SB 81: "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; and providing for an effective date."
00 SENATE BILL NO. 81 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; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 07 to read: 08 FINDINGS. The legislature finds that 09 (1) since 1997, the federal government has imposed fiscal sanctions against 10 the Government of Sudan for acts of terrorism and atrocities directed against civilians in the 11 Darfur region of Sudan; 12 (2) the fiscal sanctions described in (1) of this section are monitored through 13 the United States Department of the Treasury's office of foreign assets control; 14 (3) the State of Alaska controls significant financial assets through
01 investments in the Alaska permanent fund and funding of the State of Alaska retirement 02 systems, supplemental annuity plans, and deferred compensation, among other funds; 03 (4) it is a fundamental responsibility of the State of Alaska to decide where, 04 how, and by whom financial resources in its control are invested, taking into account 05 numerous pertinent factors; and 06 (5) the investment of financial resources in business firms and financial 07 institutions with ties to the repressive regime in the Sudan is inconsistent with the moral and 08 political values of the people of Alaska. 09 * Sec. 2. AS 37.10 is amended by adding new sections to read: 10 Sec. 37.10.072. Sudan divestment. (a) The commissioner or any fiduciary of a 11 fund subject to this title may not invest in and if owned, shall cause the fund to divest 12 ownership in the publicly traded securities of a company that is placed by the 13 commissioner on a list of companies that conduct or have direct investments in 14 business operations in Sudan. On or before January 31 of each year, if the fund has 15 investments managed by an outside investment manager, the fiduciary shall direct the 16 investment manager not to invest in and if owned, to divest ownership in the publicly 17 traded securities of a company that is placed by the commissioner on a list of 18 companies that conduct or have direct investments in business operations in Sudan. 19 (b) If an investment in a fund under (a) of this section is managed as a 20 commingled investment or other business structure in which the fund is not the sole 21 owner of the investment interest or the investment is an index fund, the provisions of 22 (a) of this section do not apply. The commissioner shall require that, on or before 23 January 31 of each year, the fiduciary submit letters to the managers of commingled 24 investments requesting the manager to consider removing from the commingled 25 investment any company on the list of companies that conduct or have direct 26 investments in business operations in Sudan. 27 (c) The commissioner shall create and update on or before December 31 of 28 each year a list of companies that conduct or have direct investments in business 29 operations in Sudan. 30 (d) The commissioner shall make reasonable efforts to investigate all publicly 31 traded companies to determine whether the company conducts or has direct
01 investments in business operations in Sudan. In conducting the investigation, the 02 commissioner may use the following: 03 (1) credible publicly available information regarding companies with 04 active business operations compiled by nonprofit organizations, research firms, 05 international organizations, and government entities; 06 (2) information supplied by institutional investors that have divested 07 from companies that conduct or have direct investments in business operations in 08 Sudan. 09 (e) The commissioner shall provide written notice and an opportunity to 10 comment in writing to each company identified as a company that conducts or has 11 direct investments in business operations in Sudan under (d) of this section. 12 (f) The commissioner shall add a company identified under (d) of this section 13 to the list of companies that conduct or have direct investments in business operations 14 in Sudan not earlier than 90 days after providing written notice under (e) of this 15 section, unless the company demonstrates to the commissioner that it does not conduct 16 or have direct investments in business operations in Sudan. 17 (g) The commissioner shall make every effort to avoid erroneously adding a 18 company to the list of companies that conduct or have direct investments in business 19 operations in Sudan. The commissioner shall verify that the company conducts or has 20 direct investments in business operations in Sudan before adding it to the list of 21 companies that conduct or have direct investments in business operations in Sudan. 22 (h) On or before January 31 of each year, the commissioner shall advise the 23 president of the senate, the speaker of the house, and the United States presidential 24 special envoy for Sudan of the companies on the list of companies that conduct or 25 have direct investments in business operations in Sudan. 26 (i) The commissioner of revenue may adopt regulations under AS 44.62 to 27 carry out the purposes of the section. 28 (j) In this section 29 (1) "business operations" 30 (A) means power production activities, mineral extraction 31 activities, oil-related activities, or the production of military equipment;
