Sponsored by:
Senator DOUGLAS J. STEINHARDT
District 23 (Hunterdon, Somerset and Warren)
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
Requires State Division of Investment to review pension and annuity fund assets to determine extent to which assets are invested in businesses with ties to Chinese government.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the review of State pension and annuity fund assets to determine whether fund assets are invested in business entities with ties to the Chinese government and supplementing P.L.1950, c.270 (C.52:18A-79 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding any law, rule or regulation to the contrary, the Director of the Division of Investment in the Department of the Treasury shall conduct a review of State pension and annuity fund assets to determine the extent to which those assets are invested in any foreign company with an equity tie to the government of China or its instrumentalities. The director is authorized to consult an independent research firm that specializes in global security risk for portfolio determinations to conduct the review.
As used in this section:
“Equity tie” means manufacturing or mining plants, employees or advisors, facilities, or an investment, fiduciary, monetary or physical presence of any kind, including an ownership stake in one or more subsidiary or joint venture with one or more companies in the country. “Equity tie” shall not include the activities of any foreign company providing humanitarian aid to the Chinese people through a non-governmental organization; and
“Humanitarian aid” means the provision of goods and services intended to relieve human suffering or to promote general health and welfare.
b. Within six months from the effective date of this section, the Director of the Division of Investment shall submit a report to the Governor, the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), and the State Investment Council a report of all pension and annuity fund assets invested in foreign companies with an equity tie to the government of China and recommendations as to whether the State should divest fund assets from those companies.
2. This act shall take effect immediately.
STATEMENT
This bill requires the Director of the Division of Investment in the Department of the Treasury to conduct a review of State pension and annuity fund assets to determine the extent to which those assets are invested in any foreign company with an equity tie to the government of China or its instrumentalities. According to the division’s most recent investment reporting package, 8.3 percent of the State’s international equity portfolio investments are in emerging markets located in China. These investments have a market value of approximately $1.2 billion. For purposes of the bill, “equity tie” means manufacturing or mining plants, employees or advisors, facilities, or an investment, fiduciary, monetary or physical presence of any kind, including an ownership stake in one or more subsidiary or joint venture with one or more companies in the country. Equity tie would not include the activities of any foreign company providing humanitarian aid to the Chinese people through a non-governmental organization.
Six months after the bill’s effective date, the director would be required to submit to the Governor, the Legislature, and the State Investment Council a report of all pension and annuity fund assets invested in foreign companies with an equity tie to the government of China and recommendations as to whether the State should divest fund assets from those companies.