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This document includes House Committee Amendments incorporated into the bill on Mon, Feb 4, 2008 at 4:03 PM by ddonat. --> This document includes House Floor Amendments incorporated into the bill on Wed, Feb 20, 2008 at 11:51 AM by jeyring. --> 1
8 LONG TITLE
9 Committee Note:
10 The Retirement and Independent Entities Interim Committee recommended this bill.
11 General Description:
12 This bill modifies the Utah State Retirement and Insurance Benefit Act by restricting
13 investment of funds in certain entities.
14 Highlighted Provisions:
15 This bill:
16 . provides certain definitions;
17 . requires the Utah State Retirement Board to ensure that the monies of the Utah State
18 Retirement Investment Fund are not invested in any business operations with a
19 publicly traded foreign company that has certain business operations with the
20 country of Iran;
21 . exempts private equity H. [
21a funds .H from application of the section;
22 . requires the board to make rules to implement certain provisions, including
23 identifying scrutinized companies and providing notice of potential investment
25 . requires the board to divest of any investments in scrutinized companies provided
26 that divestment is not at a loss;
27 . indemnifies board members when divesting in compliance with the section; and
28 . exempts monies invested in a defined contribution plan from the investment
30 Monies Appropriated in this Bill:
32 Other Special Clauses:
34 Utah Code Sections Affected:
36 49-11-306, Utah Code Annotated 1953
38 Be it enacted by the Legislature of the state of Utah:
39 Section 1. Section 49-11-306 is enacted to read:
40 49-11-306. Definitions -- Investment prohibitions -- Rules -- Exceptions.
41 (1) As used in this section:
42 (a) (i) "Business operations" means engaging in commerce in any form, including
43 acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating any
44 apparatus of business or commerce, which includes equipment, facilities, personnel, products,
45 services, personal property, and real property.
46 (ii) "Business operations" does not include providing humanitarian aid.
47 (b) H. [
48 H. [
48a1 provision of
48a supplies or
49 services to a scrutinized entity;
50 H. [
50a commissioned by a
51 scrutinized entity; or
52 H. [
52a entity; H. [
53a linked to a
54 scrutinized entity; and
55 H. [
55a reduce the
56 investment to 5% or below within one year; or
57 H. [
57a investment of $20
58 million or more, or any combination of investments which in the aggregate exceeds $20 million
59 in any 12-month period, in a scrutinized entity.
60 H. [
62 (c) (i) "Scrutinized entity" means the government of, the governmental
63 instrumentalities of, and any company or organization owned or controlled by the Islamic
64 Republic of Iran.
65 (ii) Notwithstanding Subsection (1)(c)(i), "scrutinized entity" does not include the
66 government of, the governmental instrumentalities of, or any company or organization owned
67 or controlled by a country or entity that:
68 (A) has been removed from the United States Department of State's list of countries
69 that have been determined to repeatedly provide support for acts of international terrorism; and
70 (B) pursuant to the Iran and Libya Sanctions Act of 1996, Pub. L. No. 104-172, as
71 amended, has been determined and certified to have ceased its efforts to design, develop,
72 manufacture, or acquire a nuclear explosive device or related materials and technology.
73 (2) (a) Notwithstanding any other provision of this part and subject to federal
74 limitations, the board shall ensure that the monies of the Utah State Retirement Investment
75 Fund are not invested in a scrutinized company or a scrutinized entity in accordance with the
76 provisions of Subsections (2)(b) and (c).
77 (b) Subject to the provisions of Subsection (2)(c), any divestment of holdings required
78 under Subsection (2)(a) shall be completed in at least the following time frames which shall
79 begin on H. [
80 (i) 33% within 180 days;
81 (ii) 66% within 360 days; and
82 (iii) 100% within 540 days.
83 (c) Notwithstanding the provisions of Subsections (2)(a) and (b), the board H. :
83a (i) .H is not
84 required to divest any holdings at a loss, to be calculated on cost basis H. [
84a (ii) is not required to divest from investments in private equity, alternative investments,
84b or commingled funds. .H
85 (d) The board, including present and former board members, is not liable for breach of
86 fiduciary duty by reason of any decision to avoid, restrict, reduce, or eliminate investments in a
87 scrutinized company in accordance with the requirements of this section.
88 (3) The board shall make rules to provide procedures for:
89 (a) identifying and maintaining a list of scrutinized companies;
90 (b) determining what investments are made in a scrutinized company or scrutinized
92 (c) providing notice that the Utah State Retirement Investment Fund has identified a
93 company as a scrutinized company and will withdraw its investment in the scrutinized
94 company, which notice may provide up to 90 days for the company to provide evidence that it
95 is not a scrutinized entity before divestment occurs; and
96 (d) implementing other provisions required by this section.
97 (4) The provisions of this section do not apply to monies invested in a defined
98 contribution plan as defined in Section 49-11-102 .
Legislative Review Note
as of 11-14-07 12:56 PM
Office of Legislative Research and General Counsel
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