Contracting legislation: The Maryland Senate passed SB 235, amending Section 17 of the State Finance and Procurement Code. A person is identified as engaging in investment activities with Iran if they provide goods and services exceeding $20 million to the Iranian energy sector, or if they are a financial institution extending $20 million or more in credit. (1) The Board of Public Works is obligated to provide 90 days’ notice to a party that they are eligible for inclusion on a public list of sanctioned persons. It also allows them the opportunity to respond to the notice demonstrating that they are not conducting investment activities in Iran.
Divestment legislation: SBill 214 (Divestiture from Iran and Sudan Act) requires the State Retirement and Pension System to divest from companies doing business in Iran and Sudan. The same 90 day notification standard applies. (2) (3) All fiduciaries of the pension system are granted legal immunity for “good faith divestment actions,” with such fiduciaries defined as “a member of the retirement Board of Trustees, an Investment Committee member; or a State Retirement Agency employee who “exercises any discretionary authority or control over the management or administration of the several systems or the management or disposition of the assets of the several systems.” (4)
Effects: In the most recent implementation report, released in March of 2014, the State Retirement and Pension System has isolated six companies doing business with Iran from which the pension fund must divest. (5)
Of note: The Maryland Jewish Alliance, a now-defunct political activism group, lobbied for the divestment bill. (6) Efforts to implement sanctions were begun the year before the passage of SB 214, with an initial bill falling through. (7) The Maryland State Treasurer and the Executive Director of the state pension system indicated concerns about the bill at the time of its passing.