Senate Bill No. 47
(By Senator White)
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[Introduced January 13, 2010; referred to the Committee on
Pensions; and then to the Committee on Finance.]
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A BILL to amend and reenact §12-6-2 of the Code of West Virginia,
1931, as amended; to amend said code by adding thereto two new
sections, designated §12-6-12a and §12-6-12b; to amend and
reenact §12-6C-3 of said code; and to amend said code by
adding thereto two new sections, designated §12-6C-9a and
§12-6C-9b, all relating to the divestiture of state moneys
from companies that do business in countries that sponsor or
promote terrorist activities.
Be it enacted by the Legislature of West Virginia:
That §12-6-2 of the Code of West Virginia, 1931, as amended,
be amended and reenacted; that said code be amended by adding
thereto two new sections, designated §12-6-12a and §12-6-12b; that
§12-6C-3 of said code be amended and reenacted; and that said code
be amended by adding thereto two new sections, designated §12-6C-9a
and §12-6C-9b, all to read as follows:
ARTICLE 6. WEST VIRGINIA INVESTMENT MANAGEMENT BOARD.
§12-6-2. Definitions.
As used in this article, unless a different meaning clearly
appears from the context:
(1) "Beneficiaries" means those individuals entitled to
benefits from the participant plans;
(2) "Board" means the governing body for the West Virginia
Investment Management Board and any reference elsewhere in this
code to Board of Investments or West Virginia Trust Fund means the
board as defined in this subdivision;
(3) "Business operations" means maintaining, selling or
leasing equipment, facilities, personnel or any other apparatus of
business of commerce in a country engaging in terrorist activities,
including ownership or possession of real or personal property
located in a country engaging in terrorist activities.
(4) "Company" means a sole proprietorship, organization,
association, corporation, partnership, venture or other entity, its
subsidiary or affiliate that exists for profit making purposes or
to otherwise secure economic advantage. "Company" also means a
company owned or controlled, either directly or indirectly, by the
government of a country engaging in terrorist activities, that is
established or organized under the laws of or has its principal
place of business in a country engaging in terrorist activities.
(3) (5) "401(a) plan" means a plan which is described in Section 401(a) of the Internal Revenue Code of 1986, as amended,
and with respect to which the board has been designated to hold
assets of the plan in trust pursuant to the provisions of section
nine-a of this article;
(6) "Invest" or "investment" means the purchase, ownership or
control of stock of a company, association or corporation, the
capital stock of a mutual water company or corporation, bonds
issued by the government or a political subdivision of a country
engaging in terrorist activities, corporate bonds or other debt
instruments issued by a company, or the commitment of funds or
other assets to a company including a loan or extension of credit
to that company.
(7) "Iran" means the Islamic Republic of Iran or a territory
under the administration or control of Iran.
(4) (8) "Local government funds" means the moneys of a
political subdivision, including policemen's pension and relief
funds, firemen's pension and relief funds and volunteer fire
departments, transferred to the board for deposit;
(9) "Military equipment" means weapons, arms or military
defense supplies.
(5) (10) "Participant plan" means any plan or fund subject now
or hereafter to subsection (a), section nine-a of this article;
(6) (11) "Political subdivision" means and includes a county,
municipality or any agency, authority, board, county board of education, commission or instrumentality of a county or
municipality and regional councils created pursuant to the
provisions of section five, article twenty-five, chapter eight of
this code;
(7) (12) "Trustee" means any member serving on the West
Virginia Investment Management Board:
Provided, That in section
nine-a of this article in which the terms of the trusts are set
forth, "trustee" means the West Virginia Investment Management
Board;
(8) (13) "Securities" means all bonds, notes, debentures or
other evidences of indebtedness and other lawful investment
instruments; and
(9) (14) "State funds" means all moneys of the state which may
be lawfully invested except the "school fund" established by
section four, article XII of the State Constitution.
(15) "Terrorist activities" means any activity which is
unlawful under the laws of the place where it is committed or
which, if committed in the United States, would be unlawful under
the laws of the United States or any state and which involves any
of the following:
(A) The highjacking or sabotage of any conveyance, including
an aircraft, vessel or vehicle.
(B) The seizing or detaining, and threatening to kill, injure
or continue to detain, an individual in order to compel a third person, including a governmental organization, to do or abstain
from doing any act as an explicit or implicit condition for the
release of the individual seized or detained.
(C) A violent attack upon an internationally protected person,
as defined in 18 U.S.C. §1116(b)(4) or upon the liberty of such a
person.
(D) An assassination.
(E) The use of any:
(i) Biological agent, chemical agent or nuclear weapon or
device; or
(ii) Explosive or firearm with intent to endanger, directly or
indirectly, the safety of one or more individuals or to cause
substantial damage to property.
(G) A threat, attempt or conspiracy to do any of the
foregoing.
(H) The preparation or planning of a terrorist activity.
