AN ACT to amend the Indiana Code concerning pensions.
purposes, including:
(1) radar systems; or
(2) military grade transport vehicles.
(b) The term does not include weapons, arms, or military
defense supplies sold to peacekeeping forces that may be
dispatched to a state sponsor of terror by the United Nations or the
African Union.
Sec. 10.4. (a) As used in this chapter, "mineral extraction
activities" means the exploration, extraction, processing,
transporting, or wholesale sale of elemental minerals or associated
metals or oxides, including:
(1) gold;
(2) copper;
(3) chromium;
(4) chromite;
(5) diamonds;
(6) iron;
(7) iron ore;
(8) silver;
(9) tungsten;
(10) uranium; and
(11) zinc.
(b) The term includes the facilitation of mineral extraction
activities, including the provision of supplies or services in support
of mineral extraction activities.
Sec. 10.6. (a) As used in this chapter, "oil related activities"
includes:
(1) the export of oil;
(2) the extraction of or production of oil;
(3) the exploration for oil;
(4) the ownership of rights to oil blocks;
(5) the refining or processing of oil;
(6) the transportation of oil;
(7) the selling or trading of oil; or
(8) the construction or maintenance of a pipeline, a refinery,
or another oil field infrastructure.
(b) The term includes the facilitation of oil related activities,
including the provision of supplies or services in support of oil
related activities. The mere retail sale of gasoline and related
consumer products is not considered an oil related activity.
Sec. 10.8. As used in this chapter, "power production activities"
means any business operation that involves a project commissioned
by a state sponsor of terror whose purpose is to facilitate power
generation and delivery. The term includes the following:
(1) Establishing power generating plants or hydroelectric
dams.
(2) Selling or installing components for power generating
plants or hydroelectric dams.
(3) Providing service contracts related to the installation or
maintenance of power generating plants or hydroelectric
dams.
(4) Facilitating power production activities, including
providing supplies or services in support of power production
activities.
Sec. 11. As used in this chapter, "private market fund" means
any:
(1) private equity fund;
(2) private equity fund of funds;
(3) venture capital fund;
(4) hedge fund;
(5) hedge fund of funds;
(6) real estate fund; or
(7) investment vehicle;
that is not publicly traded.
Sec. 12. As used in this chapter, "scrutinized business
operations" means business operations that have caused a
company to become a scrutinized company.
Sec. 13. (a) As used in this chapter, "scrutinized company"
means a company that meets any of the following criteria:
(1) Both of the following apply to the company:
(A) The company has business operations that involve
contracts with or the provision of supplies or services to:
(i) a state sponsor of terror;
(ii) companies in which a state sponsor of terror has any
direct or indirect equity share;
(iii) consortiums or projects commissioned by a state
sponsor of terror; or
(iv) companies involved in consortiums or projects
commissioned by a state sponsor of terror.
(B) Either:
(i) more than ten percent (10%) of the company's
revenues or assets is linked to a state sponsor of terror
involve oil related activities or mineral extraction
activities; or
(ii) more than ten percent (10%) of the company's
revenues or assets is linked to a state sponsor of terror
involve power production activities.
(2) The company supplies military equipment to a state
sponsor of terror, unless the company implements safeguards
to prevent the use of the equipment by forces actively
participating in an armed conflict in a state sponsor of terror.
This subdivision does not apply to companies involved in the
sale of military equipment solely to any internationally
recognized peacekeeping force or humanitarian organization.
(b) The term does not include a social development company.
Sec. 14. (a) As used in this chapter, "social development
company" means a company that is:
(1) licensed by the United States Department of Treasury
under the Federal Trade Sanction Reform and Export
Enhancement Act of 2000 (P.L. 106-387); or
(2) lawfully operating under the laws of another country
whose primary purpose in a state sponsor of terror is to
provide humanitarian goods or services.
