PRINTER'S NO. 1428
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1209
Session of
2019
INTRODUCED BY BOYLE, DONATUCCI, HILL-EVANS, SCHLOSSBERG,
FREEMAN, ISAACSON, HOHENSTEIN, YOUNGBLOOD, MURT AND JOHNSON-
HARRELL, APRIL 15, 2019
REFERRED TO COMMITTEE ON STATE GOVERNMENT, APRIL 15, 2019
AN ACT
Amending the act of July 2, 2010 (P.L.266, No.44), entitled "An
act providing for divestiture by the State Treasurer, the
State Employees' Retirement System and the Public School
Employees' Retirement System of investments in companies
doing business in Iran and Sudan," amending the title of the
act; and further providing for definitions, for required
actions, for reporting and for expiration.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The title of the act of July 2, 2010 (P.L.266,
No.44), known as the Protecting Pennsylvania's Investments Act,
is amended to read:
AN ACT
Providing for divestiture by the State Treasurer, the State
Employees' Retirement System and the Public School Employees'
Retirement System of investments in companies doing business
in Brunei, Iran and Sudan.
Section 2. The definitions of "business activities," "oil-
related activities," "scrutinized company" and "social
development company" in section 2 of the act are amended and the
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section is amended by adding definitions to read:
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Brunei." The nation of Brunei.
"Business activities." Owning or controlling property or
assets located in, having employees or facilities located in,
providing goods or services to, having distribution agreements
with, issuing credit or loans to, purchasing bonds or commercial
paper issued by, investing in or having equity ties to or with
Brunei, Iran[,] or Sudan or any company domiciled in Brunei,
Iran or Sudan.
* * *
"Government of Brunei." The government of Brunei and its
instrumentalities and companies owned or controlled by the
government of Brunei.
* * *
"Oil-related activities." The term includes all of the
following:
(1) Development of petroleum or natural gas resources of
Brunei, Iran or Sudan. This paragraph does not include the
mere sale of gasoline and related consumer products.
(2) Owning rights to oil or natural gas blocks.
(3) Exporting, extracting, producing, refining,
processing, exploring for, transporting, selling or trading
oil or natural gas.
(4) Constructing, maintaining or operating any pipeline,
refinery, liquefaction facility or other oil or natural gas
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infrastructure.
(5) Facilitating activities referred to in paragraph
(1), (2), (3) or (4), including by supplying services in
support of the activities.
* * *
"Scrutinized company." Any of the following:
(1) Any foreign company that has:
(i) invested at least $20,000,000 in oil-related
activities in Brunei or Iran in any 12-month period since
August 5, 1996;
(ii) supplied military equipment to the government
of Iran within the 12-month period prior to the effective
date of this section; or
(iii) knowingly and intentionally violated the
United States export controls with respect to Brunei or
Iran during the 12-month period prior to the effective
date of this section.
(2) Any foreign company that meets the criteria set
forth either in subparagraph (i) or (ii):
(i) The company has business activities that involve
contracts with or provision of supplies or services to
the government of Brunei or the government of Sudan,
companies in which the government of Brunei or the
government of Sudan has any direct equity share,
government of Brunei-commissioned or government of Sudan-
commissioned consortiums or projects, or companies
involved in government of Brunei-commissioned or
government of Sudan-commissioned consortiums or projects;
and
(A) more than 10% of the company's revenue or
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assets linked to Brunei or Sudan involve oil-related
activities or mineral extraction activities; less
than 75% of the company's revenues or assets linked
to Brunei or Sudan involve contracts with or
provision of oil-related or mineral extracting
products or services to the government of Brunei or
the regional government of southern Sudan or a
project or consortium created exclusively by that
regional government; and the company has failed to
take substantial action specific to Brunei or Sudan;
or
(B) more than 10% of the company's revenues or
assets linked to Brunei or Sudan involve power
production activities; less than 75% of the company's
power production activities include projects whose
intent is to provide power or electricity to the
marginalized populations of Sudan; and the company
has failed to take substantial action specific to
Brunei or Sudan.
(ii) The company supplies military equipment within
Brunei or Sudan, unless it clearly shows that the
military equipment cannot be used to facilitate offensive
military actions in Brunei or Sudan or the company
implements rigorous and verifiable safeguards to prevent
use of that equipment by forces actively participating in
armed conflict, for example, through post-sale tracking
of such equipment by the company, certification from a
reputable and objective third party that such equipment
is not being used by a party participating in armed
conflict in Brunei or Sudan or sale of such equipment
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solely to the regional government of southern Sudan or
any internationally recognized peacekeeping force or
humanitarian organization.
The term does not include a foreign company that is a social
development company.
"Social development company." A company whose primary
purpose in Brunei, Iran or Sudan is to provide humanitarian
goods or services, including medicine or medical equipment,
agricultural supplies or infrastructure; educational
opportunities; journalism-related activities; information or
information materials; spiritual-related activities; services of
a purely clerical or reporting nature; food, clothing or general
consumer goods.
"Substantial action specific to Brunei." Adopting,
publicizing and implementing a formal plan to cease scrutinized
business activities within one year and to refrain from any such
new business activities; or through engagement with the
government of Brunei, accomplishing the repeal of the Syariah
Penal Code imposed on the Muslim population of Brunei.
