 information provided by nonprofit organizations, research22 firms, and government entities;23 (2) contacting asset managers contracted by the24 retirement systems that invest in expatriated entities;25 (3) contacting other institutional investors that have26 divested from or engaged with expatriated entities; andSB3342 - 9 - LRB104 19095 RPS 32540 b1 (4) retaining an independent research firm to identify2 expatriated entities.3 By July 1, 2022, the Illinois Investment Policy Board4shall make its best efforts to identify all for-profit5companies that contract to shelter migrant children and6include those companies in the list of restricted companies7distributed to each retirement system. These efforts shall8include the following, as appropriate in the Illinois9Investment Policy Board's judgment:10 (1) reviewing and relying on publicly available11 information regarding for-profit companies that contract12 to shelter migrant children, including information13 provided by nonprofit organizations, research firms, and14 government entities;15 (2) contacting asset managers contracted by the16 retirement systems that invest in for-profit companies17 that contract to shelter migrant children;18 (3) contacting other institutional investors that have19 divested from or engaged with for-profit companies that20 contract to shelter migrant children; and21 (4) retaining an independent research firm to identify22 for-profit companies that contract to shelter migrant23 children.24 No later than 6 months after the effective date of this25amendatory Act of the 102nd General Assembly, the Illinois26Investment Policy Board shall make its best efforts toSB3342 - 10 - LRB104 19095 RPS 32540 b1identify all companies that are domiciled or have their2principal place of business in Russia or Belarus and companies3that are subject to Russian Harmful Foreign Activities4Sanctions and include those companies in the list of5restricted companies distributed to each retirement system.6These efforts shall include the following, as appropriate in7the Illinois Investment Policy Board's judgment:8 (1) reviewing and relying on publicly available9 information regarding companies that are domiciled or have10 their principal place of business in Russia or Belarus and11 companies that are subject to Russian Harmful Foreign12 Activities Sanctions, including information provided by13 nonprofit organizations, research firms, and government14 entities;15 (2) contacting asset managers contracted by the16 retirement systems that invest in companies that are17 domiciled or have their principal place of business in18 Russia or Belarus and companies that are subject to19 Russian Harmful Foreign Activities Sanctions;20 (3) contacting other institutional investors that have21 divested from or engaged with companies that are domiciled22 or have their principal place of business in Russia or23 Belarus and companies that are subject to Russian Harmful24 Foreign Activities Sanctions; and25 (4) retaining an independent research firm to identify26 companies that are domiciled or have their principal placeSB3342 - 11 - LRB104 19095 RPS 32540 b1 of business in Russia or Belarus and companies that are2 subject to Russian Harmful Foreign Activities Sanctions.3 No later than 6 months after the effective date of this4amendatory Act of the 104th General Assembly, the Illinois5Investment Policy Board shall make its best efforts to6identify all for-profit companies that contract to shelter7incarcerated or detained persons and include those companies8in the list of restricted companies distributed to each9retirement system. These efforts shall include the following,10as appropriate in the Illinois Investment Policy Board's11judgment:12 (1) reviewing and relying on publicly available13 information regarding for-profit companies that contract14 to shelter incarcerated or detained persons, including15 information provided by nonprofit organizations, research16 firms, and government entities;17 (2) contacting asset managers contracted by the18 retirement systems that invest in for-profit companies19 that contract to shelter incarcerated or detained persons;20 (3) contacting other institutional investors that have21 divested from or engaged with for-profit companies that22 contract to shelter incarcerated or detained persons; and23 (4) retaining an independent research firm to identify24 for-profit companies that contract to shelter incarcerated25 or detained persons.26 (e) The Illinois Investment Policy Board shall adhere toSB3342 - 12 - LRB104 19095 RPS 32540 b1the following procedures for companies on the list of2restricted companies:3 (1) For each company newly identified in subsection4 (d), the Illinois Investment Policy Board, unless it5 determines by an affirmative vote that it is unfeasible,6 shall send a written notice informing the company of its7 status and that it may become subject to divestment or8 shareholder activism by the retirement systems.9 (2) If, following the Illinois Investment Policy10 Board's engagement pursuant to this subsection (e) with a11 restricted company, that company ceases activity that12 designates the company to be an Iran-restricted company, a13 Sudan-restricted company, a company that boycotts Israel,14 an expatriated entity, [or] a for-profit company that15 contracts to shelter migrant children, or a for-profit16 company that contracts to shelter incarcerated or detained17 persons, the company shall be removed from the list of18 restricted companies and the provisions of this Section19 shall cease to apply to it unless it resumes such20 activities.21 (3) For a company that is domiciled or has its22 principal place of business in Russia or Belarus, if,23 following the Illinois