Bill Text: IA HF2290 | 2021-2022 | 89th General Assembly | Introduced
Bill Title: A bill for an act relating to the investment of certain public funds in companies that are owned or controlled by Chinese military or government services.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2022-02-08 - Introduced, referred to State Government. H.J. 194. [HF2290 Detail]
Download: Iowa-2021-HF2290-Introduced.html
House
File
2290
-
Introduced
HOUSE
FILE
2290
BY
BEST
A
BILL
FOR
An
Act
relating
to
the
investment
of
certain
public
funds
in
1
companies
that
are
owned
or
controlled
by
Chinese
military
2
or
government
services.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
5472YH
(1)
89
ec/rn
H.F.
2290
Section
1.
Section
12.8,
subsection
1,
Code
2022,
is
amended
1
to
read
as
follows:
2
1.
The
treasurer
of
state
shall
invest
or
deposit,
subject
3
to
chapters
12F
,
12H
,
and
12J
,
and
12K
and
as
provided
by
law,
4
any
of
the
public
funds
not
currently
needed
for
operating
5
expenses
and
shall
do
so
upon
receipt
of
monthly
notice
from
6
the
director
of
the
department
of
administrative
services
of
7
the
amount
not
so
needed.
In
the
event
of
loss
on
redemption
8
or
sale
of
securities
invested
as
prescribed
by
law,
and
if
9
the
transaction
is
reported
to
the
executive
council,
neither
10
the
treasurer
nor
director
of
the
department
of
administrative
11
services
is
personally
liable
but
the
loss
shall
be
charged
12
against
the
funds
which
would
have
received
the
profits
or
13
interest
of
the
investment
and
there
is
appropriated
from
the
14
funds
the
amount
so
required.
15
Sec.
2.
NEW
SECTION
.
12K.1
Definitions.
16
As
used
in
this
chapter,
unless
the
context
otherwise
17
requires:
18
1.
“Company”
means
a
sole
proprietorship,
organization,
19
association,
corporation,
partnership,
joint
venture,
limited
20
partnership,
limited
liability
partnership,
limited
liability
21
company,
or
other
entity
or
business
association,
including
22
all
wholly
owned
subsidiaries,
majority-owned
subsidiaries,
23
parent
companies,
or
affiliates
of
such
entities
or
business
24
associations,
that
exists
for
profit-making
purposes.
25
2.
“Direct
holdings”
in
a
company
means
all
securities
of
26
a
company
held
directly
by
the
public
fund
or
in
an
account
or
27
fund
in
which
the
public
fund
owns
all
shares
or
interests.
28
3.
“Indirect
holdings”
in
a
company
means
all
securities
29
of
a
company
held
in
an
account
or
fund
managed
by
one
or
more
30
persons
not
employed
by
the
public
fund,
in
which
the
public
31
fund
owns
shares
or
interests
together
with
other
investors
not
32
subject
to
the
provisions
of
this
chapter.
Indirect
holdings
33
include
but
are
not
limited
to
mutual
funds,
fund
of
funds,
34
private
equity
funds,
hedge
funds,
and
real
estate
funds.
35
-1-
LSB
5472YH
(1)
89
ec/rn
1/
8
H.F.
2290
4.
“Prohibited
company”
means
a
company
that
is
owned
1
or
controlled
by
Chinese
military
or
government
services,
2
including
but
not
limited
to
the
people’s
liberation
army
3
of
China
or
the
communist
party
of
China,
and
that
has
been
4
sanctioned
in
any
way
by
the
United
States
government.
5
5.
“Public
fund”
means
the
treasurer
of
state,
the
state
6
board
of
regents,
the
public
safety
peace
officers’
retirement
7
system
created
in
chapter
97A,
the
Iowa
public
employees’
8
retirement
system
created
in
chapter
97B,
the
statewide
fire
9
and
police
retirement
system
created
in
chapter
411,
or
the
10
judicial
retirement
system
created
in
chapter
602.
11
6.
“Scrutinized
company”
means
any
company
that
is
owned
or
12
controlled
by
Chinese
military
or
government
services.
13
Sec.
3.
NEW
SECTION
.
12K.2
Identification
of
companies
——
14
notice.
15
1.
a.
Within
sixty
days
following
the
effective
date
of
16
this
Act,
a
public
fund
shall
identify
or
have
identified
all
17
scrutinized
companies
in
which
the
public
fund
has
direct
or
18
indirect
holdings
and
shall
create
and
make
available
to
the
19
public
a
scrutinized
companies
list
for
that
public
fund.
20
The
public
fund
shall
review
and
update,
if
necessary,
the
21
scrutinized
companies
list
on
a
quarterly
basis
thereafter.
22
b.
