Missouri 2025 Regular Session

Missouri Senate Bill SB529 Compare Versions

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Old	New	Differences
1	1
2	2	FIRST REGULAR SESSION
3	3	SENATE BILL NO. 529
4	4	103RD GENERAL ASSEMBLY
5	5	INTRODUCED BY SENATOR CRAWFORD.
6	6	1423S.02I KRISTINA MARTIN, Secretary
7	7	AN ACT
8	8	To amend chapter 105, RSMo, by adding thereto one new section relating to divestment of certain
9	9	investments of public employee retirement systems.
10	10
11	11	Be it enacted by the General Assembly of the State of Missouri, as follows:
12	12	Section A. Chapter 105, RSMo, is amended by adding thereto 1
13	13	one new section, to be known as section 105.693, to read as 2
14	14	follows:3
15	15	105.693. 1. As used in this section, the following 1
16	16	terms mean: 2
17	17	(1) "Board", the governing board or decision -making 3
18	18	body of a system that is authorized by law to administer the 4
19	19	system; 5
20	20	(2) "Control": 6
21	21	(a) The same meaning as such term is defined in the 7
22	22	Investment Company Act of 1940, 15 U.S.C. Section 80a –2(a); 8
23	23	or 9
24	24	(b) Involvement in an entity's governance struc ture, 10
25	25	monitoring, or internal human resources decisions consistent 11
26	26	with the objectives set out in the Opinion on Strengthening 12
27	27	the United Front Work of the Private Economy in the New Era 13
28	28	issued by the General Office of the Central Committee of the 14
29	29	Chinese Communist Party (2020) or a successor or similar 15
30	30	document; 16
31	31	(3) "Divest", a sale, redemption, replacement, or any 17
32	32	other activity that terminates an investment; 18 SB 529 2
33	33	(4) "Fund", the retirement benefit fund of a system; 19
34	34	(5) "Investment", any investment, as such term is 20
35	35	defined in section 105.687, that the board or system is 21
36	36	authorized to make; 22
37	37	(6) "Person", an individual or entity; 23
38	38	(7) "Restricted entity", the following, including 24
39	39	wholly-owned subsidiaries, majority -owned subsidiaries, 25
40	40	parent companies, and affiliates that exist for profit - 26
41	41	making purposes: 27
42	42	(a) Any person, other than a U.S. person, as the term 28
43	43	"U.S. person" is defined in 15 CFR 772.1, that is identified 29
44	44	for the People's Republic of China on the Entity List, 30
45	45	Supplement No. 4 to 15 CFR 744, as a person reasonably 31
46	46	believed to be involved, or to pose a significant risk of 32
47	47	being or becoming involved, in activities contrary to the 33
48	48	national security or foreign policy interests of the United 34
49	49	States until the End-User Review Committee of the Bureau of 35
50	50	Industry and Security in the United States Department of 36
51	51	Commerce determines that the person no longer meets that 37
52	52	criteria and removes the person from the list; 38
53	53	(b) Any person that: 39
54	54	a. The United States Secretary of Defense has listed 40
55	55	as a Communist Chinese military company operating directly 41
56	56	or indirectly in the United States or in any of its 42
57	57	territories or possessions under Section 1237 of the Strom 43
58	58	Thurmond National Defense Authorization A ct of Fiscal Year 44
59	59	1999, P.L. 105-261, as amended by Section 1233 of P.L. 106 - 45
60	60	398 and Section 1222 of P.L. 108 -375, 50 U.S.C. Section 1701 46
61	61	note, until such time as the United States Secretary of 47
62	62	Defense removes the person from such list; 48
63	63	b. The United States Secretary of Defense, in 49
64	64	consultation with the United States Secretary of the 50 SB 529 3
65	65	Treasury, determines is a Communist Chinese military company 51
66	66	operating directly or indirectly in the United States or in 52
67	67	any of its territories or possessions and therefore lists as 53
68	68	such under Section 1237 of the Strom Thurmond National 54
69	69	Defense Authorization Act of Fiscal Year 1999, P.L. 105 -261, 55
70	70	as amended by Section 1233 of P.L. 106 -398 and Section 1222 56
71	71	of P.L. 108-375, 50 U.S.C. Section 1701 note, until such 57
72	72	time as the United States Secretary of Defense removes the 58
73	73	person from such list; or 59
74	74	c. The United States Secretary of the Treasury 60
75	75	publicly lists as meeting the criteria in Section 61
