Amendment AA1-AB623

LRBa1400/1

ARG:jld:jf

2007 - 2008 LEGISLATURE

ASSEMBLY AMENDMENT 1, TO 2007 ASSEMBLY BILL 623

February 26, 2008 - Offered by Representatives Kessler, Fields, Benedict, Nelson, Hintz, Pope-Roberts, Cullen, Van Akkeren, Schneider, Wasserman, Berceau, Young, Turner, Soletski, Seidel, Grigsby, Parisi, Toles, Sheridan, Pocan, Hilgenberg, Hixson, Molepske, Zepnick, Hebl, Gronemus, Smith, A. Williams, Wood and Suder.

AB623-AA1,1,1 At the locations indicated, amend the bill as follows:

AB623-AA1,1,2 1. Page 2, line 6: delete "To" and substitute "To".

AB623-AA1,1,4 2. Page 2, line 6: delete " manage" and substitute "Subject to sub. (2m), to manage".

AB623-AA1,1,5 3. Page 2, line 10: after that line insert:

AB623-AA1,1,6 " Section 2m. 25.15 (2m) of the statutes is created to read:

AB623-AA1,1,12 25.15 (2m) Qualification of standard of responsibility for certain investments. (a) Subject to par. (c), the investment in any security directly banned by the U.S. Congress or in any security of a business entity doing business in a country or region declared by Congress to be engaging in acts of genocide violates the standard of responsibility under sub. (2) if Congress has explicitly passed an act legally enabling states to divest from such securities.

AB623-AA1,1,13 (b) Paragraph (a) does not apply to any of the following:

AB623-AA1,2,4 1. Any investment by the board if, with respect to the investment, the board follows divestment authorization guidelines contained in the act of Congress providing guidance on industries or business operations that should be targeted for divestment and business operations that should be exempt from divestment.

AB623-AA1,2,6 2. Any security that is an indirect holding in an actively managed investment fund.

AB623-AA1,2,7 3. Any investment in a private equity fund.

AB623-AA1,2,12 4. Any security that is a passively managed indirect holding in a fund if the costs to the board of divesting the security exceed 10 percent of the total value of the board's holding in the fund that is attributable to that security. This subdivision applies only for so long as the costs of divestment exceed the amount specified in this subdivision.

AB623-AA1,2,19 5. Any security if divestment of the security by the board would cause the value for all assets under management by the board to decrease to 99.9 percent or less of the value of all assets under management by the board when calculated as if the board had not divested itself of any security to avoid violating its standard of responsibility as provided in par. (a). This subdivision applies only for so long as the decrease in value of assets specified in this subdivision would result from divestment.

AB623-AA1,2,22 (c) If an act of Congress specified in par. (a) becomes effective after the effective date of this paragraph .... [revisor inserts date], the board does not violate its standard of responsibility if it does all of the following:

AB623-AA1,3,2 1. Not later than 90 days after the effective date of the act of Congress, identifies all securities in which it has direct or indirect holdings that would cause it to violate its standard of responsibility under par. (a) and notify the issuer of each such security of the provisions of this subsection.

AB623-AA1,3,11 2. Not later than 90 days after providing the notice specified in subd. 1., for each security for which notice is provided under subd. 1., determines whether continuing to hold the security would cause the board to violate its standard of responsibility under par. (a). For purposes of this subdivision, if a business entity adopts a corporate policy that will effectively cease business operations in a country or region declared by Congress to be engaging in acts of genocide, the board may consider the business entity to no longer be doing business in the country or region and the board's continuing to hold securities of the business entity after the adoption of the corporate policy does not violate the board's standard of responsibility under par. (a).

AB623-AA1,3,16 3. If the answer under subd. 2. is in the affirmative, begins divesting the security not later than 90 days after providing the notice specified in subd. 1. and divests at least 50 percent of its assets in all such securities within 9 months after the effective date of the act of Congress and 100 percent of its assets in all such securities within 15 months after the effective date of the act of Congress.".

AB623-AA1,3,17 4. Page 3, line 11: after "(2)" insert "and (2m)".

AB623-AA1,3,18 5. Page 3, line 11: after that line insert:

AB623-AA1,3,19 " Section 4m. Nonstatutory provisions.

AB623-AA1,4,2 (1) Notwithstanding section 25.15 (2m) of the statutes, as created by this act, with respect to any act of Congress specified in section 25.15 (2m) (a) of the statutes that became effective on or prior to the effective date of this subsection, the investment board does not violate its standard of responsibility under section 25.15 of the statutes, as affected by this act, if the investment board does all of the following:

AB623-AA1,4,6 (a) Not later than 90 days after the effective date of this paragraph, identifies all securities in which it has direct or indirect holdings that would cause it to violate its standard of responsibility under section 25.15 (2m) of the statutes, as created by this act, and notifies the issuer of each such security of the provisions of this act.

AB623-AA1,4,17 (b) Not later than 90 days after providing the notice specified in paragraph (a), for each security for which notice is provided under paragraph (a), determines whether continuing to hold the security would cause it to violate its standard of responsibility under section 25.15 (2m) of the statutes, as created by this act. For purposes of this paragraph, if a business entity adopts a corporate policy that will effectively cease business operations in a country or region declared by Congress to be engaging in acts of genocide, the board may consider the business entity to no longer be doing business in the country or region and the board's continuing to hold securities of the business entity after the adoption of the corporate policy does not violate the board's standard of responsibility under section 25.15 (2m) of the statutes, as created by this act.

AB623-AA1,4,22 (c) If the answer to paragraph (b) is in the affirmative, begins divesting the security not later than 90 days after providing the notice specified in paragraph (a) and divests at least 50 percent of its assets in all such securities within 9 months after the effective date of this paragraph and 100 percent of its assets in all such securities within 15 months after the effective date of this paragraph.".

AB623-AA1,4,23 (End)