OLR Bill Analysis

HB 5269



This bill requires the state treasurer to divest and not further invest in any security or instrument issued by Venezuela. It also requires her to review the state's major investment holdings to determine the extent to which state funds are invested in companies doing business in Venezuela.

The bill allows the state treasurer to divest in any company doing business with Venezuela or decide to not further invest state funds or not enter any future investments with such companies. The bill requires the state treasurer to consider several factors when making this determination, described below. If she determines divestment is warranted, she must give notice to the company that funds will be divested for as long as the company does business in Venezuela.

Under the bill, the state treasurer, whenever feasible and consistent with her fiduciary duties, must encourage certain companies in which state funds are invested to act responsibly and not take actions promoting or enabling Venezuela's corruption and the Venezuelan peoples' impoverishment. This requirement applies to companies that the United State Department of Treasury's Office of Foreign Assets Control or the state treasurer identifies as doing business in Venezuela.

The bill also requires the state treasurer to report, at least once per fiscal year, to the Investment Advisory Council on any actions she takes under the bill.

EFFECTIVE DATE: October 1, 2018


The bill requires the state treasurer to determine the extent to which state funds are invested in companies doing business in Venezuela and determine whether to divest, not further invest state funds, or not enter into any future investments with such companies. Under the bill, invest means a commitment of funds or other assets to a company, including ownership or control of a share or interest in the company, its bonds, or other debt instruments. Under the bill, a company is any:

1. corporation, utility, partnership, or joint venture;

2. franchisor or franchisee;

3. trust;

4. entity investment vehicle;

5. financial institution; or

6. other entity or business association, including all wholly-owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of such entities or business associations that exist for the purpose of making profit.

The bill's provisions apply for companies doing business in Venezuela, which, under the bill, means engaging in commerce in any form in the Bolivarian Republic of Venezuela, its government, and any of its agencies, instrumentalities, or political subdivisions, including (1) maintaining equipment, facilities, personnel, or other business or commerce apparatus in Venezuela; (2) leasing or owning real or personal property in Venezuela; or (3) engaging in any business activity with Venezuela's government.


The bill requires the state treasurer to consider the following factors when determining whether to take action under the bill:

1. revenues the company pays directly to the Venezuelan government,

2. whether the company knowingly obstructs lawful inquiries into its operations and investments in Venezuela,

3. whether the company attempts to circumvent any applicable United States sanctions,

4. the company's humanitarian activities in Venezuela,

5. whether the company is authorized by the United States federal government to do business in Venezuela, and

6. any other factor the state treasurer deems prudent.

She must also consider whether the company's business conducted in Venezuela involves contracts with or provisions of supplies or services to:

1. the Venezuelan government;

2. companies in which the Venezuelan government has any direct or indirect equity share;

3. consortia or projects commissioned by the Venezuelan government; or

4. companies involved in such consortia or projects where such business involves oil-related activities, investments that directly and significantly contribute to the development of Venezuela's petroleum resources (i.e., petroleum, petroleum byproducts, and natural gas), or any other business activity that is subject to economic sanctions imposed by the United States government.

Under the bill, oil-related activities exclude selling retail gasoline and related consumer products, but include:

1. owning rights to oil blocks;

2. exporting, extracting, producing, refining, processing, exploring for, transporting, selling, or trading oil;

3. constructing, maintaining, or operating a pipeline, refinery, or other oil field infrastructure; and

4. facilitating such activities, including providing supplies and services in support of such activities.


Government Administration and Elections Committee

Joint Favorable