Illinois House Bill HB3123

Illinois 2025-2026 Regular Session

• Introduced: 2/6/25
• Refer: 2/18/25

Caption

CHINESE INVESTMENTS PROHIBITED

Summary

HB3123 would prohibit Illinois state agencies, public agencies, and state-funded retirement systems from investing in a broad set of China-related financial instruments and institutions. The bill bars investments in Chinese Communist Party sovereign debt, CCP-backed securities, securities issued by entities domiciled or headquartered in the People’s Republic of China, and securities issued by companies subject to Chinese Military-Industrial Complex sanctions. It also prohibits state money and public funds from being deposited in banks or financial institutions based in China or subject to those sanctions. The bill also adds procurement and higher-education disclosure requirements. State contract bidders would have to disclose whether they, or their parents or subsidiaries, did business in the prior 24 months with the Chinese Communist Party or related entities, and those disclosures could be considered in contract awards and posted by the Comptroller. Public colleges and universities would have to disclose donations or endowments tied to restricted China-related companies. In the pension code, the Illinois Investment Policy Board would be directed to identify Chinese restricted companies, maintain them on the restricted list, and retirement systems would have to divest direct holdings in covered Chinese sovereign debt and securities within specified timelines, subject to limited exceptions and fiduciary standards.

Impact

HB3123 would expand Illinois law by adding China-focused restrictions to the Deposit of State Moneys Act, the Public Funds Investment Act, the Illinois Procurement Code, the Illinois Pension Code, and the Board of Higher Education Act. It would create new investment prohibitions for the State Treasurer, public agencies, and state retirement systems; require divestment from certain direct holdings; and expand disclosure obligations for state contractors and public universities. The bill would also broaden the Illinois Investment Policy Board’s responsibilities to identify and maintain a list of restricted companies tied to China and Chinese military-industrial sanctions.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate, amendments, or bipartisan support/opposition in the available record. Based on the bill text alone, the measure appears strongly precautionary and restrictive toward China-linked investments and business relationships, reflecting a national-security-oriented posture. The absence of recorded votes or hearing discussion means the overall legislative sentiment cannot be measured from the supplied materials.

Contention

The likely points of contention are the breadth of the China-related prohibitions, the impact on investment flexibility and fiduciary management, and the procurement disclosure burden on bidders and agencies. Supporters would likely emphasize national security, supply-chain risk, and limiting state ties to the Chinese Communist Party and sanctioned entities. Critics would likely focus on the potential for overbreadth, administrative complexity in identifying covered companies, possible effects on returns and diversification for pension funds, and the practical difficulty of tracing indirect ownership, affiliates, and foreign business operations.