Shown verbatim: the complete text as captured from the official PDF posted by the Arkansas General Assembly, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
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1 State of Arkansas As Engrossed: H3/3/25 H3/5/25 S4/7/25
2 95th General Assembly A Bill
3 Regular Session, 2025 HOUSE BILL 1352
4
5 By: Representatives Beaty Jr., Achor, Andrews, Barker, Beck, Bentley, S. Berry, Breaux, Brooks, A.
6 Brown, K. Brown, M. Brown, N. Burkes, R. Burkes, Joey Carr, John Carr, Cavenaugh, Childress, C.
7 Cooper, Cozart, Crawford, Dalby, Eaton, Evans, Furman, Gazaway, Gramlich, Hall, Hawk, Hollowell, L.
8 Johnson, Long, Lundstrum, Lynch, Maddox, McAlindon, McClure, M. McElroy, McGrew, B. McKenzie,
9 McNair, Milligan, J. Moore, Nazarenko, Painter, Pearce, Perry, Pilkington, Puryear, Ray, R. Scott
10 Richardson, Richmond, Rose, Rye, Schulz, M. Shepherd, Torres, Tosh, Underwood, Unger, Vaught,
11 Walker, Wing, Wooten
12 By: Senator B. Johnson
13
14 For An Act To Be Entitled
15 AN ACT TO AMEND VARIOUS LAWS CONCERNING ACTIONS
16 RELATED TO CERTAIN FOREIGN ENTITIES; TO WITHHOLD
17 FUNDING FOR STATE-SUPPORTED INSTITUTIONS OF HIGHER
18 EDUCATION WITH A CONFUCIUS INSTITUTE OR SIMILAR
19 INSTITUTE RELATED TO THE PEOPLE'S REPUBLIC OF CHINA;
20 TO PROHIBIT A STATE-SUPPORTED INSTITUTION OF HIGHER
21 EDUCATION FROM INVESTING IN CHINESE FUNDS; TO
22 PROHIBIT THE ESTABLISHMENT OF SISTER CITIES WITH
23 CERTAIN PROHIBITED FOREIGN PARTIES; TO PROHIBIT THE
24 INVESTMENT OF RETIREMENT AND PENSION FUNDS IN CHINESE
25 FUNDS; AND FOR OTHER PURPOSES.
26
27
28 Subtitle
29 TO AMEND VARIOUS LAWS CONCERNING ACTIONS
30 RELATED TO CERTAIN FOREIGN ENTITIES.
31
32 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
33
34 SECTION 1. Arkansas Code Title 6, Chapter 60, Subchapter 1, is amended
35 to add additional sections to read as follows:
36 6-60-123. Prohibited institutes.
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1 (a) The state shall withhold funding for a state-supported institution
2 of higher education that has a Confucius Institute or similar institute
3 related to the People's Republic of China, including without limitation a
4 Chinese cultural center.
5 (b)(1) A state-supported institution of higher education shall certify
6 annually that the state-supported institution of higher education does not
7 have a prohibited institution described in subsection (a) of this section.
8 (2) A state-supported institution of higher education shall
9 abolish any existing Confucius Institute or similar institute related to the
10 People's Republic of China by December 31, 2025.
11 (3) If a state-supported institution of higher education does
12 not certify that it does not have a prohibited institution as required by
13 subdivision (b)(1) of this section, state funding for the state-supported
14 institution of higher education shall be withheld.
15
16 6-60-124. Prohibited investments.
17 A state-supported institution of higher education shall not invest in a
18 Chinese company or a restricted investment product consistent with � 25-1-
19 1301 et seq.
20
21 SECTION 2. Arkansas Code Title 14, Chapter 1, Subchapter 1, is amended
22 to add an additional section to read as follows:
23 14-1-111. Certain sister cities prohibited -- Definition.
24 (a) As used in this section, "prohibited foreign party" means a:
25 (1) Citizen or resident of a country subject to International
26 Traffic in Arms Regulations, 22 C.F.R. � 126.1, as existing on January 1,
27 2025;
28 (2) Foreign government formed within a country subject to
29 International Traffic in Arms Regulations, 22 C.F.R. � 126.1, as existing on
30 January 1, 2025; or
31 (3) Party other than an individual or a government that is
32 created or organized under the laws of a foreign government within a country
33 subject to International Traffic in Arms Regulations, 22 C.F.R. � 126.1, as
34 existing on January 1, 2025.
35 (b) A municipality shall not form a sister city with a prohibited
36 foreign party.
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1 (c) A sister city formed between a municipality and a prohibited
2 foreign party before the effective date of this section shall be terminated.
