General Assembly Raised Bill No. 881
January Session, 2011 LCO No. 2728
*02728_______GAE*
Referred to Committee on Government Administration and Elections
Introduced by:
(GAE)
General Assembly
Raised Bill No. 881
January Session, 2011
LCO No. 2728
*02728_______GAE*
Referred to Committee on Government Administration and Elections
Introduced by:
(GAE)
AN ACT CONCERNING THE POWERS OF THE STATE TREASURER AND DIVESTMENT OF STATE FUNDS INVESTED IN COMPANIES DOING BUSINESS IN IRAN.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective October 1, 2011) In addition to the powers granted to the Treasurer by any provision of the general statutes and any public or special act, the Treasurer may appoint, as the Treasurer determines is necessary, investment personnel to carry out the provisions of chapter 32 of the general statutes. Such investment personnel shall serve at the pleasure of the Treasurer.
Sec. 2. Subsection (a) of section 3-13a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) The Treasurer, [shall,] with the advice and consent of the Investment Advisory Council, shall appoint a chief investment officer and may appoint a deputy chief investment officer to assist the chief investment officer, for the Connecticut retirement pension and trust funds, who shall serve at the pleasure of the Treasurer and whose compensation shall be determined by the Treasurer within [a] salary [range] ranges established by the Treasurer in consultation with the Investment Advisory Council. The provisions of section 4-40 shall not apply to the compensation of said [officer. Said] officers. The chief investment officer shall be sworn to the faithful discharge of duties under law [. Said officer] and shall, under the direction of the Treasurer and subject to the provisions of sections 3-13 to 3-13d, inclusive, and 3-31b, advise the Treasurer on investing the trust funds of the state. Said officer shall also perform such other duties as the Treasurer may direct. In addition to said [officer] officers, the Treasurer may [, with the advice and consent of the Investment Advisory Council, appoint a deputy chief investment officer, whose compensation shall be determined by the Treasurer within salary ranges established by the Treasurer in consultation with the Investment Advisory Council and that shall not be subject to the provisions of section 4-40,] appoint principal investment officers, investment officers and other personnel to assist said chief investment officer, which officers and other personnel shall serve at the pleasure of the Treasurer.
Sec. 3. Section 3-13g of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) For the purposes of this section:
(1) "Company" means any corporation, utility, partnership, joint venture, franchisor, franchisee, trust, entity investment vehicle, financial institution or other entity or business association, including all wholly-owned subsidiaries, majority-owned subsidiaries, parent companies or affiliates of such entities or business associations that exist for the purpose of making profit;
(2) "Doing business in Iran" means engaging in commerce in any form in Iran, including maintaining equipment, facilities, personnel or other apparatus of business or commerce in Iran, including, but not limited to, the lease or ownership of real or personal property in Iran or engaging in any business activity with the government of Iran;
(3) "Invest" means the commitment of funds or other assets to a company, including, but not limited to, the ownership or control of a share or interest in the company, and the ownership or control of a bond or other debt instrument by the company;
(4) "Iran" means the Islamic Republic of Iran, including its government and any of its agencies, instrumentalities or political subdivisions;
(5) "Mineral extraction activities" include activities such as exploring, extracting, processing, transporting, or wholesale selling or trading of elemental minerals or associated metal alloys or oxides (ore), including gold, copper, chromium, chromite, diamonds, iron, silver, tungsten, uranium and zinc, as well as facilitating such activities, including providing supplies or services in support of such activities;
(6) "Oil-related activities" include, but are not limited to, activities such as (A) owning rights to oil blocks, (B) exporting, extracting, producing, refining, processing, exploring for, transporting, selling or trading of oil, (C) constructing, maintaining or operating a pipeline, refinery or other oil field infrastructure, and (D) facilitating such activities, including providing supplies and services in support of such activities, but does not include the selling of retail gasoline and related consumer products; and
(7) "Petroleum resources" means petroleum, petroleum byproducts and natural gas.
(b) The State Treasurer shall review the major investment [policies] holdings of the state for [purposes of ensuring that state funds are not invested in any corporation engaged in any form of business in Iran which could be considered to be contrary to the foreign policy or national interests of the United States, particularly in respect to the release of all American hostages held in Iran.] the purpose of determining the extent to which state funds are invested in companies doing business in Iran. Whenever feasible and consistent with the fiduciary duties of the State Treasurer, the State Treasurer shall encourage companies in which state funds are invested and that are doing business in Iran, as identified by the United States Department of Treasury's Office of Foreign Assets Control or the State Treasurer, to act responsibly and not take actions that promote or otherwise enable Iran's development of nuclear weaponry or its support of terrorism.
