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SB 3342

Illinois SenateIntroduced

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.txt
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3342
Introduced 2/4/2026, by Sen. Graciela Guzmán
SYNOPSIS AS INTRODUCED:
30 ILCS 235/2.4 new
40 ILCS 5/1-110.16
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.
LRB104 19095 RPS 32540 b
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY
A BILL FOR
SB3342 LRB104 19095 RPS 32540 b
AN ACT concerning government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Funds Investment Act is amended by
adding Section 2.4 as follows:
(30 ILCS 235/2.4 new)
Sec. 2.4. Transactions with for-profit companies that
contract to shelter incarcerated or detained persons
prohibited.
(a) In this Section:
"Contract to shelter incarcerated or detained persons" has
the meaning given to that term in subsection (a) of Section
1-110.16 of the Illinois Pension Code.
"Local government" means a municipality with a population
of 500,000 or more or a county with a population of 3,000,000
or more.
(b) Notwithstanding any provision of law to the contrary,
a local government shall not invest public funds in any
investment instrument issued by a for-profit company that
contracts to shelter incarcerated or detained persons.
(c) No later than 6 months after the effective date of this
amendatory Act of the 104th General Assembly, a local
government shall identify those companies in which the local
SB3342 - 2 - LRB104 19095 RPS 32540 b
government owns direct holdings and indirect holdings of
for-profit companies that contract to shelter incarcerated or
detained persons that are on the list of restricted companies
published by the Illinois Investment Policy Board under
Section 1-110.16 of the Illinois Pension Code.
(d) A local government shall 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 list of
restricted companies under subsection (d) of Section 1-110.16
of the Pension Code.
(e) With respect to actions taken in compliance with this
Section, including all good-faith determinations regarding
companies as required by this Section, a local government is
exempt from any conflicting statutory or common law
obligations, including any fiduciary duties under this Act and
any obligations with respect to choice of asset managers,
investment funds, or investments for the local government's
securities portfolios.
Section 10. The Illinois Pension Code is amended by
changing Section 1-110.16 as follows:
SB3342 - 3 - LRB104 19095 RPS 32540 b
(40 ILCS 5/1-110.16)
Sec. 1-110.16. Transactions prohibited by retirement
systems; certain companies [that boycott Israel, for-profit ]
[companies that contract to shelter migrant children, ]
[Iran-restricted companies, Sudan-restricted companies, ]
[expatriated entities, companies that are domiciled or have ]
[their principal place of business in Russia or Belarus, and ]
[companies that are subject to Russian Harmful Foreign ]
[Activities Sanctions].
(a) As used in this Section:
"Boycott Israel" means engaging in actions that are
politically motivated and are intended to penalize,
inflict economic harm on, or otherwise limit commercial
relations with the State of Israel or companies based in
the State of Israel or in territories controlled by the
State of Israel.
"Company" means any sole proprietorship, organization,
association, corporation, partnership, joint venture,
limited partnership, limited liability partnership,
limited liability company, or other entity or business
association, including all wholly owned subsidiaries,
majority-owned subsidiaries, parent companies, or
affiliates of those entities or business associations,
that exist for the purpose of making profit.
"Company that is subject to Russian Harmful Foreign
SB3342 - 4 - LRB104 19095 RPS 32540 b
Activities Sanctions" means a company that is subject to
sanctions under the Russian Harmful Foreign Activities
Sanctions Regulations (31 CFR Part 587), any Presidential
Executive Order imposing sanctions against Russia, or any
federal directive issued pursuant to any such Executive
Order.
"Contract to shelter incarcerated or detained persons"
means contracting with a local government, a state
government, or the federal government to shelter
individuals for the provision of services relating to
community correctional supervision, the operation of a
correctional facility, or the incarceration of persons for
violations of local, state, or federal criminal law or to
shelter individuals detained for federal civil immigration
violations under the federal Immigration and Nationality
Act. "Contract to shelter incarcerated or detained
persons" does not include a private contractor or private
vendor under item (1) or (2) of Section 3 of the Private
Correctional Facility Moratorium Act.
"Contract to shelter migrant children" means entering
into a contract with the federal government to shelter
migrant children under the federal Unaccompanied Alien
Children Program or a substantially similar federal
program.
