Bill Text: IA HSB41 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act prohibiting the state board of regents from investing public moneys in companies that are owned or controlled by Chinese military or government services and including effective date provisions.(See HF 181.)
Spectrum: Committee Bill
Status: (Introduced) 2023-02-01 - Committee report approving bill, renumbered as HF 181. [HSB41 Detail]
Download: Iowa-2023-HSB41-Introduced.html
House
Study
Bill
41
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
EDUCATION
BILL
BY
CHAIRPERSON
WHEELER)
A
BILL
FOR
An
Act
prohibiting
the
state
board
of
regents
from
investing
1
public
moneys
in
companies
that
are
owned
or
controlled
2
by
Chinese
military
or
government
services
and
including
3
effective
date
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
Section
262.14,
unnumbered
paragraph
1,
Code
1
2023,
is
amended
to
read
as
follows:
2
The
board
may
invest
funds
belonging
to
the
institutions,
3
subject
to
section
262.14A,
chapters
12F
,
12H
,
and
12J
,
and
the
4
following
regulations:
5
Sec.
2.
NEW
SECTION
.
262.14A
Restrictions
on
China-related
6
investments.
7
1.
As
used
in
this
section:
8
a.
“Company”
means
a
sole
proprietorship,
organization,
9
association,
corporation,
partnership,
joint
venture,
limited
10
partnership,
limited
liability
partnership,
limited
liability
11
company,
or
other
entity
or
business
association,
including
12
all
wholly
owned
subsidiaries,
majority-owned
subsidiaries,
13
parent
companies,
or
affiliates
of
such
entities
or
business
14
associations,
that
exists
for
profit-making
purposes.
15
b.
“Direct
holdings”
in
a
company
means
all
securities
of
16
a
company
held
directly
by
the
state
board
of
regents
or
in
an
17
account
or
fund
in
which
the
state
board
of
regents
owns
all
18
shares
or
interests.
19
c.
“Indirect
holdings”
in
a
company
means
all
securities
20
of
a
company
held
in
an
account
or
fund
managed
by
one
or
21
more
persons
not
employed
by
the
state
board
of
regents,
in
22
which
the
state
board
of
regents
owns
shares
or
interests
23
together
with
other
investors
not
subject
to
the
provisions
of
24
this
section.
Indirect
holdings
include
mutual
funds,
fund
25
of
funds,
private
equity
funds,
hedge
funds,
and
real
estate
26
funds.
27
d.
“Prohibited
company”
means
a
company
that
is
owned
or
28
controlled
by
Chinese
military
or
government
services
or
their
29
instrumentalities,
including
the
people’s
liberation
army
of
30
China
or
the
communist
party
of
China.
“Prohibited
company”
31
includes
a
company
in
which
the
Chinese
military
or
government
32
services
or
their
instrumentalities,
including
the
people’s
33
liberation
army
of
China
or
the
communist
party
of
China,
own
a
34
majority
interest,
either
directly
or
indirectly.
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e.
“Scrutinized
company”
means
any
company
that
is
owned
or
1
controlled
by
Chinese
military
or
government
services
or
their
2
instrumentalities.
3
2.
a.
On
or
before
July
1,
2023,
the
state
board
of
regents
4
shall
identify
or
have
identified
all
scrutinized
companies
5
in
which
the
state
board
of
regents
has
direct
or
indirect
6
holdings
and
shall
create
and
make
available
to
the
public
a
7
scrutinized
companies
list.
The
state
board
of
regents
shall
8
review
and
update,
if
necessary,
the
scrutinized
companies
list
9
on
a
quarterly
basis
thereafter.
10
b.
In
identifying
or
having
identified
scrutinized
11
companies,
the
state
board
of
regents
may
review
and
rely,
12
in
the
best
judgment
of
the
state
board
of
regents,
on
13
publicly
available
information
and
other
information
that
14
may
be
provided
by
nonprofit
organizations,
research
firms,
15
international
organizations,
and
government
entities.
