Bill Text: IA HSB180 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act concerning public contracts with companies that boycott certain companies or that engage in nonpecuniary social investment policies.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2023-02-23 - Subcommittee recommends amendment and passage. Vote Total: 2-1. [HSB180 Detail]
Download: Iowa-2023-HSB180-Introduced.html
House
Study
Bill
180
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
GOVERNOR
BILL)
A
BILL
FOR
An
Act
concerning
public
contracts
with
companies
that
boycott
1
certain
companies
or
that
engage
in
nonpecuniary
social
2
investment
policies.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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_____
H.F.
_____
Section
1.
Section
12.8,
subsection
1,
Code
2023,
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
Legislative
findings
and
intent.
16
The
general
assembly
is
deeply
concerned
over
the
increased
17
prevalence
of
investing
based
on
social
and
environmental
18
factors,
known
as
environmental,
social,
and
governance
19
investing,
rather
than
pecuniary
factors.
Therefore,
the
20
general
assembly
intends
to
ensure
that
state
funds
and
funds
21
administered
by
the
state,
including
public
employee
retirement
22
funds,
are
protected
from
political
influence
detrimental
to
23
the
financial
health
of
the
state
and
its
citizens
and
promote
24
the
general
assembly’s
goal
of
protecting
free
enterprise.
25
Sec.
3.
NEW
SECTION
.
12K.2
Definitions.
26
As
used
in
this
chapter,
unless
the
context
otherwise
27
requires:
28
1.
“Boycott
of
certain
companies”
means,
except
as
otherwise
29
provided
in
chapters
12F,
12H,
and
12J
or
without
a
reasonable
30
business
purpose,
refusal
to
invest
in
a
company,
termination
31
of
business
activities
with
a
company,
or
another
action
that
32
is
intended
to
penalize,
inflict
economic
harm
on,
or
limit
33
commercial
relations
with
a
company
because
the
company
does
34
any
of
the
following:
35
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H.F.
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a.
Engages
in,
or
does
business
with
a
company
that
engages
1
in,
the
exploration,
production,
utilization,
transportation,
2
or
sale
of
fossil
fuel-based
energy,
timber,
mining,
or
3
production
agriculture.
4
b.
Engages
in,
or
does
business
with
a
company
that
engages
5
in,
the
manufacturing,
distribution,
sale,
import,
export,
or
6
lawful
use
of
firearms,
firearm
parts,
firearm
accessories,
or
7
ammunition.
8
2.
“Company”
means
any
business
or
business
entity,
bank,
9
national
banking
association,
nonbank
financial
institution,
10
financial
services
company,
investment
company,
bank
and
trust
11
company,
trust
company,
savings
and
loan
association,
building
12
and
loan
association,
mutual
savings
bank,
credit
union,
or
13
savings
bank,
including
a
wholly
owned
subsidiary,
majority-
14
owned
subsidiary,
parent
company,
or
affiliate
of
such
business
15
or
business
entity,
that
exists
for
the
purpose
of
making
a
16
profit.
17
3.
“Nonpecuniary
social
investment”
means,
except
as
18
otherwise
provided
in
this
chapter
and
chapters
12F,
12H,
19
and
12J,
investment
or
commitment
of
public
funds
to
further
20
environmental,
social,
governance,
political,
or
ideological
21
interests
and
for
the
purpose
of
obtaining
an
effect
other
than
22
a
maximized
return
to
the
public
fund
without
a
reasonable
23
business
purpose.
24
4.
“Public
entity”
means
the
state,
political
subdivisions
25
of
the
state,
public
school
corporations,
and
all
public
26
officers,
boards,
commissions,
departments,
agencies,
and
27
authorities
empowered
by
law
to
enter
into
public
contracts
for
28
the
expenditure
of
public
funds,
including
the
state
board
of
29
regents
and
institutions
under
the
control
of
the
state
board
30
of
regents.
“Public
entity”
includes
a
public
fund.
31
5.
“Public
fund”
means
the
treasurer
of
state,
the
state
32
board
of
regents,
the
public
safety
peace
officers’
retirement
33
system
created
in
chapter
97A,
the
Iowa
public
employees’
34
retirement
system
created
in
chapter
97B,
the
statewide
fire
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H.F.
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and
police
retirement
system
created
in
chapter
411,
or
the
1
judicial
retirement
system
created
in
chapter
602.
2
6.
“Reasonable
business
purpose”
means
includes
any
purpose
3
directly
related
to
any
of
the
following:
4
a.