In
identifying
or
having
identified
scrutinized
23
companies,
the
public
fund
may
review
and
rely,
in
the
best
24
judgment
of
the
public
fund,
on
publicly
available
information
25
and
other
information
that
may
be
provided
by
nonprofit
26
organizations,
research
firms,
international
organizations,
and
27
government
entities.
The
public
fund
may
also
contact
asset
28
managers
and
institutional
investors
for
the
public
fund
to
29
identify
scrutinized
companies
based
upon
industry-recognized
30
lists
of
such
companies
that
the
public
fund
may
have
indirect
31
holdings
in.
32
c.
The
Iowa
public
employees’
retirement
system,
acting
33
on
behalf
of
the
system
and
other
public
funds
subject
to
34
this
section,
may
develop
and
issue
a
request
for
proposals
35
-2-
LSB
5472YH
(1)
89
ec/rn
2/
8
H.F.
2290
for
third-party
services
to
complete
the
identification
of
1
scrutinized
companies
and
the
compilation
of
a
scrutinized
2
companies
list.
The
request
for
proposals
may
request
bids
for
3
optional
services
related
to
this
purpose,
including
but
not
4
limited
to
provision
of
notice
of
such
scrutinized
companies
5
as
required
in
subsection
2.
The
Iowa
public
employees’
6
retirement
system
shall
consult
with
all
other
public
funds
7
regarding
the
development
of
the
request
for
proposals,
however
8
selection
of
a
successful
proposal
and
the
final
scope
of
9
services
to
be
provided
shall
be
determined
only
by
those
10
public
funds
that
have
agreed
to
utilize
the
third-party
11
services.
If
more
than
one
public
fund
decides
to
utilize
the
12
third-party
services,
the
participating
public
funds
shall
13
equally
share
the
costs
of
such
services.
14
2.
For
each
company
on
the
scrutinized
companies
list
in
15
which
a
public
fund
has
direct
or
indirect
holdings,
the
public
16
fund
shall
send
or
have
sent
a
written
notice
informing
the
17
company
of
the
requirements
of
this
chapter.
The
public
fund
18
or
its
representative
shall
continue
to
provide
such
written
19
notice
on
an
annual
basis
if
the
company
remains
a
scrutinized
20
company.
21
Sec.
4.
NEW
SECTION
.
12K.3
Divestment.
22
1.
A
public
fund
shall
not
acquire
publicly
traded
23
securities
of
a
prohibited
company.
24
2.
a.
A
public
fund
shall
sell,
redeem,
divest,
or
withdraw
25
all
publicly
traded
securities
of
a
prohibited
company
no
later
26
than
one
hundred
eighty
days
following
the
date
the
company
27
becomes
a
prohibited
company.
28
b.
This
subsection
shall
not
be
construed
to
require
the
29
premature
or
otherwise
imprudent
sale,
redemption,
divestment,
30
or
withdrawal
of
an
investment,
but
such
sale,
redemption,
31
divestment,
or
withdrawal
shall
be
completed
as
provided
by
32
this
subsection.
33
Sec.
5.
NEW
SECTION
.
12K.4
Reports.
34
1.
Each
public
fund
shall,
within
thirty
days
after
the
35
-3-
LSB
5472YH
(1)
89
ec/rn
3/
8
H.F.
2290
scrutinized
companies
list
is
created
or
updated
as
required
by
1
section
12K.2,
make
the
list
available
to
the
public.
2
2.
On
October
1,
2022,
and
each
October
1
thereafter,
each
3
public
fund
shall
make
available
to
the
public,
and
file
with
4
the
general
assembly,
an
annual
report
covering
the
prior
5
fiscal
year
that
includes
all
of
the
following:
6
a.
The
scrutinized
companies
list
as
of
the
end
of
the
7
fiscal
year.
8
b.
A
summary
of
all
written
notices
sent
as
required
by
9
section
12K.2
during
the
fiscal
year.
10
c.
All
investments
sold,
redeemed,
divested,
or
withdrawn
as
11
provided
in
section
12K.3
during
the
fiscal
year.
12
Sec.
6.
NEW
SECTION
.
12K.5
Legal
obligations.
13
With
respect
to
actions
taken
in
compliance
with
this
14
chapter,
including
all
good-faith
determinations
regarding
15
companies
as
required
by
this
chapter,
the
public
fund
16
shall
be
exempt
from
any
conflicting
statutory
or
common
law
17
obligations,
including
any
such
obligations
with
respect
to
18
choice
of
asset
managers,
investment
funds,
or
investments
for
19
the
public
fund’s
securities
portfolios.
20
Sec.
7.
NEW
SECTION
.
12K.6
Applicability.
