Bill Text: CA AB1551 | 2015-2016 | Regular Session | Introduced
Bill Title: State funds: divestment: foreign boycotts of Israel.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2016-11-30 - Died at Desk. [AB1551 Detail]
Download: California-2015-AB1551-Introduced.html
BILL NUMBER: AB 1551 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Travis Allen
JANUARY 4, 2016
An act to amend Sections 16649.80, 16649.81, 16649.82, 16649.83,
16649.84, 16649.86, 16649.88, and 16649.89 of, and to add Section
16649.85 to, the Government Code, relating to state funds.
LEGISLATIVE COUNSEL'S DIGEST
AB 1551, as introduced, Travis Allen. State funds: divestment:
foreign boycotts of Israel.
Existing law prohibits state trust funds, as defined, from making,
holding, or renewing investments in business firms or financial
institutions that engage in discriminatory business practices in
furtherance of, or in compliance with, the Arab League's economic
boycott of Israel, as specified. Existing law also prohibits state
moneys, as defined, from being deposited with financial institutions
that engage in those discriminatory business practices.
This bill would enact the California Israel Commerce Protection
Act. The bill would additionally apply those prohibitions to
investment in business firms or financial institutions that engage in
discriminatory business practices in furtherance or in compliance
with the boycott of Israel, as defined. The bill would require state
trust funds to use the most recent federal report on politically
motivated acts of boycott, divestment from, and sanctions against
Israel to determine which business firms and financial institutions
engage in those practices. The bill would make conforming changes and
related findings and declarations.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the
California Israel Commerce Protection Act.
SEC. 2. The Legislature finds and declares as follows:
(a) The United States and Israel have a unique bond based on their
shared, enduring values, which are reflected in the virtues and
principles of freedom and democracy, and have stood together as
allies since Israel was first formed as a nation.
(b) For years, California and Israel have established business
partnerships and trade relations with each other, and those
partnerships have helped enhance the agricultural, educational,
energy, entertainment, health, medical, scientific, and water
policies in California, Israel, and the United States.
(c) On March 5, 2014, as the culmination of an effort started as
Assembly Bill 1032 of the 2009-10 Regular Session, the Governor of
California and the Prime Minister of Israel signed a memorandum of
understanding (MOU) for strategic partnerships for joint innovation,
exchanges, and cooperation between California and Israel.
(d) In July 2015, the Legislature affirmed its support for the MOU
by passing Senate Concurrent Resolution 25, noting that participants
in the MOU had already expanded cooperation between Israel and
California in areas such as alternative energy, agriculture, business
innovation, and academia, and declaring that collaboration with
Israel will foster peace and democracy in the Middle East.
(e) Public retirement systems in this state currently invest on
behalf of the citizens of California in publicly traded foreign
companies that may be at risk due to ties with businesses that are
publicly boycotting Israel.
(f) Investments in publicly traded foreign companies that have
business operations with a company that boycotts Israel risk the
pensions of the dedicated public employees of this state.
(g) Excluding and divesting from companies that boycott Israel and
from portfolios that include those companies 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.
(h) Israel is recognized around the world as the strongest
democratically elected government in the Middle East and is an
American ally, and that nation's democracy and relationship with the
United States add to the security and strength of California.
(i) It is unconscionable for this state to invest in companies
that boycott Israel, as California has long standing social,
political, and economic partnerships with the State of Israel.
SEC. 3. Section 16649.80 of the Government Code is amended to
read:
16649.80. The definitions in this section shall govern the
construction and interpretation of this chapter.
(a) "Investment" or "invest" means the commitment of funds or
other assets to a business firm, including a loan or other extension
of credit made to that firm, or security given for the other assets
to that business enterprise, or the beneficial ownership or control
of a share or interest in that business firm, or of a bond or other
debt instrument issued by that business firm.
(b) "Business firm" means any foreign or domestic organization,
association, corporation, partnership, venture, or other entity, its
subsidiary, or affiliate which exists for profitmaking purposes or to
otherwise secure economic advantage, other than a financial
institution.
(c) "Financial institution" means any foreign or domestic bank,
bank holding company, savings and loan association, or credit union,
or any foreign or domestic insurance company, brokerage firm,
securities firm, investment company, mortgage banking company,
finance company, personal property broker, mortgage loan broker, or
consumer credit company, or any affiliate or subsidiary thereof.
(d) "Business arrangements" means projects, ventures,
undertakings, contractual relations, or other efforts requiring
ongoing or periodic performance by either or both parties.
(e) "Discriminatory business practices" means business
arrangements that are prohibited by Sections 16721 and 16721.5 of the
Business and Professions Code.
(f) "State trust moneys" means funds administered by the Public
Employees' Retirement Fund, the Legislators' Retirement Fund, the
State Teachers' Retirement Fund, the Judges' Retirement Fund, the
Judges' Retirement System II Fund, the Volunteer Firefighter Fund,
the General Fund portion of the University of California Retirement
Fund, and any funds invested pursuant to this part.
(g) "State trust fund" means the Public Employees' Retirement
Fund, the Legislators' Retirement Fund, the State Teachers'
Retirement Fund, the Judges' Retirement Fund, the Judges' Retirement
System II Fund, the Volunteer Firefighter Fund, and any investment
fund created by this part.
(h) "State moneys" means all money, bonds, and securities in
possession of or collected by any state agency.
(i) "Compliance with the Arab League's economic boycott of Israel"
means taking any action, with respect to the boycott of Israel by
Arab countries, which is prohibited by the United States Export
Administration Act of 1979.