(I) The gathering of information on potential targets for
terrorist activity.
(J) The providing of any type of material support, including
the sale of military equipment, providing a safe house,
transportation, communication, funds, false identification,
weapons, explosives or training, to any individual the nation knows
or has reason to believe has committed or plans to commit a
terrorist activity.
(K) The soliciting of funds or other things of value for
terrorist activity of for any terrorist organization.
(L) The solicitation of any individual for membership in a
terrorist organization, terrorist government or to engage in a
terrorist activity.
§12-6-12a. Legislative findings on investment with countries
engaging in terrorist activities.
(a) The Securities and Exchange Commission has determined that
business activities in countries engaging in terrorist activities
and that are subject to sanctions by the United States may
materially harm the shared value of foreign companies. Shares in
these foreign companies may be held by using state money.
(b) Publicly traded companies in the United States are
substantially restricted in doing business in or with countries
engaging in terrorist activities that the United States Department
of State has identified as sponsoring terrorism.
(c) State money is currently invested on behalf of the
citizens of West Virginia in publicly traded companies that may be
at risk due to business ties with countries engaging in terrorist
activities and are involved in proliferation of weapons of mass
destruction.
(d) Investments in publicly traded foreign companies that have
business operations in or with countries engaging in terrorist
activities are liable for sanctions under United States law and risk the pensions of the dedicated public employees of this state.
(e) Excluding companies with business activities in foreign
countries engaging in terrorist activities and divesting from
public portfolios will help protect the public retirement systems
in this state from investment losses related to these business
activities and may improve the investment performance of the public
retirement systems.
(f) It is unconscionable for this state to invest in foreign
companies with business activities benefitting countries engaging
in terrorist activities that commit egregious violations of human
rights and sponsor terrorist acts.
(g) It is the governments of these countries engaging in
terrorist activities and not the people of nations such as Iran,
North Korea and Sudan, that are responsible for support of
terrorism and which commits egregious violation of human rights
under which its own citizens are required to live.
§12-6-12b. Investment of state money in companies that do business
in countries engaging in terrorist activities is
restricted.
(a) The board of investment may not invest state money in a
company which has business operations in a country engaging in
terrorist activities as identified by the board through publicly
available information including, but not limited to, information
provided by nonprofit and other organizations and government entities.
(b) On or before June 30, 2011, the Board of Investments shall
determine which companies are subject to divestment.
(c) After the determination described in subdivision (b), the
Board of Investments shall take appropriate action to sell, redeem,
divest or withdraw any investment held in violation of this
section. Such sale, divestment, redemption or withdrawal shall be
completed not later than one year following the effective date of
this section.
(d) Within sixty days after the effective date of this
section, the Board of Investments shall submit to the Governor, the
President of the Senate and the Speaker of the House a report of
all investments held as of such effective date that are in
violation of this section. One year after the effective date of
this section, the executive director shall report on the completion
of all sales, redemptions, divestments or withdrawals of such
investments in compliance with this section.
ARTICLE 6C. WEST VIRGINIA BOARD OF TREASURY INVESTMENTS.
§12-6C-3. Definitions.
As used in this article, unless a different meaning clearly
appears from the context:
(1) "Board" means the governing body for the West Virginia
Board of Treasury Investments. References in this code to the
entity investing the moneys of the Consolidated Fund, to the West Virginia Board of Investments, to the West Virginia Trust Fund or
to the West Virginia Investment Management Board in connection with
investing moneys in the Consolidated Fund means the board as
defined in this subdivision;
(2) "Business operations" means maintaining, selling or
leasing equipment, facilities, personnel or any other apparatus of
business of commerce in a country engaging in terrorist activities,
including ownership or possession of real or personal property
located in a country engaging in terrorist activities.
(3) "Company" means a sole proprietorship, organization,
association, corporation, partnership, venture or other entity, its
subsidiary or affiliate that exists for profit making purposes or
to otherwise secure economic advantage. "Company" also means a
company owned or controlled, either directly or indirectly, by the
government of a country engaging in terrorist activities, that is
established or organized under the laws of or has its principal
place of business in a country engaging in terrorist activities.
(2) (4) "Consolidated fund" means the investment fund
continued in section six of this article and transferred to the
board by the West Virginia Investment Management Board for
Management and Investment;
(3) (5) "Director" means any member serving on the board;
(6) "Invest" or "investment" means the purchase, ownership or
control of stock of a company, association or corporation, the capital stock of a mutual water company or corporation, bonds
issued by the government or a political subdivision of a country
engaging in terrorist activities, corporate bonds or other debt
instruments issued by a company, or the commitment of funds or
other assets to a company including a loan or extension of credit
to that company.
(4) (7) "Local government funds" means the moneys of a
political subdivision, including policemen's and firemen's pension
and relief funds, and volunteer fire department funds, transferred
to the board for deposit;
(8) "Military equipment" means weapons, arms or military
defense supplies.
