HB 394: "An Act relating to the investment of state money by public agencies; and relating to the divestment of certain investments by public agencies."
00 HOUSE BILL NO. 394 01 "An Act relating to the investment of state money by public agencies; and relating to the 02 divestment of certain investments by public agencies." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 LEGISLATIVE FINDINGS. The legislature finds that 07 (1) divestment campaigns and related tactics have become a tool of economic 08 warfare, targeting the autonomy and security of key allies and trade partners of the state and 09 the United States; 10 (2) Taiwan and the State of Israel are known for dynamic and innovative 11 approaches in many business sectors; 12 (3) the state possesses natural resources in abundance, including the National 13 Petroleum Reserve, and is known as a world leader in environmentally responsible resource 14 development in the Arctic; a campaign that targets investment in the state's natural resource
01 sector based on its geographic location will result in the migration of investment away from 02 the state, which possesses and maintains robust environmental standards, to parts of the world 03 with a less robust track record of environmentally responsible resource development; 04 (4) an organization that, pursuant to a boycott or divestment campaign, 05 including an environmental, social, or governance campaign, or similar project targeting this 06 state, or targeting the continued existence of a foreign country or autonomous region, refuses 07 to deal with the state, the State of Israel, Ukraine, or another foreign country, or Taiwan, or an 08 entity that does business with these organizations or in these places, makes a discriminatory 09 decision based on geographic or national origin that impairs the commercial soundness of the 10 organization as an investment. 11 * Sec. 2. AS 37.05 is amended by adding a new section to article 7 to read: 12 Sec. 37.05.810. Restrictions on investment of state money. (a) 13 Notwithstanding any other provision of law to the contrary, and except as otherwise 14 provided in this section, a public agency may not invest state money in an organization 15 identified by the department in (b) of this section that promotes or engages in a 16 boycott or divestment campaign targeting the state, or pursued for the purpose of 17 preventing the continued autonomy of Taiwan or the existence of a foreign country. 18 (b) The department shall develop, maintain, and make publicly available a list 19 of organizations that the department determines are restricted organizations. The 20 department shall make every effort to avoid including an organization on the list that 21 is not a restricted organization. The department shall annually review and update the 22 list and make the list available to the public. 23 (c) The department shall provide 90 days' written notice to an organization of 24 the department's intent to include the organization on the list. The notice must inform 25 the organization that inclusion on the list would make the organization ineligible for 26 the investment of state money in the organization and may result in the organization 27 becoming subject to divestment by public agencies. The notice must specify that the 28 organization may be removed from the list if the organization stops promoting or 29 engaging in the boycott. 30 (d) The department shall provide an organization identified under (c) of this 31 section with an opportunity to comment in writing regarding the organization's being a
01 restricted organization. The organization may deny its involvement in a boycott or 02 divestment campaign or state that the organization has ended its promotion of or 03 engagement in the boycott or divestment campaign. If the organization demonstrates 04 to the department that the organization is not a restricted organization , the department 05 may not place the organization on the list. If an organization had been promoting or 06 engaged in a boycott or divestment campaign but has ended its involvement, the 07 organization must submit a written certified statement to the department affirming that 08 the organization will not resume promoting or engaging in the boycott or divestment 09 campaign. The department shall retain in its records written statements received under 10 this subsection. 11 (e) Upon completion of the list under this section, the department shall 12 identify any organization on the list in which a public agency has an investment. 13 (f) Except as provided in (g) of this section, a public agency that has an 14 investment in an organization identified under (e) of this section shall divest itself of 15 the investment within 180 days after the department adopts the list. 16 (g) This section does not require a public agency to divest itself of an 17 investment unless the department determines that the divestment is consistent with the 18 fiduciary responsibilities of the public agency. 19 (h) This section does not apply to 20 (1) a business activity that is done for an ordinary business purpose; 21 (2) an investment by a state agency in a sole proprietorship; or 22 (3) an investment by a state agency that totals less than $5,000,000. 23 (i) In this section, 24 (1) "boycott" means a refusal to do business with, a termination of 25 business with, or another action that is intended to penalize, inflict economic harm on, 26 or limit commercial relations with Taiwan, the state, or a foreign country; 27 (2) "department" means the Department of Revenue; 28 (3) "investment" 29 (A) means a commitment or contribution of funds or property, 30 a loan or other extension of credit, or the entry into or renewal of a contract for 31 goods or services;
01 (B) does not mean a commingled fund, a derivative instrument, 02 a passive investment strategy that seeks to replicate the return of an index, or a 03 similar item; 04 (4) "list" means the initial or revised list developed and maintained by 05 the department under (b) - (d) of this section; 06 (5) "organization" means 07 (A) an organization, association, corporation, partnership, joint 08 venture, limited partnership, limited liability partnership, limited liability 09 company, or other entity or business association; and 10 (B) a wholly-owned subsidiary, majority-owned subsidiary, 11 parent company, or affiliate of an entity or business association identified in 12 (A) of this paragraph; 13 (6) "public agency" means a department, institution, board, 14 commission, division, authority, public corporation, committee, school district, 15 political subdivision, or other administrative unit of a municipality, political 16 subdivision of the state, or the executive or legislative branch of state government, 17 including the University of Alaska, the Alaska Permanent Fund Corporation, the 18 Alaska Housing Finance Corporation, the Alaska Industrial Development and Export 19 Authority, and a regional educational attendance area; 20 (7) "restricted organization" means an organization that promotes or 21 engages in a boycott or divestment campaign targeting the state, or pursued for the 22 purpose of preventing the continued autonomy of Taiwan or the existence of a foreign 23 country; 24 (8) "state money" means money in the budget reserve fund established 25 under AS 37.05.540, money in the earnings reserve account established under 26 AS 37.13.145, money in a pension fund, and all other money over which a public 27 agency has the power to direct its use. 28 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION. (a) Within 30 days after the effective date of this Act, the department 31 shall begin and follow the process required under AS 37.05.810(b) - (e), enacted by sec. 2 of
01 this Act, to establish a list of restricted organizations. 02 (b) In this section, "restricted organization" has the meaning given in AS 37.05.810(i), 03 enacted by sec. 2 of this Act.