AB269: Bill Text

LRB-3060/1

ARG:cjs

2019 - 2020 LEGISLATURE

2019 Assembly BILL 269

June 7, 2019 - Introduced by Representatives Sargent, Stubbs, Subeck, C. Taylor, Anderson, Brostoff, Crowley, Emerson, Ohnstad, Sinicki and Zamarripa, cosponsored by Senators Larson and Risser. Referred to Committee on Financial Institutions.

AB269,1,3 An Act to amend 25.182; and to create 25.17 (14m) (d) and 25.183 (4) of the statutes; relating to: prohibiting the Investment Board from making investments in firearms companies.

Analysis by the Legislative Reference Bureau

This bill prohibits, with exceptions, the State of Wisconsin Investment Board from investing in securities of any company that manufactures or imports firearms, ammunition, or firearms accessories (firearms company). Within 30 days after the effective date of the bill, SWIB must make its best efforts to identify firearms companies and make a list of these companies. SWIB must update this list at least quarterly. For each company included on this list, SWIB must send a written notice to the company informing the company that SWIB is prohibited from investing in the company and of the reason for this prohibition. After 30 days following the effective date of the bill, SWIB may not make any new investment in securities of any company included on the list. If at this time SWIB already maintains investments in companies included on the list, SWIB must divest itself of these investments within approximately six months. If SWIB later updates its list and adds a company in which SWIB already maintains an investment, SWIB must divest itself of the investment within six months after the company is added to the list. However, these investment prohibitions do not apply to investments made by external managers with whom SWIB has contracted, investments in mutual funds and other commingled instruments, and investments in private equity funds. The bill also requires SWIB to include, in an annual report that under current law SWIB submits to the legislature, SWIB's most recent list and other information relating to SWIB's divestment from firearms companies.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB269,1 Section 1 . 25.17 (14m) (d) of the statutes is created to read:

AB269,2,5 25.17 (14m) (d) The most recent list under s. 25.183 (4) (b) 1. and other information relating to the board's efforts to satisfy the requirements under s. 25.183 (4), including, as applicable, the board's status of divestment from firearms companies.

AB269,2 Section 2 . 25.182 of the statutes is amended to read:

AB269,2,13 25.182 Management authority for certain funds. In addition to the management authority provided under any other provision of law, and notwithstanding any limitation on the board's management authority provided under any other provision of law except s. 25.183 (4), the board shall have authority to manage the money and property of the core retirement investment trust and, subject to s. 25.17 (5), the variable retirement investment trust in any manner that does not violate the standard of responsibility specified in s. 25.15 (2).

AB269,3 Section 3 . 25.183 (4) of the statutes is created to read:

AB269,2,15 25.183 (4) Investments in firearms companies. (a) In this subsection:

AB269,2,16 1. “Company” has the meaning given for “business entity” in s. 13.62 (5).

AB269,2,17 2. “Firearms company” means any of the following:

AB269,2,20 a. Any company engaged in the business of manufacturing or importing firearms or ammunition and having a license to do so issued by the federal government.

AB269,3,2 b. Any company engaged in the business of manufacturing or importing firearms accessories.

AB269,3,4 c. Any parent company or subsidiary company of a company described in subd. 2. a. or b.

AB269,3,9 (b) 1. No later than the 30th day beginning after the effective date of this subdivision .... [LRB inserts date], the board shall make its best efforts to identify firearms companies and shall make a list of such companies. At least quarterly, the board shall update this list after again making its best efforts to identify all such companies.

AB269,3,11 2. For purposes of subd. 1., the board's best efforts to identify firearms companies shall, at a minimum, include all of the following:

AB269,3,15 a. Contacting the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, or any successor agency, to obtain information to identify companies licensed to manufacture or import firearms or ammunition, including, if necessary, making federal Freedom of Information Act requests.

AB269,3,18 b. Reviewing publicly available information regarding firearms companies, including information provided by nonprofit organizations, research firms, and government entities.

AB269,3,20 c. Contacting other institutional investors known to the board to have undertaken to identify firearms companies.

AB269,3,23 3. The board shall send a written notice to each firearms company included on the list under subd. 1. informing the company that the board is prohibited from investing in the company and of the reason for this prohibition.

AB269,4,3 (c) Notwithstanding s. 25.15 (2), but subject to pars. (d) to (f), after the 30th day beginning after the effective date of this paragraph .... [LRB inserts date], the board may not invest any of the moneys in funds under its management in any equity or debt securities of any firearms company included on the board's most recent list under par. (b) 1.

AB269,4,8 (d) 1. Notwithstanding s. 25.15 (2), but subject to pars. (e) and (f), if the board, on the 30th day beginning after the effective date of this subdivision .... [LRB inserts date], maintains any investment prohibited under par. (c), the board shall divest itself of the investment not later than the first day of the 7th month beginning after the effective date of this subdivision .... [LRB inserts date].

AB269,4,13 2. Notwithstanding s. 25.15 (2), but subject to pars. (e) and (f), if upon its quarterly review the board updates its list under par. (b) 1. to add a company in which the board maintains an investment prohibited under par. (c), the board shall divest itself of the investment not later than 6 months after the company is added to the list under par. (b) 1.

AB269,4,17 (e) In determining whether an investment is prohibited under pars. (c) and (d), the board may rely on 3rd-party information about a company available from any research or screening service contracted by the board or from any other pension fund or investment adviser.

AB269,4,18 (f) This subsection does not apply to any of the following:

AB269,4,20 1. Investments made for the board by investment advisers with which the board has contracted to manage and control board assets under s. 25.18 (2) (e).

AB269,4,23 2. Investments by the board in mutual funds, index funds, or similar commingled investment instruments in which the board does not directly hold a company's security in its own name or as nominee.

AB269,4,24 3. Investments by the board in private equity funds.

AB269,4 Section 4 . Initial applicability.

AB269,5,3 (1) Report. The treatment of s. 25.17 (14m) (d) first applies to the report required to be submitted by the March 31 occurring at least 60 days after the effective date of this subsection.

AB269,5,4 (End)