Bill > HF181

Introduced Session

This bill prohibits the state board of regents from investing public moneys in companies that are owned or controlled by Chinese military or government services. The bill defines “company” as any entity or business association, including all subsidiaries, parent companies, or affiliates of such entities or business associations, that exist for profit-making purposes. The bill defines “direct holdings” in a company as all securities of a company held directly by the state board of regents or in an account or fund in which the state board of regents owns all shares or interests. The bill defines “indirect holdings” in a company as all securities of a company held in an account or fund managed by one or more persons not employed by the state board of regents, in which the state board of regents owns shares or interests together with other investors not subject to the provisions of this new Code section 262.14A. The bill defines “prohibited company” as a company that is owned or controlled by Chinese military or government services or their instrumentalities, including the people’s liberation army of China or the communist party of China. The bill defines “scrutinized company” as any company that is owned or controlled by Chinese military or government services or their instrumentalities. The bill requires the state board of regents to identify all scrutinized companies in which the state board of regents has direct or indirect holdings on or before July 1, 2023. Additionally, the bill requires the state board of regents to create and make available to the public a scrutinized companies list and review and update the list on a quarterly basis. The bill authorizes the state board of regents to review and rely on publicly available information and information from other sources when identifying scrutinized companies. The bill requires the state board of regents to send notice to all companies on the scrutinized companies list on an annual basis informing the company of the requirements of the new Code section. The bill prohibits the state board of regents from acquiring publicly traded securities of a prohibited company. The bill requires the state board of regents to sell, redeem, divest, or withdraw all publicly traded securities of a prohibited company no later than 180 days following the date the company becomes a prohibited company. The bill requires the state board of regents, within 30 days after the scrutinized companies list is created or updated, to make the list available to the public. Additionally, the bill requires the state board of regents to make available to the public and file with the general assembly an annual report beginning October 1, 2024, and each October 1 thereafter. The bill provides that, with respect to actions taken in compliance with new Code section 262.14A, the state board of regents shall be exempt from any conflicting statutory or common law obligations, including any such obligations in respect to choice of asset managers, investment funds, or investments for the state board of regents’ securities portfolios. The bill provides that the provisions related to the creation of a scrutinized companies list, divestment of publicly traded securities of a prohibited company, and reporting shall not apply if the United States Congress or president of the United States declares that mandatory divestment of the type provided for in new Code section 262.14A interferes with the conduct of United States foreign policy. The bill modifies Code section 262.14 to impose these same restrictions on the state board of regents’ investments of moneys belonging to the state university of Iowa, including the university of Iowa hospitals and clinics, the Iowa state university of science and technology, including the agricultural experiment station, the university of northern Iowa, the Iowa braille and sight saving school, the Iowa school for the deaf, the Oakdale campus, and the university of Iowa hospitals and clinics’ center for disabilities and development. The bill takes effect upon enactment.

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Rereferred to Education. H.J. 1029. (on 05/04/2023)

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