Adds to existing law to require certain governmental entities in Idaho to divest from investments in foreign adversaries.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 640 BY COMMERCE AND HUMAN RESOURCES COMMITTEE AN ACT1 RELATING TO FOREIGN ADVERSARIES; PROVIDING LEGISLATIVE INTENT; AMENDING TI-2 TLE 57, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 21, TITLE 57, IDAHO3 CODE, TO DEFINE TERMS, TO ESTABLISH PROVISIONS PROHIBITING INVESTMENTS4 IN FOREIGN ADVERSARIES, TO ESTABLISH PROVISIONS TO REQUIRE CERTAIN5 DIVESTMENTS, AND TO PROVIDE FOR CERTAIN LIMITATIONS; PROVIDING SEVER-6 ABILITY; AND DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE.7

Be It Enacted by the Legislature of the State of Idaho:8

SECTION 1. LEGISLATIVE INTENT. The Foreign Adversary Divestment Act9 will ensure that the State of Idaho's public investment dollars are not10 put at risk in countries of concern and do not fund the development of the11 military technologies and surveillance tools of foreign adversaries that12 impede the furthering of the State of Idaho's interests and the interests of13 the United States of America, by requiring the divestment of public pension14 dollars and university endowment funds from countries of concern.15

SECTION 2. That Title 57, Idaho Code, be, and the same is hereby amended16 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-17 ter 21, Title 57, Idaho Code, and to read as follows:18 CHAPTER 2119 THE FOREIGN ADVERSARY DIVESTMENT ACT20 57-2101. DEFINITIONS. As used in this chapter:21 (1) "Company" means any sole proprietorship, organization, associa-22 tion, corporation, partnership, joint venture, limited partnership, lim-23 ited liability partnership, limited liability company, or other entity or24 business association, including wholly owned subsidiaries, majority-owned25 subsidiaries, parent companies, or affiliates of those entities or business26 associations, that exist for the purpose of making profit.27 (2) "Divestment" means the sale or otherwise contractual end of any28 current or planned investments.29 (3) "Domicile" means either the country in which a company is regis-30 tered, where the company's affairs are primarily completed, or where the ma-31 jority of ownership share is held.32 (4) "Foreign adversary" means any foreign country, foreign government,33 or foreign government person engaged in a long-term pattern of serious in-34 stances of conduct significantly adverse to the national security of the35 United States or security and safety of United States persons as determined36 in 15 CFR 791.4. The list of foreign adversaries provided in 15 CFR 791.4,37 as it existed on February 1, 2026, includes the People's Republic of China,38 including the Hong Kong special administrative region and the Macau special39 administrative region, the Republic of Cuba, the Islamic Republic of Iran,40

2 the Democratic People's Republic of Korea, the Russian Federation, and the1 Venezuelan regime of Nicolás Maduro.2 (5) "Governmental entity" means the state of Idaho, any state agency,3 any political subdivision within the state of Idaho, any public institution4 of higher education within the state of Idaho, any local government within5 the state of Idaho, any taxing district within the state of Idaho, or any6 agency or organization controlled by such entities.7 (6) "Investment" means any transfer of funds in any active or passive8 structure, whether direct or indirect, that seeks to generate revenue or ac-9 complish any other gain, including any non-monetary gain.10 (7) "Official government capacity" means any role in a government or11 its subsidiaries, whether elected or appointed.12 (8) "State-managed fund" means any short-term or long-term investment13 structure that is managed, run, controlled, or otherwise overseen by any14 governmental entity that such governmental entity has primary discretion15 over or vested interest in. This definition shall apply to any fund that16 is managed by a third-party entity, such as a fiduciary, but subject to the17 purview or direction of a governmental entity and populated with any funds18 from such governmental entity. This shall include but is not limited to:19 (a) Public pension funds, public retirement funds, or other funds that20 are sponsored, maintained, or contributed to or required to be con-21 tributed to by any governmental entity;22 (b) Investment funds, rainy day funds, savings accounts, or other in-23 vestment structures of any governmental entity; and24 (c) University or college endowments, trusts, or other investment25 structures that constitute, wholly or in part, a public institution of26 higher education's investable assets.27 (9) "State-owned enterprise" means any company owned or controlled,28 wholly or in part, by a government or by individuals acting in official gov-29 ernment capacities in any form.30 57-2102. INVESTMENTS IN FOREIGN ADVERSARIES PROHIBITED. (1) All31 state-managed funds are prohibited from holding investments in any foreign32 adversary, state-owned enterprise of a foreign adversary, company domiciled33 within a foreign adversary, or company owned or controlled by a foreign ad-34 versary, state-owned enterprise of a foreign adversary, company domiciled35 within a foreign adversary, or any other entity within a foreign adversary.36 (2) All state-managed funds are prohibited from investing or deposit-37 ing public funds in any bank that is domiciled or has its principal place of38 business in a foreign adversary.39 57-2103. REQUIRED DIVESTMENT. All state-managed funds shall immedi-40 ately in good faith begin divestment of any holdings prohibited by the provi-41 sions of this chapter.42 57-2104. LIMITATIONS. Nothing in this chapter shall be construed to43 limit, inhibit, conflict, impede, or otherwise interfere with required fi-44 nancial safeguards, fiduciary requirements, or other sound investment cri-45 teria that any state-managed fund is subject to that are unrelated to divest-46

3 ment from foreign adversaries or required to comply with any applicable fed-1 eral law.2

SECTION 3. SEVERABILITY. The provisions of this act are hereby declared3 to be severable and if any provision of this act or the application of such4 provision to any person or circumstance is declared invalid for any reason,5 such declaration shall not affect the validity of the remaining portions of6 this act.7

SECTION 4. An emergency existing therefor, which emergency is hereby8 declared to exist, this act shall be in full force and effect on and after9 July 1, 2026.10