(j) "Compliance with the boycott of Israel" means taking any
action in compliance with an action by a foreign government,
international organization, or affiliated agency of an international
organization, that is politically motivated and intended to penalize
or otherwise limit commercial relations specifically with Israel or
persons doing business in Israel or in Israeli-controlled
territories.
SEC. 4. Section 16649.81 of the Government Code is amended to
read:
16649.81. (a) On or after January 1, 1994,
state trust moneys shall not be used to make additional or new
investments or to renew existing investments in business firms that
engage in discriminatory business practices in furtherance of or in
compliance with the Arab League's economic boycott of Israel.
(b) On or after January 1, 2017, state trust moneys shall not be
used to make additional or new investments or to renew existing
investments in business firms that engage in discriminatory business
practices in furtherance of or in compliance with the boycott of
Israel.
SEC. 5. Section 16649.82 of the Government Code is amended to
read:
16649.82. (a) Subdivision (a) of
Section 16649.81 shall not apply to any business firm
which, that, by resolution of its governing
body, adopts a policy not to renew existing, expand existing, or
engage in new, discriminatory business practices in furtherance of or
in compliance with the Arab League's economic boycott of Israel. The
resolution required by this section shall include the following
statement: "____ (name of business firm) agrees not to renew
existing, expand existing, or engage in new, discriminatory business
practices in furtherance of or in compliance with the Arab League's
economic boycott of Israel."
(b) Subdivision (b) of Section 16649.81 shall not apply to any
business firm that, by resolution of its governing body, adopts a
policy not to renew existing, expand existing, or engage in new,
discriminatory business practices in furtherance of or in compliance
with the boycott of Israel. The resolution required by this section
shall include the following statement: "____ (name of business firm)
agrees not to renew existing, expand existing, or engage in new,
discriminatory business practices in furtherance of or in compliance
with the boycott of Israel."
SEC. 6. Section 16649.83 of the Government Code is amended to
read:
16649.83. (a) On or after January 1, 1994,
state trust moneys shall not be used to make additional or new
investments or to renew existing investments in financial
institutions that engage in discriminatory business practices in
furtherance of or in compliance with the Arab League's economic
boycott of Israel.
(b) On or after January 1, 2017, state trust moneys shall not be
used to make additional or new investments or to renew existing
investments in financial institutions that engage in discriminatory
business practices in furtherance of or in compliance with the
boycott of Israel.
SEC. 7. Section 16649.84 of the Government Code is amended to
read:
16649.84. (a) Subdivision (a) of
Section 16649.83 shall not apply to any financial institution
which, that, by resolution of its
governing body, adopts a policy not to renew existing, expand
existing, or engage in new, discriminatory business practices in
furtherance of or in compliance with the Arab League's economic
boycott of Israel. The resolution required by this section shall
include the following statement: "____ (name of financial
institution) agrees not to renew existing, expand existing, or engage
in new, discriminatory business practices in furtherance of or in
compliance with the Arab League's economic boycott of Israel."
(b) Subdivision (b) of Section 16649.83 shall not apply to any
financial institution that, by resolution of its governing body,
adopts a policy not to renew existing, expand existing, or engage in
new, discriminatory business practices in furtherance of or in
compliance with the boycott of Israel. The resolution required by
this section shall include the following statement: "____ (name of
financial institution) agrees not to renew existing, expand existing,
or engage in new, discriminatory business practices in furtherance
of or in compliance with the boycott of Israel."
SEC. 8. Section 16649.85 is added to the Government Code, to read:
16649.85. Beginning January 1, 2017, and annually thereafter,
state trust funds shall use the most recent federal report on
politically motivated acts of boycott, divestment from, and sanctions
against Israel to determine which business firms and financial
institutions engage in discriminatory business practices in
furtherance of or in compliance with the boycott of Israel.
SEC. 9. Section 16649.86 of the Government Code is amended to
read:
16649.86. (a) A copy of a resolution, as described in Sections
16649.82 and 16649.84, shall be submitted to the Treasurer and to the
chief administrative officer of each state trust fund. Information
shall also be submitted by business firms that provides a description
of the discriminatory business practices in furtherance of or in
compliance with the Arab League's economic boycott of Israel or
in compliance with the boycott of Israel in existence as of the
date of the resolution.
(b) The copy of a resolution shall be accompanied by a
certification, under penalty of perjury, that the adopted policy is
being complied with. Annually thereafter a certification, under
penalty of perjury, that the adopted policy is being complied with
shall be submitted to the Treasurer.
(c) The resolution and the information submitted to the Treasurer
shall be deemed public documents and shall be open to public
inspection.
SEC. 10. Section 16649.88 of the Government Code is amended to
read:
16649.88. (a) Effective January 1, 1998,
state trust funds shall not make or hold any investment in any
business firm or financial institution that engages in discriminatory
business practices in furtherance of or in compliance with the Arab
League's economic boycott of Israel.
(b) Effective January 1, 2017, state trust funds shall not make or
hold any investment in any business firm or financial institution
that engages in discriminatory business practices in furtherance of
or in compliance with the boycott of Israel.
SEC. 11. Section 16649.89 of the Government Code is amended to
read:
16649.89. (a ) State moneys
shall not be deposited with financial institutions that, following
January 1, 1994, engage in discriminatory business practices in
furtherance of or in compliance with the Arab League's economic
boycott of Israel.
(b) State moneys shall not be deposited with financial
institutions that, following January 1, 2017, engage in
discriminatory business practices in furtherance of or in compliance
with the boycott of Israel.
