MADAM PRESIDENT:
The Senate Committee on Pensions and Labor, to which was referred Senate Bill No. 562, has had the
same under consideration and begs leave to report the same back to the Senate with the recommendation
that said bill be AMENDED as follows:
securities of a company that are:
(1) held in an account or a fund; and
(2) managed by one (1) or more persons:
(A) who are not employed by the fund; and
(B) in which the fund owns shares or interests together
with other investors not subject to this chapter.
Sec. 10.2. (a) As used in this chapter, "military equipment"
means weapons, arms, or military defense supplies provided
directly or indirectly to any force of a state sponsor of terror. The
term includes any equipment that readily may be used for military
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;
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.
a fund shall not acquire securities of companies on the scrutinized
company list that have active business operations.
Sec. 24. If the government of the United States declares that a
company on the scrutinized company list with active business
operations in a state sponsor of terror is excluded from any federal
sanctions relating to a state sponsor of terror, the company is not
subject to divestment or investment prohibition under this chapter.
Sec. 25. Notwithstanding any provision to the contrary, sections
22 and 23 of this chapter do not apply to indirect holdings in a
private market fund that includes a scrutinized company with
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.".
Page 2, delete lines 18 through 42.
Delete pages 3 through 8.
Page 9, delete lines 1 through 5.
(Reference is to SB 562 as introduced.)
and when so amended that said bill do pass and be reassigned to the Senate Committee on
Appropriations.
Committee Vote: Yeas 8, Nays 1.