HB 396-DIVEST INVESTMENTS IN RUSSIAN ENTITIES  3:06:37 PM CHAIR KREISS-TOMKINS announced that the first order of business would be HOUSE BILL NO. 396, "An Act restricting certain investments of state funds in certain Russian entities; and providing for an effective date." 3:07:08 PM REPRESENTATIVE TARR moved to adopt the proposed committee substitute (CS)for HB 396, labeled 32-LS1618\I, Nauman, 4/15/22, as the working document. CHAIR KREISS-TOMKINS objected for presentation purposes. 3:07:28 PM XANNIE BORSETH, Staff, Representative Jonathan Kreiss-Tomkins, Alaska State Legislature, on behalf of Representative Kreiss- Tomkins, provided an explanation of changes in the proposed CS for HB 396, ("Version I"), sponsored by the House State Affairs Standing Committee, which read as follows [original punctuation provided]: Section 1 (page 1, sections a. and b.): changes divestment timeline from 90 to 180 days on page 1, lines 11, 13, and 14 and on page 2, line 6. Section 1 (page 3, section g., lines 5-7): adds "the commissioner or a fiduciary of a fund is not required to divest from an investment under this section if the commissioner or fiduciary determines that divestment is not consistent with the fiduciary responsibilities of the commissioner or the fiduciary." Section 1 (page 3, section i., line 13): adds "debt instrument issued by the government of Russia" to the definition of "Russian entity. Section 1 (page 3, section i., lines 20-21): adds that the definition of "Russian entity? does not include a company the United States federal government excludes from federal sanctions related to Russia," so if a company is not included on OFAC's list, or if it is removed, that company is no longer regarded as a "Russian entity" under this legislation. Section 2 (page 3, section a., lines 22-26): specifies that the uncodified law shall establish guidelines for transition, stating that "within 30 days after the effective date of this Act, the commissioner of revenue shall create an initial list of Russian entities" as specified by this Act. Section 2 (page 3, line 27 - page 4, line 4, section b.): establishes that section 1(g) of this Act notwithstanding, "the commissioner of revenue, a fiduciary of a fund subject to AS 37, or an outside investment manager shall, within 180 days after the effective date, divest ownership in the initial list of Russian entities created," and specified that the commissioner of revenue or the fiduciary shall submit a letter consistent with section 1(b) to the manager of a commingled investment. 3:11:19 PM REPRESENTATIVE TARR inquired about the repealer language in Section 3 and asked whether the January 1, 2024, timeline was consistent with the original version of the bill. MS. BORSETH shared her understanding that the date was consistent. REPRESENTATIVE CLAMAN asked what version of the bill Representative Tarr was referring to. MS. BORSETH reported that the original version of the bill was Version A. REPRESENTATIVE CLAMAN confirmed that the date in Version A was January 1, 2024. MS. BORSETH noted that the governor's bill pertaining to divestment from Russian entities expired on July 1, 2023. CHAIR KREISS-TOMKINS removed his objection. There being no further objection, Version I was adopted as the working document. 3:13:09 PM CHAIR KREISS-TOMKINS opened public testimony on HB 396. 3:13:41 PM KAREN MATTHIAS stated her support for HB 396. She expressed her strong belief that generally, the managers of the Alaska Permanent Fund should abide by the mandate to make investment decisions that protected and grew the fund to benefit Alaskans today and in the future; however, she acknowledged that these were not normal times. Russia's invasion of a peaceful, sovereign nation must be met with global responses, including divestment from Russian assets, she opined. She urged the legislature not to turn a blind eye to the atrocities being committed by Russia. She encouraged the committee to rely on the expertise found in the Alaska Permanent Fund Corporation (APFC) and the Department of Revenue (DOR) to ensure swift, efficient action and a well-crafted piece of legislation. CHAIR KREISS-TOMKINS closed public testimony on HB 396 and announced that the bill was held over.