Promoting
the
financial
success
or
stability
of
a
5
company.
6
b.
Mitigating
risk
to
a
company.
7
c.
Complying
with
legal
or
regulatory
requirements.
8
d.
Limiting
liability
of
a
company.
9
7.
“Scrutinized
company”
means
any
company
that
engages
in
10
nonpecuniary
social
investment
on
behalf
of
a
public
entity
or
11
a
boycott
of
certain
companies
on
behalf
of
a
public
entity.
12
8.
“Scrutinized
company
list”
means
the
list
of
scrutinized
13
companies
prepared,
maintained,
and
published
by
a
public
fund
14
pursuant
to
section
12K.3.
15
Sec.
4.
NEW
SECTION
.
12K.3
Identification
of
scrutinized
16
companies
——
notice.
17
1.
a.
By
March
1,
2024,
a
public
fund
shall
make
its
best
18
efforts
to
identify
or
have
identified
any
scrutinized
company
19
that
the
public
fund
has
entered
into
a
contract
with
to
20
provide
investment
or
management
of
securities
services
for
the
21
public
fund.
The
public
fund
shall
create
and
make
available
22
to
the
public
a
scrutinized
company
list
for
that
public
fund.
23
The
public
fund
shall
review
on
an
annual
basis
and
update,
if
24
necessary,
the
scrutinized
company
list.
25
b.
In
making
its
best
efforts
to
identify
or
have
identified
26
a
scrutinized
company,
the
public
fund
shall
consider
and
may
27
rely
upon
any
of
the
following
information:
28
(1)
A
company’s
certification
that
it
is
not
engaged
29
in
nonpecuniary
social
investment
or
a
boycott
of
certain
30
companies.
31
(2)
Publicly
available
information
made
by
the
company,
32
including
information
that
may
be
provided
by
nonprofit
33
organizations,
research
firms,
and
international
organizations,
34
or
publicly
available
statements
by
a
member
of
a
company’s
35
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governing
body,
an
executive
director
of
a
company,
or
any
1
other
officer
or
employee
of
the
company
with
the
authority
to
2
issue
policy
statements
on
behalf
of
the
company.
3
(3)
Information
published
by
the
state
or
federal
4
government.
5
c.
The
Iowa
public
employees’
retirement
system,
acting
6
on
behalf
of
the
system
and
other
public
funds
subject
to
7
this
section,
may
develop
and
issue
a
request
for
proposals
8
for
third-party
services
to
complete
the
identification
of
9
any
scrutinized
company
and
the
compilation
of
a
scrutinized
10
company
list.
The
Iowa
public
employees’
retirement
system
11
shall
consult
with
all
other
public
funds
on
the
development
of
12
the
request
for
proposals.
However,
selection
of
a
successful
13
proposal
and
the
final
scope
of
services
to
be
provided
shall
14
be
determined
only
by
those
public
funds
that
have
agreed
to
15
utilize
the
third-party
services.
If
more
than
one
public
fund
16
decides
to
utilize
the
third-party
services,
the
participating
17
public
funds
shall
equally
share
the
costs
of
such
services.
18
2.
a.
For
each
company
on
the
scrutinized
company
list,
the
19
public
fund
shall
send
or
have
sent
a
written
notice
informing
20
the
company
of
its
status
as
a
scrutinized
company
and
that
21
it
may
become
subject
to
contract
termination
with
the
public
22
fund.
23
b.
If,
following
notice
as
provided
by
this
section,
a
24
company
ceases
activity
that
designates
it
as
a
scrutinized
25
company
and
submits
a
written
statement
to
the
public
fund
that
26
it
has
ceased
engaging
in
nonpecuniary
social
investment
or
a
27
boycott
of
certain
companies,
the
company
shall
be
removed
from
28
the
scrutinized
company
list.
29
Sec.
5.
NEW
SECTION
.
12K.4
Public
funds
——
contract
and
30
investment
requirements.
31
1.
A
public
fund
shall
not
enter
into
a
contract
with
a
32
company
to
provide
investment
or
management
of
securities
33
services
to
the
public
fund
so
long
as
such
company
remains
on
34
the
public
fund’s
scrutinized
company
list
as
provided
in
this
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chapter
or
if
the
company
would
engage
in
nonpecuniary
social
1
investment
or
a
boycott
of
certain
companies
on
behalf
of
the
2
public
fund.
3
2.
a.
