HB406 Alabama 2023 Session

Summary

Primary Sponsor

Mike ShawRepresentative

Republican

Session

Regular Session 2023

Title

Relating to public investments; to require the State Treasurer and the Boards of Control of the Retirement Systems of Alabama and the Judicial Retirement Fund to establish and maintain a list of certain companies owned or controlled by Chinese military or government services and designated by the U.S. government as companies with whom U.S. citizens are restricted from entering into transactions; to make this list available to the public; to prohibit the State Treasurer and the Boards of Control of the Retirement Systems of Alabama and the Judicial Retirement Fund from acquiring direct holdings in publicly traded securities of a listed company, and requiring the sale, redemption, divestment, or withdrawal of all direct holdings in publicly traded securities of a listed company within 180 days after the company becomes a listed company; and to define terms.

Summary

HB406 would require Alabama’s public investment entities to identify, publish, and divest from Chinese military- or government-linked companies.

What This Bill Does

The bill requires the State Treasurer and the Boards of Control for the Employees', Teachers', and Judicial Retirement Funds to create and publicly maintain a list of prohibited companies. They may use a third-party service to identify these companies and must update the list quarterly. They cannot buy direct holdings in these companies and must sell or divest any direct holdings within 180 days of a company being added to the list. It also requires public notices to listed companies and annual reports detailing the list, notices, and divestments, and provides definitions for key terms.

Who It Affects

• Public funds (State Treasurer and the Boards of Control for the Employees' Retirement System of Alabama, Teachers' Retirement System of Alabama, and Judicial Retirement Fund) that manage Alabama's public pension and retirement assets; they must identify prohibited companies, maintain the list, and execute divestment.
• Prohibited companies identified on the list (those owned or controlled by Chinese military or government services and designated by U.S. government lists); they will receive notices and may be subject to forced divestment if they are on the list.

Key Provisions

• Create and publicly maintain a list of prohibited companies defined as businesses owned or controlled by Chinese military or government services and designated by U.S. government lists.
• Allow use of third-party services to identify prohibited companies and potentially share costs if multiple public funds use these services.
• Public funds must not acquire direct holdings in prohibited companies and must sell/divest all direct holdings within 180 days after a company is listed.
• Publicly disclose the prohibited companies list within 30 days of creation or update and file an annual report detailing the list, notices sent, divestments completed, and indirect holdings.
• Provide definitions for key terms (Company, Direct Holdings, Indirect Holdings, Prohibited Company, Public Fund).
• Allow good-faith exemptions from conflicting obligations and require compliance with changes only if not undermining U.S. policy; effective date is the first day of the third month after passage.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Public funds, investment in certain companies owned or controlled by China prohibited