"Direct holdings" in a company means all publicly
traded securities of that company that are held directly
SB3342 - 5 - LRB104 19095 RPS 32540 b
by the retirement system in an actively managed account or
fund in which the retirement system owns all shares or
interests.
"Expatriated entity" has the meaning ascribed to it in
Section 1-15.120 of the Illinois Procurement Code.
"Illinois Investment Policy Board" means the board
established under subsection (b) of this Section.
"Indirect holdings" in a company means all securities
of that company that are held in an account or fund, such
as a mutual fund, managed by one or more persons not
employed by the retirement system, in which the retirement
system owns shares or interests together with other
investors not subject to the provisions of this Section or
that are held in an index fund.
"Iran-restricted company" means a company that meets
the qualifications under Section 1-110.15 of this Code.
"Private market fund" means any private equity fund,
private equity funds of funds, venture capital fund, hedge
fund, hedge fund of funds, real estate fund, or other
investment vehicle that is not publicly traded.
"Restricted companies" means companies that boycott
Israel, for-profit companies that contract to shelter
migrant children, for-profit companies that contract to
shelter incarcerated or detained persons, Iran-restricted
companies, Sudan-restricted companies, expatriated
entities, companies that are domiciled or have their
SB3342 - 6 - LRB104 19095 RPS 32540 b
principal place of business in Russia or Belarus, and
companies that are subject to Russian Harmful Foreign
Activities Sanctions.
"Retirement system" means a retirement system
established under Article 2, 14, 15, 16, or 18 of this Code
or the Illinois State Board of Investment.
"Sudan-restricted company" means a company that meets
the qualifications under Section 1-110.6 of this Code.
(b) There shall be established an Illinois Investment
Policy Board. The Illinois Investment Policy Board shall
consist of 7 members. Each board of a pension fund or
investment board created under Article 15, 16, or 22A of this
Code shall appoint one member, and the Governor shall appoint
4 members. The Governor shall designate one member of the
Board as the Chairperson.
(b-5) The term of office of each member appointed by the
Governor, who is serving on the Board on June 30, 2022, is
abolished on that date. The terms of office of members
appointed by the Governor after June 30, 2022 shall be as
follows: 2 initial members shall be appointed for terms of 2
years, and 2 initial members shall be appointed for terms of 4
years. Thereafter, the members appointed by the Governor shall
hold office for 4 years, except that any member chosen to fill
a vacancy occurring otherwise than by expiration of a term
shall be appointed only for the unexpired term of the member
whom he or she shall succeed. Board members may be
SB3342 - 7 - LRB104 19095 RPS 32540 b
reappointed. The Governor may remove a Governor's appointee to
the Board for incompetence, neglect of duty, malfeasance, or
inability to serve.
(c) Notwithstanding any provision of law to the contrary,
beginning January 1, 2016, Sections 1-110.15 and 1-110.6 of
this Code shall be administered in accordance with this
Section.
(d) By April 1, 2016, the Illinois Investment Policy Board
shall make its best efforts to identify all Iran-restricted
companies, Sudan-restricted companies, and companies that
boycott Israel and assemble those identified companies into a
list of restricted companies, to be distributed to each
retirement system.
These efforts shall include the following, as appropriate
in the Illinois Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
information regarding Iran-restricted companies,
Sudan-restricted companies, and companies that boycott
Israel, including information provided by nonprofit
organizations, research firms, and government entities;
(2) contacting asset managers contracted by the
retirement systems that invest in Iran-restricted
companies, Sudan-restricted companies, and companies that
boycott Israel;
(3) contacting other institutional investors that have
divested from or engaged with Iran-restricted companies,
SB3342 - 8 - LRB104 19095 RPS 32540 b
Sudan-restricted companies, and companies that boycott
Israel; and
(4) retaining an independent research firm to identify
Iran-restricted companies, Sudan-restricted companies,
and companies that boycott Israel.
The Illinois Investment Policy Board shall review the list
of restricted companies on a quarterly basis based on evolving
information from, among other sources, those listed in this
subsection (d) and distribute any updates to the list of
restricted companies to the retirement systems and the State
Treasurer.
