Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698746910691.pdf (Micronesia, Federated States of)
TWENTY-SECOND CONGRESS OF THE FEDERATED STATES OF MICRONESIA FIRST REGULAR SESSION, 2021 CONGRESSIONAL BILL NO.

22-25 P.C.

NO.

22-32 PUBLIC LAW NO.

22-06 AN ACT To amend sections 1202, 1204, and 1216 of title 55 of the Code of the Federated States of Micronesia (Annotated), as amended by Public Laws Nos.

19-67, 20-185, and 21-12, to clarify definitions, to clarify the purpose and restrictions of the FSM Trust Fund, and for other purposes.
BE IT ENACTED BY THE CONGRESS OF THE FEDERATED STATES OF MICRONESIA: 1 Section 1.

Section 1202 of title 55 of the Code of the 2 Federated States of Micronesia (Annotated), as amended by Public 3 Law No.

19-67, is hereby further amended to read as follows: "Section 1202.

Definitions.
Unless otherwise specified or clear from the context, words and phrases used in this chapter shall have the following meanings: (1) 'Baseline Funding' means the balance of the FSM Trust Fund on January 1, 2016 not including the balances of the State Sub-Accounts; (2) 'Board' means the Board of Trustees of the Fund appointed pursuant to section 1208 of this title; (3) 'Contributing government' means the government of any State of the FSM or the National Government once such government has made a contribution of funds to the State Sub-Account’s; (4) 'FSM' means the sovereign nation of the Federated States of Micronesia; CBL 22-26/PC #22-13 P.C.
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22-25 (5) 'Financial year' means the fiscal year of the Fund, which shall be the twelve-month period ending on the last day of each September; (6) 'Fiscal year' means the fiscal year of the National Government; (7) 'Fund' means the FSM Trust Fund created by this chapter, including the accounts therein; (8) 'Fund custodians' means the one or more firms selected by the Board to assume responsibility for the physical possession of the Fund assets or evidences of assets; (9) 'Fund managers' means one or more firms selected by the Board to manage the investment and reinvestment of the Fund's resources; (10) 'Fund returns' means the returns accruing to the Fund by way of income generated from the Fund's resources and the capital appreciation of those resources; (11) ‘General Fund’ means the General Fund of the Federated States of Micronesia, into which all revenues raised pursuant to the tax laws and other revenue laws shall be deposited.
(12) 'National Government' means the National Government of the FSM; (13) 'Other participating government' means a State 2 of 5 P.C.

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22-25 government of the FSM; (14) 'Real value' means the value of contributions to the Fund adjusted annually at the beginning of the financial year in the same percentage as the United States Bureau of Labor Statistics Consumer Price Index for All Urban Consumers All Items, United States City Average of the previous 12 months; and (15) 'Reinvestment' means the process whereby Fund returns, whether in the form of income or appreciation, become part of the capital of the Fund.” Section 2.
Section 1204 of title 55 of the Code of 12 the Federated States of Micronesia (Annotated), as amended 13 by Public Laws Nos.

19-67 and 21-12 is hereby further 14 amended to read as follows: “Section 1204.

Purpose.

(1) The purpose of the Trust Fund is to establish sustainable and permanent financial resources to assist the National and State Governments in addressing potential long-term challenges and unforeseen threats.
(2) The establishment of Account A and Account B is to create a disciplined approach to ensure the protection of the Fund’s Real Value into perpetuity while providing sustainable source to supplement the needs of the General Fund.

(3) The purpose of the State Sub-Account’s A and B of 3 of 5 P.C.

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22-25 1 2 3 4 the Fund are consistent with the subsections (1) above and are further defined in section 1217 of this chapter.” Section 3.
Section 1216 of title 55 of the Code of the 5 Federated States of Micronesia (Annotated), as amended by Public 6 Laws Nos.

19-67 and 20-185, is hereby further amended to read as 7 follows: “Section 1216.

Miscellaneous restrictions.

(1) Except as provided in subsection 1211(a) of this chapter, the Fund shall not borrow money.

(2) The Fund shall not be used to guaranty the debt of another person or entity.
(3) In recognition of the existential threat from climate change, it is mandate that the investments in the Trust fund shall follow a sustainable investment policy that integrates the considerations of the risks and opportunities coming from a global transition into a lower carbon economy, such as renewable and clean energy.

Specifically, current investment returns shall be balanced against long term sustainability goals.
Portfolio management techniques shall evolve with the conform to the prevailing green finance policies a.

Investment portfolio shall seek protection from investment risks associated with rapid global decarbonization.

4 of 5 P.C.

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22-25 b.
22-25 b.

Investment portfolio shall seek investment opportunities associated with a global transition to a lower carbon economy such as emerging technology and industries of renewable energy, energy efficiency, water, waste management, carbon capture, pollution control, food & sustainable agriculture, as well as other goals set forth in the United Nations Sustainable Development Goals (UNSDGs).” Section 4.
This act shall become law upon approval by the 10 President of the Federated States of Micronesia or upon its 11 becoming law without such approval.

12 June 1st , 2021 /s/ David W. Panuelo David W. Panuelo President Federated States of Micronesia 5 of 5