HB 1330 — A BILL for an Act to amend and reenact section 21-10-07.1 of the North Dakota Century Code, relating to the prudent investor rule.

25.0779.0400025.0779.02000 Sixty-ninth Legislative Assembly of North Dakota FIRST ENGROSSMENT with Senate Amendments ENGROSSED HOUSE BILL NO.

1330 Introduced by Representatives Satrom, Grueneich, Ostlie Senators Conley, Lemm A BILL for an Act to amendcreate and reenactenact a new section 21-10-07.1to chapter 21-10 of the North Dakota Century Code, relating to thedivestment prudentfrom investorlegacy rule.fund investments in Chinese companies;

and to amend and reenact section 21-10-07.1 of the North Dakota Century Code, relating to the prudent investor rule.

A new section to chapter 21-10 of the North Dakota Century Code is created and enacted as follows:

Prohibition against Chinese investment.

1.

As used in this section:

a.

"China" means the government of the People's Republic of China, the Chinese Communist Party, the Chinese military, or any instrumentality thereof.

b.

"Chinese company" means a company formed and domiciled in China.

c.

"Company" means a sole proprietorship, an organization, an association, a corporation, a partnership, a joint venture, a limited partnership, a limited liability partnership, a limited liability company, or any other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, and parent companies, or an affiliate of such entity or business associate which exists for the purpose of making a profit.

d.

"Direct holdings" means all securities of a company which are held directly by the legacy fund or in an account or fund in which the legacy fund owns all shares or interests.

The term does not include indirect holdings in actively managed Page No.

1 25.0779.02000 Sixty-ninth Legislative Assembly investment funds, including a private equity fund, or holdings in exchange-traded funds.

e.

"Indirect holdings" means all securities of a company which are held in a commingled fund or other collective investment, such as a mutual fund, in which the legacy fund owns shares or interests, together with other investors not subject to this chapter.

f.

"Majority-owned" means to have ownership of more than fifty percent of the outstanding equity interests of a company.

2.

The legacy fund investments may not consist of direct holdings in a Chinese company.

3.

The state investment board shall:

a.

Initiate a review of all direct holdings of legacy fund investments to determine which direct holdings, if any, include securities of a Chinese company;

b.

Develop a divestment plan for all direct holdings in Chinese companies, which must divest at least twenty percent of the total value of Chinese investments held as of August 1, 2025, per year;

and c.

Complete divestment from direct holdings in Chinese companies under the divestment plan pursuant to subdivision b no later than August 1, 2030.

SECTION 2.

May divest from Chinese companies.companies as defined under section 1 of this Act.

As used in this subsection:

a.

"Chinese company" means a company formed and domiciled in China.

b.

"Company" means a sole proprietorship, an organization, an association, a corporation, a partnership, a joint venture, a limited partnership, a limited liability partnership, a limited liability company, or any other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, and parent companies, or an affiliate of such entity or business associate which exists for the purpose of making a profit.

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