In
accordance
with
sound
investment
criteria
and
4
consistent
with
fiduciary
obligations,
a
public
fund
shall
5
terminate
a
contract
to
provide
investment
or
management
6
of
securities
services
with
a
company
on
the
public
fund’s
7
scrutinized
company
list,
so
long
as
the
company
remains
on
8
that
list,
within
eighteen
months
following
the
first
written
9
notice
sent
to
the
scrutinized
company
as
required
by
section
10
12K.3.
11
b.
This
subsection
shall
not
be
construed
to
require
the
12
premature
or
otherwise
imprudent
termination
of
a
contract,
but
13
any
termination
of
a
contract
shall
be
completed
as
provided
14
by
this
subsection.
15
Sec.
6.
NEW
SECTION
.
12K.5
Reports.
16
1.
Scrutinized
companies
list.
Each
public
fund
shall,
17
within
thirty
days
after
the
scrutinized
company
list
is
18
created
or
updated
as
required
by
section
12K.3,
make
the
list
19
available
to
the
public.
20
2.
Annual
report.
On
October
1,
2024,
and
each
October
21
1
thereafter,
each
public
fund
shall
make
available
to
the
22
public,
and
file
with
the
general
assembly,
an
annual
report
23
covering
the
prior
fiscal
year
that
includes
the
following:
24
a.
The
scrutinized
company
list
as
of
the
end
of
the
fiscal
25
year.
26
b.
A
summary
of
all
written
notices
sent
as
required
by
27
section
12K.3
during
the
fiscal
year.
28
c.
All
contracts
terminated
as
provided
in
section
12K.4
29
during
the
fiscal
year.
30
Sec.
7.
NEW
SECTION
.
12K.6
Public
entities
——
contract
31
requirements.
32
A
public
entity
shall
not
enter
into
a
contract
of
one
33
thousand
dollars
or
more
with
a
scrutinized
company
included
on
34
a
scrutinized
company
list
created
by
a
public
fund
pursuant
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to
section
12K.3
for
services
including
but
not
limited
to
the
1
investment
or
management
of
securities
in
which
any
public
2
funds
are
invested.
3
Sec.
8.
NEW
SECTION
.
12K.7
Public
funds
——
legal
4
obligations.
5
1.
With
respect
to
actions
taken
in
compliance
with
this
6
chapter,
including
all
good-faith
determinations
regarding
7
companies
as
required
by
this
chapter,
the
public
fund
shall
8
be
immune
from
any
liability
and
exempt
from
any
conflicting
9
statutory
or
common
law
obligations,
including
any
such
10
obligations
in
respect
to
choice
of
asset
managers,
investment
11
funds,
or
investments
for
the
public
fund’s
securities
12
portfolios.
13
2.
This
chapter
shall
not
limit
the
ability
of
a
public
fund
14
to
terminate
the
contract
of
an
investment
manager
or
other
15
vendor
at
any
time
and
for
any
reason
in
the
exercise
of
the
16
public
fund’s
fiduciary
duties.
17
Sec.
9.
Section
35A.13,
subsection
4,
paragraph
a,
Code
18
2023,
is
amended
to
read
as
follows:
19
a.
Notwithstanding
subsection
5
,
moneys
in
the
fund,
except
20
so
much
of
the
fund
as
may
be
necessary
to
be
kept
on
hand
21
for
the
making
of
disbursements
under
this
section
,
shall
22
be
invested
by
the
treasurer
of
state,
in
consultation
with
23
the
commission
and
the
public
retirement
systems
committee
24
established
by
section
97D.4
,
in
any
investments
authorized
for
25
the
Iowa
public
employees’
retirement
system
in
section
97B.7A
,
26
including
common
stock,
and
subject
to
the
requirements
of
27
chapters
12F
,
12H
,
and
12J
,
and
12K,
and
the
earnings
therefrom
28
shall
be
credited
to
the
fund.
The
treasurer
of
state
may
29
execute
contracts
and
agreements
with
investment
advisors,
30
consultants,
and
investment
management
and
benefit
consultant
31
firms
in
the
administration
of
investments
of
moneys
in
the
32
fund.
33
Sec.
10.
Section
97A.7,
subsection
1,
Code
2023,
is
amended
34
to
read
as
follows:
35
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S.F.
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H.F.
_____
1.