By April 1, 2018, the Illinois Investment Policy Board
shall make its best efforts to identify all expatriated
entities and include those companies in the list of restricted
companies distributed to each retirement system and the State
Treasurer. These efforts shall include the following, as
appropriate in the Illinois Investment Policy Board's
judgment:
(1) reviewing and relying on publicly available
information regarding expatriated entities, including
information provided by nonprofit organizations, research
firms, and government entities;
(2) contacting asset managers contracted by the
retirement systems that invest in expatriated entities;
(3) contacting other institutional investors that have
divested from or engaged with expatriated entities; and
SB3342 - 9 - LRB104 19095 RPS 32540 b
(4) retaining an independent research firm to identify
expatriated entities.
By July 1, 2022, the Illinois Investment Policy Board
shall make its best efforts to identify all for-profit
companies that contract to shelter migrant children and
include those companies in the list of restricted companies
distributed to each retirement system. These efforts shall
include the following, as appropriate in the Illinois
Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
information regarding for-profit companies that contract
to shelter migrant children, including information
provided by nonprofit organizations, research firms, and
government entities;
(2) contacting asset managers contracted by the
retirement systems that invest in for-profit companies
that contract to shelter migrant children;
(3) contacting other institutional investors that have
divested from or engaged with for-profit companies that
contract to shelter migrant children; and
(4) retaining an independent research firm to identify
for-profit companies that contract to shelter migrant
children.
No later than 6 months after the effective date of this
amendatory Act of the 102nd General Assembly, the Illinois
Investment Policy Board shall make its best efforts to
SB3342 - 10 - LRB104 19095 RPS 32540 b
identify all companies that are domiciled or have their
principal place of business in Russia or Belarus and companies
that are subject to Russian Harmful Foreign Activities
Sanctions and include those companies in the list of
restricted companies distributed to each retirement system.
These efforts shall include the following, as appropriate in
the Illinois Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
information regarding companies that are domiciled or have
their principal place of business in Russia or Belarus and
companies that are subject to Russian Harmful Foreign
Activities Sanctions, including information provided by
nonprofit organizations, research firms, and government
entities;
(2) contacting asset managers contracted by the
retirement systems that invest in companies that are
domiciled or have their principal place of business in
Russia or Belarus and companies that are subject to
Russian Harmful Foreign Activities Sanctions;
(3) contacting other institutional investors that have
divested from or engaged with companies that are domiciled
or have their principal place of business in Russia or
Belarus and companies that are subject to Russian Harmful
Foreign Activities Sanctions; and
(4) retaining an independent research firm to identify
companies that are domiciled or have their principal place
SB3342 - 11 - LRB104 19095 RPS 32540 b
of business in Russia or Belarus and companies that are
subject to Russian Harmful Foreign Activities Sanctions.
No later than 6 months after the effective date of this
amendatory Act of the 104th General Assembly, the Illinois
Investment Policy Board shall make its best efforts to
identify all for-profit companies that contract to shelter
incarcerated or detained persons and include those companies
in the list of restricted companies distributed to each
retirement system. These efforts shall include the following,
as appropriate in the Illinois Investment Policy Board's
judgment:
(1) reviewing and relying on publicly available
information regarding for-profit companies that contract
to shelter incarcerated or detained persons, including
information provided by nonprofit organizations, research
firms, and government entities;
(2) contacting asset managers contracted by the
retirement systems that invest in for-profit companies
that contract to shelter incarcerated or detained persons;
(3) contacting other institutional investors that have
divested from or engaged with for-profit companies that
contract to shelter incarcerated or detained persons; and
(4) retaining an independent research firm to identify
for-profit companies that contract to shelter incarcerated
or detained persons.
(e) The Illinois Investment Policy Board shall adhere to
SB3342 - 12 - LRB104 19095 RPS 32540 b
the following procedures for companies on the list of
restricted companies:
(1) For each company newly identified in subsection
(d), the Illinois Investment Policy Board, unless it
determines by an affirmative vote that it is unfeasible,
shall send a written notice informing the company of its
status and that it may become subject to divestment or
shareholder activism by the retirement systems.
