I 

118TH CONGRESS 

1ST SESSION H. R. 6528 

To encourage State and local governments to prohibit certain investment 

activities in the People’s Republic of China, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 30, 2023 

Mr. JOHNSON of South Dakota (for himself, Mr. MOOLENAAR, Mr. WITTMAN, 

Mrs. HINSON, and Mr. GIMENEZ) introduced the following bill; which was 

referred to the Committee on Financial Services 

A BILL 

To encourage State and local governments to prohibit certain 

investment activities in the People’s Republic of China, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘PRC Accountability 

5 and Divestment Act of 2023’’. 


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1 SEC. 2. AUTHORITY OF STATE OR LOCAL GOVERNMENTS 

2 TO DIVEST FROM CERTAIN ENTITIES THAT 

3 INVEST IN CHINA. 

4 (a) SENSE OF CONGRESS.—It is the sense of Con5 gress that the United States should support the decision 

6 of any State or local government that for moral, pruden7 tial, or reputational reasons divests from, or prohibits the 

8 investment of assets of the State or local government in, 

9 a person that engages in investment activities in the Peo10 ple’s Republic of China, as described in subsection (c). 

11 (b) AUTHORITY TO DIVEST.—Notwithstanding any 

12 other provision of law, a State or local government may 

13 adopt and enforce measures that meet the requirements 

14 of subsection (d) to divest the assets of the State or local 

15 government from, or prohibit investment of the assets of 

16 the State or local government in, any person that the 

17 State or local government determines, using credible infor18 mation available to the public, engages in investment ac19 tivities in the People’s Republic of China described in sub20 section (c). 

21 (c) INVESTMENT ACTIVITIES DESCRIBED.—A person 

22 described in this subsection engages in investment activi23 ties in the People’s Republic of China if the person has 

24 an investment in any of the following: 

25 (1) A Chinese entity— 


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1 (A) designated by Executive Order 13959 

2 (50 U.S.C. 1701 note; relating to addressing 

3 the threat from securities investments that fi4 nance Communist Chinese military companies); 

5 (B) designated by Executive Order 14105 

6 (88 Fed. Reg. 54867; relating to addressing 

7 United States investments in certain national 

8 security technologies and products in countries 

9 of concern); or 

10 (C) included in the List of Specially Des11 ignated Nationals and Blocked Persons main12 tained by the Office of Foreign Assets Control. 

13 (2) A Chinese entity— 

14 (A) included on the Non-SDN Chinese 

15 Military-Industrial Complex Companies List 

16 (NS–CMIC List) maintained by the Office of 

17 Foreign Assets Control of the Department of 

18 the Treasury under Executive Order 14032; 

19 (B) that is a Chinese military company or 

20 a military-civil fusion contributor and included 

21 on the list maintained by the Department of 

22 Defense in accordance with section 1260H(b) of 

23 the National Defense Authorization Act for Fis24 cal Year 2021 (10 U.S.C. 113 note); 


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1 (C) included on the list required under sec2 tion 1237 of the National Defense Authoriza3 tion Act for Fiscal Year 1999 (50 U.S.C. 1701 

4 note); 

5 (D) included on the Entity List set forth 

6 in Supplement No. 4 to part 744 of the Export 

7 Administration Regulations; 

8 (E) included on the Denied Persons List 

9 described in section 764.3(a)(2) of the Export 

10 Administration Regulations; 

11 (F) included on the Unverified List set 

12 forth in Supplement No. 6 to part 744 of the 

13 Export Administration Regulations; 

14 (G) included on the Military End User 

15 List set forth in Supplement No. 7 to part 744 

16 of the Export Administration Regulations; 

17 (H) that produces or provides communica18 tions equipment or service on the list published 

19 by the Federal Communications Commission 

20 under section 2(a) of the Secure and Trusted 

21 Communications Networks Act of 2019 (47 

22 U.S.C. 1601(a)); 

23 (I) included on the on the Uyghur Forced 

24 Labor Prevention Act Entity List, maintained 

25 by the Department of Homeland Security; 


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1 (J) included on the Withhold Release Or2 ders and Findings List maintained by the Com3 missioner of U.S. Customs and Border Protec4 tion pursuant to the Uyghur Forced Labor Pre5 vention Act (Public Law 117–78); 

6 (K) included on the list of covered issuers 

7 (as defined in section 104 of the Sarbanes8 Oxley Act of 2002 (15 U.S.C. 7214)) main9 tained by the Securities and Exchange Commis10 sion; or 

11 (L) any other list maintained by the 

12 United States Government that designates a 

13 Chinese entities for a restriction relating to in14 vestment, contracting, or procurement. 

15 (3) A Chinese entity otherwise subject to the 

16 control of a Chinese entity listed in (1) or (2). 

