by Janet Cox
On April 13, the California State Senate Public Employment and Retirement Committee approved SB 185, the Public Divestiture of Thermal Coal Companies Act, 3–2 on a party line vote.
The bill, sponsored by Senate President pro Tempore Kevin de León, requires the state’s two largest public pension funds to divest from companies that derive at least half of their revenues from coal mining/extraction. It now moves to the Senate Appropriations Committee; from there to the floor of the Senate; and then on to the Assembly. With our help, it can be the first divestment bill passed by a state legislature.
All of you who wrote or collected letters of support for the bill after we and 350.org sent out the call last week made a real difference. The email blast that 350.org sent to folks in California resulted in almost 4,500 messages directly to state senators. Fossil Free California sent a letter to the committee urging passage, jointly with 350 Bay Area. And 16 other organizations also signaled their support, including 350 Sacramento, the Friends Committee on Legislation of California, and Physicians for Social Responsibility.
A good lineup of speakers expressed support before the committee voted. The Chamber of Commerce and the Western States Power Association sent lobbyists to oppose the bill, on the basis that 1) the legislature shouldn’t single out “one type of business” for divestment (because—well, who’s next???!!!) and 2) the requirement in the bill that the pension funds study and report on the feasibility of divesting from oil and gas is inappropriate because we’re not as bad as Iran or Sudan (targets of previous divestment initiatives), and the fact of the study will hurt the feelings of all the people who work for the oil and gas industry in California.
You can watch the hearing here. In its press release, the committee summarized the bill’s provisions:
Require the Public Employees Retirement System and the State Teacher’s Retirement System, consistent with their fiduciary responsibilities, to divest their holding of thermal coal power and require their governing boards to undertake all of the following:
- Divest the public employee retirement funds of any investments in thermal coal companies;
- Make no additional or new investments or renew existing investments in thermal coal companies; and
- Liquidate the investments of the board in a thermal coal company no later than 18 months after the statute applies to that company.
On or before January 1, 2017, require the CalPERS and CalSTRS boards to file a report with the Legislature and the Governor containing all of the following:
- Actions it has taken to implement this statute, including a list of investments and companies of which it has divested.
- Recommendations to ensure the board is able to act consistent with its fiduciary responsibilities.
- In consultation with the Secretary of the California Environmental Protection Agency, a comprehensive assessment of the feasibility of divesting the public employee retirement funds of additional fossil fuel investments such as natural gas and petroleum, and its implications for the fund.
Earlier on April 13, the CalPERS Investment Committee voted to accept staff’s recommendation that they take “no position” on the bill. Before that vote, Board Member Richard Costigan said emphatically that “no position” is actually a strong statement. Theresa Taylor, who spoke in favor of supporting the bill, voted no. Five of us spoke at the CalPERS meeting, and no one spoke against the bill. The Investment Committee meeting video will be linked here in the next week or so.
So—we’re on our way. I’m hoping all of the letters you have written will follow the bill through the Senate process. I’ll let everyone know if that is not the case.
Stay tuned for the next gripping installment!
Janet Cox is leading the Fossil Free California campaign to pass SB 185.