The
board
of
trustees
shall
be
the
trustees
of
the
1
retirement
fund
created
by
this
chapter
as
provided
in
section
2
97A.8
and
shall
have
full
power
to
invest
and
reinvest
funds
3
subject
to
the
terms,
conditions,
limitations,
and
restrictions
4
imposed
by
subsection
2
and
chapters
12F
,
12H
,
and
12J
,
and
5
12K
and
subject
to
like
terms,
conditions,
limitations,
and
6
restrictions
said
trustees
shall
have
full
power
to
hold,
7
purchase,
sell,
assign,
transfer,
or
dispose
of
any
of
the
8
securities
and
investments
of
the
retirement
fund
which
have
9
been
invested,
as
well
as
of
the
proceeds
of
said
investments
10
and
any
moneys
belonging
to
the
retirement
fund.
The
board
11
of
trustees
may
authorize
the
treasurer
of
state
to
exercise
12
any
of
the
duties
of
this
section
.
When
so
authorized
the
13
treasurer
of
state
shall
report
any
transactions
to
the
board
14
of
trustees
at
its
next
monthly
meeting.
15
Sec.
11.
Section
97B.4,
subsection
5,
Code
2023,
is
amended
16
to
read
as
follows:
17
5.
Investments.
The
system,
through
the
chief
investment
18
officer,
shall
invest,
subject
to
chapters
12F
,
12H
,
and
12J
,
19
and
12K
and
in
accordance
with
the
investment
policy
and
20
goal
statement
established
by
the
board,
the
portion
of
the
21
retirement
fund
which,
in
the
judgment
of
the
system,
is
not
22
needed
for
current
payment
of
benefits
under
this
chapter
23
subject
to
the
requirements
of
section
97B.7A
.
24
Sec.
12.
Section
262.14,
unnumbered
paragraph
1,
Code
2023,
25
is
amended
to
read
as
follows:
26
The
board
may
invest
funds
belonging
to
the
institutions,
27
subject
to
chapters
12F
,
12H
,
and
12J
,
and
12K
and
the
28
following
regulations:
29
Sec.
13.
Section
411.7,
subsection
1,
Code
2023,
is
amended
30
to
read
as
follows:
31
1.
The
board
of
trustees
is
the
trustee
of
the
fire
32
and
police
retirement
fund
created
in
section
411.8
and
33
shall
annually
establish
an
investment
policy
to
govern
the
34
investment
and
reinvestment
of
the
moneys
in
the
fund,
subject
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to
the
terms,
conditions,
limitations,
and
restrictions
1
imposed
by
subsection
2
and
chapters
12F
,
12H
,
and
12J
,
and
2
12K
.
Subject
to
like
terms,
conditions,
limitations,
and
3
restrictions
the
system
has
full
power
to
hold,
purchase,
sell,
4
assign,
transfer,
or
dispose
of
any
of
the
securities
and
5
investments
in
which
the
fund
has
been
invested,
as
well
as
of
6
the
proceeds
of
the
investments
and
any
moneys
belonging
to
the
7
fund.
8
Sec.
14.
Section
602.9111,
subsection
1,
Code
2023,
is
9
amended
to
read
as
follows:
10
1.
So
much
of
the
judicial
retirement
fund
as
may
not
be
11
necessary
to
be
kept
on
hand
for
the
making
of
disbursements
12
under
this
article
shall
be
invested
by
the
treasurer
of
13
state
in
any
investments
authorized
for
the
Iowa
public
14
employees’
retirement
system
in
section
97B.7A
and
subject
to
15
the
requirements
of
chapters
12F
,
12H
,
and
12J
,
and
12K,
and
16
the
earnings
therefrom
shall
be
credited
to
the
fund.
The
17
treasurer
of
state
may
execute
contracts
and
agreements
with
18
investment
advisors,
consultants,
and
investment
management
and
19
benefit
consultant
firms
in
the
administration
of
the
judicial
20
retirement
fund.
21
EXPLANATION
22
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
23
the
explanation’s
substance
by
the
members
of
the
general
assembly.
24
This
bill
creates
new
Code
chapter
12K,
which
restricts
25
public
funds,
defined
as
the
treasurer
of
state,
the
state
26
board
of
regents,
the
Iowa
public
employees’
retirement
system
27
(IPERS),
the
public
safety
peace
officers’
retirement
system,
28
the
statewide
fire
and
police
retirement
system,
and
the
29
judicial
retirement
system,
and
public
entities,
defined
to
30
include
a
public
fund
and
the
state
and
political
subdivisions
31
of
the
state,
from
generally
entering
into
a
contract
with
32
certain
companies
engaged
in
nonpecuniary
social
investment
or
33
a
boycott
of
certain
companies.