Investment Policy Board's24 engagement pursuant to this subsection (e), that company25 is no longer domiciled or has its principal place of26 business in Russia or Belarus, the company shall beSB3342 - 13 - LRB104 19095 RPS 32540 b1 removed from the list of restricted companies and the2 provisions of this Section shall cease to apply to it3 unless it becomes domiciled or has its principal place of4 business in Russia or Belarus.5 (4) For a company that is subject to Russian Harmful6 Foreign Activities Sanctions, if, following the Illinois7 Investment Policy Board's engagement pursuant to this8 subsection (e), that company is no longer subject to9 Russian Harmful Foreign Activities Sanctions, the company10 shall be removed from the list of restricted companies and11 the provisions of this Section shall cease to apply to it12 unless it becomes subject to Russian Harmful Foreign13 Activities Sanctions.14 (f) Except as provided in subsection (f-1) of this Section15the retirement system shall adhere to the following procedures16for companies on the list of restricted companies:17 (1) The retirement system shall identify those18 companies on the list of restricted companies in which the19 retirement system owns direct holdings and indirect20 holdings.21 (2) The retirement system shall instruct its22 investment advisors to sell, redeem, divest, or withdraw23 all direct holdings of restricted companies from the24 retirement system's assets under management in an orderly25 and fiduciarily responsible manner within 12 months after26 the company's most recent appearance on the list ofSB3342 - 14 - LRB104 19095 RPS 32540 b1 restricted companies.2 (3) The retirement system may not acquire securities3 of restricted companies.4 (4) The provisions of this subsection (f) do not apply5 to the retirement system's indirect holdings or private6 market funds. The Illinois Investment Policy Board shall7 submit letters to the managers of those investment funds8 containing restricted companies requesting that they9 consider removing the companies from the fund or create a10 similar actively managed fund having indirect holdings11 devoid of the companies. If the manager creates a similar12 fund, the retirement system shall replace all applicable13 investments with investments in the similar fund in an14 expedited timeframe consistent with prudent investing15 standards.16 (f-1) The retirement system shall adhere to the following17procedures for restricted companies that are expatriated18entities or for-profit companies that contract to shelter19migrant children:20 (1) To the extent that the retirement system believes21 that shareholder activism would be more impactful than22 divestment, the retirement system shall have the authority23 to engage with a restricted company prior to divesting.24 (2) Subject to any applicable State or Federal laws,25 methods of shareholder activism utilized by the retirement26 system may include, but are not limited to, bringingSB3342 - 15 - LRB104 19095 RPS 32540 b1 shareholder resolutions and proxy voting on shareholder2 resolutions.3 (3) The retirement system shall report on its4 shareholder activism and the outcome of such efforts to5 the Illinois Investment Policy Board by April 1 of each6 year.7 (4) If the engagement efforts of the retirement system8 are unsuccessful, then it shall adhere to the procedures9 under subsection (f) of this Section.10 (f-5) Beginning on the effective date of this amendatory11Act of the 102nd General Assembly, no retirement system shall12invest moneys in Russian or Belarusian sovereign debt, Russian13or Belarusian government-backed securities, any investment14instrument issued by an entity that is domiciled or has its15principal place of business in Russia or Belarus, or any16investment instrument issued by a company that is subject to17Russian Harmful Foreign Activities Sanctions, and no18retirement system shall invest or deposit State moneys in any19bank that is domiciled or has its principal place of business20in Russia or Belarus. As soon as practicable after the21effective date of this amendatory Act of the 102nd General22Assembly, each retirement system shall instruct its investment23advisors to sell, redeem, divest, or withdraw all direct24holdings of Russian or Belarusian sovereign debt and direct25holdings of Russian or Belarusian government-backed securities26from the retirement system's assets under management in anSB3342 - 16 - LRB104 19095 RPS 32540 b1orderly and fiduciarily responsible manner.2 Notwithstanding any provision of this Section to the3contrary, a retirement system may cease divestment pursuant to4this subsection (f-5) if clear and convincing evidence shows5that the value of investments in such Russian or Belarusian6sovereign debt and Russian or Belarusian government-backed7securities becomes equal to or less than 0.05% of the market8value of all assets under management by the retirement system.9For any cessation of divestment authorized by this subsection10(f-5), the retirement system shall provide a written notice to11the Illinois Investment Policy Board in advance of the12cessation of divestment, setting forth the reasons and13justification, supported by clear and convincing evidence, for14its decision to cease divestment under this subsection (f-5).15 The provisions of this subsection (f-5) do not apply to16the retirement system's indirect holdings or private market17funds.18 (g) Upon request, and by April 1 of each year, each19retirement system shall provide the Illinois Investment Policy20Board with information regarding investments sold, redeemed,21divested, or withdrawn in compliance with this Section.22 (h) Notwithstanding any provision of this Section to the23contrary, a