(5) (9) "Participant" means any state government spending unit
or political subdivision which transfers moneys to the board for
investment;
(6) (10) "Political subdivision" means and includes a county,
municipality or any agency, authority, board, county board of
education, commission or instrumentality of a county or
municipality and regional councils created pursuant to the
provisions of section five, article twenty-five, chapter eight of
this code;
(7) (11) "Securities" means all bonds, notes, debentures or
other evidences of indebtedness and other lawful investment
instruments; and
(8) (12) "State funds" means all moneys of the state which may
be lawfully invested except for the "school fund" established by
section four, article XII of the State Constitution.
(13) "Terrorist activities" means any activity which is
unlawful under the laws of the place where it is committed or
which, if committed in the United States, would be unlawful under
the laws of the United States or any state and which involves any
of the following:
(A) The highjacking or sabotage of any conveyance, including
an aircraft, vessel or vehicle.
(B) The seizing or detaining, and threatening to kill, injure,
or continue to detain, an individual in order to compel a third
person, including a governmental organization, to do or abstain
from doing any act as an explicit or implicit condition for the
release of the individual seized or detained.
(C) A violent attack upon an internationally protected person,
as defined in 18 U.S.C. §1116(b)(4) or upon the liberty of such a
person.
(D) An assassination.
(E) The use of any:
(i) Biological agent, chemical agent or nuclear weapon or
device; or
(ii) Explosive or firearm with intent to endanger, directly or
indirectly, the safety of one or more individuals or to cause substantial damage to property.
(F) A threat, attempt or conspiracy to do any of the
foregoing.
(G) The preparation or planning of a terrorist activity.
(H) The gathering of information on potential targets for
terrorist activity.
(I) The providing of any type of material support, including
the sale of military equipment, providing a safe house,
transportation, communication, funds, false identification,
weapons, explosives or training, to any individual the nation knows
or has reason to believe has committed or plans to commit a
terrorist activity.
(J) The soliciting of funds or other things of value for
terrorist activity of for any terrorist organization.
(K) The solicitation of any individual for membership in a
terrorist organization, terrorist government, or to engage in a
terrorist activity.
§12-6C-9a. Legislative findings on investment with countries
engaging in terrorist activities.
(a) The Securities and Exchange Commission has determined that
business activities in countries engaging in terrorist activities
and that are subject to sanctions by the United States may
materially harm the shared value of foreign companies. Shares in
these foreign companies may be held by using state money.
(b) Publicly traded companies in the United States are
substantially restricted in doing business in or with countries
engaging in terrorist activities that the United States Department
of State has identified as sponsoring terrorism.
(c) State money is currently invested on behalf of the
citizens of West Virginia in publicly traded companies that may be
at risk due to business ties with countries engaging in terrorist
activities and are involved in proliferation of weapons of mass
destruction.
(d) Investments in publicly traded foreign companies that have
business operations in or with countries engaging in terrorist
activities are liable for sanctions under United States law and
risk the pensions of the dedicated public employees of this state.
(e) Excluding companies with business activities in foreign
countries engaging in terrorists activities and divesting from
public portfolios will help protect the public retirement systems
in this state from investment losses related to these business
activities and may improve the investment performance of the public
retirement systems.
(f) It is unconscionable for this state to invest in foreign
companies with business activities benefitting countries engaging
in terrorist activities that commit egregious violations of human
rights and sponsor terrorist acts.
(g) It is the governments of these countries engaging in terrorist activities and not the people of nations such as Iran,
North Korea and Sudan, that are responsible for support of
terrorism and which commits egregious violation of human rights
under which its own citizens are required to live.
§12-6C-9b. Investment of state money in companies that do business
in countries engaging in terrorist activities is
restricted.
(a) The board may not invest state money in a company which
has business operations in a country engaging in terrorist
activities as identified by the board through publicly available
information including, but not limited to, information provided by
nonprofit and other organizations and government entities.
(b) On or before June 30, 2011, the board shall determine
which companies are subject to divestment.
(c) After the determination described in subdivision (b), the
board shall take appropriate action to sell, redeem, divest or
withdraw any investment held in violation of this section. Such
sale, divestment, redemption or withdrawal shall be completed not
later than one year following the effective date of this section.
(d) Within sixty days after the effective date of this
section, the board shall submit to the Governor, the President of
the Senate and the Speaker of the House a report of all investments
held as of such effective date that are in violation of this
section. One year after the effective date of this section, the executive director shall report on the completion of all sales,
redemptions, divestments or withdrawals of such investments in
compliance with this section.
NOTE: The purpose of this bill is to remove all state money
from investments with companies that do business with or in
countries engaging in terrorist activities.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§12-6-12a, §12-6-12b, §12-6C-9a and §12-6C-9b are new;
therefore, strike-throughs and underscoring have been omitted.