Minnesota Legislature
HF 4165
1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 04/04/2022 09:32am
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 03/10/2022 | |
| 1st Engrossment | Posted on 03/17/2022 |
Current Version - 1st Engrossment
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5.1
A bill for an act
relating to state government; requiring divestment from certain investments relating
to Russia and Belarus; terminating contracts with Russian and Belarusian entities;
requiring a report; proposing coding for new law in Minnesota Statutes, chapters
11A; 16C.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[11A.245] INVESTMENT IN RUSSIA AND BELARUS.
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new text begin Subdivision 1. new text end
new text begin Definitions. new text end
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(a) For the purposes of this section, the following terms have
the meanings given.
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(b) "Active business operations" means all business operations that are not inactive
business operations.
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(c) "Belarus" means the government of the Republic of Belarus and its instrumentalities
or political subdivisions, and companies owned or controlled by the Republic of Belarus.
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(d) "Company" means any sole proprietorship, organization, association, corporation,
partnership, joint venture, limited partnership, limited liability partnership, limited liability
company, or other entity or business association, including all wholly owned subsidiaries,
majority-owned subsidiaries, parent companies, or affiliates of such entities or business
associations, that exists for profit-making purposes.
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(e) "Direct holdings" means all publicly traded debt and equity securities, including
depository receipts representing ownership rights of such securities, of an entity subject to
this section, or derivatives or notes representing exposure to such securities, that are held
directly by the state board or held in an account or fund in which the state board owns all
shares or interests.
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(f) "Inactive business operations" means the continued holding or renewal of rights to
property previously operated for the purpose of generating revenues but not presently
deployed for such a purpose.
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(g) "Indirect holdings" means all investments held in an account or fund, including a
mutual fund, a real estate fund, a private equity fund, or a commingled fund, managed by
one or more persons who are not employed by the state board, in which the public funds
own shares or interests together with other investors who are not subject to this section.
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(h) "Russia" means the government of the Russian Federation or its instrumentalities or
political subdivisions, and companies owned or controlled by the Russian Federation.
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new text begin Subd. 2. new text end
new text begin Divestment required. new text end
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(a) The state board must sell, redeem, or withdraw, in
a fiscally prudent manner and consistent with applicable laws and regulations not in conflict
with this section, all direct holdings of the following assets:
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(1) securities issued by a company with a principal place of business in Russia or Belarus,
or depository receipts representing ownership rights to such securities;
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(2) securities issued by Russia or Belarus;
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(3) securities issued by any governmental unit of Russia or Belarus;
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(4) currency issued by Russia, Belarus, or a governmental unit of Russia or Belarus; and
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(5) derivatives or notes representing exposure to any assets listed in this subdivision.
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(b) For purposes of this subdivision, when determining whether a company has a principal
place of business in Russia or Belarus, the state board must give consideration to the
company's country of risk; domicile; country of incorporation; the country in which the
company's securities are issued; and other relevant factors as determined by the state board
or its director.
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(c) At least quarterly, the director must report to the state board on the status of any
actions taken under this subdivision.
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new text begin Subd. 3. new text end
new text begin Schedule. new text end
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To the extent practicable, the sale, redemption, or withdrawal of
assets under subdivision 2 must be completed according to the following schedule:
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(1) at least 50 percent of any direct holdings must be removed from the state board's
assets under management by nine months after the effective date of this section; and
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(2) 100 percent of any direct holdings must be removed from the state board's assets
under management within 15 months after the effective date of this section.
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new text begin Subd. 4. new text end
new text begin Prohibition on new acquisitions. new text end
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The state board may not further acquire
securities that are subject to sale, redemption, or withdrawal under subdivision 2.
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new text begin Subd. 5. new text end
new text begin Relation to federal action. new text end
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If the federal government excludes an asset from
its present, or any future, federal sanctions relating to Russia or Belarus, that asset is exempt
from the divestment requirements and the investment prohibitions in this section.
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new text begin Subd. 6. new text end
new text begin Exemptions. new text end
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Subdivision 2 does not apply to any of the following:
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(1) investments in a company that is primarily engaged in supplying goods or services
intended to relieve human suffering in Russia or Belarus;
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(2) investments in a company that is primarily engaged in promoting health; education;
or journalistic, religious, or welfare activities in Russia or Belarus; and
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(3) investments in a United States company that is authorized by the federal government
to have active business operations in Russia or Belarus.
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new text begin Subd. 7. new text end
new text begin Excluded securities. new text end
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Subdivision 2 does not apply to indirect holdings in
actively managed investment funds. The state board must submit letters to the managers of
investment funds containing assets that would otherwise be subject to sale, redemption, or
withdrawal under subdivision 2 requesting the managers to consider removing those assets
from the fund or to create a similar actively managed fund with indirect holdings that do
not include those assets. If a manager creates a similar fund, the state board shall promptly
replace all applicable investments with investments in the similar fund consistent with
prudent investing standards. For the purposes of this section, private equity funds shall be
deemed to be actively managed investment funds.
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new text begin Subd. 8. new text end
new text begin Reporting. new text end
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By January 15 of each calendar year, the state board shall submit
a report to the chairs and ranking minority members of the legislative committees and
divisions with jurisdiction over the state board. The report must include:
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(1) a list of all investments sold, redeemed, or withdrawn in compliance with subdivision
2;
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(2) a list of all prohibited investments under subdivision 4; and
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(3) a description of any progress made under subdivision 7.
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new text begin Subd. 9. new text end
new text begin Expiration. new text end
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This section ceases to be operative if the President of the United
States determines and certifies that state legislation similar to this section interferes with
the conduct of United States foreign policy.
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new text begin Subd. 10. new text end
new text begin Other legal obligations. new text end
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The state board, including its executive director and
staff, is exempt from any statutory or common law obligations that conflict with actions
taken in compliance with this section, including all good-faith determinations regarding
companies as required by this section, including any obligations regarding the choice of
asset managers, investment funds, or investments for the State Board of Investment's
securities portfolios.
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new text begin Subd. 11. new text end
new text begin Severability. new text end
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The provisions of this section are severable. If any provision of
this section or its application is held invalid, that invalidity does not affect other provisions
or applications that can be given effect without the invalid provision or application.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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Sec. 2.
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[16C.051] CONTRACTS WITH RUSSIA OR BELARUS.
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new text begin Subdivision 1. new text end
new text begin Definitions. new text end
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(a) For purposes of this section, the following terms have
the meanings given.
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(b) "Belarusian entity" means an institution or company that is headquartered in the
Republic of Belarus or has its principal place of business in the Republic of Belarus.
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(c) "Russian entity" means an institution or company that is headquartered in the Russian
Federation or has its principal place of business in the Russian Federation.
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new text begin Subd. 2. new text end
new text begin Terminating contracts with Russia or Belarus. new text end
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(a) All state agencies must:
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(1) review existing contracts to determine if any existing contracts are with Russian
entities or Belarusian entities;
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(2) promptly terminate existing contracts with Russian entities or Belarusian entities as
practicable; and
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(3) refrain from entering into contracts with Russian entities or Belarusian entities unless
the head of the state agency determines that there is no suitable alternative.
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(b) Nothing in this section is intended to require or encourage state agencies to terminate
or avoid contracts with Minnesota companies or other domestic entities, or to relieve state
agencies of any obligations under applicable laws, rules, or regulations related to contracting
and procurement.
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new text begin Subd. 3. new text end
new text begin Severability. new text end
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The provisions of this section are severable. If any provision of
this section or its application is held invalid, that invalidity does not affect other provisions
or applications that can be given effect without the invalid provision or application.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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