| 1 | 1 | | SECONDREGULARSESSION |
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| 2 | 2 | | HOUSEBILLNO.1869 |
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| 3 | 3 | | 102NDGENERALASSEMBLY |
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| 4 | 4 | | INTRODUCEDBYREPRESENTATIVEDEATON. |
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| 5 | 5 | | 4486H.01I DANARADEMANMILLER,ChiefClerk |
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| 6 | 6 | | ANACT |
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| 7 | 7 | | Toamendchapter105,RSMo,byaddingtheretoonenewsectionrelatingtopublicemployee |
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| 8 | 8 | | retirementsystems. |
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| 9 | 9 | | BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows: |
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| 10 | 10 | | SectionA.Chapter105,RSMo,isamendedbyaddingtheretoonenewsection,tobe |
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| 11 | 11 | | 2knownassection105.693,toreadasfollows: |
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| 12 | 12 | | 105.693.1.Asusedinthissection,thefollowingtermsmean: |
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| 13 | 13 | | 2 (1)"Board",thegoverningboardordecision-makingbodyofaretirement |
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| 14 | 14 | | 3systemthatisauthorizedbylawtoadministerthesystem; |
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| 15 | 15 | | 4 (2)"Control": |
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| 16 | 16 | | 5 (a)AssuchtermisdefinedundertheInvestmentCompanyActof1940(15 |
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| 17 | 17 | | 6U.S.C.80a–2(a));or |
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| 18 | 18 | | 7 (b)Involvementinanentity'sgovernancestructure,monitoring,orinternal |
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| 19 | 19 | | 8humanresourcesdecisionsconsistentwiththeobjectivessetoutintheOpinionon |
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| 20 | 20 | | 9StrengtheningtheUnitedFrontWorkofthePrivateEconomyintheNewEraissuedby |
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| 21 | 21 | | 10theGeneralOfficeoftheCentralCommitteeoftheChineseCommunistParty(2020)or |
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| 22 | 22 | | 11asuccessororsimilardocument; |
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| 23 | 23 | | 12 (3)"Divest",asale,redemption,replacement,oranyotheractivitythat |
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| 24 | 24 | | 13terminatesaninvestment; |
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| 25 | 25 | | 14 (4)"Fund",theretirementbenefitfundofasystem; |
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| 26 | 26 | | 15 (5)"Investment",anyinvestment,assuchtermisdefinedundersection105.687, |
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| 27 | 27 | | 16thattheboardorsystemisauthorizedtomake; |
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| 28 | 28 | | 17 (6)"Person",anindividualorentity; |
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| 29 | 29 | | EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis |
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| 30 | 30 | | intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18 (7)"Restrictedentity",thefollowing,includingwhollyownedsubsidiaries, |
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| 31 | 31 | | 19majority-ownedsubsidiaries,parentcompanies,andaffiliatesthatexistforprofit- |
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| 32 | 32 | | 20makingpurposes: |
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| 33 | 33 | | 21 (a)Anyperson,otherthanaU.S.personasdefinedunder15CFR772.1,thatis |
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| 34 | 34 | | 22identifiedforthePeople'sRepublicofChinaontheEntityList(SupplementNo.4to15 |
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| 35 | 35 | | 23CFRPart744)asapersonreasonablybelievedtobeinvolved,ortoposeasignificant |
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| 36 | 36 | | 24riskofbeingorbecominginvolved,inactivitiescontrarytothenationalsecurityor |
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| 37 | 37 | | 25foreignpolicyinterestsoftheUnitedStatesuntiltheEnd-UserReviewCommitteeofthe |
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| 38 | 38 | | 26BureauofIndustryandSecurityintheUnitedStatesDepartmentofCommerce |
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| 39 | 39 | | 27determinesthatthepersonnolongermeetsthatcriteriaandremovesthepersonfrom |
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| 40 | 40 | | 28thelist; |
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| 41 | 41 | | 29 (b)Anypersonthat: |
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| 42 | 42 | | 30 a.TheUnitedStatesSecretaryofDefensehaslistedasaCommunistChinese |
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| 43 | 43 | | 31militarycompanyoperatingdirectlyorindirectlyintheUnitedStatesorinanyofits |
