Bill Text: AZ SB1340 | 2024 | Fifty-sixth Legislature 2nd Regular | Engrossed
Bill Title: Public funds; foreign adversaries; divestment
Spectrum: Strong Partisan Bill (Republican 10-1)
Status: (Vetoed) 2024-04-23 - Governor Vetoed [SB1340 Detail]
Download: Arizona-2024-SB1340-Engrossed.html
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House Engrossed Senate Bill
public funds; foreign adversaries; divestment |
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State of Arizona Senate Fifty-sixth Legislature Second Regular Session 2024
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SENATE BILL 1340 |
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An Act
amending title 35, chapter 2, article 8, Arizona Revised Statutes, by adding section 35-392.01; relating to public monies.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Heading change
The article heading of title 35, chapter 2, article 8, Arizona Revised Statutes, is changed from "Terrorism Country Divestments" to "TERRORISM COUNTRY AND Foreign adversary divestments".
Sec. 2. Title 35, chapter 2, article 8, Arizona Revised Statutes, is amended by adding section 35-392.01, to read:
35-392.01. Publicly managed funds; foreign adversary; divestment; state board of investment; definitions
A. A PUBLICLY managed fund may not do any of the following:
1. hold an investment in any of the following:
(a) a foreign ADVERSARY.
(b) A STATE-OWNED enterprise of a foreign ADVERSARY.
(c) A company domiciled within a foreign ADVERSARY.
(d) Any other entity owned by or domiciled in a foreign ADVERSARY.
2. Invest or deposit public monies in a bank that is domiciled in, or has a PRINCIPAL place of business in, a foreign ADVERSARY.
B. On the effective date of this section, A publicly MANAGED fund shall immediately begin divestment of any holdings or investments prohibited pursuant to subsection A of this section. A publicly MANAGED fund shall complete Total DIVESTMENT not later than two years after the effective date of this section.
c. Not later than six months after the effective date of this section, the state board of investment shall do all of the following:
1. Review all publicly AVAILABLE information regarding companies that ARE STATE-OWNED ENTERPRISES OF and are DOMICILED WITHIN A FOREIGN ADVERSARY OR whose primary affairs are conducted within a foreign adversary, including information provided by nonprofit organizations, research firms and governmental entities.
2. contact asset managers and fund managers contracted by a PUBLICLY managed fund that invest in companies and in funds that are state-owned enterprises of, or are domiciled within, A FOREIGN ADVERSARY or whose primary affairs are conducted within a foreign adversary.
3. contact other institutional investors that have divested from or engaged with companies that are state-owned enterprises of, or are domiciled within, A FOREIGN ADVERSARY or whose primary affairs are conducted within a foreign adversary.
4. retain an independent research firm to identify companies that are direct or indirect investment holdings of a publicly managed fund that are state-owned enterprises of, or are domiciled within, A FOREIGN ADVERSARY or whose primary affairs are conducted within a foreign adversary.
5. Compile and distribute a list to publicly managed funds of all the companies OR ENTITIES IN THIS STATE THAT ARE STATE-OWNED ENTERPRISES OF AND ARE DOMICILED WITHIN A FOREIGN ADVERSARY.
D. this section does not inhibit, conflict, impede or otherwise interfere with any required financial safeguards, fiduciary requirements or other sound investment criteria that a publicly managed fund is subject to.
E. For the purposes of this section:
1. "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 wholly owned subsidiaries, majority-owned subsidiaries, parent companies or affiliates of those entities or business associations, that exist for the purpose of making a profit.
2. "Divestment" means the sale, forfeiture or other contractual end of any current or planned investments.
3. "Domicile" means the country where a company is registered, where the company's affairs are primarily completed or where the majority of the ownership share is held.
4. "Foreign ADVERSARY" means a country determined to be a foreign adversary pursuant to 15 Code of Federal Regulations section 7.4.
5. "Investment" means a transfer of monies into any active, passive, direct or indirect structure that seeks to generate revenue or accomplish any other gain, including nonmonetary gains.
6. "PUBLICLY managed fund" means the state treasurer or a retirement plan or system established by or pursuant to title 38.
7. "State-owned enterprise" means any company owned or controlled, in whole or in part, by a government or by an individual acting in an official government capacity.
Sec. 3. Short title
This act may be cited as the "Foreign Adversary Divestment Act".
Sec. 4. Applicability
Section 35-392.01, Arizona Revised Statutes, as added by this act, applies to contracts entered into or renewed from and after the effective date of this act.
