Bill Text: NJ S2340 | 2018-2019 | Regular Session | Introduced
Bill Title: Prohibits investment of certain public funds in companies doing business in countries that sponsor terrorism.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2018-04-05 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S2340 Detail]
Download: New_Jersey-2018-S2340-Introduced.html
Sponsored by:
Senator ANTHONY R. BUCCO
District 25 (Morris and Somerset)
SYNOPSIS
Prohibits investment of certain public funds in companies doing business in countries that sponsor terrorism.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the investment of certain public funds and supplementing P.L.1950, c.270 (C.52:18A-79 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
a. Despite significant pressure from the United States Government, the countries designated as state sponsors of terrorism, such as Cuba, Iran, North Korea and the Sudan, have not taken all the necessary actions to disassociate themselves fully from their ties to terrorism;
b. State sponsors of terrorism impede the efforts of the United States and the international community to fight terrorism while providing critical foundations for terrorist groups to obtain funds, weapons, materials, and the secure areas they require to plan and conduct operations;
c. Official United States sanctions largely prohibit United States companies from doing business with countries that the United States Department of State has designated as sponsoring terrorism;
d. America's largest and most prominent public pension systems tend to be heavily invested in global publicly traded companies that have business activities in terrorist-sponsoring states;
e. On average, America's top 100 pension systems invest between 15 and 23 percent of their portfolio in companies that do business in terrorist-sponsoring states;
f. There are approximately 400 public companies that do business with terrorist-sponsoring states, many of which provide critical revenues and advanced equipment and technology to these countries;
g. The federal Securities and Exchange Commission in May 2001 determined that business operations in terrorist-sponsoring countries can represent a material risk to investors;
h. There is a proven risk to the share value and corporate reputation of companies doing business in terrorist-sponsoring countries; and
i. It is in the best interest of this State that a statutory prohibition be enacted to prohibit the investment of public employee retirement funds in companies doing business in countries designated as state sponsors of terrorism.
2. Notwithstanding any provision of law to the contrary, no assets of any pension or annuity fund under the jurisdiction of the Division of Investment in the Department of the Treasury, or its successor, shall be invested in any bank or financial institution which directly or through a subsidiary has outstanding loans to or financial activities in or with countries, or their instrumentalities, designated as state sponsors of terrorism by the United States Department of State and no such assets shall be invested in the stocks, securities or other obligations of any company which directly or through a subsidiary is engaged in business in or with countries, or their instrumentalities, designated as state sponsors of terrorism.
3. The State Investment Council and the Director of the Division of Investment shall take appropriate action to sell, redeem, divest or withdraw any investment held in violation of the provision of this act. This act shall not be construed to require the premature or otherwise imprudent sale, redemption, divestment or withdrawal of an investment, but such sale, redemption, divestment or withdrawal shall be completed not later than three years following the effective date of this act.
4. Within 60 days after the effective date of this act, the Director of the Division of Investment shall file with the Legislature a report of all investments held as of the effective date of this act which are in violation of the provisions of this act. Every year thereafter, the director shall report on all investments sold, redeemed, divested or withdrawn in compliance with this act.
Each report after the initial report shall provide: a description of the progress which the division has made since the previous report and since the enactment of this act in implementing the provisions of section 2 of this act.
Any additional country that may be designated a state sponsor of terrorism by the federal Department of State and action taken by the division as a result of that designation to comply with section 2 of this act.
5. This act shall take effect on the first day of the month after enactment.
STATEMENT
This bill requires the Division of Investment in the Department of the Treasury to divest State-administered pension fund investments from companies, banks and financial institutions that have ties to, or activities in, countries designated as state sponsors of terrorism by the United States Department of State. An August 2004 report written by the Center for Security Policy found that America's 100 largest and most prominent pension systems have the power to help defeat terrorism by divesting a portion or all of the approximately $188 billion these funds have invested in 400 companies doing business in terrorist-sponsoring states.
International terrorism and the development and proliferation of weapons of mass destruction are the most pressing national security concerns presently facing the United States. Therefore, it is important that the investment of the retirement funds of public employees avoid contributing to these twin scourges.
The federal Department of State submits annually a "Patterns of Global Terrorism" report, in compliance with Title 22 of the United States Code, to provide Congress with a full and complete report on terrorism for those countries and groups that meet certain criteria.
