Divestment; exemption for certain passively managed comingled funds

Sec. 16. (a) Except as provided in sections 18 and 19 of this chapter, if, after ninety (90) days after the system's first engagement with a business under section 14 of this chapter, the business continues to engage in boycott, divest from, or sanction Israel activity, the system shall sell, redeem, divest, or withdraw all publicly traded securities of the business that are held by a fund, as follows: (1) At least fifty percent (50%) of such assets shall be removed from a fund's assets under management within nine (9) months after the business's appearance on the restricted business list. (2) One hundred percent (100%) of such assets shall be removed from a fund's assets under management within fifteen (15) months after the business's appearance on the restricted business list. (b) If a business that ceased boycott, divest from, or sanction Israel activity following engagement under section 14 of this chapter resumes boycott, divest from, or sanction Israel activity, the business shall be placed immediately back on the restricted business list. If a fund has holdings in the business, the system shall sell, redeem, divest, or withdraw all publicly traded securities of the business as provided in subsection (a) based on the date the business is placed back on the restricted business list. The system shall send a written notice to the business indicating that the business was placed back on the restricted business list and is subject to divestment. (c) The board is not required to divest a fund's holdings in a passively managed commingled fund that includes a restricted business engaging in boycott, divest from, or sanction Israel activity if the estimated cost of divestment of the commingled fund is greater than ten percent (10%) of the total value of the restricted businesses held in the commingled fund. The board shall include any commingled fund that includes a restricted business that is exempted from divestment under this subsection in the board's report submitted to the legislative council under section 21 of this chapter.