3
4 SECTION 3. Arkansas Code Title 25, Chapter 1, is amended to add an
5 additional subchapter to read as follows:
6 Subchapter 13 -- Investment of Funds in Chinese Company
7
8 25-1-1301. Definitions.
9 As used in this subchapter:
10 (1)(A) "Chinese company" means a company, other than a United
11 States person or United States subsidiary as defined by 15 C.F.R. � 772.1, as
12 it existed on January 1, 2025, that:
13 (i) Is domiciled, incorporated, issued, or listed in
14 the People's Republic of China;
15 (ii) Is headquartered in the People's Republic of
16 China;
17 (iii) Has its principal place of business in the
18 People's Republic of China;
19 (iv) Is controlled by the government of the People's
20 Republic of China, the Communist Party of China, the People's Liberation
21 Army, or any instrumentality thereof, including without limitation the State-
22 owned Assets Supervision and Administration Commission of the State Council
23 or the National Social Security Fund; or
24 (v) Is majority-owned by an entity controlled by the
25 government of the People's Republic of China, the Communist Party of China,
26 the People's Liberation Army, or any instrumentality thereof, including the
27 State-owned Assets Supervision and Administration Commission of the State
28 Council or the National Social Security Fund.
29 (B) "Chinese company" does not include a parent company
30 that has one (1) or more subsidiaries or affiliates that meet the definition
31 under subdivision (1)(A) of this section if the parent company does not:
32 (i) Meet the criteria in subdivision (1)(A); and
33 (ii) Recognize more than fifty percent (50%) of the
34 total annual global revenue of the parent company and subsidiaries from The
35 People's Republic of China and Hong Kong Special Administrative Region
36 combined;
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1 (2) "Company" means a sole proprietorship, organization,
2 association, corporation, partnership, joint venture, limited partnership,
3 limited liability partnership, limited liability company, or any other entity
4 or business association, including without limitation all wholly-owned
5 subsidiaries, majority-owned subsidiaries, and parent companies, or an
6 affiliate that exists for the purpose of making a profit;
7 (3) "Control" means:
8 (A) The same as defined in the Investment Company Act of
9 1940, 15 U.S.C. � 80a-2, as it existed on January 1, 2025; or
10 (B) Involvement in an entity's governance structure,
11 monitoring, or internal human resources decisions of an entity;
12 (4) "Fiduciary" means a person who:
13 (A) Exercises authority to invest or manage the assets of
14 a state or local fund;
15 (B) Provides investment advice for a fee or other direct
16 or indirect compensation with respect to the assets of a state or local fund
17 or has authority or responsibility to provide investment advice; or
18 (C) Is a member of a public investment entity;
19 (5) "Investment product" means a commingled fund or a collective
20 investment, including without limitation a mutual fund or an index fund, in
21 which a public investment entity, state fund, or local fund together with one
22 (1) or more other investors share ownership or interest in the investments;
23 (6) "Private equity" means an asset class consisting of equity
24 or debt in companies or real property that are not publicly traded on a
25 listed stock exchange, whether owned directly by a public investment entity
26 or indirectly through a limited partnership or other company;
27 (7) "Public investment entity" means:
28 (A) A state or local board, political subdivision, or
29 other governing body within the state other than an individually directed
30 defined contribution plan that is responsible for investing or managing a
31 state or local fund, including without limitation public pension funds;
32 (B) Public retirement funds;
33 (C) City, county, or other local or municipal entity
34 investment funds;
35 (D) Institution of higher education public funds or a
36 qualified tuition program under 26 U.S.C. � 529, as it existed on January 1,
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1 2025;
2 (E) The Treasurer of State; and
3 (F) Other state-sponsored funds;
4 (8) "Restricted investment product" means an investment in a
5 Chinese company or an investment product that holds one (1) or more publicly-
6 traded investments in a Chinese company; and
7 (9) "Venture capital" means an investment of capital to a
8 business at any stage of its development before the business makes a public
9 offering of stock.
10
11 25-1-1302. Prohibited investments.
12 (a) Notwithstanding any other statutes, except as provided in � 25-1-
13 1305, this subchapter restricts the investment and financial decisions of all
14 public investment entities.
15 (b) A public investment entity, a service provider contracted by a
16 public investment entity, and all other fiduciaries shall not knowingly:
17 (1) Invest state or local funds in a Chinese company or
18 restricted investment product after the effective date of this subchapter; or
19 (2) Deposit state or local funds in a Chinese company that is a
20 bank or financial institution after the effective date of this subchapter.
21
22 25-1-1303. Reporting requirements.
