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