HEA 1378 Summary

• Creates Chapter 11 of IC 5-10.2 establishing mandatory divestment requirements for Indiana's public retirement system from businesses engaged in boycott, divestment, or sanctions (BDS) activities against Israel, effective July 1, 2016.

• Requires the board of trustees to identify restricted businesses by January 31, 2017, notify them in writing, and provide 90 days for the business to cease BDS activity or face divestment of publicly traded securities (50% within 9 months, 100% within 15 months).

• Exempts indirect holdings in actively managed funds and passively managed commingled funds if divestment costs exceed 10% of the fund's value in restricted businesses, though the board must request fund managers remove restricted businesses.

• Provides civil immunity and indemnification to state officials, system employees, and board members for any actions taken in compliance with the divestment requirements.

• Requires the board to submit reports to the legislative council by November 1, 2017, and annually thereafter listing restricted businesses, divestment actions, and exempted funds; the chapter expires if BDS activities cease, federal sanctions are revoked, or Congress/the President declare such divestment interferes with U.S. foreign policy.