17 (4) Any agency or instrumentality of the Peo18 ple’s Republic of China. 

19 (d) REQUIREMENTS.—Any measure taken by a State 

20 or local government under subsection (b) shall meet the 

21 following requirements: 

22 (1) NOTICE.—The State or local government 

23 shall provide written notice to each person to which 

24 a measure is to be applied. 


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1 (2) TIMING.—The measure shall apply to a per2 son not earlier than the date that is 90 days after 

3 the date on which written notice is provided to the 

4 person under paragraph (1). 

5 (3) OPPORTUNITY FOR HEARING.—The State 

6 or local government shall provide an opportunity to 

7 comment in writing to each person to which a meas8 ure is to be applied. If the person demonstrates to 

9 the State or local government that the person does 

10 not engage in investment activities in the People’s 

11 Republic of China described in subsection (c), the 

12 measure shall not apply to the person. 

13 (4) SENSE OF CONGRESS ON AVOIDING ERRO14 NEOUS TARGETING.—It is the sense of Congress 

15 that a State or local government should not adopt 

16 a measure under subsection (b) with respect to a 

17 person unless the State or local government has 

18 made every effort to avoid erroneously targeting the 

19 person and has verified that the person engages in 

20 investment activities in the People’s Republic of 

21 China described in subsection (c). 

22 (e) NOTICE TO DEPARTMENT OF JUSTICE.—Not 

23 later than 30 days after adopting a measure pursuant to 

24 subsection (b), a State or local government shall submit 


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1 written notice to the Attorney General describing the 

2 measure. 

3 (f) RULE OF CONSTRUCTION.—A Federal law or reg4 ulation, including this Act, shall not preempt any measure 

5 of a State or local government authorized under sub6 section (b). 

7 (g) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—Except as provided in para9 graph (2) or subsection (h), this section applies to 

10 measures adopted by a State or local government be11 fore, on, or after the date of the enactment of this 

12 Act. 

13 (2) NOTICE REQUIREMENTS.—Except as pro14 vided in subsection (h), subsections (d) and (e) apply 

15 to measures adopted by a State or local government 

16 on or after the date of the enactment of this Act. 

17 (h) AUTHORIZATION FOR PRIOR ENACTED MEAS18 URES.— 

19 (1) IN GENERAL.—Notwithstanding any other 

20 provision of this section or any other provision of 

21 law, a State or local government may enforce a 

22 measure (without regard to the requirements of sub23 section (d), except as provided in paragraph (2)) 

24 adopted by the State or local government before the 

25 date of the enactment of this Act that provides for 


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1 the divestment of assets of the State or local govern2 ment from, or prohibits the investment of the assets 

3 of the State or local government in, any person that 

4 the State or local government determines, using 

5 credible information available to the public, engages 

6 in investment activities in the People’s Republic of 

7 China (determined without regard to subsection (c)) 

8 or other business activities in the People’s Republic 

9 of China that are identified in the measure. 

10 (2) APPLICATION OF NOTICE REQUIRE11 MENTS.—A measure described in paragraph (1) 

12 shall be subject to the requirements of paragraphs 

13 (1) and (2) and the first sentence of paragraph (3) 

14 of subsection (d) on and after the date that is 2 

15 years after the date of the enactment of this Act. 

16 (i) DEFINITIONS.—In this section: 

17 (1) ASSETS.— 

18 (A) IN GENERAL.—Except as provided in 

19 subparagraph (B), the term ‘‘assets’’ refers to 

20 public monies and includes any pension, retire21 ment, annuity, or endowment fund, or similar 

22 instrument, that is controlled by a State or 

23 local government. 

24 (B) EXCEPTION.—The term ‘‘assets’’ does 

25 not include employee benefit plans covered by 


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1 title I of the Employee Retirement Income Se2 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

3 (2) CHINESE ENTITY.—The term ‘‘Chinese en4 tity’’ means— 

5 (A) a person that is incorporated in, has a 

6 principal place of business in, or is organized 

7 under the laws of the People’s Republic of 

8 China; 

9 (B) a person whose equity securities are 

10 traded in the ordinary course of business on one 

11 or more exchanges in the People’s Republic of 

12 China; or 

13 (C) a person who is controlled by a single 

14 entity or individual, that is— 

15 (i) a citizen, national, or resident of 

16 the People’s Republic of China, other than 

17 an individual who is— 

18 (I) a citizen or lawful permanent 

19 resident of the United States; or 

20 (II) domiciled in Taiwan and pos21 sesses a valid identification card or 

22 number issued by the Government of 

23 Taiwan; 

24 (ii) an agent or instrumentality of the 

25 People’s Republic of China; or 


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1 (iii) a person described in subpara2 graph (A) or (B). 

