New Jersey Senate Bill S3584

New Jersey 2022-2023 Regular Session

• Introduced: 2/13/23
• Refer: 2/13/23
• Failed: 2/27/23

Caption

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

Impact

Upon implementation, S3584 will significantly influence how public funds are managed concerning foreign investments, particularly in firms connected to the Chinese government. The measure aims to mitigate risks associated with equity ties that could jeopardize both financial and operational integrity of state pension funds. The legislative intent highlights a proactive approach to safeguard taxpayer money against foreign influences deemed sensitive or potentially harmful to national interests. A preliminary report with findings and recommendations must be submitted six months post-enactment.

Summary

Senate Bill S3584 requires the New Jersey Division of Investment within the Department of the Treasury to review pension and annuity fund assets to assess their investments in foreign companies with ties to the Chinese government. This bill directs the Director of the Division to ascertain the extent of these investments and prepares for potential divestment if necessary. The review aims to address concerns about national security and the ethical implications of state investments in foreign companies linked to the Chinese government.

Contention

A significant aspect of contention surrounding S3584 revolves around defining what constitutes an 'equity tie' and how these ties impact the state's financial strategies. Critics argue that broad definitions may lead to aggressive divestment strategies that could undermine profitable investments. There are concerns regarding the operational feasibility of conducting thorough evaluations and the potential delay in divestment actions if required. Furthermore, opponents might point to the risks of disabling financial returns by prematurely withdrawing from established firms with substantial market presence.