HB 45: "An Act relating to certain investments of the Alaska permanent fund, the state's retirement systems, the State of Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees in companies that do business in Sudan, and restricting those investments."
00 HOUSE BILL NO. 45 01 "An Act relating to certain investments of the Alaska permanent fund, the state's 02 retirement systems, the State of Alaska Supplemental Annuity Plan, and the deferred 03 compensation program for state employees in companies that do business in Sudan, and 04 restricting those investments." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 37.10 is amended by adding a new section to read: 07 Sec. 37.10.212. Investments in companies involved in business in Sudan. 08 (a) The board shall comply with requirements of AS 37.13.125. For purposes of this 09 subsection, references to the "board" in AS 37.13.125 are construed to mean the 10 "Alaska Retirement Management Board." 11 (b) To the extent that this section conflicts with AS 37.10.270(a) or other 12 provisions, the provisions of this section prevail. The board may cooperate with the 13 Board of Trustees of the Alaska Permanent Fund Corporation in carrying out the 14 requirements of AS 37.13.125.
01 * Sec. 2. AS 37.13 is amended by adding a new section to read: 02 Sec. 37.13.125. Investments in companies involved in business in Sudan. 03 (a) The board shall make its best efforts to identify all scrutinized companies in which 04 the fund has direct holdings or might have direct holdings in the future that have active 05 business operations in Sudan. The board shall prepare and update on a quarterly basis 06 a scrutinized companies list or, in good faith, rely on a scrutinized companies list 07 generated and updated on a quarterly basis by another entity the board determines has 08 suitable expertise. A company that stops active business operations in Sudan shall be 09 removed from the list, and a company that becomes engaged in or resumes active 10 business operations in Sudan shall be added to the list. The scrutinized companies list 11 prepared by the board or relied on by the board shall be created and updated based on 12 evolving information, including information obtained by 13 (1) reviewing publicly available information regarding companies with 14 active business operations compiled by nonprofit organizations, research firms, 15 international organizations, and government entities; 16 (2) contacting fund asset managers regarding the identity of companies 17 with active business operations; 18 (3) contacting other institutional investors that have divested from 19 companies that have active business operations. 20 (b) A company may not be included on the scrutinized companies list if 21 (1) its primary purpose in Sudan is to provide humanitarian goods or 22 services, services of a purely clerical or reporting nature, or food, clothing, or 23 consumer goods that do not include oil-related activities, mineral extraction activities, 24 or power production activities and if the company has not taken actions within the 25 immediately preceding 20-month period that support or promote the genocidal 26 campaign in Darfur, including actions that prevent Darfur's victimized persons from 27 communicating with each other, that encourage Sudanese citizens to speak out against 28 an internationally approved security force for Darfur, or that alter the record on human 29 rights abuses in Darfur; 30 (2) it has adopted, publicized, and implemented a formal plan to stop 31 active business operations within one year and to refrain thereafter from resuming
01 active business operations; 02 (3) it has undertaken significant humanitarian efforts in conjunction 03 with an international organization, the government of Sudan, the regional government 04 of southern Sudan, or a nonprofit entity that has been evaluated and certified by an 05 independent entity to be substantial and of benefit to one or more marginalized 06 populations of Sudan; or 07 (4) it has materially improved conditions for the genocidally 08 victimized population in Darfur through negotiation with the government of Sudan. 09 (c) The board shall, on an ongoing basis, identify the companies on the 10 scrutinized companies list in which the fund has direct holdings. For each identified 11 company, the board shall determine whether the company is engaged in active 12 business operations or is now engaged only in inactive business operations. The board 13 shall send a written notice informing each company engaged only in inactive business 14 operations of the requirements of this section and shall encourage the company to 15 refrain from initiating active business operations. After sending the notice, the board 16 shall remove the company from the scrutinized companies list relied on by the board. 17 The board shall send a written notice to each company engaged in active business 18 operations that the company is subject to divestment by the fund. The notice must 19 offer the company the opportunity to clarify its activities in Sudan and encourage the 20 company to stop its active business operations or convert the active business 21 operations to inactive business operations to avoid divestment by the fund. If, within 22 90 days after the notice has been sent, the company stops its active business 23 operations, the company shall be removed from the scrutinized companies list relied 24 on by the board. 25 (d) If, 90 days after notice is sent by the board, a company continues to have 26 active business operations in Sudan, all publicly traded securities of the company held 27 directly by the fund and managed by a hired manager or by an employee of the fund 28 shall be immediately sold, redeemed, or otherwise divested. At least 50 percent of the 29 assets of the company held directly by the fund but not managed by a hired manager 30 or an employee of the fund shall be divested within nine months after the company's 31 most recent placement on the scrutinized companies list, and the balance of those
