Legislature(2009 - 2010)
2009-01-26 Senate Journal
Full Journal pdf2009-01-26 Senate Journal Page 0073 SB 81 SENATE BILL NO. 81 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: "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." was read the first time and referred to the Senate Special Committee on World Trade, Technology, and Innovations, State Affairs and Finance Committees. The following fiscal information was published today: Fiscal Note No. 1, zero, Department of Revenue Fiscal Note No. 2, zero, Department of Revenue Governor's transmittal letter dated January 23: Dear President Stevens: Under the authority of Article III, Section 18, of the Alaska Constitution, I am transmitting a bill relating to certain investments of the Alaska permanent fund, the state's retirement systems, the State of 2009-01-26 Senate Journal Page 0074 Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees in companies that do business in Sudan, and restricting those investments. This bill requires the fiduciaries of state investment funds to divest of investments in publicly traded companies that conduct business operations or have direct investments in business operations in Sudan, as defined by the federal Sudan Divestment and Accountability Act of 2007, P.L. 110-174. On September 21, 2004, addressing the United Nations General Assembly, President George W. Bush stated, "[A]t this hour, the world is witnessing terrible suffering and horrible crimes in the Darfur region of Sudan, crimes my government has concluded are genocide." On September 25, 2006, Congress reaffirmed that "the genocide unfolding in the Darfur region of Sudan is characterized by acts of terrorism and atrocities directed against civilians, including mass murder, rape, and sexual violence committed by the Janjaweed and associated militias with the complicity and support of the National Congress Party-led faction of the Government of Sudan." The federal government has imposed sanctions against the Government of Sudan since 1997. These sanctions are monitored through the U.S. Treasury Department's Office of Foreign Assets Control (OFAC). The investment of funds in business firms and financial institutions with ties to the repressive regime in Sudan is inconsistent with the moral and political values of the people of Alaska. It is a fundamental responsibility of the state of Alaska to decide where, how, and by whom financial resources in its control should be invested, taking into account numerous pertinent factors. The people of Alaska condemn the human rights abuses, enslavement and genocide in Sudan and declare these atrocities to be contrary to the fundamental principles of human rights and standards of justice and individual freedoms. The bill will require the commissioner of the Department of Revenue, the Alaska Retirement Management Board of Trustees, and the Alaska Permanent Fund Board of Trustees to divest of investments in publicly traded companies that conduct business operations or have direct investments in business operations in Sudan. These provisions are drafted to comply with the federal Sudan Divestment and Accountability Act of 2007, P.L. 110-174, which includes notice of the enactment of this measure to the United States Attorney General. 2009-01-26 Senate Journal Page 0075 The bill also provides for immunity and indemnification for the state's investment fund fiduciaries in connection with the implementation of a Sudan divestment policy. There is authority for the notion that divestment policies are not consistent with the prudent investor standard (see, e.g., 1998 Inf. Op. Att'y Gen. at 198 (663-98-0297; Aug. 12); Alaska State Senate, Rural Research Agency, Alaska's Permanent Fund: Legislative History, Intent and Operations at 39-40 (Jan. 1986)). Accordingly, these provisions are important to protect the fiduciaries of the state's investment funds from any challenge or liability that may result from implementation of this bill. Further, the bill provides for sunset of the divestment provisions of this bill upon the earlier of three occurrences: 1.) if the sunset provisions in sec. 12 of the Sudan Divestment and Accountability Act of 2007 are satisfied, 2.) if Congress or the President declares that Sudan divestment policies interfere with United States foreign policy; or 3.) if the Sudan Divestment and Accountability Act of 2007 is repealed. I urge your prompt and favorable action on this measure. Sincerely, /s/ Sarah Palin Governor