The
16
state
board
of
regents
may
also
contact
asset
managers
and
17
institutional
investors
for
the
state
board
of
regents
to
18
identify
scrutinized
companies
based
upon
industry-recognized
19
lists
of
such
companies
that
the
state
board
of
regents
may
20
have
indirect
holdings
in.
21
3.
For
each
company
on
the
scrutinized
companies
list
22
in
which
the
state
board
of
regents
has
direct
or
indirect
23
holdings,
the
state
board
of
regents
shall
send
or
have
sent
24
a
written
notice
informing
the
company
of
the
requirements
of
25
this
section.
The
state
board
of
regents
or
its
representative
26
shall
continue
to
provide
such
written
notice
on
an
annual
27
basis
if
the
company
remains
a
scrutinized
company.
28
4.
The
state
board
of
regents
shall
not
acquire
publicly
29
traded
securities
of
a
prohibited
company.
30
5.
a.
The
state
board
of
regents
shall
sell,
redeem,
31
divest,
or
withdraw
all
publicly
traded
securities
of
a
32
prohibited
company
no
later
than
one
hundred
eighty
days
33
following
the
date
the
company
becomes
a
prohibited
company.
34
b.
This
subsection
shall
not
be
construed
to
require
the
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premature
or
otherwise
imprudent
sale,
redemption,
divestment,
1
or
withdrawal
of
an
investment,
but
such
sale,
redemption,
2
divestment,
or
withdrawal
shall
be
completed
as
provided
by
3
this
subsection.
4
6.
The
state
board
of
regents
shall,
within
thirty
days
5
after
the
scrutinized
companies
list
is
created
or
updated
6
as
required
by
subsection
2,
make
the
list
available
to
the
7
public.
8
7.
On
October
1,
2024,
and
each
October
1
thereafter,
the
9
state
board
of
regents
shall
make
available
to
the
public,
and
10
file
with
the
general
assembly,
an
annual
report
covering
the
11
prior
fiscal
year
that
includes
all
of
the
following:
12
a.
The
scrutinized
companies
list
as
of
the
end
of
the
13
fiscal
year.
14
b.
A
summary
of
all
written
notices
sent
as
required
by
15
subsection
3
during
the
fiscal
year.
16
c.
All
investments
sold,
redeemed,
divested,
or
withdrawn
as
17
provided
in
subsection
5
during
the
fiscal
year.
18
8.
With
respect
to
actions
taken
in
compliance
with
this
19
section,
including
all
good-faith
determinations
regarding
20
companies
as
required
by
this
section,
the
state
board
of
21
regents
shall
be
exempt
from
any
conflicting
statutory
22
or
common
law
obligations,
including
any
such
obligations
23
with
respect
to
choice
of
asset
managers,
investment
funds,
24
or
investments
for
the
state
board
of
regents’
securities
25
portfolios.
26
9.
The
requirements
of
subsections
2
through
7
shall
not
27
apply
if
the
United
States
Congress
or
president
of
the
United
28
States,
through
legislation
or
executive
order,
declares
that
29
mandatory
divestment
of
the
type
provided
for
in
this
section
30
interferes
with
the
conduct
of
United
States
foreign
policy.
31
Sec.
3.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
32
importance,
takes
effect
upon
enactment.
33
EXPLANATION
34
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
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the
explanation’s
substance
by
the
members
of
the
general
assembly.
1
This
bill
prohibits
the
state
board
of
regents
from
2
investing
public
moneys
in
companies
that
are
owned
or
3
controlled
by
Chinese
military
or
government
services.
4
The
bill
defines
“company”
as
any
entity
or
business
5
association,
including
all
subsidiaries,
parent
companies,
or
6
affiliates
of
such
entities
or
business
associations,
that
7
exist
for
profit-making
purposes.
The
bill
defines
“direct
8
holdings”
in
a
company
as
all
securities
of
a
company
held
9
directly
by
the
state
board
of
regents
or
in
an
account
or
10
fund
in
which
the
state
board
of
regents
owns
all
shares
or
11
interests.
