New Jersey Senate Bill S3735

New Jersey 2022-2023 Regular Session

• Introduced: 3/30/23
• Refer: 3/30/23

Caption

Requires State Division of Investment to review pension and annuity fund assets to determine extent to which assets are invested in businesses with ties to foreign adversaries.

Impact

If enacted, S3735 will mandate a systematic evaluation of the pension and annuity funds managed by the state. The review is designed to identify investments in companies that have connections to foreign entities, as classified by the Secretary of Commerce. The director of the Division of Investment will also have the authority to engage with independent research firms to enhance the accuracy of the review, ensuring that evaluations are grounded in expert analysis of global security risks.

Summary

Senate Bill S3735, introduced in New Jersey, requires the State Division of Investment to review the assets of pension and annuity funds to assess their investment ties to foreign adversaries. The bill aims to ensure that state funds are not allocated to companies with equity ties to foreign entities deemed adversarial to the United States' national security interests. This requirement is particularly relevant given the increasing concerns about foreign influence and security risk related to financial investments.

Contention

One point of potential contention around S3735 is the interpretation of what constitutes a 'foreign adversary' and the criteria used to classify equity ties. The bill specifically excludes companies that provide humanitarian aid, which has raised questions about the balance between security and ethical investment practices. There is a concern that the definitions used could inadvertently lead to the divestment from companies that are not a genuine threat to state security but are linked to nations deemed adversarial by U.S. standards.