Establishes the teachers' fossil fuel divestment act; requires the New York state teachers' retirement system to divest the retirement system of any stocks, securities, equities, assets, or other obligations of corporations or companies included on an exclusion list of coal producers and oil and gas producers.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1580
SPONSOR: Kelles TITLE OF BILL:
An act to amend the education law, in relation to requiring the New York
state teachers' retirement system to divest the retirement system of any
investments in corporations or companies included on an exclusion list
of coal producers and oil and gas producers
SUMMARY OF PROVISIONS:
Sec. 1- title of the bill: "Teachers' Fossil Fuel Divestment Act"
Sec. 2 - legislative findings
Sec. 3 - amends the Education law by adding a new section 508-b that
sets forth definitions; requires the retirement board to create a fossil
fuel company exclusion list; provides for alignment with fiduciary
responsibilities of the retirement fund; requires the retirement fund to
divest from any companies on the exclusion list and provides a timeline
for such divestment; allows for Investment in index funds provided 1% or
less of fund's assets are invested in coal, oil, gas producers; provides
for public notice of divestments.
Sec. 4 - effective date
JUSTIFICATION:
Climate change Is a real and serious threat to the health, welfare, and
prosperity of all New Yorkers, now and in the future. Maintaining the
status quo of fossil fuel energy production will lead to catastrophic
results. Accordingly, this legislation requires that the New York State
Teachers' Retirement System divest from fossil fuels, so that the value
created by New York State's teachers is not used to make investments
that threaten the future they are working to build. In July 2019, New
York State passed the climate leadership and community protection act,
and committed to reducing statewide greenhouse gas emissions by 85% by
2050, and net zero emissions In all sectors of the economy. Other cities
and states have chosen to pursue similar paths to reduce greenhouse gas
emissions.
There are no existing laws or duties that require New York State to
invest in energy sources that are harmful to the environment, or in
contradiction to the goals of the climate leadership and community
protection act. To the contrary, there is no quarrel under New York law,
as there could not be, with the exercise of legislative power to
restrict the classes of investments that New York State public pension
funds might make. Moreover, there are ample investments that are avail-
able that do not present the same harms presented by fossil fuel compa-
nies.
Pension fund divestment has become common in recent years. In February,
New York State Comptroller Thomas P. DiNapoll, the trustee of the New
York State Common Retirement Fund, announced that the fund will divest
$26.8 million of actively managed holdings in eight oil and gas compa-
nies that it has determined are not ready to transition to a low-carbon
economy. Many cities and states have recognized the harmful effects of
investing in fossil fuels, and have committed to divesting. Over 1,100
institutional Investors representing more than $11 trillion in holdings
have chosen to pursue full or partial divestment from fossil fuel
producers, including the New York City Employees Retirement System, the
New York City Board of Education Retirement System, the endowment and
pension funds of the University of California system, and the sovereign
wealth funds of Norway and Ireland.
New York owes duties to its residents, and the New York State Teachers'
Retirement System owes duties to future beneficiaries. These duties can
and should reasonably include considerations of human interests, quality
of life, public safety and security, and ultimately require a shift away
from fossil fuels to help mitigate the future adverse effects of climate
change. Accordingly, it is appropriate to amend the education law to
require such divestment.
PRIOR LEGISLATIVE HISTORY:
A6331 of 2021-22: referred to governmental employees
A1101 of 2023-24: referred to governmental employees
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This bill will have no effect on revenue or spending.
EFFECTIVE DATE:
This bill Is effective immediately.