(b) A company described in subsection (a)(2) includes a
company whose primary purpose is to provide:
(1) food;
(2) medicine or medical equipment;
(3) agricultural supplies or infrastructure;
(4) educational opportunities;
(5) journalism related activities;
(6) spiritual related activities or materials;
(7) information or information materials;
(8) general consumer goods; or
(9) services of a purely clerical or reporting nature;
to aid the inhabitants of a state sponsor of terror.
Sec. 15. As used in this chapter, "state sponsor of terror" means
a country determined by the Secretary of State of the United States
to have repeatedly provided support for acts of international
terrorism.
Sec. 16. As used in this chapter, "substantial action" means
adopting, publicizing, and implementing a formal plan to cease
scrutinized business operations within one (1) year and to refrain
from any new business operations.
Sec. 17. (a) Not later than March 30, 2010, each board shall
make a good faith effort to identify all scrutinized companies in
which the fund administered by the board has direct or indirect
holdings.
(b) In carrying out its responsibilities under subsection (a), each
board may use existing research or contract with a research firm.
(c) A board or a research firm with which the board contracts
under subsection (b) may take any of the following actions:
(1) Review publicly available information regarding
companies with business operations in states that sponsor
terror.
(2) Contact other institutional investors that have divested
from or invest in companies with business operations in states
that sponsor terror.
(3) Contact asset managers that are contracted by the fund
and that invest in companies with business operations in states
that sponsor terror.
(d) Not later than the first meeting of the board after March 30,
2010, each board shall compile the names of all scrutinized
companies into a scrutinized company list and indicate whether
each scrutinized company has active or inactive business
operations in a state sponsor of terror.
(e) Each board shall update its scrutinized company list at least
on an annual basis based on evolving information from sources
described in subsections (b) and (c).
(f) If the Secretary of State of the United States determines that
a country is a state sponsor of terror after June 30, 2009, each
board shall add any additional scrutinized company resulting from
the Secretary of State's determination when each board updates its
scrutinized company list under subsection (e).
Sec. 18. After a board creates or updates the scrutinized
company list under section 17 of this chapter, the board shall
immediately identify the companies on the scrutinized company list
in which the fund administered by the board has direct or indirect
holdings.
Sec. 19. (a) Each fund shall send to each scrutinized company:
(1) that is identified under section 18 of this chapter as one in
which the fund has direct or indirect holdings; and
(2) that has only inactive business operations;
a written notice concerning the provisions of this chapter and a
statement encouraging the company to continue to refrain from
initiating active business operations in a state sponsor of terror
until the company is able to avoid scrutinized business operations
altogether.
(b) Each fund shall continue to correspond on a semiannual
basis with scrutinized companies:
(1) in which the fund has direct or indirect holdings; and
(2) that have only inactive business operations.
Sec. 20. (a) Each fund shall send to each scrutinized company:
(1) that is identified under section 18 of this chapter as one in
which the fund has direct or indirect holdings; and
(2) that has active business operations;
a written notice concerning the contents of this chapter and a
statement indicating that the fund's holdings in the company may
become subject to divestment by the fund.
(b) A notice sent under this section must:
(1) offer the company the opportunity to clarify the
company's state sponsor of terror related activities; and
(2) encourage the company to:
(A) cease its scrutinized business operations; or
(B) convert the company's operations to inactive business
operations in order to avoid divestment by the fund of the
fund's holdings in the company;
not later than one hundred eighty (180) days after the date of
the notice.
Sec. 21. (a) If, within one hundred eighty (180) days after a fund
first sends written notice to a company under section 20 of this
chapter, the company ceases scrutinized business operations, the
company shall be removed from the fund's scrutinized company
list, and sections 22, 23, 24, and 25 of this chapter do not apply to
the company unless the company resumes scrutinized business
operations.
(b) If, within one hundred eighty (180) days after a fund first
sends written notice to a company under section 20 of this chapter,
the company converts its scrutinized active business operations to
inactive business operations, the company is subject to section 19
of this chapter.
