Summary: The Divestment from Fossil Fuels Act requires the state/city/county’s retirement fund to divest from companies that mine, drill and produce fossil fuels.
Based upon New York SB 4596 (2018)
SECTION 1. SHORT TITLE
This Act shall be called the “Divestment from Fossil Fuels Act.”
SECTION 2. FINDINGS AND PURPOSE
(A) FINDINGS—The legislature finds that:
(B) PURPOSE—This law is enacted to protect the health and welfare of the residents and future residents of [STATE/CITY/COUNTY].
SECTION 3. PROHIBITION
After section XXX [which is in the section on administration of public pension funds], the following new section XXX shall be inserted:
(X) DIVESTMENT FROM FOSSIL FUELS
(A) Notwithstanding any provision of law to the contrary, the [Comptroller] shall not have the power to invest the available monies of the common retirement fund in any stocks, debt or other securities of any corporation or company, or any subsidiary, affiliate or parent of any corporation or company, among the two hundred largest publicly traded fossil fuel companies, as established by carbon content in the companies’ proven oil, gas and coal reserves. The [Comptroller] shall, in accordance with sound investment criteria and consistent with his or her fiduciary obligations, divest any such stocks or other securities whether they are owned directly or held through separate accounts or any commingled funds. Divestment pursuant to this subsection must be completed by [January 1, 2022], with the exception of companies engaged in the mining, extraction or production of coal, divestment from which must be completed no later than one year after the effective date of this subsection.
(B) The [Comptroller] shall be permitted to cease divesting from companies under paragraph (A) of this subsection, reinvest in companies from which it divested under paragraph (A) of this subsection, or continue to invest in companies from which it has not yet divested upon clear and convincing evidence showing that as a direct result of such divestment, the total and aggregate value of all assets under management by, or on behalf of, the common retirement fund becomes or shall become:
Cessation of divestment, reinvestment or any subsequent ongoing investment authorized by this subsection shall be strictly limited to the minimum steps necessary to avoid the contingency set forth in the preceding sentence. For any cessation of divestment, and in advance of such cessation, authorized by this subsection, the [Comptroller] shall provide a written report to the [Attorney General], the [Senate standing committee on pensions], and the [Assembly standing committee on government employees], updated semi-annually thereafter as applicable, setting forth the reasons and justification, supported by clear and convincing evidence, for its decisions to cease divestment, to reinvest or to remain invested in fossil fuel companies.
(C) Within sixty days of the effective date of this subsection, the [Comptroller] shall facilitate the identification of fossil fuel companies from which the common retirement fund is required to divest under paragraph (A) of this subsection, and file a copy of this list with the [Attorney General], the [Senate standing committee on pensions], and the [Assembly standing committee on government employees]. Annually thereafter, the public fund shall file a report with the [Attorney General], the [Senate standing committee on pensions], and the [Assembly standing committee on government employees] that includes:
SECTION 4. EFFECTIVE DATE
This law shall become effective on July 1, 20XX.