State Retirement and Pension System - Divestment From Israel

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1455*

HOUSE BILL 1455
P6 6lr3072

By: Delegates Young, Acevero, Alston, and Martinez
Introduced and read first time: February 13, 2026
Assigned to: Appropriations

A BILL ENTITLED

AN ACT concerning 1

State Retirement and Pension System – Divestment From Israel 2

FOR the purpose of requiring the Board of Trustees for the State Retirement and Pension 3
System to review certain investment holdings; requiring the Board of Trustees to 4
take certain divestment actions with regard to certain Israeli investments; 5
prohibiting the Board of Trustees from making certain new investments; providing 6
certain immunities from liability for certain persons; requiring the Board of Trustees 7
to act in good faith in taking certain actions in a certain manner; requiring the Board 8
of Trustees to make certain recommendations to the Joint Committee on Pensions; 9
and generally relating to the investment of assets of the State R etirement and 10
Pension System. 11

BY adding to 12
Article – State Personnel and Pensions 13
Section 21–123.4 14
Annotated Code of Maryland 15
(2024 Replacement Volume and 2025 Supplement) 16

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18

Article – State Personnel and Pensions 19

21–123.4. 20

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 21
INDICATED. 22

(2) (I) “ACTIVELY MANAGED SEPA RATE ACCOUNTS ” MEANS THE 23
ACCOUNTS OF THE SEVE RAL SYSTEMS THAT ARE ACTIVELY MANAGED AT THE 24
2 HOUSE BILL 1455

DIRECTION OF THE BOARD OF TRUSTEES AND HELD IN SEPARATE ACCOUNTS. 1

(II) “ACTIVELY MANAGED SEPA RATE ACCOUNTS ” DOES NOT 2
MEAN INDEXED FUNDS , PRIVATE EQUITY FUNDS , REAL ESTATE FUNDS , OR OTHER 3
COMMINGLED OR PASSIVELY MANAGED FUNDS. 4

(3) “COMPANY” MEANS ANY CORPORATION, UTILITY, PARTNERSHIP, 5
JOINT VENTURE , FRANCHISOR, FRANCHISEE, TRUST, ENTITY INVESTMENT 6
VEHICLE, FINANCIAL INSTITUTION, OR A WHOLLY OWNED SUBSIDIARY OF ANY OF 7
THESE ENTITIES. 8

(4) “DIVESTMENT ACTION ” MEANS SELLING , REDEEMING, 9
TRANSFERRING, EXCHANGING, OTHERWISE DISPOSING OF, AND REFRAINING FROM 10
FURTHER INVESTMENT IN CERTAIN INVESTMENTS. 11

(5) “ELIGIBLE ACCOUNTS ” MEANS ACTIVELY MANAG ED SEPARATE 12
ACCOUNTS CONTAINING FUNDS OF THE SEVERAL SYSTEMS. 13

(6) “INVESTMENT” MEANS THE COMMITMENT OF FUNDS OR OTHER 14
ASSETS TO A COMPANY, INCLUDING: 15

(I) THE OWNERSHIP OR CONTROL OF A SHARE OR INTEREST IN 16
THE COMPANY; OR 17

(II) THE OWNERSHIP OR CONTROL OF A BOND OR OTHER DEBT 18
INSTRUMENT OF A COMPANY. 19

(7) (I) “ISRAEL” MEANS THE GOVERNMENT OF ISRAEL. 20

(II) “ISRAEL” INCLUDES ALL AGENCIE S, INSTITUTIONS, 21
INSTRUMENTALITIES, AND POLITICAL SUBDIVISIONS OF ISRAEL. 22

(8) “ISRAEL–RESTRICTED INVESTMENT” MEANS AN INVESTMENT IN: 23

(I) THE DEVELOPMENT CORPORATION FOR ISRAEL; 24

(II) ANY SECURITY OR ASSET HELD IN OR ASSOCIATED WITH THE 25
GOVERNMENT OF ISRAEL; OR 26

(III) ANY BOND OR SOVEREIG N DEBT ISSUED BY THE 27
GOVERNMENT OF ISRAEL. 28

(B) THE BOARD OF TRUSTEES SHALL REVIEW THE INVESTMENT HOLDINGS 29
IN ELIGIBLE ACCOUNTS FOR THE PURPOSE OF DETERMINING THE EXTENT TO WHICH 30
HOUSE BILL 1455 3

