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HB474 INTRODUCED
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HB474
5VJVL6M-1
By Representatives Butler, Harrison
RFD: Financial Services
First Read: 17-Feb-26
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5VJVL6M-1 02/17/2026 KMS (L)cr 2026-610
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First Read: 17-Feb-26
SYNOPSIS:
Under existing law, the Board of Control of the
Retirement Systems of Alabama is authorized to act as
trustee of several funds and is granted full power to
invest and reinvest funds.
This bill would enforce the prohibition placed
on investment activities by certain Presidential
Executive Orders addressing an identified national
emergency regarding the threat from securities
investments that finance Communist Chinese military
companies.
This bill would also prohibit the purchase or
sale of any publicly traded securities to or from
certain entities affiliated with Communist Chinese
military companies or any publicly traded securities
that are derivative of such securities or are designed
to provide investment exposure to such securities.
A BILL
TO BE ENTITLED
AN ACT
Relating to public investments; to add Section
16-25-20.1, to the Code of Alabama 1975, to prohibit the Board
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16-25-20.1, to the Code of Alabama 1975, to prohibit the Board
of Control of the Teachers' Retirement System of Alabama from
making certain investments; and to add Section 36-27-25.1 to
the Code of Alabama 1975, to prohibit the Board of Control for
the Employees' Retirement System of Alabama from making
certain investments.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 16-25-20.1 and 36-27-25.1 are added
to the Code of Alabama 1975, to read as follows:
§16-25-20.1
(a) As used in this section, the following terms have
the following meanings:
(1) INVESTMENT ACTIVITIES. The act of investing or the
lending of assets of the Teachers' Retirement System of
Alabama.
(2) RESTRICTED ENTITY. All of the following:
a. A Chinese entity that is:
1. Designated by Presidential Executive Order 13959,
relating to addressing the threat from securities investments
that finance communist Chinese military companies;
2. Designated by presidential Executive Order 14105(88
Fed. Reg. 54867), relating to addressing United States
investments in certain national security technologies and
products in countries of concern; and
3. Included in the List of Specially Designated
Nationals and Blocked Persons maintained by the U.S.
Department of the Treasury, Office of Foreign Assets Control.
b. A Chinese entity that is:
1. Included on the Non-SDN Chinese Military-Industrial
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1. Included on the Non-SDN Chinese Military-Industrial
Complex Companies List (NS-CMIC List) maintained by the U.S.
Department of the Treasury, Office of Foreign Assets Control
under Presidential Executive Order 14032;
2. A Chinese military company or a military-civil
fusion contributor and included on the list maintained by the
Department of Defense in accordance with Section 1260H(b) of
the National Defense Authorization Act for fiscal year 2021;
3. Included on the list required under Section 1237 of
the National Defense Authorization Act for fiscal year 1999;
4. Included on the Entity List in 15 C.F.R. Supplement
No. 4 to Part 744 of the federal government's Export
Administration regulations;
5. Included on the Denied Persons List described in 15
C.F.R. § 764.3(a)(2) of the federal government's Export
Administration regulations;
6. Included on the Unverified List set forth in 15
C.F.R. Supplement No.6 to Part 744 of the Export
Administration regulations;
7. Included on the Military End User List set forth in
15 C.F.R. Supplement No.7 to Part 744 of the Export
Administration regulations;
8. Produces or provides communications equipment or
service on the list published by the Federal Communications
Commission under 47 U.S.C. § 1601(a) of the Secure and Trusted
Communications Networks Act of 2019;
9. Included on the Uyghur Forced Labor Prevention Act
entity list maintained by the Department of Homeland Security;
10. Included on the Withhold Release Orders and
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10. Included on the Withhold Release Orders and
Findings List maintained by the Commissioner of U.S. Customs
and Border Protection pursuant to the Uyghur Forced Labor
Prevention Act 88 Fed. Reg. 85899;
11. Included on the list of covered issuers, as defined
in Section 104 of the Sarbanes Oxley Act of 2002 15 U.S.C. §
7214, maintained by the Securities and Exchange Commission;
and
12. Otherwise included on any other list maintained by
the United States Government that designates a Chinese entity
for a restriction relating to investment, contracting, or
procurement.
c. A Chinese entity otherwise subject to the control of
a Chinese entity listed in paragraph a. or b.
d. Any agency or instrumentality of the People's
Republic of China.
