IL HB3961

Prohibits Illinois public pension systems (General Assembly, State Employees, State Universities, Downstate Teachers, Judges, and Illinois State Board of Investment) from making new direct investments in fossil fuel companies, including their subsidiaries, affiliates, or parents

Requires pension systems to divest all existing fossil fuel holdings by January 1, 2030, with investments subject to liquidity restrictions extended to January 1, 2035

Limits indirect investments to vehicles with no more than 2% of assets in fossil fuel companies, and bans investment in commercial paper or corporate bonds issued by fossil fuel companies

Mandates pension trustees identify and report all fossil fuel holdings within 90 days of enactment, with detailed quarterly reporting posted publicly and submitted to the General Assembly

Requires annual reporting beginning January 1, 2026 on climate-related financial risk analysis, shareholder engagement activities, proxy voting records, and alignment with the Paris Climate Agreement and Illinois Energy Transition Act goals