Sec. 22. (a) Except as provided in sections 24 and 25 of this
chapter, if a company continues to have scrutinized active business
operations one hundred eighty (180) days after a fund first sends
written notice to the company under section 20 of this chapter, the
fund shall sell, redeem, divest, or withdraw all publicly traded
securities of the company that are held by the fund, as follows:
(1) At least fifty percent (50%) of the securities shall be
removed from the fund's assets under management within
three (3) years after the company's appearance on the
scrutinized company list.
active business operations in a state sponsor of terror.
Sec. 25.5. Notwithstanding any provision to the contrary,
sections 22 and 23 of this chapter do not apply to indirect holdings
in actively managed investment funds. However, if a fund has
indirect holdings in actively managed investment funds containing
the securities of scrutinized companies with active business
operations, the fund shall submit letters to the managers of the
investment funds requesting that the managers remove the
scrutinized companies with active business operations from the
fund or create a similar actively managed fund with indirect
holdings without scrutinized companies with active business
operations. If the manager creates a similar fund, the fund shall
replace all applicable investments with investments in the similar
fund in a period consistent with prudent investing standards.
Sec. 26. (a) On or before November 1, 2010, and thereafter as
directed by the legislative council, each board shall submit a report
in an electronic format under IC 5-14-6 to the legislative council.
Notwithstanding IC 5-14-6-4(b)(2), the submission of a report
under this subsection to the executive director of the legislative
services agency fulfills the board's requirement to send a copy of
the report to each member of the general assembly using the
member's senate or house of representatives electronic mail
address.
(b) A report submitted by the board of a fund under this section
must include at least the following information, as of the date of the
report:
(1) A copy of the fund's scrutinized company list.
(2) A summary of correspondence between the fund and
companies under sections 19 and 20 of this chapter.
(3) All investments sold, redeemed, divested, or withdrawn by
the fund in compliance with section 22 of this chapter.
(4) All commingled funds that are exempted from divestment
under section 22 of this chapter.
(5) All companies whose securities the fund is prohibited from
acquiring under section 23 of this chapter.
(6) Any progress made under section 21 of this chapter.
Sec. 27. The provisions of this chapter regarding any country
determined to be a state sponsor of terror cease to apply to that
country on the earlier of the following:
(1) The date the Secretary of State of the United States
removes the country from its official list of state sponsors of
terrorism.
(2) The date Congress or the President of the United States,
through legislation or executive order, declares that
mandatory divestment of the type provided for in this chapter
interferes with the conduct of foreign policy of the United
States.
Sec. 28. With respect to actions taken in compliance with this
chapter, including all good faith determinations regarding
companies on the scrutinized company list, a fund is exempt from
any conflicting statutory or common law obligations, including any
obligations with respect to choice of asset managers, investment
funds, or investments for fund securities portfolios.
Sec. 29. (a) Both:
(1) the state and its officers, agents, and employees; and
(2) each fund and its board members, executive director,
officers, agents, and employees;
are immune from civil liability for any act or omission related to
the removal of an asset from the fund under this chapter.
(b) In addition to the immunity provided under subsection (a),
both:
(1) the officers, agents, and employees of the state; and
(2) the board members, executive director, officers, agents,
and employees of a fund;
are entitled to indemnification from the fund for all losses, costs,
and expenses, including reasonable attorney's fees, associated with
defending against any claim or suit relating to an act authorized
under this chapter.
Sec. 30. The provisions of this chapter are severable in the
manner provided in IC 1-1-1-8(b).
the Secretary of State of the United States are providing
military, financial, political, diplomatic, and organizational
aid to known terrorist groups.
(3) Support for terrorism and the acquisition of weapons of
mass destruction represent a grave threat to the security of
the United States and to the citizens of the state of Indiana.
(4) The threat from terrorism to the security of the United
States and to the citizens of the state of Indiana constitutes the
extraordinary circumstances necessary for mandatory
divestment by the funds of the funds' holdings in scrutinized
companies with active business operations in a state sponsor
of terror.