Thursday afternoon Gov. Roy Cooper signed a bill divesting the state of retirement investments in companies that are boycotting Israel.
With the signing of the “Divestment from Companies That Boycott Israel” act North Carolina becomes one of more than 20 that have adopted similar legislation.
The bill, sponsored by Rep. Stephen Ross (R-Alamance), directs the State Treasurer to adopt a policy prohibiting the State Retirement System and the Department of the Treasurer from investing in companies that are boycotting Israel.
After the bill signing, Carin Savel, CEO of the Jewish Federation of Raleigh-Cary said, “This is a tremendously moving day for North Carolina and for the State of Israel. I couldn’t be prouder of our representatives and our governor for seeing this bill to fruition.”
Savel said there were approximately 75 people in attendance from other federations and Jewish organizations across the state, which worked together to see the bill passed.
“It was a long time coming, and it’s a historic moment today,” Savel said.
The bill, which goes into effect October 1, also directs the Treasurer to compile a list of companies that are engaging in a boycott of Israel.
Companies on the list would be off-limits from investment by the Department of the Treasurer or the State Retirement System.
Any existing investments in companies on the list are to be divested within 180 days of the compiling of the list.
The bill further prohibits state agencies from contracting with a company on the list. Any existing contracts will be declared void or allowed to expire and not renewed.
When the bill was passed, the Jewish Federation of North Carolina said in a statement, “The state of North Carolina has long been a trading partner with Israel, and thanks to this legislation, that connection will not be hindered. North Carolina businesses conduct nearly $140 million per year in exports and commerce with Israel.”
Rep. Jon Hardister (R-Guilford) was one of the primary sponsors of the bill and attended the bill signing.
Prior to Cooper singing the bill, Hardister said, “North Carolina does millions of dollars of trade with Israel on an annual basis. We have a vested interest in supporting Israel as a friend and ally on the world stage. In a global economy, it is perfectly permissible for states to consider how taxpayers’ funds impact foreign affairs.”
Karah Manning, communications director of the Retirement Systems Division of the State Treasurer said Thursday in an email, “As you are aware, HB161, Divestment from Companies that Boycott Israel, has criteria similar to the Iran Divestment and Sudan Divestment Acts. Further, HB161 also contains technical corrections to the Iran and Sudan Acts to sync up the reporting with HB161.”
Regarding the logistics of complying with the bill, Manning said, “The bill allows for the department to utilize the following sources in evaluating whether or not a company meets the divestment criteria: other state lists of restricted companies pursuant to similar laws, federal information or guidance, credible information from non-profits, research organizations, governmental entities, or otherwise generally publicly available information. The department typically uses a research vendor to review those sources of information and help determine if a company meets the intention and dollar thresholds established in the bill.”
“If this bill were simply a resolution supporting the state of Israel, I would support it,” former Rep. Phil Lehman (D-Durham) said during debate on the House floor in March. “There are no American companies engaged in a boycott of Israel. We are wading into foreign relations here. This is not something that the North Carolina General Assembly needs to get into.”
Savel agreed that it is true that there are not many companies boycotting Israel but said, “Most of the states where this has passed, it gets passed as a precursor of what might happen, so it lets people know where the state stands.”
Noting that a similar bill was passed a couple of years ago relating to dealings with Iran, Savel said that a bill like this is “just and fair.”
Manning also said, “The department will take steps to enact a policy within ‘30 days after October 1, 2017,’ and ‘within 120 days of adoption of the policy,’ we will make publicly available a list of companies that meet the criteria. It is difficult to know if any companies will meet the criteria until research has been reviewed, but once a divestment list is developed, the list will be posted on our website.”
She also said, “We do not know at this time how HB161 will impact the state’s investments. With our similar work with the other divestment bills, we are confident in our ability to thoroughly uphold the law.”