Proyectos de ley › 89.ª Asamblea General
Relating to the investment of certain public funds in companies that are owned or controlled by Chinese military or government services
Temas:State budgetState government
La misma legislación: SF 2271
Dónde está ahora
- Hecho: Presentado8 de febrero de 2022
- Se detuvo: SubcomitéMurió al terminar la Asamblea General
- Sigue: Comité de la Cámara
- Sigue: Lo aprueba la Cámara
- Sigue: Comité del Senado
- Sigue: Lo aprueba el Senado
- Sigue: A gobernador(a)
- Sigue: Firmado como ley
Murió al terminar la sesión La sesión de 2022 terminó el 24 de mayo de 2022, la última sesión ordinaria de la Asamblea General. Los proyectos que no pasaron por ambas cámaras murieron. ¿Qué es el embudo (funnel)?
Qué contiene
Resumen con IA Certain state investment funds in Iowa would be prohibited from buying stocks in companies owned or controlled by the Chinese military or government. These funds must create and update a public list of these scrutinized companies and must sell any holdings in companies that the U.S. government officially sanctions. The state would also be required to report on these investment activities to the public and the General Assembly every year. (Todavía no está traducido al español.)1
Lea la explicación oficial (en inglés)
This bill relates to the investment of certain public funds in companies that are owned or controlled by Chinese military or government services. The bill defines “company” as any entity or business association, including all subsidiaries, parent companies, or affiliates of such entities or business associations, that exist for profit-making purposes. The bill defines “direct holdings” in a company as all securities of a company held directly by the public fund or in an account or fund in which the public fund owns all shares or interests. The bill defines “indirect holdings” in a company as all securities of a company held in an account or fund managed by one or more persons not employed by the public fund, in which the public fund owns shares or interests together with other investors not subject to the provisions of this new Code chapter 12K. The bill defines “prohibited company” as a company that is owned or controlled by Chinese military or government services that has been sanctioned by the United States government. The bill defines “public fund” as the treasurer of state, the state board of regents, the public safety peace officers’ retirement system, the Iowa public employees’ retirement system (IPERS), the statewide fire and police retirement system, or the judicial retirement system. The bill defines “scrutinized company” as any company that is owned or controlled by Chinese military or government services. The bill requires a public fund to identify all scrutinized companies in which the public fund has direct or indirect holdings within days following the effective date of the bill. Additionally, the bill requires a public fund to create and make available to the public a scrutinized companies list and review and update the list on a quarterly basis. The bill authorizes a public fund to review and rely on publicly available information and information from other sources when identifying scrutinized companies. The bill also authorizes IPERS to develop and issue a request for proposals for third-party services to complete the identification of scrutinized companies and the compilation of the scrutinized companies list. The bill requires a public fund to send notice to all companies on the scrutinized companies list on an annual basis informing the company of the requirements of the new Code chapter. The bill prohibits a public fund from acquiring publicly traded securities of a prohibited company. The bill requires a public fund to sell, redeem, divest, or withdraw all publicly traded securities of a prohibited company no later than 180 days following the date the company becomes a prohibited company. The bill requires each public fund, within days after the scrutinized companies list is created or updated, to make the list available to the public. Additionally, the bill requires a public fund to make available to the public and file with the general assembly an annual report beginning October 1, 2022, and each October thereafter. The bill provides that, with respect to actions taken in compliance with the Code chapter, the public fund shall be exempt from any conflicting statutory or common law obligations, including any such obligations in respect to choice of asset managers, investment funds, or investments for the public fund’s securities portfolios. The bill provides that the provisions related to the creation of a scrutinized companies list, divestment of publicly traded securities of a prohibited company, and reporting shall not apply if the United States Congress or president of the United States declares that mandatory divestment of the type provided for in the Code chapter interferes with the conduct of United States foreign policy.9111.
