DEPARTMENT
OF
AUDITS
AND
ACCOUNTS
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
Russell W.
Hinton
State Auditor
(404) 656-2174
State Auditor
(404) 656-2174
March
28, 2008
The
Honorable Ben Bridges, Chairman
House Retirement Committee
State Capitol, Room 402
Atlanta, Georgia 30334
House Retirement Committee
State Capitol, Room 402
Atlanta, Georgia 30334
SUBJECT: State
Auditor’s
Certification
Substitute to Senate Bill 451
(LC 21 9928S)
Dear Chairman Bridges:
Substitute to Senate Bill 451
(LC 21 9928S)
Dear Chairman Bridges:
This
substitute bill would create the “Protecting Georgia’s Investments
Act.” Specifically, this bill would provide that public funds be required
to identify all ‘scrutinized companies’ in which the public fund has
direct or indirect holdings. This legislation defines ‘scrutinized
companies’ as any company that has, with actual knowledge, on or after
August 5, 1996, made an investment of $20 million or more in Iran’s
petroleum sector which directly or significantly contributes to the enhancement
of Iran’s ability to develop the petroleum resources of Iran.
‘Public fund’ is defined in this legislation to mean a large
retirement system as defined in 47-20-84 of the Official Code of Georgia
Annotated.
This
legislation would require public funds to identify these scrutinized companies
by October 1, 2008 and update their listing of these companies annually. This
legislation specifies that neither employees of a retirement system nor the
retirement system shall be liable for a good faith omission in identifying
scrutinized companies.
This
bill also outlines the procedures that must be followed by public funds with
direct holdings in any ‘scrutinized companies.’ These procedures
include notifying companies of their status, encouraging the companies to cease
such activities, and divesting securities in such companies under certain
circumstances. This bill provides for certain exclusions and provides for the
termination of these prohibitions if certain Federal action occurs.
The
substitute bill would require the State Treasurer to annually prepare a list of
scrutinized companies. The list shall be made available to each public fund in
Georgia and each such fund may rely on the list in meeting the requirements of
this legislation. This substitute bill would also change the automatic repeal
date from July 1, 2011 to July 1, 2015.
This is to certify that the
changes made in this substitute bill are nonfiscal amendments as defined in the
Public Retirement Systems Standards Law.
Respectfully,
/s/ Russell W.
Hinton
State Auditor
State Auditor
RWH/cs