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General Assembly Committee Bill No. 6874
January Session, 2019
LCO No. 5044
Referred to Committee on GOVERNMENT ADMINISTRATION
AND ELECTIONS
Introduced by:
(GAE)
AN ACT CONCERNING TH E DIVESTMENT OF STATE FUNDS FROM
COMPANIES THAT HOLD PUERTO RICAN DEBT.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective October 1, 2019): (a) For the purposes of 1
this section: 2
(1) "Company" means any corporation, utility, partnership, joint 3
venture, franchisor, franchisee, trust, entity investment vehicle, 4
financial institution or other entity or business association, including 5
all wholly-owned subsidiaries, majority-owned subsidiaries, parent 6
companies or affiliates of such entities or business associations, that 7
exist for the purpose of making profit; 8
(2) "Holding debt in Puerto Rico" means holding general obligation 9
bonds or other debt instruments issued by Puerto Rico; 10
(3) "Invest" means the commitment of funds or other assets to a 11
company, including, but not limited to, the ownership or control of a 12
share or interest in the company, and the ownership or control of a 13
bond or other debt instrument by the company; and 14
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(4) "Puerto Rico" means the Commonwealth of Puerto Rico, 15
including its government, and any of its agencies, instrumentalities or 16
political subdivisions, but does not include the United States 17
government. 18
(b) The State Treasurer shall review the major investment holdings 19
of the state for the purpose of determining the extent to which state 20
funds are invested in companies holding debt in Puerto Rico. 21
Whenever feasible and consistent with the fiduciary duties of the 22
Treasurer, the Treasurer shall encourage companies in which state 23
funds are invested and that are holding debt in Puerto Rico, as 24
identified by the United States Department of Treasury, the United 25
States Government Accountability Office or the Treasurer, to act 26
responsibly and not take actions that promote or otherwise add to the 27
fiscal or humanitarian crisis in Puerto Rico. 28
(c) The State Treasurer may divest state funds, decide to not further 29
invest state funds or not enter into any future investment in any 30
company holding debt in Puerto Rico. In determining whether to 31
divest state funds in accordance with this subsection, the factors which 32
the Treasurer shall consider shall include, but not be limited to, the 33
extent of any humanitarian activities undertaken by such company in 34
Puerto Rico, the amount of debt in Puerto Rico held by such company 35
and any other factor that the Treasurer deems prudent. If the Treasurer 36
determines that divestment of state funds is warranted from a 37
company in which state funds are invested due to such company 38
holding debt in Puerto Rico, the Treasurer shall give notice to such 39
company that such funds shall be divested from such company for as 40
long as such company is holding debt in Puerto Rico. 41
(d) The State Treasurer shall, at least once each fiscal year, provide a 42
report to the Investment Advisory Council on actions taken by the 43
Treasurer pursuant to this section. 44
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This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2019 New section
Statement of Purpose:
To authorize the State Treasurer to divest from any companies that
hold the debt of the Commonwealth of Puerto Rico due to the ongoing
fiscal and humanitarian crisis on the island.
[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.]
Co-Sponsors: REP. ROSARIO, 128th Dist.
H.B. 6874