34
The
bill
defines
“boycott
of
certain
companies”
as,
without
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a
reasonable
business
purpose
or
as
otherwise
required
under
1
Code
chapters
12F,
12H,
and
12J,
to
take
any
adverse
action
to
2
penalize
or
limit
business
opportunities
for
companies
engaging
3
or
doing
business
with
fossil
fuel-based
energy,
timber,
4
mining,
production
agriculture,
firearms,
firearm
parts,
5
firearm
accessories,
or
ammunition
companies.
“Nonpecuniary
6
social
investment”
is
defined
to
mean,
except
as
otherwise
7
provided
in
new
Code
chapter
12K
in
this
bill
and
Code
chapters
8
12F,
12H,
and
12J,
investment
or
commitment
of
public
funds
9
to
further
environmental,
social,
governance,
political,
or
10
ideological
interests
without
a
reasonable
business
purpose.
11
The
bill
also
defines
“scrutinized
company”
as
any
company
that
12
engages
in
nonpecuniary
social
investment
on
behalf
of
a
public
13
entity
or
a
boycott
of
certain
companies
on
behalf
of
a
public
14
entity.
15
Concerning
public
funds,
the
bill
requires
each
public
fund
16
to
develop
and
maintain
a
list
of
scrutinized
companies
that
17
the
public
fund
has
entered
into
a
contract
with
to
provide
18
investment
or
management
of
securities
services
for
the
public
19
fund.
Each
public
fund
shall
determine
this
list
by
March
1,
20
2024,
and
update
it
on
an
annual
basis.
Once
a
company
is
21
listed
on
the
scrutinized
companies
list
of
a
public
fund,
the
22
bill
requires
the
public
fund
to
send
a
notice
to
that
company
23
relative
to
the
requirements
of
the
bill,
to
include
notice
24
that
the
company
may
qualify
for
termination
of
a
contract
for
25
investment
or
management
of
securities
services
by
the
public
26
fund.
27
New
Code
section
12K.4
requires
that
a
public
fund
shall
28
not
enter
into
a
contract
with
a
company
to
provide
investment
29
or
management
of
securities
services
to
the
public
fund
of
a
30
company
on
the
public
fund’s
most
recent
scrutinized
company
31
list
or
of
a
company
that
would
engage
in
nonpecuniary
social
32
investment
or
boycott
of
certain
companies
on
behalf
of
the
33
public
fund.
If
the
public
fund
has
a
contract
for
investment
34
services
with
a
scrutinized
company,
the
public
fund
shall
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proceed
to
terminate
the
contract
with
that
company
in
18
1
months,
as
applicable,
so
long
as
the
company
remains
a
2
scrutinized
company.
3
The
bill
further
requires
each
public
fund
to
prepare
4
and
make
available
to
the
public,
and
file
with
the
general
5
assembly,
an
annual
report,
beginning
October
1,
2024,
6
concerning
actions
taken
by
the
public
fund
relative
to
the
7
requirements
of
new
Code
chapter
12K
in
the
previous
fiscal
8
year.
9
New
Code
section
12K.6
provides
that
a
public
entity
shall
10
not
enter
into
a
contract
of
$1,000
or
more
with
a
scrutinized
11
company
included
on
a
scrutinized
company
list
for
services
12
including
but
not
limited
to
the
investment
or
management
of
13
securities
in
which
any
public
funds
are
invested.
14
The
bill
further
provides
that
with
respect
to
actions
15
taken
in
compliance
with
the
bill,
including
all
good-faith
16
determinations
regarding
companies
as
required,
the
public
17
fund
shall
be
immune
from
any
liability
and
exempt
from
any
18
conflicting
statutory
or
common
law
obligations,
including
19
any
such
obligations
in
respect
to
choice
of
asset
managers,
20
investment
funds,
or
investments
for
the
public
fund.
In
21
addition,
the
bill
provides
that
the
requirements
of
the
bill
22
shall
not
limit
the
ability
of
a
public
fund
to
terminate
23
any
contract
of
an
investment
manager
or
other
vendor
in
the
24
exercise
of
the
public
fund’s
fiduciary
duties.
25
The
bill
makes
conforming
changes
to
Code
sections
12.8,
26
35A.13,
97A.7,
97B.4,
262.14,
411.7,
and
602.9111.
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