FUNDS IN ELIGIBLE AC COUNTS ARE INVESTED IN ISRAEL–RESTRICTED 1
INVESTMENTS. 2

(C) EXCEPT AS PROVIDED IN SUBSECTION (D) OF THIS SECTION, THE 3
BOARD OF TRUSTEES: 4

(1) SHALL TAKE DIVESTMEN T ACTION IN ELIGIBLE ACCOUNTS WITH 5
REGARD TO CURRENT ISRAEL–RESTRICTED INVESTMENTS; AND 6

(2) MAY NOT MAKE ANY NEW INVESTMENTS FROM NET NEW FUNDS IN 7
AN ELIGIBLE ACCOUNT IN ANY ISRAEL–RESTRICTED INVESTMENT. 8

(D) NOTWITHSTANDING THE PROVISIONS OF THIS SECTION, THE BOARD OF 9
TRUSTEES MAY EXCLUDE FROM THE PROVISIONS OF SUBSECTION (C) OF THIS 10
SECTION A DIVESTMENT ACTION THAT CANNOT BE EXECUTED F OR FAIR MARKET 11
VALUE OR GREATER. 12

(E) ON OR BEFORE APRIL 1 AND OCTOBER 1 EACH YEAR, THE BOARD OF 13
TRUSTEES SHALL SUBMIT A REPORT, IN ACCORDANCE WITH § 2–1257 OF THE STATE 14
GOVERNMENT ARTICLE, TO THE SENATE BUDGET AND TAXATION COMMITTEE, THE 15
HOUSE APPROPRIATIONS COMMITTEE, AND THE JOINT COMMITTEE ON PENSIONS 16
THAT PROVIDES: 17

(1) ALL DIVESTMENT ACTIONS TAKEN BY THE BOARD OF TRUSTEES 18
IN ACCORDANCE WITH THIS SECTION; 19

(2) A LIST OF INVESTMENT S THAT THE BOARD OF TRUSTEES HAS 20
DETERMINED TO BE INE LIGIBLE FOR INVESTME NTS OF NET NEW FUNDS UNDER 21
SUBSECTION (C)(2) OF THIS SECTION; AND 22

(3) OTHER DEVELOPMENTS R ELEVANT TO ISRAEL–RESTRICTED 23
INVESTMENTS. 24

(F) THE BOARD OF TRUSTEES OR ANY OTHER FIDUCIARY OF THE SEVERAL 25
SYSTEMS MAY NOT BE HELD LIABLE FOR ANY ACTIONS TAKEN OR DECISIONS MADE 26
IN GOOD FAITH FOR TH E PURPOSE OF COMPLYING WITH OR EX ECUTING THE 27
REQUIREMENTS OF ANY DIVESTMENT PROVISIONS UNDER THIS SECTION. 28

(G) THE BOARD OF TRUSTEES SHALL ACT IN GOOD FAITH TO CARRY OUT 29
DIVESTMENT ACTION AS REQUIRED BY THIS SEC TION IN COMPLIANCE W ITH ALL 30
APPLICABLE STATE, FEDERAL, AND INTERNATIONAL HUMAN RIGHTS LAW. 31

(H) NOTHING IN THIS SECTION SHALL REQUIRE THE BOARD OF TRUSTEES 32
TO TAKE ACTION AS DESCRIBED IN THIS SECTION UNLESS THE BOARD OF TRUSTEES 33
4 HOUSE BILL 1455

DETERMINES IN GOOD F AITH THAT THE ACTION IS CONSISTENT WITH T HE 1
FIDUCIARY RESPONSI BILITIES OF THE BOARD OF TRUSTEES AS DESCRIBED IN 2
SUBTITLE 2 OF THIS TITLE. 3

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2026. 5