01 (B) does not include operations that the company can 02 demonstrate 03 (i) are conducted under contract directly and 04 exclusively with the regional government of southern Sudan; 05 (ii) are conducted under a license from the United 06 States Department of the Treasury, office of foreign assets control, or 07 are expressly exempted under federal law from the requirement to be 08 conducted under such a license; 09 (iii) consist of providing goods or services to 10 marginalized populations of Sudan; 11 (iv) consist of providing goods or services to an 12 internationally recognized peacekeeping force or humanitarian 13 organization; 14 (v) consist of providing goods or services that are used 15 only to promote health or education; or 16 (vi) have been voluntarily suspended; 17 (2) "commissioner" means the commissioner of revenue; 18 (3) "Government of Sudan" 19 (A) means the government in Khartoum, Sudan, which is led 20 by the National Congress Party, formerly known as the National Islamic Front, 21 or any successor government formed on or after October 13, 2006; 22 (B) includes the coalition National Unity Government agreed 23 upon in the Comprehensive Peace Agreement for Sudan; 24 (C) does not include the regional government of southern 25 Sudan; 26 (4) "marginalized populations of Sudan" means adversely affected 27 groups in regions authorized to receive assistance under sec. 8(c), P.L. 109-344 28 (Darfur Peace and Accountability Act of 2006) and marginalized areas in northern 29 Sudan described in sec. 4(9), P.L. 109-344; 30 (5) "military equipment" 31 (A) means weapons, arms, military supplies, and equipment
01 that readily may be used for military purposes; 02 (B) includes radar systems or military-grade transport vehicles, 03 supplies, or services sold or provided directly to a force actively participating 04 in armed conflict in Sudan; 05 (6) "mineral extraction activities" 06 (A) means exploring, extracting, processing, transporting, or 07 wholesale selling or trading of elemental minerals, associated metal alloys, 08 oxides, or ore; 09 (B) includes activities involving gold, copper, chromium, 10 chromite, diamonds, iron, iron ore, silver, tungsten, uranium, and zinc; 11 (7) "oil-related activities" means 12 (A) exporting, extracting, producing, refining, processing, 13 exploring for, transporting, selling, or trading oil; and 14 (B) constructing, maintaining, or operating a pipeline, refinery, 15 or other oilfield infrastructure; 16 (8) "power production activities" 17 (A) means a business operation that involves a project 18 commissioned by the National Electricity Corporation of Sudan or other 19 similar entity of the Government of Sudan whose purpose is to facilitate power 20 generation and delivery; 21 (B) includes establishing power-generating plants or 22 hydroelectric dams, selling or installing components for the project, or 23 providing service contracts related to the installation or maintenance of the 24 project. 25 Sec. 37.10.073. Divestment exemptions, immunity, and indemnification. 26 For actions taken in compliance with AS 37.10.072 or inaction done in good faith, the 27 commissioner of revenue, fiduciary, and the commissioner of revenue's or fiduciary's 28 agents, attorneys, trustees, officers, employees, staff, custodians, research firms, and 29 investment managers under contract, and board members complying with 30 AS 37.10.220 or AS 37.13.120 are 31 (1) exempt from any conflicting state statutory or common law
01 obligations, including any obligations with respect to choice of asset managers, 02 investment funds, or investments for the public fund's securities portfolios; 03 (2) immune from liability under state or local law; 04 (3) indemnified and held harmless by the State of Alaska from claims, 05 demands, suits, actions, damages, judgments, costs, charges, and expenses, including 06 costs and attorney fees, and against all liability, losses, and damages of any nature that 07 the commissioner, fiduciary, and the commissioner's or fiduciary's agents, attorneys, 08 trustees, officers, employees, staff, custodians, research firms, and investment 09 managers under contract may at any time sustain by reason of any decision to restrict, 10 reduce, or eliminate investments made in compliance with AS 37.10.072; and 11 (4) immune from adverse licensing actions under AS 08. 12 * Sec. 3. AS 37.10.220 is amended by adding a new subsection to read: 13 (d) The board shall comply with AS 37.10.072. 14 * Sec. 4. AS 37.13.120 is amended by adding a new subsection to read: 15 (f) The board shall comply with AS 37.10.072. 16 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 REPEAL. Sections 1, 3, and 4 of this Act and AS 37.10.072, enacted by sec. 2 of this 19 Act, are repealed on the earliest of the day after 20 (1) the commissioner of revenue gives written notice to the revisor of statutes 21 and the lieutenant governor that the President of the United States has certified to Congress 22 that the Government of Sudan has honored its commitments to 23 (A) abide by the United Nations Security Council Resolution 1769 24 (2007); 25 (B) cease attacks on civilians; 26 (C) demobilize and demilitarize the Janjaweed and associated militias; 27 (D) grant free and unfettered access for delivery of humanitarian 28 assistance; and 29 (E) allow for the safe and voluntary return of refugees and internally 30 displaced persons; 31 (2) the United States Congress or the President of the United States, through
01 legislation or executive order, declares that the Sudan divestment authorized in AS 37.10.072 02 interferes with the conduct of United States foreign policy; or 03 (3) P.L. 110-174 (Sudan Accountability and Divestment Act of 2007) is 04 repealed. 05 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 NOTICE. Not later than 30 days after the enactment of this Act, the Department of 08 Law is directed to submit written notice to the attorney general of the United States describing 09 this Act. 10 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).