3 (3) CONTROL.—The term ‘‘control’’ has the 

4 meaning given that term in part 800.208 of title 31, 

5 Code of Federal Regulations, or any successor regu6 lations. 

7 (4) INVESTMENT.—The ‘‘investment’’ in8 cludes— 

9 (A) a commitment or contribution of funds 

10 or property; 

11 (B) a loan or other extension of credit; and 

12 (C) the entry into or renewal of a contract 

13 for goods or services. 

14 (5) MEASURE.—The term ‘‘measure’’ means a 

15 law or regulation. 

16 (6) PEOPLE’S REPUBLIC OF CHINA.—The term 

17 ‘‘People’s Republic of China’’ includes any and all 

18 Special Administrative Regions of China, including 

19 Hong Kong and Macau but not including Taiwan. 

20 (7) PERSON.—The term ‘‘person’’ means— 

21 (A) a natural person, corporation, com22 pany, business association, partnership, society, 

23 trust, or any other nongovernmental entity, or24 ganization, or group; 


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1 (B) any governmental entity or instrumen2 tality of a government, including a multilateral 

3 development institution (as defined in section 

4 1701(c)(3) of the International Financial Insti5 tutions Act (22 U.S.C. 262r(c)(3))); and 

6 (C) any successor, subunit, parent entity, 

7 or subsidiary of, or any entity under common 

8 ownership or control with, any entity described 

9 in subparagraph (A) or (B). 

10 (8) STATE OR LOCAL GOVERNMENT.—The term 

11 ‘‘State or local government’’ includes— 

12 (A) any State and any agency or instru13 mentality thereof; 

14 (B) any local government within a State, 

15 and any agency or instrumentality thereof; 

16 (C) any other governmental instrumen17 tality of a State or locality; and 

18 (D) any public institution of higher edu19 cation within the meaning of the Higher Edu20 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

21 (9) STATE.—The term ‘‘State’’ means each of 

22 the several States. 


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1 SEC. 3. SAFE HARBOR FOR CHANGES OF INVESTMENT 

2 POLICIES BY ASSET MANAGERS. 

3 (a) IN GENERAL.—Section 13(c)(1) of the Invest4 ment Company Act of 1940 (15 U.S.C. 80a–13(c)(1)) is 

5 amended— 

6 (1) in subparagraph (A), by striking ‘‘or’’ at 

7 the end; 

8 (2) in subparagraph (B), by striking the period 

9 at the end and inserting ‘‘; or’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(C) engage in investment activities in the 

12 People’s Republic of China described in section 

13 2(c) of the PRC Accountability and Divestment 

14 Act of 2023.’’. 

15 (b) REGULATIONS.—Not later than 120 days after 

16 the date of the enactment of this Act, the Securities and 

17 Exchange Commission shall issue any revisions the Com18 mission determines to be necessary to the regulations re19 quiring disclosure by each registered investment company 

20 that divests itself of securities in accordance with section 

21 13(c) of the Investment Company Act of 1940 to include 

22 divestments of securities in accordance with paragraph 

23 (1)(C) of such section, as added by subsection (a). 


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1 SEC. 4. SENSE OF CONGRESS REGARDING CERTAIN ERISA 

2 PLAN INVESTMENTS. 

3 It is the sense of Congress that a fiduciary of an em4 ployee benefit plan, as defined in section 3(3) of the Em5 ployee Retirement Income Security Act of 1974 (29 

6 U.S.C. 1002(3)), may divest plan assets from, or avoid 

7 investing plan assets in, any person the fiduciary deter8 mines engages in investment activities in the People’s Re9 public of China described in section 2(c) of this Act, with10 out breaching the responsibilities, obligations, or duties 

11 imposed upon the fiduciary by subparagraph (A) or (B) 

12 of section 404(a)(1) of the Employee Retirement Income 

13 Security Act of 1974 (29 U.S.C. 1104(a)(1)), if— 

14 (1) the fiduciary makes such determination 

15 using credible information that is available to the 

16 public; and 

17 (2) the fiduciary prudently determines that the 

18 result of such divestment or avoidance of investment 

19 would not be expected to provide the employee ben20 efit plan with— 

21 (A) a lower rate of return than alternative 

22 investments with commensurate degrees of risk; 

23 or 


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1 (B) a higher degree of risk than alter2 native investments with commensurate rates of 

3 return. 

Æ 


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