Nota fiscal
Resumen con IA This bill requires various public funds to identify and sell investments in companies owned or controlled by Chinese military or government services. The fiscal impact on the Treasurer of State, Board of Regents, IPERS, PORS, 411 System, and Judicial Retirement System cannot be determined until the list of companies and the amount to be divested can be determined. The 411 System faces estimated annual costs between $15,000 and $30,000, while the Board of Regents faces approximately $25,000 in annual costs, but all additional administrative and vendor costs are expected to be minimal for the respective trust funds. (en inglés)3
Lea la nota fiscal (en inglés)
Description
Senate File 2271 relates to investments of certain public funds in companies that are owned or controlled by Chinese military or government services. The Bill requires a public fund to identify all direct and indirect holdings of all prohibited companies within 180 days of the effective date of the Bill. The Bill authorizes the Iowa Public Employees’ Retirement System (IPERS) to develop and issue a request for proposals for third-party services to identify prohibited companies and to compile a prohibited companies list. Within 180 days of identifying prohibited companies, the public funds are required to sell, redeem, divest, or withdraw all direct holdings in publicly traded securities of a prohibited company.
The Bill also requires each public fund to file an annual report with the General Assembly and make the report available to the public beginning October 1, 2023, and each October 1 thereafter. The report will include a list of prohibited companies as of the end of the fiscal year; a summary of all written notices; all direct holding investments sold, redeemed, divested, or withdrawn; and a list of indirect holdings of the public fund in publicly traded securities of prohibited companies and the percentage of the total portfolio the indirect holdings represent. The Bill defines “public fund” as the Treasurer of State, the Board of Regents, the IPERS, the Department of Public Safety Peace Officers’ Retirement System (PORS), the Municipal Fire and Police Retirement System (411 System), and the Judicial Retirement System.
Background
As of December 31, 2021, IPERS had 542 direct holdings and 704 indirect holdings in Chinese companies, totaling approximately $854.5 million. The IPERS Trust Fund had a balance of $45.205 billion on December 31, 2021. At this time, the other public funds impacted by this Bill do not know the extent of their holdings.
The retirement systems currently use a third-party service provider for divestment services. The IPERS maintains the contract, which covers Iowa Code chapters 12F, 12H, and 12J. The contract was renewed effective January 1, 2022, for six years.
Assumptions
- The IPERS will secure a third-party vendor to identify and vet a list of directly held companies that meet the definition of a prohibited company under the Bill.
- Any divested funds will be reinvested in different funds in the IPERS investment portfolio.
- It is assumed there will be additional costs to IPERS related to securing a third-party vendor to review the current list of direct and indirect holdings. The vendor will determine which direct holdings meet the description of a prohibited company that must be divested under the Bill.
- The IPERS Trust Fund will absorb any staff and third-party vendor costs, including the following:
- Costs to coordinate divestment with external money managers.
- Costs to amend contracts with external money managers to comply with the Bill.
- Staff costs to manage the reporting and divestment program.
- Costs for a third-party vendor to review IPERS’ list of Chinese holdings ongoing.
- The Treasurer of State’s Office invests the PORS funds and Judicial Retirement System funds. Any costs associated with implementation will be paid by the PORS and the Judicial Retirement System, respectively.
- Estimated costs to the 411 System for third-party vendor screening and internal administrative costs range from $15,000 to $30,000 annually.
- The Board of Regents costs are approximately $25,000 annually for divestment services. Adding a fourth group will increase the cost for the service, but that figure is unknown at this time.
Fiscal Impact
The fiscal impact of SF 2271 on the Treasurer of State, Board of Regents, IPERS, PORS, 411 System, and Judicial Retirement System cannot be determined until the list of companies and the amount to be divested can be determined. Any divested funds will be reinvested within the respective public funds’ investment portfolios. There will be no State General Fund impact. Any additional administrative and third-party vendor screening costs will be paid from the respective trust funds of the retirement systems and are anticipated to be minimal.
Sources
- Iowa Public Employees’ Retirement System (IPERS)
- Treasurer of State
- Municipal Fire and Police Retirement System (411 System)
- Board of Regents
- Department of Public Safety
- Judicial Branch
- IPERS, Chinese Investments · 7 de marzo de 2022
Lo que cambia del Código de Iowa (Iowa Code)
Crea§12K.1§12K.2§12K.3§12K.4§12K.5§12K.6
Cabildeo
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89th General Assembly
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- SF 98 Relating to the investment of certain public funds in companies that are owned or controll…90th General Assembly · Renumbered as SF 418Nearly identical
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Matched by wording or an identical title.