21
The
requirements
of
sections
12K.2,
12K.3,
and
12K.4
shall
22
not
apply
if
the
United
States
Congress
or
president
of
the
23
United
States,
through
legislation
or
executive
order,
declares
24
that
mandatory
divestment
of
the
type
provided
for
in
this
25
chapter
interferes
with
the
conduct
of
United
States
foreign
26
policy.
27
Sec.
8.
Section
97A.7,
subsection
1,
Code
2022,
is
amended
28
to
read
as
follows:
29
1.
The
board
of
trustees
shall
be
the
trustees
of
the
30
retirement
fund
created
by
this
chapter
as
provided
in
section
31
97A.8
and
shall
have
full
power
to
invest
and
reinvest
funds
32
subject
to
the
terms,
conditions,
limitations,
and
restrictions
33
imposed
by
subsection
2
and
chapters
12F
,
12H
,
and
12J
,
and
34
12K
and
subject
to
like
terms,
conditions,
limitations,
and
35
-4-
LSB
5472YH
(1)
89
ec/rn
4/
8
H.F.
2290
restrictions
said
trustees
shall
have
full
power
to
hold,
1
purchase,
sell,
assign,
transfer,
or
dispose
of
any
of
the
2
securities
and
investments
of
the
retirement
fund
which
have
3
been
invested,
as
well
as
of
the
proceeds
of
said
investments
4
and
any
moneys
belonging
to
the
retirement
fund.
The
board
5
of
trustees
may
authorize
the
treasurer
of
state
to
exercise
6
any
of
the
duties
of
this
section
.
When
so
authorized
the
7
treasurer
of
state
shall
report
any
transactions
to
the
board
8
of
trustees
at
its
next
monthly
meeting.
9
Sec.
9.
Section
97B.4,
subsection
5,
Code
2022,
is
amended
10
to
read
as
follows:
11
5.
Investments.
The
system,
through
the
chief
investment
12
officer,
shall
invest,
subject
to
chapters
12F
,
12H
,
and
12J
,
13
and
12K
and
in
accordance
with
the
investment
policy
and
14
goal
statement
established
by
the
board,
the
portion
of
the
15
retirement
fund
which,
in
the
judgment
of
the
system,
is
not
16
needed
for
current
payment
of
benefits
under
this
chapter
17
subject
to
the
requirements
of
section
97B.7A
.
18
Sec.
10.
Section
262.14,
unnumbered
paragraph
1,
Code
2022,
19
is
amended
to
read
as
follows:
20
The
board
may
invest
funds
belonging
to
the
institutions,
21
subject
to
chapters
12F
,
12H
,
and
12J
,
and
12K
and
the
22
following
regulations:
23
Sec.
11.
Section
411.7,
subsection
1,
Code
2022,
is
amended
24
to
read
as
follows:
25
1.
The
board
of
trustees
is
the
trustee
of
the
fire
26
and
police
retirement
fund
created
in
section
411.8
and
27
shall
annually
establish
an
investment
policy
to
govern
the
28
investment
and
reinvestment
of
the
moneys
in
the
fund,
subject
29
to
the
terms,
conditions,
limitations,
and
restrictions
30
imposed
by
subsection
2
and
chapters
12F
,
12H
,
and
12J
,
and
31
12K
.
Subject
to
like
terms,
conditions,
limitations,
and
32
restrictions
the
system
has
full
power
to
hold,
purchase,
sell,
33
assign,
transfer,
or
dispose
of
any
of
the
securities
and
34
investments
in
which
the
fund
has
been
invested,
as
well
as
of
35
-5-
LSB
5472YH
(1)
89
ec/rn
5/
8
H.F.
2290
the
proceeds
of
the
investments
and
any
moneys
belonging
to
the
1
fund.
2
Sec.
12.
Section
602.9111,
subsection
1,
Code
2022,
is
3
amended
to
read
as
follows:
4
1.
So
much
of
the
judicial
retirement
fund
as
may
not
be
5
necessary
to
be
kept
on
hand
for
the
making
of
disbursements
6
under
this
article
shall
be
invested
by
the
treasurer
of
7
state
in
any
investments
authorized
for
the
Iowa
public
8
employees’
retirement
system
in
section
97B.7A
and
subject
to
9
the
requirements
of
chapters
12F
,
12H
,
and
12J
,
and
12K
,
and
10
the
earnings
therefrom
shall
be
credited
to
the
fund.
The
11
treasurer
of
state
may
execute
contracts
and
agreements
with
12
investment
advisors,
consultants,
and
investment
management
and
13
benefit
consultant
firms
in
the
administration
of
the
judicial
14
retirement
fund.
15
EXPLANATION
16
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
17
the
explanation’s
substance
by
the
members
of
the
general
assembly.