(b) The State Auditor or his or her designee, no later
than January 1, 2027, shall create a list of restricted
entities and shall update the list every six months
thereafter. The retirement system shall not engage in
investment activities with a listed restricted entity.
(c) Upon publication of the restricted entity list, the
Board of Control shall identify any holdings of the retirement
system in a restricted entity and, acting as a prudent
investor, shall expeditiously divest from any holdings or
other investment activity in that restricted entity.
§36-27-25.1
(a) As used in this section, the following terms have
the following meanings:
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the following meanings:
(1) INVESTMENT ACTIVITIES. The act of investing or the
lending of assets of the retirement system.
(2) RESTRICTED ENTITY. All of the following:
a. A Chinese entity that is:
1. Designated by Presidential Executive Order 13959,
relating to addressing the threat from securities investments
that finance communist Chinese military companies;
2. Designated by Presidential Executive Order 14105 (88
Fed. Reg. 54867), relating to addressing United States
investments in certain national security technologies and
products in countries of concern; and
3. Included in the List of Specially Designated
Nationals and Blocked Persons maintained by the U.S.
Department of the Treasury, Office of Foreign Assets Control.
b. A Chinese entity that is:
1. Included on the Non-SDN Chinese Military-Industrial
Complex Companies List (NS-CMIC List) maintained by the U.S.
Department of the Treasury, Office of Foreign Assets Control
under Presidential Executive Order 14032;
2. A Chinese military company or a military-civil
fusion contributor and included on the list maintained by the
Department of Defense in accordance with Section 1260H(b) of
the National Defense Authorization Act for fiscal year 2021;
3. Included on the list required under Section 1237 of
the National Defense Authorization Act for fiscal year 1999;
4. Included on the Entity List in 15 C.F.R. Supplement
No. 4 to Part 744 of the federal government's Export
Administration regulations;
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Administration regulations;
5. Included on the Denied Persons List described in 15
C.F.R. § 764.3(a)(2) of the federal government's Export
Administration regulations;
6. Included on the Unverified List set forth in 15
C.F.R. Supplement No.6 to Part 744 of the Export
Administration regulations;
7. Included on the Military End User List set forth in
15 C.F.R. Supplement No.7 to Part 744 of the Export
Administration regulations;
8. Produces or provides communications equipment or
service on the list published by the Federal Communications
Commission under 47 U.S.C. § 1601(a) of the Secure and Trusted
Communications Networks Act of 2019;
9. Included on the Uyghur Forced Labor Prevention Act
entity list maintained by the Department of Homeland Security;
10. Included on the Withhold Release Orders and
Findings List maintained by the Commissioner of U.S. Customs
and Border Protection pursuant to the Uyghur Forced Labor
Prevention Act 88 Fed. Reg. 855899;
11. Included on the list of covered issuers, as defined
in Section 104 of the Sarbanes Oxley Act of 2002, 15 U.S.C. §
7214, maintained by the Securities and Exchange Commission;
and
12. Otherwise included on any other list maintained by
the United States Government that designates a Chinese entity
for a restriction relating to investment, contracting, or
procurement.
c. A Chinese entity otherwise subject to the control of
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c. A Chinese entity otherwise subject to the control of
a Chinese entity listed in paragraph b.
d. Any agency or instrumentality of the People's
Republic of China.
(b) The State Auditor or his or her designee, no later
than January 1, 2027, shall create a list of restricted
entities and shall update the list every six months
thereafter. The retirement system shall not engage in
investment activities with a listed restricted entity.
(c) Upon publication of the restricted entity list, the
Board of Control shall identify any holdings of the retirement
system in a restricted entity and, acting as a prudent
investor, shall expeditiously divest from any holdings or
other investment activity in that restricted entity.
Section 2. This act shall become effective on October
1, 2026.
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