companies. A. 1. The Treasurer shall prepare and maintain and provide to each state governmental entity a list of financial companies that boycott energy companies. In maintaining the list, the Treasurer may: a. review and rely, as appropriate in the Treasurer's judgment, on publicly available information regarding financial companies including information provided by the state, nonprofit organizations, research firms, international organizations, and governmental entities, and b. request written verification from a financial company that it does not boycott energy companies and rely, as appropriate in the Treasurer's judgment and without conducting further investigation, research, or inquiry, on a financial company's written response to the request. 2. A financial company that fails to provide to the Treasurer a written verification under subparagraph b of paragraph 1 of this subsection before the sixty-first day after receiving the request from the Treasurer is presumed to be boycotting energy companies. 3. The Treasurer shall update the list annually or more often as the Treasurer considers necessary, but not more often than quarterly, based on information from, among other sources, those listed in subparagraph a of paragraph 1 of this subsection. 4. Not later than the thirtieth day after the date the list of financial companies that boycott energy companies is first provided or updated, the Treasurer shall file the list with the presiding officer of each house of the Legislature and the Attorney General and post the list on a publicly available Internet website. 5. The Treasurer may retain third-party consultants to assist in the implementation of the provisions of this act. B. Not later than the thirtieth day after the date a state governmental entity receives the list provided under paragraph 1 of subsection A of this section, the state governmental entity shall notify the Treasurer of the listed financial companies in which the state governmental entity owns direct holdings or indirect holdings. C. 1. For each listed financial company identified under paragraph 1 of subsection A of this section, the state governmental entity shall send a written notice: a. informing the financial company of its status as a listed financial company, b. warning the financial company that it may become subject to divestment by state governmental entities after the expiration of the period described by paragraph 2 of this subsection, and c. offering the financial company the opportunity to clarify its activities related to companies described by paragraph 1 of subsection A of this section. 2. Not later than the ninetieth day after the date the financial company receives notice under paragraph 1 of this subsection, the financial company shall cease boycotting energy companies to avoid qualifying for divestment by state governmental entities. 3. If, during the time provided by paragraph 2 of this subsection, the financial company ceases boycotting energy companies, the Treasurer shall remove the financial company from the list maintained under paragraph 1 of subsection A of this section, and this subsection will no longer apply to the financial company unless it resumes boycotting energy companies. 4. If, after the time provided by paragraph 2 of this subsection expires, the financial company continues to boycott energy companies, the state governmental entity shall sell, redeem, divest, or withdraw all publicly traded securities of the financial company, except securities described by subsection E of this section, according to the schedule provided under subsection D of this section. D. 1. A state governmental entity required to sell, redeem, divest, or withdraw all publicly traded securities of a listed financial company shall comply with the following schedule: a. at least fifty percent (50%) of those assets shall be removed from the state governmental entity's assets under management not later than the one-hundred- eightieth day after the date the financial company receives notice pursuant to paragraph 1 of subsection C of this section unless the state governmental entity determines, based on a good-faith exercise of its fiduciary discretion and subject to subparagraph b of this subsection, that a later date is more prudent, and b. one hundred percent (100%) of those assets shall be removed from the state governmental entity's assets under management not later than the three-hundred- sixtieth day after the date the financial company receives notice pursuant to paragraph 1 of subsection C of this section. 2. If a financial company that ceased boycotting energy companies after receiving notice pursuant to paragraph 1 of subsection C of this section resumes its boycott, the state governmental entity shall send a written notice to the financial company informing it that the state governmental entity will sell, redeem, divest, or withdraw all publicly traded securities of the financial company according to the schedule in paragraph 1 of subsection D of this section. 3. Except as provided by paragraph 1 of subsection D of this section, a state governmental entity may delay the schedule for divestment under that subsection only to the extent that the state governmental entity determines, in the state governmental entity's good-faith judgment, and consistent with the entity's fiduciary duty, that divestment from listed financial companies will likely result in a loss in value or a benchmark deviation described by paragraph 1 of subsection F of this section. 4. If a state governmental entity delays the schedule for divestment, the state governmental entity shall submit a report to the Treasurer, the presiding officer of each house of the Legislature, and the Attorney General stating the reasons and justification for the delay in divestment by the state governmental entity from listed financial companies. The report shall include documentation supporting its determination that the divestment would result in a loss in value or a benchmark deviation described by paragraph 1 of subsection F of this section including objective numerical estimates. The state governmental entity shall update the report every six (6) months. E. A state governmental entity is not required to divest from any indirect holdings in actively or passively managed investment funds or private equity funds. The state governmental entity shall submit letters to the managers of each investment fund containing listed financial companies requesting that they remove those financial companies from the fund or create a similar actively or passively managed fund with indirect holdings devoid of listed financial companies. If a manager creates a similar fund with substantially the same management fees and same level of investment risk and anticipated return, the state governmental entity may replace all applicable investments with investments in the similar fund in a time frame consistent with prudent fiduciary standards but not later than the four-hundred-fiftieth day after the date the fund is created. F. 1. A state governmental entity may cease divesting from one or more listed financial companies only if clear and convincing evidence shows that: a. the state governmental entity has suffered or will suffer a loss in the value of assets under management by the state governmental entity as a result of having to divest from listed financial companies under this subsection, or b. an individual portfolio that uses a benchmark-aware strategy would be subject to an aggregate expected deviation from its benchmark as a result of having to divest from listed financial companies under this subsection. 2. A state governmental entity may cease divesting from a listed financial company as provided by this section only to the extent necessary to ensure that the state governmental entity does not suffer a loss in value or deviate from its benchmark as described by paragraph 1 of this subsection. 3. Before a state governmental entity may cease divesting from a listed financial company under this section, the state governmental entity shall provide a written report to the Treasurer, the presiding officer of each house of the Legislature, and the Attorney General setting forth the reason and justification, supported by clear and convincing evidence, for deciding to cease divestment or to remain invested in a listed financial company. The state governmental entity shall update the report required by this subsection semiannually, as applicable. 4. This section does not apply to reinvestment in a financial company that is no longer a listed financial company. G. Except as provided in subsection F of this section, a state governmental entity shall not acquire securities of a listed financial company.
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