Prohibiting the Investment Board from making certain investments relating to China and Iran. (FE)

This bill prohibits SWIB from purchasing or selling any publicly traded security of a Chinese military-industrial complex company. The bill defines “Chinese military-industrial complex company” as a company listed in the Annex to Executive Order 14032 or later identified by the federal Secretary of the Treasury as such a company. However, the bill allows SWIB, for specified periods, to divest from prohibited securities already held by SWIB.

The bill also generally prohibits SWIB from investing in securities of any company that 1) has outstanding loans or other commitments of credit to the government of Iran; 2) maintains property or personnel, or has business operations, in Iran; 3) contracts with the government of Iran or provides goods or services in Iran;

or 4) sells weapons, military technology, oil-production or mineral-extraction equipment, or related goods with reasonable knowledge that they will be resold to the government of Iran or redistributed into Iran. For purposes of the bill, the government of Iran includes any company owned or controlled by Iran. If SWIB maintains a prohibited investment on the effective date of the bill, SWIB must divest itself of the investment within approximately one year. However, the investment prohibition does not apply to investments made by external managers with whom SWIB has contracted, investments in mutual funds and other commingled instruments, and investments in private equity funds. In determining whether an investment is prohibited, SWIB may rely on information about a company available from a third-party screening service that utilizes criteria reasonably similar to the criteria described in items 1 to 4 above.

The bill also requires SWIB to include, in an annual report that under current law SWIB submits to the legislature, information relating to SWIB's efforts to satisfy the requirements under the bill, including identification of companies in which investment is prohibited and, as applicable, SWIB's status of divestment from these companies.