76	76	1237(b)(4)(B) of the Strom Thurmond National Defense 62
77	77	Authorization Act of Fiscal Year 1999, P.L. 105 -261, as 63
78	78	amended by Section 1222 of P.L. 108 -375, 50 U.S.C. Section 64
79	79	1701 note, or publicly lists as a subsidiary of a person 65
80	80	already determined to be a Communist Chinese military 66
81	81	company, until the United States Se cretary of the Treasury 67
82	82	determines that the person no longer meets that criteria and 68
83	83	removes the person from such list; 69
84	84	(c) Any investment that is domiciled, issued, 70
85	85	incorporated, or listed in the People's Republic of China, 71
86	86	other than a U.S. per son or U.S. subsidiary, as the terms 72
87	87	"U.S. person" or "U.S. subsidiary" are defined in 15 CFR 73
88	88	772.1, or that is publicly confirmed to be controlled by the 74
89	89	People's Republic of China, the Chinese Communist Party, or 75
90	90	a provincial division, municipality, governmental agency, 76
91	91	sovereign wealth fund, or political instrumentality of the 77
92	92	People's Republic of China; 78
93	93	(d) Any organization or citizen that is identified by 79
94	94	the appropriate government agencies to be required by the 80
95	95	National Intelligence Law of the People's Republic of China 81
96	96	(2017), as amended in 2018, or any successor to support, 82 SB 529 4
97	97	assist, and cooperate with the state intelligence work of 83
98	98	the People's Republic of China and keep the secrets of the 84
99	99	national intelligence work of the People's R epublic of 85
100	100	China; or 86
101	101	(e) Any person that is listed on the Specially 87
102	102	Designated Nationals and Blocked Persons List published by 88
103	103	the Office of Foreign Assets Control of United States 89
104	104	Department of the Treasury; 90
105	105	(8) "Restricted investment prod uct", an investment 91
106	106	product that: 92
107	107	(a) Is managed by one or more persons: 93
108	108	a. That are not employed by the system; and 94
109	109	b. In which the system on behalf of the fund owns 95
110	110	investments together with investors other than the system; 96
111	111	and 97
112	112	(b) Holds investments in a restricted entity; 98
113	113	(9) "System", any state or local public retirement 99
114	114	system or plan established by the state or any political 100
115	115	subdivision or instrumentality of the state for the purpose 101
116	116	of providing plan benefits for e lected or appointed public 102
117	117	officials or employees of the state or any political 103
118	118	subdivision or instrumentality of the state. 104
119	119	2. After August 28, 2025, a system shall not knowingly 105
120	120	invest in a restricted entity or a restricted investment 106
121	121	product and shall divest any investment that the system has 107
122	122	on behalf of a fund in accordance with this section. 108
123	123	3. Before December 1, 2025, and at least annually on 109
124	124	or before December first of each subsequent year, the board 110
125	125	shall make a good faith effort to identify all restricted 111
126	126	entities and restricted investment products in which the 112
127	127	system holds an investment. The board may use an 113
128	128	independent research firm to assist the board. 114 SB 529 5
129	129	4. (1) If the board determines after a review under 115
130	130	subsection 3 of this section that the system has investments 116
131	131	in a restricted entity or a restricted investment product, 117
132	132	the board shall establish a plan to divest the investment 118
133	133	and complete the divestment as soon as financially prudent. 119
134	134	Except as provided in su bdivision (2) of this subsection, 120
135	135	the investment shall be divested no later than August 28, 121
136	136	2026. 122
137	137	(2) The investment may be divested after August 28, 123
138	138	2026, but shall be divested no later than August 28, 2028, 124
139	139	if the board finds that the following conditions exist: 125
140	140	(a) The divestment of the investment by August 28, 126
141	141	2026, would result in the system incurring aggregate 127
142	142	transaction costs in excess of five hundred thousand dollars; 128
143	143	(b) The selling of global public equity interests 129
144	144	would result in a loss on secondary markets; or 130
