SB69 would restrict the Teachers’ Retirement System of Alabama and the Employees’ Retirement System of Alabama from making certain investments tied to Chinese entities identified by a range of federal national-security, export-control, sanctions, and forced-labor lists. The bill defines “restricted entity” broadly to include entities designated under presidential executive orders, Treasury and Defense Department lists, Commerce export-control lists, FCC communications-security restrictions, DHS/Uyghur Forced Labor Prevention Act lists, SEC covered issuer lists, and other U.S. government lists that restrict investment, contracting, or procurement. It also includes agencies or instrumentalities of the People’s Republic of China and entities controlled by listed Chinese entities.
The bill directs the State Auditor, or a designee, to create and update a restricted-entity list every six months. Once that list is published, the retirement systems’ boards must avoid investment activity with listed entities and must promptly identify and divest any existing holdings in those entities, acting as prudent investors. The bill adds new sections to the Alabama Code governing both retirement systems and is set to take effect October 1, 2025.
In practical terms, SB69 would narrow the investment universe for two major public pension systems in Alabama and impose ongoing compliance and monitoring obligations on the State Auditor and the retirement boards. It would affect public pension fund managers, outside investment managers, and any companies or funds with exposure to the covered Chinese entities or related securities, including derivative products designed to provide investment exposure to them.
The overall sentiment reflected in the bill’s sponsorship and committee assignment appears supportive of restricting state pension investments linked to Communist Chinese military companies and related national-security concerns. The bill’s framing emphasizes compliance with federal executive orders and security-related restrictions rather than a broader divestment policy. No committee transcript or recorded vote information was provided, and the bill’s current status as indefinitely postponed suggests it did not advance to enactment.
The main point of contention is likely the breadth and complexity of the restricted-entity definition, which sweeps in multiple federal lists and categories of Chinese entities, potentially making compliance difficult and limiting investment flexibility. Another likely concern is the financial impact on retirement-system returns and portfolio management, since the bill requires divestment and prohibits future transactions with listed entities. Supporters would likely view the measure as a national-security safeguard, while critics may see it as overbroad or administratively burdensome.
SB69 would add Sections 16-25-20.1 and 36-27-25.1 to the Alabama Code, creating investment prohibitions for the Teachers’ Retirement System of Alabama and the Employees’ Retirement System of Alabama. It would require the State Auditor to maintain a restricted-entity list and would compel the retirement systems to cease investment activity with listed entities and divest existing holdings. The bill would therefore impose new statutory limits on public pension investment authority, compliance duties, and divestment obligations for state retirement boards and their investment managers.
The bill appears to have been introduced in a generally favorable policy environment among its sponsors, with a clear national-security rationale centered on limiting Alabama public pension exposure to Chinese military-linked entities. The absence of recorded committee debate or votes limits the ability to gauge broader legislative sentiment, but the bill’s indefinite postponement indicates it did not ultimately secure enough support to move forward. Overall, the available context suggests support among proponents of anti-China investment restrictions, with no documented public opposition in the provided materials.
The likely areas of contention are the bill’s broad definition of “restricted entity,” the administrative burden of maintaining and updating the list, and the potential effect on pension investment performance. Critics could argue that the bill forces divestment based on multiple overlapping federal lists and may reduce diversification or returns for retirement funds. Supporters would likely emphasize national security, compliance with federal restrictions, and avoiding state pension support for Communist Chinese military companies or related entities.