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| 44 | 44 | | 32territoriesorpossessionsunderSection1237ofPub.L.105-261,asamendedbySection |
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| 45 | 45 | | 331233ofPub.L.106-398andSection1222ofPub.L.108-375,untilsuchtimeasthe |
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| 46 | 46 | | 34UnitedStatesSecretaryofDefenseremovesthepersonfromsuchlist; |
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| 47 | 47 | | 35 b.TheUnitedStatesSecretaryofDefense,inconsultationwiththeUnitedStates |
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| 48 | 48 | | 36SecretaryoftheTreasury,determinesisaCommunistChinesemilitarycompany |
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| 49 | 49 | | 37operatingdirectlyorindirectlyintheUnitedStatesorinanyofitsterritoriesor |
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| 50 | 50 | | 38possessionsandthereforelistsassuchunderSection1237ofPub.L.105-261,as |
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| 51 | 51 | | 39amendedbySection1233ofPub.L.106-398andSection1222ofPub.L.108-375,until |
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| 52 | 52 | | 40suchtimeastheUnitedStatesSecretaryofDefenseremovesthepersonfromsuchlist; |
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| 53 | 53 | | 41or |
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| 54 | 54 | | 42 c.TheUnitedStatesSecretaryoftheTreasurypubliclylistsasmeetingthe |
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| 55 | 55 | | 43criteriainSection1237(b)(4)(B)ofPub.L.105-261,orpubliclylistsasasubsidiaryofa |
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| 56 | 56 | | 44personalreadydeterminedtobeaCommunistChinesemilitarycompany,untilthe |
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| 57 | 57 | | 45UnitedStatesSecretaryoftheTreasurydeterminesthatthepersonnolongermeetsthat |
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| 58 | 58 | | 46criteriaandremovesthepersonfromsuchlist; |
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| 59 | 59 | | 47 (c)Anyinvestmentthatisdomiciled,issued,incorporated,orlistedinthe |
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| 60 | 60 | | 48People'sRepublicofChina,otherthanaU.S.personorU.S.subsidiaryasdefinedunder |
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| 61 | 61 | | 4915CFR772.1,orthatispubliclyconfirmedtobecontrolledbythePeople'sRepublicof |
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| 62 | 62 | | 50China,theChineseCommunistParty,oraprovincialdivision,municipality, |
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| 63 | 63 | | 51governmentalagency,sovereignwealthfund,orpoliticalinstrumentalityofthe |
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| 64 | 64 | | 52People'sRepublicofChina;or |
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| 65 | 65 | | 53 (d)Anyorganizationorcitizenthatisidentifiedbytheappropriategovernment |
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| 66 | 66 | | 54agenciestoberequiredbytheNationalIntelligenceLawofthePeople'sRepublicof |
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| 67 | 67 | | HB1869 2 55China(2017),asamendedin2018,oranysuccessortosupport,assist,andcooperate |
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| 68 | 68 | | 56withthestateintelligenceworkofthePeople'sRepublicofChinaandkeepthesecretsof |
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| 69 | 69 | | 57thenationalintelligenceworkofthePeople'sRepublicofChina; |
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| 70 | 70 | | 58 (8)"Restrictedinvestmentproduct",aninvestmentproductthat: |
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| 71 | 71 | | 59 (a)Ismanagedbyoneormorepersons: |
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| 72 | 72 | | 60 a.Thatarenotemployedbythesystem;and |
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| 73 | 73 | | 61 b.Inwhichthesystemonbehalfofthefundownsinvestmentstogetherwith |
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| 74 | 74 | | 62investorsotherthanthesystem;and |
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| 75 | 75 | | 63 (b)Holdsinvestmentsinarestrictedentity; |
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| 76 | 76 | | 64 (9)"System",anystateorlocalpublicretirementsystemorplanestablishedby |
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| 77 | 77 | | 65thestateoranypoliticalsubdivisionorinstrumentalityofthestateforthepurposeof |
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| 78 | 78 | | 66providingplanbenefitsforelectedorappointedpublicofficialsoremployeesofthestate |
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| 79 | 79 | | 67oranypoliticalsubdivisionorinstrumentalityofthestate. |
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| 80 | 80 | | 68 2.AfterAugust28,2024,asystemshallnotknowinglyinvestinarestricted |
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| 81 | 81 | | 69entityorarestrictedinvestmentproductandshalldivestanyinvestmentthatthesystem |