145	145	(c) The divestment of the investment by August 28, 131
146	146	2026, would otherwise fail to comply with federal or state 132
147	147	law or other legal obligations. 133
148	148	5. Prior to divesting any commingled fund required by 134
149	149	this section in which the divestment would result in a 135
150	150	realized loss, the staff of the system shall notify the 136
151	151	board and if, within two business days, a majority of the 137
152	152	trustees of the board object, no further action shall be 138
153	153	taken until a special or regu lar meeting of the board. 139
154	154	6. The board shall determine whether to cease or defer 140
155	155	divestment in the entity or product initiated under this 141
156	156	section and resume investment in the entity or product 142
157	157	during any period in which the entity or product has n ot 143
158	158	returned to being a restricted entity or restricted 144
159	159	investment product if any of the following conditions are 145
160	160	met: 146 SB 529 6
161	161	(1) The entity or product meets or exceeds the rules 147
162	162	and standards of the Public Company Accounting Oversight 148
163	163	Board and the Sarbanes-Oxley Act of 2002, P.L. 107 -204, 116 149
164	164	Stat. 745; or 150
165	165	(2) The board determines that a fund has holdings in a 151
166	166	passively managed commingled fund that includes a restricted 152
167	167	entity and the estimated cost of divestment of the 153
168	168	commingled fund is gre ater than ten percent of the total 154
169	169	value of the restricted entities held in the commingled fund. 155
170	170	7. (1) On or before December 31, 2025, and annually 156
171	171	on or before December thirty -first of each subsequent year, 157
172	172	the board shall submit a report to th e general assembly. 158
173	173	(2) The report shall include at least the following 159
174	174	information, as of the date of the report: 160
175	175	(a) A copy of the restricted entity list; 161
176	176	(b) All publicly traded securities sold, redeemed, 162
177	177	divested, or withdrawn in co mpliance with this section; 163
178	178	(c) All commingled funds that are exempted from 164
179	179	divestment under subsections 5, 6, or 10 of this section; and 165
180	180	(d) Any progress made under subsection 6 of this 166
181	181	section. 167
182	182	8. With respect to actions taken in comp liance with 168
183	183	this section, including all good faith determinations 169
184	184	regarding restricted entities and restricted investment 170
185	185	products, the board and the system are exempt from any 171
186	186	conflicting statutory or common law obligations, including 172
187	187	any obligations with respect to choice of asset managers, 173
188	188	investment fiduciaries, investment funds, or investments for 174
189	189	fund investment portfolios. 175
190	190	9. The state and any political subdivision of the 176
191	191	state; its officers, agents, and employees; and the board 177
192	192	and employees of a system shall be immune from civil 178 SB 529 7
193	193	liability for any act or omission related to the removal of 179
194	194	an asset from a fund under this section and are entitled to 180
195	195	indemnification from the system for all losses, costs, and 181
196	196	expenses, including reason able attorney's fees, associated 182
197	197	with defending against any claim or suit relating to an act 183
198	198	authorized under section. 184
199	199	10. (1) Notwithstanding any provision of law to the 185
200	200	contrary, the provisions of this section do not apply to 186
201	201	investments in private market funds. 187
202	202	(2) Notwithstanding any provision of law to the 188
203	203	contrary, the provisions of this section do not apply to 189
204	204	indirect holdings in actively managed investment funds. 190
205	205	(3) If a manager or investment fiduciary creates a 191
206	206	similar actively managed investment fund without the 192
207	207	restricted entities, the board shall replace all applicable 193
208	208	investments with the investments in the similar actively 194
209	209	managed investment fund within a period consistent with 195
210	210	prudent investing standards. 196
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