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HB 504

RELATING TO ENVIRONMENTAL STEWARDSHIP.

2025 Regular Session Introduced by Linda Ichiyama

HB 504 prohibits Alabama's retirement systems from investing in entities linked to the Chinese military, protecting state funds from national security risks.

Received notice of disagreement (Hse. Com. No. 704).
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Bill Summary · HB 504

Summary of HB 504: Prohibition on Investments with Restricted Entities

Bill Number: HB 504
Title: Public Investments; to prohibit Board of Control of Employees' Retirement Systems of Alabama and Teachers' Retirement Systems of Alabama from investing with restricted entities affiliated with Communist Chinese military companies
Introduced: April 01, 2025
Status: Read for the first time and referred to the House Committee on Fiscal Responsibility
Classification: Bill
Subject: Retirement

Purpose and Intent

HB 504 aims to restrict the investment activities of the Board of Control of the Employees' Retirement Systems of Alabama and the Teachers' Retirement Systems of Alabama. The bill seeks to align state investment practices with certain federal directives aimed at mitigating national security risks associated with investments in entities linked to the Communist Chinese military.

Key Provisions

  • Prohibition on Investments: The bill prohibits the purchase or sale of publicly traded securities involving entities identified as "restricted entities" that are affiliated with Communist Chinese military companies.

  • Definitions:

    • Investment Activities: Defined as the act of investing or lending assets of the retirement systems.
    • Restricted Entity: Includes various categories of Chinese entities designated by specific Presidential Executive Orders and lists maintained by U.S. government agencies, such as:
    • Entities designated under Executive Order 13959 and Executive Order 14105.
    • Entities on the Non-SDN Chinese Military-Industrial Complex Companies List.
    • Entities listed under the National Defense Authorization Act and other relevant federal regulations.

  • Creation of Restricted Entity List: The State Auditor is tasked with creating and updating a list of restricted entities by January 1, 2026, and every six months thereafter.

  • Divestment Requirement: Upon publication of the restricted entity list, the retirement systems must identify and divest from any holdings in restricted entities in a prudent manner.

Who Would Be Affected

  • Retirement Systems: The Boards of Control for both the Employees' and Teachers' Retirement Systems of Alabama will be directly impacted as they will be required to adjust their investment strategies to comply with the new prohibitions.

  • Investors and Stakeholders: This legislation may affect current and future investments in certain sectors, particularly those involving Chinese companies linked to military activities, thereby influencing the financial landscape for retirement funds.

Procedural Aspects

  • Committee Review: The bill is currently pending action in the House Committee on Fiscal Responsibility following its introduction.

  • Timeline: The bill was introduced on April 1, 2025, and the State Auditor is required to establish the restricted entity list by January 1, 2026.

Conclusion

HB 504 represents a significant step by the Alabama legislature to address national security concerns related to foreign investments, particularly those associated with the Chinese military. By prohibiting investments in restricted entities, the bill aims to protect the integrity of state retirement funds and align them with federal security measures.

Compiled from official sources — confirm details with the bill’s official record.

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