23 (a) Within six (6) months of the effective date of this subchapter and
24 at least annually each year before July 1, a public investment entity shall:
25 (1) Make a good faith effort to identify all investments in a
26 Chinese company or restricted investment product.
27 (A) The good faith effort to identify all investments
28 required under subdivision (1) of this section shall include at least one (1)
29 of the following:
30 (i) A review of publicly available information on
31 where companies are incorporated, headquartered, and conduct business,
32 including without limitation information provided by non-profit
33 organizations, research firms, and government entities;
34 (ii) Contact with asset managers or other applicable
35 service providers contracted by the public investment entity for information
36 on investments the service provider has made on behalf of the public
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1 investment entity;
2 (iii) Use of an independent research firm for
3 assistance; or
4 (iv) Reliance on the representations of an
5 investment manager, investment advisor, or investment index provider as to
6 the identification of a Chinese company within an investment product; and
7 (2) Publish a report listing all the Chinese companies or
8 restricted investment products in which the public investment entity
9 currently has investments.
10 (b) If a public investment entity has determined the public investment
11 entity has no investments required to be reported under subsection (a) of
12 this section, the public investment entity shall file a report indicating
13 that there are no investments to report.
14
15 25-1-1304. Mandatory divestment.
16 (a)(1) If a public investment entity reports an investment in a
17 Chinese company or a restricted investment product under � 25-1-1303, the
18 public investment entity shall establish a plan to divest from the Chinese
19 company or restricted investment product.
20 (2) The public investment entity shall complete the divestment
21 required under subdivision (a)(1) of this section as soon as financially
22 prudent.
23 (3) Notwithstanding subdivision (a)(2) of this section, a public
24 investment entity shall remove one hundred percent (100%) of investments in a
25 Chinese company or a restricted investment product from a fund's assets
26 within twelve (12) months after the public investment entity first reports
27 the investment in the Chinese company or restricted investment product.
28 (b) Divestment as required by subsection (a) of this section is not
29 required from a restricted investment product if:
30 (1) Less than one percent (1%) of the value of the restricted
31 investment product is made up of investments in Chinese companies; or
32 (2) The cost over the next five (5) years to the public
33 investment entity of divesting from the restricted investment product is
34 greater than one percent (1%) of the value of the public investment entity's
35 total investment portfolio.
36 (c)(1) If an investment is subject to divestment under this subchapter
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1 but is locked into a maturity date and an early divestment would result in a
2 financial penalty or loss and cause a negative financial impact to the state,
3 the investment is exempt from divestiture under this subchapter in order to
4 prevent financial harm to the state and to ensure that the fiduciary duty for
5 the state is met.
6 (2) Exemption from divestiture under subdivision (c)(1) of this
7 section shall extend no more than twelve (12) months after the maturity date
8 or after the date on which the divestment would not result in a financial
9 penalty or loss, whichever occurs first.
10
11 25-1-1305. Exemption for private equity and venture capital
12 investments.
13 (a) This subchapter does not restrict a private equity or venture
14 capital investment made in a Chinese company before the effective date of
15 this subchapter.
16 (b) After the effective date of this subchapter, a public investment
17 entity, a service provider contracted by a public investment entity, or any
18 other fiduciary shall not enter a private equity or venture capital
19 investment in a Chinese company.
20
21 25-1-1306. Conflicts.
22 With respect to an action taken in compliance with this subchapter,
23 including without limitation all good faith determinations regarding
24 investing in a Chinese company or restricted investment product, a public
25 investment entity is exempt from any conflicting state statutory or common
26 law obligations, including without limitation an obligation regarding the
27 choice of an asset manager, investment fund, or investment of a fund
28 investment portfolio.
29
30 25-1-1307. Immunity.
31 (a) The state and its officers, agents, and employees and a public
32 investment entity and its board members, executive director, officers,
33 agents, and employees are immune from civil liability for any act or omission
34 related to the removal of an asset from a fund under this subchapter.
35 (b) In addition to the immunity provided under subsection (a) of this
36 section, an officer, agent, and employee of the state and a board member,
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1 executive director, officer, agent, and employee of a public investment
2 entity are entitled to indemnification from the public investment entity for
3 all losses, costs, and expenses, including without limitation reasonable
4 attorney's fees associated with defending against a claim or suit relating to
5 this subchapter.
6
7 25-1-1308. Severability.
8 If any provision of this subchapter or the application of this
9 subchapter to any person or circumstance is held invalid, the invalidity
10 shall not affect other provisions or applications of this subchapter which
11 can be given effect without the invalid provision or application, and to this
12 end, the provisions of this subchapter are declared severable.
13
14 /s/Beaty Jr.
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8 04-07-2025 11:17:15 CRH083Every fact on this page links to its source, starting with the official bill record.