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| 82 | 82 | | 70hasonbehalfofafundinaccordancewiththissection. |
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| 83 | 83 | | 71 3.BeforeDecember1,2024,andatleastannuallyonorbeforeDecemberfirstof |
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| 84 | 84 | | 72eachsubsequentyear,theboardshallmakeagoodfaithefforttoidentifyallrestricted |
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| 85 | 85 | | 73entitiesandrestrictedinvestmentproductsinwhichthesystemholdsaninvestment. |
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| 86 | 86 | | 74Theboardmayuseanindependentresearchfirmtoassisttheboard. |
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| 87 | 87 | | 75 4.Iftheboarddeterminesafterareviewundersubsection3ofthissectionthat |
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| 88 | 88 | | 76thesystemhasinvestmentsinarestrictedentityorarestrictedinvestmentproduct,the |
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| 89 | 89 | | 77boardshallestablishaplantodivesttheinvestmentandcompletethedivestmentas |
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| 90 | 90 | | 78soonasfinanciallyprudent.However,theinvestmentshallbedivestednotlaterthanthe |
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| 91 | 91 | | 79following: |
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| 92 | 92 | | 80 (1)Atleastfiftypercentoftheinvestmentshallberemovedfromafund'sassets |
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| 93 | 93 | | 81withinthreeyearsaftertheboarddeterminesthattheinvestmentisinarestrictedentity |
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| 94 | 94 | | 82orrestrictedinvestmentproduct; |
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| 95 | 95 | | 83 (2)Atleastseventy-fivepercentoftheinvestmentshallberemovedfroma |
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| 96 | 96 | | 84fund'sassetswithinfouryearsaftertheboarddeterminesthattheinvestmentisina |
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| 97 | 97 | | 85restrictedentityorrestrictedinvestmentproduct;and |
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| 98 | 98 | | 86 (3)Onehundredpercentoftheinvestmentshallberemovedfromafund'sassets |
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| 99 | 99 | | 87withinfiveyearsaftertheboarddeterminesthattheinvestmentisinarestrictedentity |
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| 100 | 100 | | 88orrestrictedinvestmentproduct. |
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| 101 | 101 | | 89 5.Theboardshalldeterminewhethertoceaseordeferdivestmentintheentity |
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| 102 | 102 | | 90orproductinitiatedunderthissectionandresumeinvestmentintheentityorproduct |
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| 103 | 103 | | HB1869 3 91duringanyperiodinwhichtheentityorproducthasnotreturnedtobeingarestricted |
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| 104 | 104 | | 92entityorrestrictedinvestmentproductifanyofthefollowingconditionsaremet: |
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| 105 | 105 | | 93 (1)TheUnitedStatesSecretaryofStatehasissuedadeterminationthatthe |
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| 106 | 106 | | 94People'sRepublicofChinaisincompliancewitheachofthefollowing: |
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| 107 | 107 | | 95 (a)TheDecember19,1984,JointDeclarationoftheGovernmentoftheUnited |
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| 108 | 108 | | 96KingdomofGreatBritainandNorthernIrelandandtheGovernmentofthePeople's |
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| 109 | 109 | | 97RepublicofChinaontheQuestionofHongKong; |
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| 110 | 110 | | 98 (b)TheBasicLawoftheHongKongSpecialAdministrativeRegionofthe |
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| 111 | 111 | | 99People'sRepublicofChina; |
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| 112 | 112 | | 100 (c)TheUyghurHumanRightsPolicyActof2020; |
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| 113 | 113 | | 101 (d)TheDecember10,1948,UniversalDeclarationofHumanRights;and |
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| 114 | 114 | | 102 (e)TheDecember19,1966,InternationalCovenantonCivilandPolitical |
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| 115 | 115 | | 103Rights; |
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| 116 | 116 | | 104 (2)TheentityorproductmeetsorexceedstherulesandstandardsofthePublic |
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| 117 | 117 | | 105CompanyAccountingOversightBoardandtheSarbanes-OxleyActof2002(Pub.L. |
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| 118 | 118 | | 106107-204);or |
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| 119 | 119 | | 107 (3)Theboarddeterminesthatafundhasholdingsinapassivelymanaged |
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| 120 | 120 | | 108commingledfundthatincludesarestrictedentityandtheestimatedcostofdivestment |