(c) The State Treasurer (1) may divest, decide to not further invest state funds or not enter into any future investment in any company doing business in Iran; and (2) shall divest and not further invest in any security or instrument issued by Iran. In determining whether to divest state funds in accordance with the provisions of subdivision (1) of this subsection, the factors that the Treasurer shall consider shall include, but not be limited to, the following: (A) Revenues paid by such company directly to the government of Iran; (B) whether the company is doing business in Iran that involves contracts with or provision of supplies or services to (i) the government of Iran, (ii) companies in which the government of Iran has any direct or indirect equity share, (iii) consortia or projects commissioned by the government of Iran, or (iv) companies involved in consortia or projects commissioned by the government of Iran where such business involves oil-related activities, mineral extraction activities, investments that directly and significantly contribute to the development of Iran's petroleum resources or any other business activity that has been made the subject of economic sanctions imposed by the United States government; (C) whether the company has demonstrated complicity with an Iranian organization that has been identified as a terrorist organization by the United States government; (D) whether such company knowingly obstructs lawful inquiries into its operations and investments in Iran; (E) whether such company attempts to circumvent any applicable sanctions of the United States; (F) the extent of any humanitarian activities undertaken by such company in Iran; (G) whether such company is authorized by the federal government of the United States to do business in Iran; and (H) any other factor that the Treasurer deems prudent. In the event that the Treasurer determines that divestment of state funds is warranted from a company in which state funds are invested due to such company doing business in Iran, the Treasurer shall give notice to such company that such funds shall be divested from such company for as long as such company does business in Iran.
(d) The State Treasurer shall, at least once per fiscal year, provide a report to the Investment Advisory Council on actions taken by the Treasurer pursuant to the provisions of this section.
(e) The provisions of this section shall no longer be effective if both of the following occur: (1) Iran is no longer designated by the United States Department of State as a country that is a state sponsor of terrorism due to said department's determination that the country repeatedly provides support for acts of international terrorism; and (2) the President of the United States certifies to the appropriate committee of Congress, pursuant to P.L. 104-172, as amended from time to time, that Iran has ceased its efforts to design, develop, manufacture or acquire a nuclear explosive device or related materials and technology.
Sec. 4. Subsection (a) of section 3-21e of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) For the purposes of this section and subsection (a) of section 3-37:
(1) "Company" means any corporation, utility, partnership, joint venture, franchisor, franchisee, trust, entity investment vehicle, financial institution or [any wholly-owned subsidiary of such corporation] other entity or business association, including all wholly-owned subsidiaries, majority-owned subsidiaries, parent companies or affiliates of such entities or business associations, that exist for the purpose of making profit;
(2) "Doing business in Sudan" means engaging in commerce in any form in Sudan, including maintaining equipment, facilities, personnel or other apparatus of business or commerce in Sudan, including, but not limited to, the lease or ownership of real or personal property in Sudan, or engaging in any business activity with the government of Sudan;
(3) "Invest" means the commitment of funds or other assets to a company, including, but not limited to, the ownership or control of a share or interest in the company, and the ownership or control of a bond or other debt instrument by the company; and
(4) "Sudan" means the Republic of Sudan, including its government, and any of its agencies, instrumentalities or political subdivisions.
Sec. 5. Subsection (a) of section 10-183l of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) [On and after July 1, 1991, the] The management of the system shall [continue to] be vested in the Teachers' Retirement Board, which shall consist of [twelve] thirteen members, including the Treasurer, the Commissioner of Social Services and the Commissioner of Education, or their designees, who shall be members of the board, ex officio. On or before June 15, 1985, and quadrennially thereafter, the members of the system shall elect from their number, in a manner prescribed by said board, two persons to serve as members of said board for terms of four years beginning July first following such election. Both of such persons shall be active teachers who shall be nominated by the members of the system who are not retired and elected by all the members of the system. On or before July 1, 1991, and quadrennially thereafter, the members of the system shall elect from their number, in a manner prescribed by said board, three persons to serve as members of said board for terms of four years beginning July first following such election. Two of such persons shall be retired teachers who shall be nominated by the retired members of the system and elected by all the members of the system and one shall be an active teacher who shall be nominated by the members of the system who are not retired and elected by all the members of the system. If a vacancy occurs in the positions filled by the members of the system who are not retired, said board shall elect a member of the system who is not retired to fill the unexpired portion of the term. If a vacancy occurs in the positions filled by the retired members of the system, said board shall elect a retired member of the system to fill the unexpired portion of the term. The Governor shall appoint five public members to said board in accordance with the provisions of section 4-9a. The members of the board shall serve without compensation, but shall be reimbursed for any expenditures or loss of salary or wages which they incur through service on the board. All decisions of the board shall require the approval of six members of the board or a majority of the members who are present, whichever is greater.
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2011 New section
Sec. 2 October 1, 2011 3-13a(a)
Sec. 3 from passage 3-13g
Sec. 4 from passage 3-21e(a)
Sec. 5 from passage 10-183l(a)
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2011
New section
Sec. 2
October 1, 2011
3-13a(a)
Sec. 3
from passage
3-13g
Sec. 4
from passage
3-21e(a)
Sec. 5
from passage
10-183l(a)
Statement of Purpose:
To give the Treasurer explicit authority to hire investment personnel, to clarify that the consent of the Investment Advisory Council is needed only for the appointments of chief and deputy investment officers, to add the Treasurer as an ex-officio member to the Teachers' Retirement Board, to establish a process for possible divestment of state funds from companies doing business in Iran and to make conforming changes to the statute concerning divestment of state funds from companies doing business in Sudan.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]