Vote Smart's Synopsis:

Vote to pass a bill that prohibits investment of public funds from being managed through firms that account for environmental, social and governance factors.

Highlights:

• Establishes that the Iowa State Treasurer may invest public funds that are not needed explicitly for operating expenses and will do so when receiving a monthly receipt (Sec. 1).

• Establishes that the general assembly is concerned about funds being used for purposes other than pecuniary and that they intend to prohibit public funds from being used by the treasurer from investing in entities and companies they invest based on “environmental, social, and governance” Factors” (Sec. 1).

• Defines the following terms (Sec. 1):

• “Boycott of certain companies” Describes the refusal to invest or the termination of a contract with a company that engages in the sale of goods or services related to firearms or fossil fuels; 

• “Company” describes any business, bank, financial institution, etc., that exists for the purpose of making a profit;

• “Nonpecuniary social investment”  describes investment or commitment of public funds to further;

• 21 environmental, social, governance, political, or ideological interests and for the purpose of obtaining an effect other than a maximized return to the public fund without a reasonable business purpose;

• “Public entity” describes the state, public school corporations, all public offices, boards, officers, and any other entity empowered by the law; 

• “Public Fund” describes the pension fund kept by the treasurer of the state for the police, judicial, and public servant;

• “Reasonable business purpose” describes the expressed purpose of promoting the financial success of the company, mitigating risk, promoting financial security and stability;

• “Scrutinized company” describes investment or commitment of public funds to further environmental, social, governance, political, or ideological interests and for the purpose of obtaining an effect other than a maximized return to the public fund without a reasonable business purpose;and

• “Scrutinized company list” describes investment or commitment of public funds to further environmental, social, governance, political, or ideological interests and for the purpose of obtaining an effect other than a maximized return to the public fund without a reasonable business purpose.

• Establishes that by March 1st of 2024 that the public funds will have made a list of scrutinized companies for the review of the public that can see if said companies had made nonpecuniary investment moves with said information being made available by non-for-profits,the companies own financial statements, or information from the state and federal government and that said list be made available to the public after 30 days (Sec. 4).

• Establishes that the The Iowa public employees’ retirement system may request proposals for third parties to help with the identification of any company on the scrutinized companies list (Sec. 4).

• Establishes that companies on the scrutinized companies list have a right to know about their status and the termination of any contract with public entities on enforcement of the act (Sec.4).

• Establishes that once a company has ceased its non-pecuniary activity it may be removed from the list (Sec. 4). 

• Establishes that a public fund may not do business with any company currently on the scrutinized company list (Sec. 5). 

• Establishes that a public fund may on its own terminate a contract with a company on the scrutinized company list (Sec. 5) 

• Establishes that public funds who terminate contracts with entities on the scrutinized business list are exempt from conflicting statutes, terms, and liabilities (Sec. 6). 

• Establishes that The treasurer of state may execute contracts and agreements with the assistance of  investment advisors, other consultants, and investment management and benefit consultant firms in the administration of investments of monies in the fund (Sec. 7).

• Authorizes the board of trustees to manage the retirement fund, to appoint a chief investment officer to invest money, and develop an investment policy for the fire and police retirement fund as well as other duties relating to the pecuniary health of Iowa’s public funds (Sec. 10). 

• Establishes that the treasurer of state may execute contracts and agreements with investment advisors, consultants, and investment management and benefit consultant firms in the administration of the judicial retirement fund. (Sec. 10).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that prohibits investment of public funds from being managed through firms that account for environmental, social and governance factors.

Highlights:

• Establishes that the Iowa State Treasurer may invest public funds that are not needed explicitly for operating expenses and will do so when receiving a monthly receipt (Sec. 1).

• Establishes that the general assembly is concerned about funds being used for purposes other than pecuniary and that they intend to prohibit public funds from being used by the treasurer from investing in entities and companies they invest based on “environmental, social, and governance” Factors” (Sec. 1).

• Defines the following terms (Sec. 1):

• “Boycott of certain companies” Describes the refusal to invest or the termination of a contract with a company that engages in the sale of goods or services related to firearms or fossil fuels; 

• “Company” describes any business, bank, financial institution, etc., that exists for the purpose of making a profit;

• “Nonpecuniary social investment”  describes investment or commitment of public funds to further;

• 21 environmental, social, governance, political, or ideological interests and for the purpose of obtaining an effect other than a maximized return to the public fund without a reasonable business purpose;

• “Public entity” describes the state, public school corporations, all public offices, boards, officers, and any other entity empowered by the law; 

• “Public Fund” describes the pension fund kept by the treasurer of the state for the police, judicial, and public servant;

• “Reasonable business purpose” describes the expressed purpose of promoting the financial success of the company, mitigating risk, promoting financial security and stability;

• “Scrutinized company” describes investment or commitment of public funds to further environmental, social, governance, political, or ideological interests and for the purpose of obtaining an effect other than a maximized return to the public fund without a reasonable business purpose;and

• “Scrutinized company list” describes investment or commitment of public funds to further environmental, social, governance, political, or ideological interests and for the purpose of obtaining an effect other than a maximized return to the public fund without a reasonable business purpose.

• Establishes that by March 1st of 2024 that the public funds will have made a list of scrutinized companies for the review of the public that can see if said companies had made nonpecuniary investment moves with said information being made available by non-for-profits,the companies own financial statements, or information from the state and federal government and that said list be made available to the public after 30 days (Sec. 4).

• Establishes that the The Iowa public employees’ retirement system may request proposals for third parties to help with the identification of any company on the scrutinized companies list (Sec. 4).

• Establishes that companies on the scrutinized companies list have a right to know about their status and the termination of any contract with public entities on enforcement of the act (Sec.4).

• Establishes that once a company has ceased its non-pecuniary activity it may be removed from the list (Sec. 4). 

• Establishes that a public fund may not do business with any company currently on the scrutinized company list (Sec. 5). 

• Establishes that a public fund may on its own terminate a contract with a company on the scrutinized company list (Sec. 5) 

• Establishes that public funds who terminate contracts with entities on the scrutinized business list are exempt from conflicting statutes, terms, and liabilities (Sec. 6). 

• Establishes that The treasurer of state may execute contracts and agreements with the assistance of  investment advisors, other consultants, and investment management and benefit consultant firms in the administration of investments of monies in the fund (Sec. 7).

• Authorizes the board of trustees to manage the retirement fund, to appoint a chief investment officer to invest money, and develop an investment policy for the fire and police retirement fund as well as other duties relating to the pecuniary health of Iowa’s public funds (Sec. 10). 

• Establishes that the treasurer of state may execute contracts and agreements with investment advisors, consultants, and investment management and benefit consultant firms in the administration of the judicial retirement fund. (Sec. 10).

Full Bill Text