Limitating Use Of State Money

The bill prohibits state money from being used to further certain social, political, or ideological interests beyond what controlling state and federal law require. Sections 1 to 3 of the bill apply this prohibition to the public employees' retirement association (PERA) by requiring PERA to make investments solely on financial factors and prohibiting PERA from investing in an entity with a stated purpose to further certain social, political, or ideological interests beyond what federal and state law require (nonfinancial commitment). Section 1 also:

• Requires that PERA ensure that a designated agent commits to following guidelines that match PERA's obligation to act solely on financial factors prior to PERA entrusting member funds to the designated agent;
• Requires that a designated agent ensure that a proxy advisor or other service provider has committed to following guidelines that match PERA's obligation to act solely on financial factors prior to the designated agent following a recommendation of the proxy advisor or service provider; and
• Gives the attorney general the authority to enforce these investment requirements.

Section 2 requires PERA to invest solely in the financial interest of PERA members and beneficiaries. Section 3 clarifies that the fiduciary duties of PERA's board of trustees include the obligation to act in the financial interest of PERA members and benefit recipients. Section 4 requires a government contract to include a verification that a company entering into a government contract does not, and will not during the term of the contract, engage in an economic boycott of another company to further certain social, political, or ideological interests. Section 4 prohibits a person from penalizing a financial institution for complying with the non-economic boycott verification requirement. Section 4 also gives the attorney general the authority to enforce the newly created article. Section 5 requires the state treasurer to make investments solely on financial factors, prohibits the state treasurer from investing in entities with a stated nonfinancial commitment, and gives the attorney general authority to enforce these investment requirements. Sections 6 to 10 make conforming amendments.
(Note: This summary applies to this bill as introduced.)