18
This
bill
relates
to
the
investment
of
certain
public
funds
19
in
companies
that
are
owned
or
controlled
by
Chinese
military
20
or
government
services.
21
The
bill
defines
“company”
as
any
entity
or
business
22
association,
including
all
subsidiaries,
parent
companies,
or
23
affiliates
of
such
entities
or
business
associations,
that
24
exist
for
profit-making
purposes.
The
bill
defines
“direct
25
holdings”
in
a
company
as
all
securities
of
a
company
held
26
directly
by
the
public
fund
or
in
an
account
or
fund
in
which
27
the
public
fund
owns
all
shares
or
interests.
The
bill
defines
28
“indirect
holdings”
in
a
company
as
all
securities
of
a
company
29
held
in
an
account
or
fund
managed
by
one
or
more
persons
not
30
employed
by
the
public
fund,
in
which
the
public
fund
owns
31
shares
or
interests
together
with
other
investors
not
subject
32
to
the
provisions
of
this
new
Code
chapter
12K.
The
bill
33
defines
“prohibited
company”
as
a
company
that
is
owned
or
34
controlled
by
Chinese
military
or
government
services
that
35
-6-
LSB
5472YH
(1)
89
ec/rn
6/
8
H.F.
2290
has
been
sanctioned
by
the
United
States
government.
The
1
bill
defines
“public
fund”
as
the
treasurer
of
state,
the
2
state
board
of
regents,
the
public
safety
peace
officers’
3
retirement
system,
the
Iowa
public
employees’
retirement
system
4
(IPERS),
the
statewide
fire
and
police
retirement
system,
or
5
the
judicial
retirement
system.
The
bill
defines
“scrutinized
6
company”
as
any
company
that
is
owned
or
controlled
by
Chinese
7
military
or
government
services.
8
The
bill
requires
a
public
fund
to
identify
all
scrutinized
9
companies
in
which
the
public
fund
has
direct
or
indirect
10
holdings
within
60
days
following
the
effective
date
of
11
the
bill.
Additionally,
the
bill
requires
a
public
fund
12
to
create
and
make
available
to
the
public
a
scrutinized
13
companies
list
and
review
and
update
the
list
on
a
quarterly
14
basis.
The
bill
authorizes
a
public
fund
to
review
and
rely
15
on
publicly
available
information
and
information
from
other
16
sources
when
identifying
scrutinized
companies.
The
bill
also
17
authorizes
IPERS
to
develop
and
issue
a
request
for
proposals
18
for
third-party
services
to
complete
the
identification
of
19
scrutinized
companies
and
the
compilation
of
the
scrutinized
20
companies
list.
The
bill
requires
a
public
fund
to
send
notice
21
to
all
companies
on
the
scrutinized
companies
list
on
an
annual
22
basis
informing
the
company
of
the
requirements
of
the
new
Code
23
chapter.
24
The
bill
prohibits
a
public
fund
from
acquiring
publicly
25
traded
securities
of
a
prohibited
company.
The
bill
requires
a
26
public
fund
to
sell,
redeem,
divest,
or
withdraw
all
publicly
27
traded
securities
of
a
prohibited
company
no
later
than
180
28
days
following
the
date
the
company
becomes
a
prohibited
29
company.
30
The
bill
requires
each
public
fund,
within
30
days
after
the
31
scrutinized
companies
list
is
created
or
updated,
to
make
the
32
list
available
to
the
public.
Additionally,
the
bill
requires
33
a
public
fund
to
make
available
to
the
public
and
file
with
the
34
general
assembly
an
annual
report
beginning
October
1,
2022,
35
-7-
LSB
5472YH
(1)
89
ec/rn
7/
8
H.F.
2290
and
each
October
1
thereafter.
1
The
bill
provides
that,
with
respect
to
actions
taken
2
in
compliance
with
the
Code
chapter,
the
public
fund
shall
3
be
exempt
from
any
conflicting
statutory
or
common
law
4
obligations,
including
any
such
obligations
in
respect
to
5
choice
of
asset
managers,
investment
funds,
or
investments
for
6
the
public
fund’s
securities
portfolios.
7
The
bill
provides
that
the
provisions
related
to
the
8
creation
of
a
scrutinized
companies
list,
divestment
of
9
publicly
traded
securities
of
a
prohibited
company,
and
10
reporting
shall
not
apply
if
the
United
States
Congress
11
or
president
of
the
United
States
declares
that
mandatory
12
divestment
of
the
type
provided
for
in
the
Code
chapter
13
interferes
with
the
conduct
of
United
States
foreign
policy.
14
The
bill
makes
conforming
changes
to
Code
sections
12.8,
15
97A.7,
97B.4,
262.14,
411.7,
and
602.9111.
16
-8-
LSB
5472YH
(1)
89
ec/rn
8/
8
