HB 396 — An Act restricting certain investments of state funds in certain Russian entities; and providing for an effective date.

32-LS1618\I32-LS1618\A CS FOR HOUSE BILL NO.

396(STA)396 IN THE LEGISLATURE OF THE STATE OF ALASKA THIRTY-SECOND LEGISLATURE - SECOND SESSION BY THE HOUSE STATE AFFAIRS COMMITTEE Referred:Introduced:

Finance3/9/22 Sponsor(s):Referred:

HOUSEState STATEAffairs, AFFAIRSFinance COMMITTEE A BILL FOR AN ACT ENTITLED "An Act restricting certain investments of state funds in certain Russian entities;

(a) Notwithstanding any other provision of lawlaw, and except as provided otherwise in (g) of this section, the commissioner or a fiduciary of a fund subject to AS 37 may not invest in and shall cause the fund to divest ownership, if any, in the publicly traded securities of Russian entities.

Divestment of an ownership interest in a Russian entity shall occur within 18090 days after the entity is identified as a Russian entity under (c) of this section.

If a fund has investments managed by an outside investment manager, the fiduciary shall, within 18090 days after the entity is identified as a Russian entity under (c) of this section, direct the investment manager not to invest in and to divest, within 18090 days after receiving HB0396bthe direction, ownership, if any, in the HB0396a -1- CSHBHB 396(STA)396 New Text Underlined [DELETED TEXT BRACKETED] 32-LS1618\I32-LS1618\A the direction, ownership, if any, in the publicly traded securities of a company identified under this section as a Russian entity.

The commissioner shall require that, within 18090 days after the commissioner identifies a Russian entity under (c) of this section, the fiduciary submit letters to the managers of commingled investments requesting the managers to consider removing the Russian entity from the commingled investment.

(3) indemnified and held harmless by the state from claims, demands, suits, actions, damages, judgments, costs, charges, and expenses, including costs and attorney fees, and against all liability, losses, and damages of any nature that the commissioner or the fiduciary, or the agent, attorney, trustee, officer, employee, staff member, custodian, research firm, or investment manager under contract of the commissioner or the fiduciary, or the board member may, at any time, sustain because of a decision to restrict, reduce, or eliminate an CSHB 396(STA) -2- HB0396b New Text Underlined [DELETED TEXT BRACKETED] 32-LS1618\I investment made in compliance with this section;

and HB 396 -2- HB0396a New Text Underlined [DELETED TEXT BRACKETED] 32-LS1618\A (4) immune from adverse licensing actions under AS 08.

(g) The commissioner ormay aadopt fiduciaryregulations ofunder aAS fund44.62 is not required to divestcarry fromout an investment under this section if the commissionerpurposes or fiduciary determines that divestment is not consistent with the fiduciary responsibilities of thethis commissionersection. or the fiduciary.

(h) TheIn commissionerthis maysection, adopt(1) regulations"commissioner" undermeans AS 44.62 (Administrative Procedure Act) to carry out the purposescommissioner of thisrevenue; section.

(i)(2) In"Russian thisentity" section, (1) "commissioner" means the(A) commissionerall ofRussian revenue;sovereign debt;

(2)or "Russian(B) entity"an (A)entity meansidentified aby debtthe instrumentOffice issuedof byForeign Assets Control of the United States Department of the Treasury as (i) being owned or controlled by, or having acted or purported to act for or on behalf of, the government of Russia;

(B)or means(ii) anoperating entityor identifiedhaving byoperated in the Officefinancial ofservices Foreignsector Assets Control of the Unitedeconomy States Department of the TreasuryRussian asFederation. (i) being owned or controlled by, or having acted or purported to act for or on behalf of, the government of Russia;

or (ii) operating or having operated in the financial services sector of the economy of Russia;

(C) does not include a company the United States federal government excludes from federal sanctions relating to Russia.

The uncodified law of the State of Alaska is amended by adding a new section to read:

TRANSITION.

(a) Within 30 days after the effective date of Aict, the commissioner of revenue shall create an initial list of Russian entities under sec.

1(c)(1) of this Act.

(b) Except as otherwise provided in sec.

1(g) of this Act, notwithstanding (1) sec.

1(a) of this Act, the commissioner of revenue, a fiduciary of a fund subject to AS 37, or an outside investment manager shall, within 180 days after the effective date of this Act, divest ownership in the initial list of Russian entities created under (a) of this section;

HB0396b -3- CSHB 396(STA) New Text Underlined [DELETED TEXT BRACKETED] 32-LS1618\I (2) sec.

1(b) of this Act, thecommissioner of revenue shall, or shall require a fiduciary to, within 180 days after the effective date of this Act, submit a letter consistent with sec.

1(b) of this Act to a manager of a commingled investment that includes a Russian entity on the initial list created under (a) of this section.

* Sec.

3.

4.3.

CSHBHB0396a 396(STA)-3- -4-HB HB0396b396 New Text Underlined [DELETED TEXT BRACKETED]