Relating to the investment of certain public funds in and contracts with Chinese domiciled companies and funds

This bill creates new Code chapter 12K, which restricts public funds, defined as the treasurer of state, the state board of regents, the Iowa public employees’ retirement system (IPERS), the public safety peace officers’ retirement system, the statewide fire and police retirement system, and the judicial retirement system, and public entities, defined to include a public fund and the state and political subdivisions of the state, from generally investing in China domiciled companies and China exchange-traded funds and entering into a contract with China domiciled companies. The bill defines “China domiciled company” as a company incorporated in, or whose principal place of business is in, the People’s Republic of China or in the Hong Kong special administrative region of the People’s Republic of China. The definition excludes companies incorporated or located in the Republic of China. The bill also defines “China exchange-traded fund” as a fund of investments in multiple China domiciled company securities that trades intraday on an exchange like individual stocks, and tracks an underlying index of such securities. The bill requires a public fund to identify all China domiciled companies and China exchange-traded funds in which the public fund has direct holdings by October 1, 2023. Additionally, the bill requires a public fund to create and make available to the public the list and review and update the list on an annual basis. The bill authorizes a public fund to review and rely on publicly available information and information from other sources when identifying prohibited companies. The bill prohibits a public fund from acquiring direct holdings in China domiciled companies and China exchange-traded funds publicly traded securities. The bill requires a public fund to sell, redeem, divest, or withdraw all direct holdings in publicly traded securities of such a company or fund no later than days following the date the public fund becomes aware that it is a China domiciled company or China exchange-traded fund. The bill requires each public fund, within days after the list of China domiciled companies and China exchange-traded funds 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, 2023, and each October thereafter. The bill also provides that a public entity shall not enter into a contract of $1,000 or more with a China domiciled company. The bill provides that, with respect to actions taken in compliance with the bill, including all good-faith determinations regarding companies and funds subject to the bill, the public fund shall be immune from any liability and exempt from any conflicting statutory or common law obligations, including any such obligations in respect to choice of investments for the public fund’s securities portfolios.9111.