The
bill
defines
“indirect
holdings”
in
a
company
12
as
all
securities
of
a
company
held
in
an
account
or
fund
13
managed
by
one
or
more
persons
not
employed
by
the
state
board
14
of
regents,
in
which
the
state
board
of
regents
owns
shares
15
or
interests
together
with
other
investors
not
subject
to
16
the
provisions
of
this
new
Code
section
262.14A.
The
bill
17
defines
“prohibited
company”
as
a
company
that
is
owned
or
18
controlled
by
Chinese
military
or
government
services
or
19
their
instrumentalities,
including
the
people’s
liberation
20
army
of
China
or
the
communist
party
of
China.
The
bill
21
defines
“scrutinized
company”
as
any
company
that
is
owned
or
22
controlled
by
Chinese
military
or
government
services
or
their
23
instrumentalities.
24
The
bill
requires
the
state
board
of
regents
to
identify
25
all
scrutinized
companies
in
which
the
state
board
of
regents
26
has
direct
or
indirect
holdings
on
or
before
July
1,
2023.
27
Additionally,
the
bill
requires
the
state
board
of
regents
to
28
create
and
make
available
to
the
public
a
scrutinized
companies
29
list
and
review
and
update
the
list
on
a
quarterly
basis.
30
The
bill
authorizes
the
state
board
of
regents
to
review
and
31
rely
on
publicly
available
information
and
information
from
32
other
sources
when
identifying
scrutinized
companies.
The
33
bill
requires
the
state
board
of
regents
to
send
notice
to
34
all
companies
on
the
scrutinized
companies
list
on
an
annual
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basis
informing
the
company
of
the
requirements
of
the
new
Code
1
section.
2
The
bill
prohibits
the
state
board
of
regents
from
acquiring
3
publicly
traded
securities
of
a
prohibited
company.
The
bill
4
requires
the
state
board
of
regents
to
sell,
redeem,
divest,
or
5
withdraw
all
publicly
traded
securities
of
a
prohibited
company
6
no
later
than
180
days
following
the
date
the
company
becomes
a
7
prohibited
company.
8
The
bill
requires
the
state
board
of
regents,
within
30
days
9
after
the
scrutinized
companies
list
is
created
or
updated,
10
to
make
the
list
available
to
the
public.
Additionally,
the
11
bill
requires
the
state
board
of
regents
to
make
available
to
12
the
public
and
file
with
the
general
assembly
an
annual
report
13
beginning
October
1,
2024,
and
each
October
1
thereafter.
14
The
bill
provides
that,
with
respect
to
actions
taken
in
15
compliance
with
new
Code
section
262.14A,
the
state
board
16
of
regents
shall
be
exempt
from
any
conflicting
statutory
17
or
common
law
obligations,
including
any
such
obligations
18
in
respect
to
choice
of
asset
managers,
investment
funds,
19
or
investments
for
the
state
board
of
regents’
securities
20
portfolios.
21
The
bill
provides
that
the
provisions
related
to
the
22
creation
of
a
scrutinized
companies
list,
divestment
of
23
publicly
traded
securities
of
a
prohibited
company,
and
24
reporting
shall
not
apply
if
the
United
States
Congress
25
or
president
of
the
United
States
declares
that
mandatory
26
divestment
of
the
type
provided
for
in
new
Code
section
262.14A
27
interferes
with
the
conduct
of
United
States
foreign
policy.
28
The
bill
modifies
Code
section
262.14
to
impose
these
same
29
restrictions
on
the
state
board
of
regents’
investments
of
30
moneys
belonging
to
the
state
university
of
Iowa,
including
31
the
university
of
Iowa
hospitals
and
clinics,
the
Iowa
32
state
university
of
science
and
technology,
including
the
33
agricultural
experiment
station,
the
university
of
northern
34
Iowa,
the
Iowa
braille
and
sight
saving
school,
the
Iowa
school
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