Iowa Senate Bill SSB1094

Iowa 2023-2024 Regular Session

• Introduced: 1/26/23
• Refer: 1/26/23

Caption

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.)

Impact

The legislation introduces new Code chapter 12K, which mandates an annual identification and publication of companies on a scrutinized companies list. This initiative is intended to shield state funds from the influence of politically driven investment decisions, encouraging a focus solely on the financial health of the state and its employees. The bill requires all public funds and entities to review their current contracts and make necessary adjustments, particularly those involving investments and management of securities services with scrutinized companies.

Summary

Senate Study Bill 1094 (SSB1094) aims to regulate public contracts with companies that engage in either boycotts of specified industries or practice nonpecuniary social investment policies. The bill establishes a framework under which public entities—defined to include entities such as the state, public school corporations, and several retirement systems—are prohibited from contracting with companies that are considered 'scrutinized companies.' These scrutinized companies are those that engage in actions against specific sectors like fossil fuels, firearms, and certain agricultural practices, unless there is a reasonable business justification for doing so.

Contention

Notable points of contention surrounding SSB1094 center on the balance between fostering a free-market economy and addressing the potential ethical implications of investment decisions. Proponents assert that the bill is essential for maintaining fiscal responsibility within state investments. Critics, however, argue that the restrictions may limit the ability of public funds to address critical social and environmental issues by constraining where investments can be made. There are concerns that the legislation may inadvertently penalize companies seeking to invest responsibly in sectors broadly criticized for sustainability practices.