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HB 2723

PEN CD-PROHIBITED TRANSACTIONS

104th Regular Session Introduced by Carol Ammons and 20 co-sponsors

Illinois public pensions no longer must treat firms that boycott Israel as restricted investments under the Pension Code.

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Bill Summary · HB 2723

Summary — HB 2723 (2025) — Pension Code: Prohibited Transactions (Illinois)

Status: Enacted — Signed by Governor 2025-05-24; Effective 2026-01-01
Primary statutory target: 40 ILCS 5/1‑110.16 (Illinois Pension Code, General Provisions)
Companion: SB 1920

Main purpose

HB 2723 removes the requirement that the Illinois Investment Policy Board (IIPB) categorize and include in its list of "restricted companies" those companies identified as engaging in a boycott of Israel. The bill makes conforming changes to the section of the Illinois Pension Code that governs prohibited transactions and restricted-company lists used by state and local public pension systems.

Key provisions

  • Amends Section 1‑110.16 of the Illinois Pension Code (40 ILCS 5/1‑110.16).
  • Removes references to “companies that boycott Israel” from the statutory definitions and from the statutory category of “restricted companies.”
  • Eliminates or changes related duties of the Illinois Investment Policy Board to identify and assemble lists of companies that boycott Israel and to distribute those lists to retirement systems (and any quarterly review/updates that applied specifically to that category).
  • Makes conforming edits elsewhere in the section so that the statutory list of restricted companies no longer includes the boycott‑of‑Israel category.
  • Leaves other categories in place (for example, Iran‑restricted companies, Sudan‑restricted companies, expatriated entities, companies domiciled in Russia or Belarus, companies subject to Russian sanctions, and companies contracting to shelter migrant children) unless separately amended.

Who is affected

  • Illinois retirement systems and public pension funds (those established under Articles 2, 14, 15, 16, or 18 of the Code, and the Illinois State Board of Investment) — they will no longer be statutorily required to treat firms that were identified solely on the basis of alleged boycotts of Israel as “restricted” for purposes of investment prohibition/divestment rules arising from this section.
  • The Illinois Investment Policy Board — its mandated identification and reporting duties related to boycott‑of‑Israel companies are removed or narrowed.
  • Asset managers, private market funds, and companies previously included on boycott‑related restricted lists may see changes in treatment by Illinois public funds.

Procedural/timeline highlights

  • Filed/introduced in February 2025; passed both chambers (record votes on 2025‑04/05/09 series) and enrolled.
  • Sent to Governor and signed on 2025‑05‑24.
  • Statutory effective date listed in legislative actions: January 1, 2026.
  • Sponsors/co‑sponsors: multiple Illinois House members (e.g., Canales, Cunningham, Rashid, Lilian Jiménez, Justin Slaughter, etc.).

Notes and context

  • The bill’s core change is narrow: removing a single category (“companies that boycott Israel”) from the statutory definition/list that can trigger prohibited transaction or divestment obligations by public pension systems. Other restricted‑company categories in the statute remain unless addressed separately.
  • The supplied document also included an unrelated Arizona statute excerpt (amending ARS §9‑461.15 concerning municipal planned communities). That Arizona language appears to be an unrelated insertion and is not part of the Illinois Pension Code amendment summarized above.

Compiled from official sources — confirm details with the bill’s official record.

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