* * *
Section 3. Sections 4(a), (b), (c) and (d) and 5(b), (c)
introductory paragraph and (d)(1) of the act are amended to
read:
Section 4. Required actions.
(a) Procedure.--A public fund shall adhere to the procedures
under this section for determining companies on its Scrutinized
Companies with Activities in Brunei List, Scrutinized Companies
with Activities in Iran List and Scrutinized Companies with
Activities in Sudan List that qualify for divestment.
(b) Engagement.--
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(1) For each company on a public fund's Scrutinized
Companies with Activities in Brunei List, Scrutinized
Companies with Activities in Iran List or Scrutinized
Companies with Activities in Sudan List in which the public
fund has direct holdings, the public fund shall send a
written notice informing the company of its scrutinized
company status and specify the business activities which have
resulted in this determination and that it may become subject
to divestment by the public fund. The notice must inform the
company of the opportunity to clarify its scrutinized
business activities and encourage the company, within 180
days of the date of receipt of the notice, to cease its
scrutinized business activities in Brunei, Iran[,] or Sudan
[or both] or convert the activities to inactive business
activities in order to avoid qualifying for divestment by the
public fund. The notice shall be sent no later than 120 days
after the effective date of this section.
(2) If, within 180 days of the date of receipt of a
notice under paragraph (1), a company announces by public
disclosure substantial action specific to Brunei, substantial
action specific to Iran or substantial action specific to
Sudan, the public fund may maintain its holdings, but the
company shall remain on the Scrutinized Companies with
Activities in Brunei List, Scrutinized Companies with
Activities in Iran List or Scrutinized Companies with
Activities in Sudan List pending completion of the companies'
cessation of scrutinized business activities. Following
completion of a company's cessation of scrutinized business
activities, the public fund shall remove the company from its
Scrutinized Companies with Activities in Brunei List,
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Scrutinized Companies with Activities in Iran List or
Scrutinized Companies with Activities in Sudan List.
(c) Divestment.--
(1) If, after 180 days following the effective date of
receipt of the notice under subsection (b)(1), a company has
not announced by public disclosure substantial action
specific to Brunei, substantial action specific to Iran[,] or
substantial action specific to Sudan [or both] as specified
in the notice, or the public fund determines or becomes aware
that the company continues to have scrutinized business
activities, the public fund, within 26 months after the 180-
day period, shall sell, redeem, divest or withdraw from its
direct holdings all securities of the company.
(2) If a public fund determines or becomes aware that a
company that ceased scrutinized business activities following
engagement under subsection (b) has resumed the activities,
the public fund shall send a written notice to the company
under subsection (b), and the company shall be immediately
placed onto the public fund's Scrutinized Companies with
Activities in Brunei List, Scrutinized Companies with
Activities in Iran List or Scrutinized Companies with
Activities in Sudan List.
(3) A public fund shall monitor a scrutinized company
that has announced by public disclosure substantial action
specific to Brunei, substantial action specific to Iran[,] or
substantial action specific to Sudan [or both]. If, after one
year the public fund determines or becomes aware that the
company has not implemented the plan, within 26 months after
the expiration of the one-year period, the public fund shall
sell, redeem, divest or withdraw from its direct holdings all
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securities of the company.
(d) Prohibition.--A public fund may not acquire securities
of a company on its Scrutinized Companies with Activities in
Brunei List, Scrutinized Companies with Activities in Iran List
or Scrutinized Companies with Activities in Sudan List.
* * *
Section 5. Reporting.
* * *
(b) Duty of public fund.--A public fund shall, within one
year of assembly of its Scrutinized Companies with Activities in
Brunei List, Scrutinized Companies with Activities in Iran List
and Scrutinized Companies with Activities in Sudan List, provide
a report to the Governor, the President pro tempore of the
Senate, the Speaker of the House of Representatives and each
member of the boards of the Pennsylvania Municipal Retirement
System, the State Employees' Retirement System and Public School
Employees' Retirement System. The report shall include the items
required under subsection (c). The report shall be made
available to the public.
(c) Contents.--The report under subsection (b) shall include
the most recent Scrutinized Companies with Activities in Brunei
List, Scrutinized Companies with Activities in Iran List and
Scrutinized Companies with Activities in Sudan List and all of
the following:
* * *
(d) Update.--A public fund shall do all of the following:
(1) Annually update, based on evolving information under
subsection (c), and make publicly available its Scrutinized
Companies with Activities in Brunei List, Scrutinized
Companies with Activities in Iran List and Scrutinized
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Companies with Activities in Sudan List.
* * *
Section 4. Section 6 of the act is amended by adding a
subsection to read:
Section 6. Expiration.
* * *
(c) Recurrence of investment in Brunei.--A public fund shall
have no obligations under this act with respect to a company
engaged in business activities in Brunei if the government of
Brunei repeals the Syariah Penal Code imposed on the Muslim
population of the Nation of Brunei that includes the punishment
of death by stoning or whipping for an individual found guilty
of homosexual sex, sodomy, adultery or rape, and amputation of a
hand or foot for theft.
Section 5. This act shall take effect in 60 days.
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