01 assets shall be divested during the next six months. 02 (e) Indirect holdings of the fund in assets of a company on the scrutinized 03 companies list that has active business operations need not be divested if the assets are 04 part of a separate, actively managed commingled fund in which other investors also 05 own shares or interests. 06 (f) By February 1 of each year, the board shall file a report with the 07 legislature, the attorney general, and the United States Presidential Special Envoy for 08 Sudan summarizing its activities under this section. The report must include the most 09 recently updated list of scrutinized companies relied on by the board. 10 (g) To the extent that this section conflicts with AS 37.13.120 or other 11 provisions, the provisions of this section prevail. The board may cooperate with the 12 Alaska Retirement Management Board in carrying out the requirements of this 13 section. 14 (h) In this section, 15 (1) "active business operations" means engaging in commerce in any 16 form in Sudan, including acquiring, developing, maintaining, owning, selling, 17 possessing, leasing, or operating equipment, facilities, products, services, property, or 18 other apparatus of business or commerce, but does not include inactive business 19 operations; 20 (2) "company" means any sole proprietorship, organization, 21 association, partnership, corporation, joint venture, limited partnership, limited 22 liability company, or other entity or business association, including all wholly owned 23 subsidiaries, majority-owned subsidiaries, parent companies, or affiliates or business 24 associations that exist for profit-making purposes; 25 (3) "government of Sudan" means the government in Khartoum, 26 Sudan, lead by the National Congress Party or any successor government, including 27 the coalition Government of National Unity agreed on in the Comprehensive Peace 28 Agreement for Sudan, but does not include the regional government of southern 29 Sudan; 30 (4) "inactive business operations" means the mere continued holding 31 or renewal of rights to property in Sudan previously used for the purpose of generating
01 revenue but not presently used for that purpose; 02 (5) "marginalized populations" includes the portion of the populations 03 in the Darfur region that has been genocidally victimized and in southern Sudan that 04 has been victimized by Sudan's north-south civil war, the Beja, Rashidiya, and other 05 similarly underserved groups of eastern Sudan, the Nubian and other similarly 06 underserved groups in Sudan's Abyei, Southern Blue Nile, and Nuba Mountain 07 regions; and the Amri, Hamadab, Manasir, and other similarly underserved groups of 08 northern Sudan; 09 (6) "mineral extraction activities" means exploring for, extracting, 10 processing, transporting, or wholesale selling or trading of minerals, and includes the 11 provision of supplies, services, or other forms of support for those activities; 12 (7) "oil-related activities" means exploring for oil, owning rights to oil, 13 exporting, extracting, producing, refining, processing, transporting, selling, or trading 14 oil, or constructing, maintaining, or operating an oil pipeline, refinery, or other oil 15 infrastructure, and includes the provision of supplies, services, or other forms of 16 support for those activities, but does not include the retail sale of gasoline and oil- 17 based consumer products; 18 (8) "power production activities" means any business operation that 19 involves a project commissioned by the National Electricity Corporation of Sudan or 20 other similar government of Sudan entity that engages in power generation and 21 delivers, sells, installs, or maintains components for power generation and delivery 22 projects, and includes the provision of supplies, services or other forms of support for 23 those activities; 24 (9) "scrutinized company" means a company 25 (A) with business operations that involve contracts with, 26 provision of supplies to, or provision of services to the government of Sudan, a 27 company in which the government of Sudan has a direct or indirect equity 28 interest, or a company that is involved in a consortium or project 29 commissioned by the government of Sudan if 30 (i) more than 10 percent of the company's revenue or 31 assets linked to Sudan involve oil-related activities or mineral
01 extraction activities and less than 75 percent of the company's revenue 02 or assets linked to Sudan involve contracts with or provision of oil- 03 related or mineral extracting products or services to the regional 04 government of southern Sudan or a project or consortium created 05 exclusively by that regional government; or 06 (ii) more than 10 percent of the company's revenue or 07 assets linked to Sudan involve power production activities and less than 08 75 percent of the company's power production activities include 09 projects to provide power or electricity to the marginalized populations 10 of Sudan; 11 (B) that is complicit in the Darfur genocide by supporting or 12 promoting the genocidal campaign, including taking action to prevent Darfur's 13 victimized persons from communicating with each other, to encourage 14 Sudanese citizens to speak out against an internationally approved security 15 force for Darfur, or to alter the record on human rights abuses in Darfur; or 16 (C) that supplies military equipment to Sudan, unless the 17 company can clearly demonstrate that the equipment is not being used by a 18 party participating in armed conflict in Sudan, or is supplied solely to the 19 regional government of southern Sudan or an internationally recognized 20 peacekeeping force or humanitarian organization. 21 * Sec. 3. AS 37.10.212 and AS 37.13.125 are repealed on the day after the Alaska 22 Retirement Management Board and the Board of Trustees of the Alaska Permanent Fund 23 Corporation jointly inform the revisor of statutes that 24 (1) the United States Congress or the President of the United States has 25 declared that the Darfur genocide 26 (A) has been halted; and 27 (B) has not resumed for at least 12 months; 28 (2) the United States has revoked all sanctions it imposed against the 29 government of Sudan; 30 (3) the United States Congress or the President of the United States has 31 declared that the government of Sudan has honored its commitments
01 (A) to stop attacks on civilians; 02 (B) to demobilize and demilitarize the Janjaweed and associated 03 militias; 04 (C) to grant free and unfettered access for deliveries of humanitarian 05 assistance; and 06 (D) to allow for the safe and voluntary return of refugees and internally 07 displaced persons; or 08 (4) the United States Congress or the President of the United States, through 09 legislation or executive order, declares that mandatory divestment of the types provided for in 10 AS 37.13.125 interferes with the conduct of United States foreign policy. 11 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION. Within 90 days after the effective date of AS 37.10.212, added by sec. 14 1 of this Act, and of AS 37.13.125, added by sec. 2 of this Act, the Alaska Retirement 15 Management Board and the Board of Trustees of the Alaska Permanent Fund Corporation 16 shall prepare the initial list of scrutinized companies required to be identified by those 17 sections or shall select a scrutinized companies list generated by another entity.