(2) If, following the Illinois Investment Policy
Board's engagement pursuant to this subsection (e) with a
restricted company, that company ceases activity that
designates the company to be an Iran-restricted company, a
Sudan-restricted company, a company that boycotts Israel,
an expatriated entity, [or] a for-profit company that
contracts to shelter migrant children, or a for-profit
company that contracts to shelter incarcerated or detained
persons, the company shall be removed from the list of
restricted companies and the provisions of this Section
shall cease to apply to it unless it resumes such
activities.
(3) For a company that is domiciled or has its
principal place of business in Russia or Belarus, if,
following the Illinois Investment Policy Board's
engagement pursuant to this subsection (e), that company
is no longer domiciled or has its principal place of
business in Russia or Belarus, the company shall be
SB3342 - 13 - LRB104 19095 RPS 32540 b
removed from the list of restricted companies and the
provisions of this Section shall cease to apply to it
unless it becomes domiciled or has its principal place of
business in Russia or Belarus.
(4) For a company that is subject to Russian Harmful
Foreign Activities Sanctions, if, following the Illinois
Investment Policy Board's engagement pursuant to this
subsection (e), that company is no longer subject to
Russian Harmful Foreign Activities Sanctions, the company
shall be removed from the list of restricted companies and
the provisions of this Section shall cease to apply to it
unless it becomes subject to Russian Harmful Foreign
Activities Sanctions.
(f) Except as provided in subsection (f-1) of this Section
the retirement system shall adhere to the following procedures
for companies on the list of restricted companies:
(1) The retirement system shall identify those
companies on the list of restricted companies in which the
retirement system owns direct holdings and indirect
holdings.
(2) The retirement system shall instruct its
investment advisors to sell, redeem, divest, or withdraw
all direct holdings of restricted companies from the
retirement system'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
SB3342 - 14 - LRB104 19095 RPS 32540 b
restricted companies.
(3) The retirement system may not acquire securities
of restricted companies.
(4) The provisions of this subsection (f) do not apply
to the retirement system's indirect holdings or private
market funds. The Illinois Investment Policy Board shall
submit letters to the managers of those investment funds
containing restricted companies requesting that they
consider removing the companies from the fund or create a
similar actively managed fund having indirect holdings
devoid of the companies. If the manager creates a similar
fund, the retirement system shall replace all applicable
investments with investments in the similar fund in an
expedited timeframe consistent with prudent investing
standards.
(f-1) The retirement system shall adhere to the following
procedures for restricted companies that are expatriated
entities or for-profit companies that contract to shelter
migrant children:
(1) To the extent that the retirement system believes
that shareholder activism would be more impactful than
divestment, the retirement system shall have the authority
to engage with a restricted company prior to divesting.
(2) Subject to any applicable State or Federal laws,
methods of shareholder activism utilized by the retirement
system may include, but are not limited to, bringing
SB3342 - 15 - LRB104 19095 RPS 32540 b
shareholder resolutions and proxy voting on shareholder
resolutions.
(3) The retirement system shall report on its
shareholder activism and the outcome of such efforts to
the Illinois Investment Policy Board by April 1 of each
year.
(4) If the engagement efforts of the retirement system
are unsuccessful, then it shall adhere to the procedures
under subsection (f) of this Section.
(f-5) Beginning on the effective date of this amendatory
Act of the 102nd General Assembly, no retirement system shall
invest moneys in Russian or Belarusian sovereign debt, Russian
or Belarusian government-backed securities, any investment
instrument issued by an entity that is domiciled or has its
principal place of business in Russia or Belarus, or any
investment instrument issued by a company that is subject to
Russian Harmful Foreign Activities Sanctions, and no
retirement system shall invest or deposit State moneys in any
bank that is domiciled or has its principal place of business
in Russia or Belarus. As soon as practicable after the
effective date of this amendatory Act of the 102nd General
Assembly, each retirement system shall instruct its investment
advisors to sell, redeem, divest, or withdraw all direct
holdings of Russian or Belarusian sovereign debt and direct
holdings of Russian or Belarusian government-backed securities
from the retirement system's assets under management in an
SB3342 - 16 - LRB104 19095 RPS 32540 b
orderly and fiduciarily responsible manner.
