Bill Text: NY A01536 | 2019-2020 | General Assembly | Introduced

Bill Title: Limits investments of public pension funds in fossil fuel companies.

Spectrum: Partisan Bill (Democrat 38-0)

Status: (Introduced) 2019-01-15 - referred to governmental employees [A01536 Detail]

Download: New_York-2019-A01536-Introduced.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 15, 2019
        Introduced  by  M.  of A. ORTIZ, MOSLEY, FAHY, SIMON, THIELE, GOTTFRIED,
          Sponsored  by  --  M.    of  A.  COOK -- read once and referred to the
          Committee on Governmental Employees
        AN ACT to amend the retirement and social security law, in  relation  to
          limitations on investments of public pension funds
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. This act shall be known and may be  cited  as  the  "fossil
     2  fuel divestment act".
     3    § 2. Section 423 of the retirement and social security law, as amended
     4  by chapter 770 of the laws of 1970, is amended to read as follows:
     5    §  423.  Investments.    [a.]  1.  On  and after April first, nineteen
     6  hundred sixty-seven, the comptroller shall invest the  available  monies
     7  of  the common retirement fund in any investments and securities author-
     8  ized by law for each retirement system and shall hold  such  investments
     9  in his name as trustee of such fund, notwithstanding any other provision
    10  of  this  chapter.  Participating interests in such investments shall be
    11  credited to each retirement system in the manner and at the time  speci-
    12  fied  in  [paragraph] subdivision two of section four hundred twenty-two
    13  of this article.
    14    [b.] 2. (a) To assist in the management of the monies  of  the  common
    15  retirement  fund,  the  comptroller shall appoint an investment advisory
    16  committee consisting of not less than seven members who shall serve  for
    17  his  term of office. A vacancy occurring from any cause other than expi-
    18  ration of term shall be filled by the comptroller for the  remainder  of
    19  the term. Each member of the committee shall be experienced in the field
    20  of  investments  and shall have served, or shall be serving, as a senior
    21  officer or member of the board of an insurance company,  banking  corpo-
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 1536                             2
     1  ration  or  other  financial or investment organization authorized to do
     2  business in the state of New York. The committee shall advise the  comp-
     3  troller  on  investment  policies  relating  to the monies of the common
     4  retirement  fund  and  shall  review,  from time to time, the investment
     5  portfolio of the fund and make such recommendations  as  may  be  deemed
     6  necessary.
     7    (b) The comptroller shall appoint a separate mortgage advisory commit-
     8  tee,  with  the advice and consent of the investment advisory committee,
     9  to review proposed mortgage and real estate investments  by  the  common
    10  retirement  fund. In making investments, as authorized by law, the comp-
    11  troller shall be guided by policies established by each  committee  from
    12  time  to  time; and, in the event the mortgage advisory committee disap-
    13  proves a proposed mortgage or real estate investment, such shall not  be
    14  made.
    15    (c)  No officer or employee of any state department or agency shall be
    16  eligible for  membership  on  either  committee.  Each  committee  shall
    17  convene  periodically  on  call  of  the  comptroller, or on call of the
    18  chairman. The members of each committee shall be entitled to  reimburse-
    19  ment  for  their  actual  and  necessary  expenses  but shall receive no
    20  compensation for their services.
    21    3. (a) Notwithstanding any provision of law to the contrary, the comp-
    22  troller shall not have the power to invest the available monies  of  the
    23  common  retirement  fund  in any stocks, debt or other securities of any
    24  corporation or company, or any subsidiary, affiliate or  parent  of  any
    25  corporation  or  company,  among the two hundred largest publicly traded
    26  fossil fuel companies, as established by carbon content  in  the  compa-
    27  nies'  proven  oil,  gas  and  coal  reserves. The comptroller shall, in
    28  accordance with sound investment criteria and consistent with his or her
    29  fiduciary obligations, divest any such stocks or other securities wheth-
    30  er they are owned directly or held  through  separate  accounts  or  any
    31  commingled  funds.  Divestment  pursuant  to  this  subdivision  must be
    32  completed within five years of the effective date of  this  subdivision,
    33  with  the  exception  of  companies engaged in the mining, extraction or
    34  production of coal, divestment from which must  be  completed  no  later
    35  than one year after the effective date of this subdivision.
    36    (b)  The comptroller shall be permitted to cease divesting from compa-
    37  nies under paragraph (a) of this subdivision, reinvest in companies from
    38  which it divested under paragraph (a) of this subdivision,  or  continue
    39  to invest in companies from which it has not yet divested upon clear and
    40  convincing  evidence showing that as a direct result of such divestment,
    41  the total and aggregate value of all assets under management by,  or  on
    42  behalf of, the common retirement fund becomes or shall become: (i) equal
    43  to  or  less  than ninety-nine and one-half percent; or (ii) one hundred
    44  percent less fifty basis points of the hypothetical value of all  assets
    45  under  management by, or on behalf of, the common retirement fund assum-
    46  ing no divestment from any company had occurred under said paragraph (a)
    47  of this subdivision.   Cessation  of  divestment,  reinvestment  or  any
    48  subsequent  ongoing  investment  authorized  by  this  section  shall be
    49  strictly limited to the minimum steps necessary to avoid the contingency
    50  set forth in the preceding sentence. For any  cessation  of  divestment,
    51  and  in  advance  of such cessation, authorized by this subdivision, the
    52  comptroller shall provide a written report to the attorney general,  the
    53  senate  standing committee on civil service and pensions, and the assem-
    54  bly standing committee on governmental employees, updated  semi-annually
    55  thereafter  as  applicable, setting forth the reasons and justification,

        A. 1536                             3
     1  supported by clear and convincing evidence, for its decisions  to  cease
     2  divestment, to reinvest or to remain invested in fossil fuel companies.
     3    (c)  Within  sixty days of the effective date of this subdivision, the
     4  comptroller shall facilitate the identification of fossil fuel companies
     5  from which the common retirement fund is required to divest under  para-
     6  graph  (a)  of  this  subdivision, and file a copy of this list with the
     7  attorney general, the senate standing committee  on  civil  service  and
     8  pensions, and the assembly standing committee on governmental employees.
     9  Annually thereafter, the public fund shall file a report with the attor-
    10  ney  general,  the  senate  standing  committee  on  civil  service  and
    11  pensions, and the assembly standing committee on governmental  employees
    12  that includes: (i) all investments sold, redeemed, divested or withdrawn
    13  in  compliance  with  paragraph  (a)  of  this subdivision; and (ii) all
    14  prohibited investments from which the common retirement fund has not yet
    15  divested under paragraph (a) of this subdivision.
    16    § 3. This act shall take effect immediately.