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AB-20 Public employee retirement systems: divestment: Dakota Access Pipeline.(2017-2018)

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Date Published: 12/05/2016 08:52 PM
AB20:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 20


Introduced by Assembly Member Kalra

December 05, 2016


An act to add Section 7513.72 to the Government Code, relating to public employee retirement systems.


LEGISLATIVE COUNSEL'S DIGEST


AB 20, as introduced, Kalra. Public employee retirement systems: divestment: Dakota Access Pipeline.
The California Constitution authorizes the Legislature to prohibit, by statute, investments of a retirement board if it is in the public interest to do so and if the prohibition satisfies the board’s standards of fiduciary care and loyalty.
Existing law prohibits the boards of administration of the Public Employees’ Retirement System and the State Teachers’ Retirement System from investing funds in a company with active business operations in Sudan, as specified, from investing in a company that has certain business operations in Iran, as specified, and from investing in thermal coal companies, as defined.
This bill would prohibit the boards of administration of the Public Employees’ Retirement System and the State Teachers’ Retirement System, on and after January 1, 2018, from making additional investments or renewing investments in a company constructing, or funding the construction of, the Dakota Access Pipeline, as defined. This bill would require the boards, on or before July 1, 2018, to liquidate their investments in a company constructing, or funding the construction of, the Dakota Access Pipeline. The bill would provide that it does not require a board to take any action unless the board determines in good faith that the action is consistent with the board’s fiduciary responsibilities established in the constitution. The bill would make related legislative findings and declarations.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) The Dakota Access Pipeline that is being built in the southern region of North Dakota was originally planned to run north of Bismark, North Dakota, but for a variety of reasons, including environmental concerns regarding potential harm to the water supply of Bismarck and surrounding communities, it was rerouted south.
(b) The Dakota Access Pipeline is now routed just north and upstream of the Standing Rock Sioux Reservation. Thousands of people representing over 200 indigenous tribes have set up camp in an effort to block the construction of the pipeline through sacred land and, most significantly, to protect the water supply that the Sioux tribe there relies upon for its survival.
(c) The hostility of local law enforcement and the North Dakota national guard against unarmed protestors has reached dangerous levels. In recent confrontations, law enforcement has used water cannons against unarmed protesters in frigid temperatures, in addition to the ongoing use of rubber bullets and chemical agents.
(d) As Californians, we must hold ourselves to a high standard of conduct, including how we invest our pension funds. Both morally and fiscally, the millions of dollars that the Public Employees’ Retirement System and the State Teachers’ Retirement System have invested in the Dakota Access Pipeline can be better spent elsewhere.
(e) The time has come for us as a state to divest from fossil fuels and focus on emerging technologies and clean, renewable energy. Because water is life, the most immediate action we should take is to divest from the Dakota Access Pipeline.

SEC. 2.

 Section 7513.72 is added to the Government Code, to read:

7513.72.
 (a) As used in this section:
(1) “Board” means the Board of Administration of the Public Employees’ Retirement System or the Teachers’ Retirement Board of the State Teachers’ Retirement System, as applicable.
(2) “Company” means a sole proprietorship, organization, association, corporation, partnership, venture, or other entity, or its subsidiary or affiliate, that exists for profit-making purposes or to otherwise secure economic advantage.
(3) “Dakota Access Pipeline” means the oil pipeline connecting the Bakken oil fields in northwest North Dakota to Illinois, traveling through South Dakota and Iowa, that runs north and upstream of the Standing Rock Sioux Reservation.
(4) “Investment” means the purchase, ownership, or control of publicly issued stock, corporate bonds, or other debt instruments issued by a company.
(5) “Public employee retirement funds” means the Public Employees’ Retirement Fund described in Section 20062 of this code and the Teachers’ Retirement Fund described in Section 22167 of the Education Code.
(b) On and after January 1, 2018, the board shall not make additional investments or renew existing investments of public employee retirement funds in a company constructing, or funding the construction of, the Dakota Access Pipeline.
(c) On or before July 1, 2018, the board shall liquidate its investments in a company constructing, or funding the construction of, the Dakota Access Pipeline.
(d) Nothing in this section shall require a board to take action as described in this section unless the board determines in good faith that the action described in this section is consistent with the fiduciary responsibilities of the board described in Section 17 of Article XVI of the California Constitution.