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| 121 | 121 | | 109ofthecommingledfundisgreaterthantenpercentofthetotalvalueoftherestricted |
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| 122 | 122 | | 110entitiesheldinthecommingledfund. |
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| 123 | 123 | | 111 6.(1)OnorbeforeDecember31,2024,andannuallyonorbeforeDecember |
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| 124 | 124 | | 112thirty-firstofeachsubsequentyear,theboardshallsubmitareporttothegeneral |
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| 125 | 125 | | 113assembly. |
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| 126 | 126 | | 114 (2)Thereportshallincludeatleastthefollowinginformation,asofthedateof |
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| 127 | 127 | | 115thereport: |
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| 128 | 128 | | 116 (a)Acopyoftherestrictedentitylist; |
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| 129 | 129 | | 117 (b)Allpubliclytradedsecuritiessold,redeemed,divested,orwithdrawnin |
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| 130 | 130 | | 118compliancewiththissection; |
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| 131 | 131 | | 119 (c)Allcommingledfundsthatareexemptedfromdivestmentundersubsections |
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| 132 | 132 | | 1205and9ofthissection;and |
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| 133 | 133 | | 121 (d)Anyprogressmadeundersubsection5ofthissection. |
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| 134 | 134 | | 122 7.Withrespecttoactionstakenincompliancewiththissection,includingall |
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| 135 | 135 | | 123goodfaithdeterminationsregardingrestrictedentitiesandrestrictedinvestment |
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| 136 | 136 | | 124products,theboardandthesystemareexemptfromanyconflictingstatutoryor |
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| 137 | 137 | | 125commonlawobligations,includinganyobligationswithrespecttochoiceofasset |
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| 138 | 138 | | 126managers,investmentfiduciaries,investmentfunds,orinvestmentsforfundinvestment |
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| 139 | 139 | | 127portfolios. |
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| 140 | 140 | | HB1869 4 128 8.Thestateandanypoliticalsubdivisionofthestate;itsofficers,agents,and |
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| 141 | 141 | | 129employees;andtheboardandemployeesofasystemshallbeimmunefromcivilliability |
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| 142 | 142 | | 130foranyactoromissionrelatedtotheremovalofanassetfromafundunderthissection |
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| 143 | 143 | | 131andareentitledtoindemnificationfromthesystemforalllosses,costs,andexpenses, |
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| 144 | 144 | | 132includingreasonableattorney'sfees,associatedwithdefendingagainstanyclaimorsuit |
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| 145 | 145 | | 133relatingtoanactauthorizedundersection. |
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| 146 | 146 | | 134 9.(1)Exceptasprovidedundersubdivision(2)ofthissubsection,thedivestment |
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| 147 | 147 | | 135requirementsofthissectiondonotapplytoexistinginvestmentsinprivatemarket |
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| 148 | 148 | | 136funds. |
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| 149 | 149 | | 137 (2)Therequirementsofsubsection2ofthissectionshallapplytoexisting |
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| 150 | 150 | | 138investmentsinprivatemarketfunds. |
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| 151 | 151 | | 139 (3)Notwithstandinganyprovisiontothecontrary,subdivision(9)ofsubsection1 |
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| 152 | 152 | | 140ofthissectionandsubsection2ofthissubsectiondonotapplytoindirectholdingsin |
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| 153 | 153 | | 141activelymanagedinvestmentfunds. |
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| 154 | 154 | | 142 (4)Ifamanagerorinvestmentfiduciarycreatesasimilaractivelymanaged |
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| 155 | 155 | | 143investmentfundwithouttherestrictedentities,theboardshallreplaceallapplicable |
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| 156 | 156 | | 144investmentswithinvestmentinthesimilaractivelymanagedinvestmentfundina |
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| 157 | 157 | | 145periodconsistentwithprudentinvestingstandards. |
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| 158 | 158 | | ✔ |
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| 159 | 159 | | HB1869 5 |
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