Relating to the investment of certain public funds in companies that are owned or controlled by Chinese military or government services

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 business or business entity that is publicly traded and that is not based in the United States. 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 and designated by the United States government as a company that citizens are restricted or prohibited from entering into transactions with. 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 requires a public fund to identify all prohibited companies in which the public fund has direct or indirect holdings by January 1, 2024. 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 prohibited companies. The bill also authorizes IPERS to develop and issue a request for proposals for third-party services to complete the identification of prohibited companies and the compilation of the prohibited companies list. The bill requires a public fund to send notice to all companies on the prohibited companies list on an annual basis informing the company of the requirements of the new Code chapter. The bill requires public funds to scrutinize and engage with companies the fund identifies for possible inclusion as a prohibited company for a period of not more than months. The bill prohibits a public fund from acquiring direct holdings in publicly traded securities of a prohibited company. The bill requires a public fund to sell, redeem, divest, or withdraw all direct holdings in 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 prohibited 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, 2024, 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.F. 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.