The proposed bill would amend current statutes by adding a new article to Title 35, Chapter 2 of the Arizona Revised Statutes, which would prohibit publicly managed funds from holding investments in the People's Republic of China and related entities. Specifically, it would define prohibited investments to include companies owned, controlled, or domiciled in China, as well as those majority-owned by entities linked to the Chinese government or military. The bill mandates that publicly managed funds must begin divesting from these prohibited holdings immediately and complete the divestment within one year, unless certain financial thresholds are met that would exempt them from this requirement.

Additionally, the bill introduces provisions that clarify the process for identifying prohibited investments, including reviewing publicly available information and consulting with asset managers. It also provides legal protections for publicly managed funds and their representatives, exempting them from conflicting obligations and ensuring indemnification against claims related to divestment actions. The bill emphasizes the state's policy to cease funding companies associated with the Chinese government and military, thereby reinforcing a stance against investments in entities linked to geopolitical tensions with China.