Notwithstanding any provision of this Section to the
contrary, a retirement system may cease divestment pursuant to
this subsection (f-5) if clear and convincing evidence shows
that the value of investments in such Russian or Belarusian
sovereign debt and Russian or Belarusian government-backed
securities becomes equal to or less than 0.05% of the market
value of all assets under management by the retirement system.
For any cessation of divestment authorized by this subsection
(f-5), the retirement system shall provide a written notice to
the Illinois Investment Policy Board in advance of the
cessation of divestment, setting forth the reasons and
justification, supported by clear and convincing evidence, for
its decision to cease divestment under this subsection (f-5).
The provisions of this subsection (f-5) do not apply to
the retirement system's indirect holdings or private market
funds.
(g) Upon request, and by April 1 of each year, each
retirement system shall provide the Illinois Investment Policy
Board with information regarding investments sold, redeemed,
divested, or withdrawn in compliance with this Section.
(h) Notwithstanding any provision of this Section to the
contrary, a retirement system may cease divesting from
companies pursuant to subsection (f) if clear and convincing
evidence shows that the value of investments in such companies
becomes equal to or less than 0.5% of the market value of all
SB3342 - 17 - LRB104 19095 RPS 32540 b
assets under management by the retirement system; except that
this subsection (h) does not apply to investments in
for-profit companies that contract to shelter incarcerated or
detained persons. For any cessation of divestment authorized
by this subsection (h), the retirement system shall provide a
written notice to the Illinois Investment Policy Board in
advance of the cessation of divestment, setting forth the
reasons and justification, supported by clear and convincing
evidence, for its decision to cease divestment under
subsection (f).
(i) The cost associated with the activities of the
Illinois Investment Policy Board shall be borne by the boards
of each pension fund or investment board created under Article
15, 16, or 22A of this Code.
(j) With respect to actions taken in compliance with this
Section, including all good-faith determinations regarding
companies as required by this Section, the retirement system
and Illinois Investment Policy Board are exempt from any
conflicting statutory or common law obligations, including any
fiduciary duties under this Article and any obligations with
respect to choice of asset managers, investment funds, or
investments for the retirement system's securities portfolios.
(k) It is not the intent of the General Assembly in
enacting this amendatory Act of the 99th General Assembly to
cause divestiture from any company based in the United States
of America. The Illinois Investment Policy Board shall
SB3342 - 18 - LRB104 19095 RPS 32540 b
consider this intent when developing or reviewing the list of
restricted companies.
(l) If any provision of this amendatory Act of the 99th
General Assembly or its application to any person or
circumstance is held invalid, the invalidity of that provision
or application does not affect other provisions or
applications of this amendatory Act of the 99th General
Assembly that can be given effect without the invalid
provision or application.
If any provision of Public Act 100-551 or its application
to any person or circumstance is held invalid, the invalidity
of that provision or application does not affect other
provisions or applications of Public Act 100-551 that can be
given effect without the invalid provision or application.
If any provision of Public Act 102-118 or its application
to any person or circumstance is held invalid, the invalidity
of that provision or application does not affect other
provisions or applications of Public Act 102-118 that can be
given effect without the invalid provision or application.
If any provision of this amendatory Act of the 102nd
General Assembly or its application to any person or
circumstance is held invalid, the invalidity of that provision
or application does not affect other provisions or
applications of this amendatory Act of the 102nd General
Assembly that can be given effect without the invalid
provision or application.
SB3342 - 19 - LRB104 19095 RPS 32540 b
If any provision of this amendatory Act of the 104th
General Assembly or its application to any person or
circumstance is held invalid, the invalidity of that provision
or application does not affect other provisions or
applications of this amendatory Act of the 104th General
Assembly that can be given effect without the invalid
provision or application.
(Source: P.A. 102-118, eff. 7-23-21; 102-699, eff. 4-19-22;
102-1108, eff. 12-21-22.)
Section 99. Effective date. This Act takes effect upon
becoming 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.

Assignments
Assignments
Referred to · Feb 4, 2026

History

SB 3342 has taken 4 actions since Feb 4, 2026, the latest on Feb 6, 2026.

ChamberAction
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