retirement system may cease divesting from24companies pursuant to subsection (f) if clear and convincing25evidence shows that the value of investments in such companies26becomes equal to or less than 0.5% of the market value of allSB3342 - 17 - LRB104 19095 RPS 32540 b1assets under management by the retirement system; except that2this subsection (h) does not apply to investments in3for-profit companies that contract to shelter incarcerated or4detained persons. For any cessation of divestment authorized5by this subsection (h), the retirement system shall provide a6written notice to the Illinois Investment Policy Board in7advance of the cessation of divestment, setting forth the8reasons and justification, supported by clear and convincing9evidence, for its decision to cease divestment under10subsection (f).11 (i) The cost associated with the activities of the12Illinois Investment Policy Board shall be borne by the boards13of each pension fund or investment board created under Article1415, 16, or 22A of this Code.15 (j) With respect to actions taken in compliance with this16Section, including all good-faith determinations regarding17companies as required by this Section, the retirement system18and Illinois Investment Policy Board are exempt from any19conflicting statutory or common law obligations, including any20fiduciary duties under this Article and any obligations with21respect to choice of asset managers, investment funds, or22investments for the retirement system's securities portfolios.23 (k) It is not the intent of the General Assembly in24enacting this amendatory Act of the 99th General Assembly to25cause divestiture from any company based in the United States26of America. The Illinois Investment Policy Board shallSB3342 - 18 - LRB104 19095 RPS 32540 b1consider this intent when developing or reviewing the list of2restricted companies.3 (l) If any provision of this amendatory Act of the 99th4General Assembly or its application to any person or5circumstance is held invalid, the invalidity of that provision6or application does not affect other provisions or7applications of this amendatory Act of the 99th General8Assembly that can be given effect without the invalid9provision or application.10 If any provision of Public Act 100-551 or its application11to any person or circumstance is held invalid, the invalidity12of that provision or application does not affect other13provisions or applications of Public Act 100-551 that can be14given effect without the invalid provision or application.15 If any provision of Public Act 102-118 or its application16to any person or circumstance is held invalid, the invalidity17of that provision or application does not affect other18provisions or applications of Public Act 102-118 that can be19given effect without the invalid provision or application.20 If any provision of this amendatory Act of the 102nd21General Assembly or its application to any person or22circumstance is held invalid, the invalidity of that provision23or application does not affect other provisions or24applications of this amendatory Act of the 102nd General25Assembly that can be given effect without the invalid26provision or application.SB3342 - 19 - LRB104 19095 RPS 32540 b1 If any provision of this amendatory Act of the 104th2General Assembly or its application to any person or3circumstance is held invalid, the invalidity of that provision4or application does not affect other provisions or5applications of this amendatory Act of the 104th General6Assembly that can be given effect without the invalid7provision or application.8(Source: P.A. 102-118, eff. 7-23-21; 102-699, eff. 4-19-22;9102-1108, eff. 12-21-22.)10 Section 99. Effective date. This Act takes effect upon11becoming law.
Amends the General Provisions Article of the Illinois Pension Code. Requires the Illinois Investment Policy Board to make its best efforts to identify all for-profit companies that contract to shelter incarcerated or detained persons and to include those companies in the list of restricted companies for purposes of investment distributed to each retirement system and the Illinois State Board of Investment. Provides that an exception to divestment requirements for investments that are equal to or less than 0.5% of the market value of all assets under management by the retirement does not apply to investments in for-profit companies that contract to shelter incarcerated or detained persons. Makes conforming changes. Amends the Public Funds Investment Act. Provides that a municipality with a population of 500,000 or more or a county with a population of 3,000,000 or more shall not invest public funds in an investment instrument issued by for-profit companies that contract to shelter incarcerated or detained persons. Requires such a municipality or county to instruct its investment advisors to sell, redeem, divest, or withdraw all holdings of a for-profit company that enters into a contract to shelter incarcerated or detained persons from the local government's 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 published by the Illinois Investment Policy Board. Effective immediately.
Sponsors
Sen. Graciela Guzman (D) sponsors SB 3342, and 1 member has co-sponsored it.
Committees
SB 3342 went before 1 committee: Assignments.
History
SB 3342 has taken 4 actions since Feb 4, 2026, the latest on Feb 6, 2026.
| Chamber | Action | |||
|---|---|---|---|---|
Feb 6, 2026 | Senate | Added as Chief Co-Sponsor Sen. Robert Peters | ||
Feb 4, 2026 | Senate | Filed with Secretary by Sen. Graciela Guzmán | ||
Feb 4, 2026 | Senate | First Reading | ||
Feb 4, 2026 | Senate | Referred to Assignments |
Votes
SB 3342 has not gone to a roll call.
Source: ilga.gov · legiscan.com