A bill for an act relating to public contracts, public fund investing, and lending practices with certain companies that engage in economic boycotts based on environmental, social, or governance criteria, and including effective date and applicability provisions.(See HF 653.)
Impact
The implications of HF2 are far-reaching. By mandating that public funds avoid companies engaging in ESG-related boycotts, the bill aims to shield critical Iowa industries from what the legislators term 'economic warfare.' This is intended to create a clearly defined, financially motivated relationship between public entities and private businesses, discouraging considerations that lawmakers perceive as politically motivated rather than economically sound. As such, this may position Iowa as a potential outlier compared to states adopting more flexible ESG considerations.
Summary
House File 2 (HF2) proposes a significant legislative shift regarding public contracts and fund investment practices in Iowa. The bill specifically addresses the interactions of public entities with companies engaged in economic boycotts based on environmental, social, or governance (ESG) criteria. HF2 restricts public funds, including state retirement systems, from engaging with investment managers who consider factors beyond strict financial interests related to these boycotts. It is positioned to prevent public entities from entering contracts with companies that might impose boycotts on protected sectors such as fossil fuels, agriculture, or firearms.
Contention
Notably, HF2 has sparked debates about the balance between state oversight and corporate responsibility. Proponents argue that it preserves financial prudence by preventing entities from considering non-financial factors that could compromise public investments. Conversely, critics express concern that this approach undermines the ability of public funds to incentivize corporate responsibility regarding environmental and social issues. Detractors argue that the legislation could enforce a narrow scope of investment practices, hampering the ethical evolution of corporate governance in Iowa.
Enforcement
The bill designates the attorney general as the enforcer of compliance regarding the requirements set forth in HF2. This introduces a regulatory framework that allows for significant oversight of contract compliance, ensuring that companies engaged in economic boycotts cannot gain contracts exceeding $1,000 unless they confirm their non-participation in such practices. The act’s immediate effectiveness following its passage underscores its urgency in meeting the legislative intent.
Similar To
A bill for an act concerning public contracts by public funds with companies that boycott certain companies or that engage in nonpecuniary social investment policies.(Formerly HF 2.)
A bill for an act concerning public contracts by public funds with companies that boycott certain companies or that engage in nonpecuniary social investment policies.(Formerly HF 2.)
A bill for an act concerning public contracts with companies that boycott certain companies or that engage in nonpecuniary social investment policies.(See SF 507.)
A bill for an act concerning public contracts with companies that boycott certain companies or that engage in nonpecuniary social investment policies.(Formerly SSB 1094.)
Relating to public contracts; to prohibit governmental entities from entering into certain contracts with companies that boycott businesses because the business engages in certain sectors or does not meet certain environmental or corporate governance standards or does not facilitate certain activities; to provide that no company in the state shall be required by a governmental entity, nor penalized by a governmental entity for declining to engage in economic boycotts or other actions that further social, political, or ideological interests; to require the Attorney General to take actions to prevent federal laws or actions from penalizing, inflicting harm on, limiting commercial relations with, or changing or limiting the activities of companies or residents of the state based on the furtherance of economic boycott criteria; and to authorize the Attorney General to investigate and enforce this act; and to provide definitions.
A bill for an act relating to the investment of certain public funds in certain companies, concerning companies that are owned or controlled by Chinese military or government services and public fund review requirements. (Formerly SF 98.) Effective date: 07/01/2023.
Relating to public contracts; to prohibit the consideration of environmental, social, and governance (ESG) criteria when awarding a public contract; and to require a responsible bidder, as a condition of being awarded a public contract, to certify, under penalty of perjury, that its employees will not be subject to a personal ESG rating as a basis of hiring, firing, or evaluation.
Establishes certain requirements for a State entity planting vegetation in certain circumstances; provides for preferences for NJ businesses providing such vegetation.