Senator ROBERT W. SINGER
District 30 (Burlington, Mercer, Monmouth and Ocean)
Senator JOSEPH F. VITALE
District 19 (Middlesex)
Senators Buono and Asselta
Prohibits investment by State of pension and annuity funds in foreign companies doing business in Iran.
CURRENT VERSION OF TEXT
An Act concerning the investment by the State of pension and annuity funds and supplementing P.L.1950, c.270.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
The State of New Jersey is deeply concerned about the situation in the Islamic Republic of Iran. President Mahmoud Ahmadinejad, the President of Iran, has added greatly to the instability of the Middle East by making statements that Israel should be “wiped off the map” and asserting that the Holocaust was a “myth.” Iran has done little to promote international cooperation and everything to fan the flames of divisiveness and crisis. Thus, global tension concerning the Middle East is fuelled to dangerous heights by the rhetoric and actions of Iran.
Iran has been committed to the destruction of Israel since the installation of theocratic rule by Ayatollah Ruhollah Khomeini in 1979 and has been cited repeatedly as one of the world’s most dangerous sponsors of international terrorism. President Ahmadinejad has also sparked international concern and controversy by refusing to stop Iran’s enrichment of nuclear materials—possibly for use in atomic weapons—and refusing to allow the United Nations to check Iran’s claim that it seeks to use nuclear power only to generate electricity.
President Ahmadinejad’s comments regarding Israel together with his determination to promote Iran’s nuclear program leads observers to conclude that the country’s resources are directed towards the destruction of Israel by atomic weapons. This State must take action to respond to these calls for the destruction of Israel and threats to world peace and stability. Therefore, it is in the best interest of this State that a statutory prohibition be enacted to prohibit the investment of public employee retirements funds in foreign companies doing business in Iran.
2. a. Notwithstanding any provision of law to the contrary, no assets of any pension or annuity fund under the jurisdiction of the Division of Investment in the Department of the Treasury, or its successor, shall be invested in any foreign company that has an equity tie to the government of Iran or its instrumentalities and is engaged in business in or with that government and its instrumentalities. This prohibition shall not apply to the activities of any foreign company providing humanitarian aid to the Iranian people through either a governmental or non-governmental organization.
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; and "humanitarian aid" means the provision of goods and services intended to relieve human suffering or to promote general welfare and health.
b. The State Investment Council and the Director of the Division of Investment, after reviewing the recommendations of and consulting with an independent research firm that specializes in global security risk for portfolio determinations selected by the State Treasurer, shall take appropriate action to sell, redeem, divest or withdraw any investment held in violation of subsection a. of this section. This section shall not be construed to require the premature or otherwise imprudent sale, redemption, divestment or withdrawal of an investment, but such sale, redemption, divestment or withdrawal shall be completed not later than three years following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. Within 60 days after the effective date of of P.L. , c. (C. ) (pending before the Legislature as this bill), the Director of the Division of Investment shall file with the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report of all investments held as of the effective date that are in violation of subsection a. of this section. Every year thereafter, the director shall report on all investments sold, redeemed, divested or withdrawn in compliance with subsection b. of this section.
Each report after the initial report shall provide a description of the progress that the division has made since the previous report and since the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) in implementing subsection b. of this section.
3. This act shall take effect immediately.
This bill prohibits the investment of New Jersey public employee retirement funds in any foreign company that has an equity tie to the government of Iran or its instrumentalities and is engaged in business in or with that government because of that country's call for the destruction of Israel and its development of nuclear technology leading to the eventual development of nuclear weapons. The bill does not apply to the activities of any foreign company providing humanitarian aid to the Iranian people through either a governmental or non-governmental organization.
The bill requires the State Investment Council and the Director of the Division of Investment to take appropriate action to divest any investments held in violation of the prohibition after reviewing the recommendations of, and consulting with, an independent research firm that specializes in global security risk for portfolio determinations selected by the State Treasurer. Periodic progress reports by the division are required.
The United States Department of State includes Iran on the list of countries that sponsor terrorism. Iran has been on the list since 1984. As a result, strict sanctions are imposed including prohibitions on arms-related exports, controls over dual-use exports, and restrictions on economic assistance and financial matters.