The California Constitution grants the retirement board of a public employee retirement system plenary authority and fiduciary responsibility for investment of moneys and administration of the retirement fund and system. These provisions qualify this grant of powers by reserving to the Legislature the authority to prohibit investments if it is in the public interest and the prohibition satisfies standards of fiduciary care and loyalty required of a retirement board. Existing law prohibits the boards of the Public Employees' Retirement System and the State Teachers' Retirement System from making new investments or renewing existing investments of public employee retirement funds in a thermal coal company, as defined. Existing law requires the boards to liquidate investments in thermal coal companies on or before July 1, 2017, and requires the boards, in making a determination to liquidate investments, to constructively engage with thermal coal companies to establish whether the companies are transitioning their business models to adapt to clean energy generation. Existing law provides 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 California Constitution. This bill would prohibit the boards of the Public Employees' Retirement System and the State Teachers' Retirement System from making new investments or renewing existing investments of public employee retirement funds in a fossil fuel company, as defined. The bill would require the boards to liquidate investments in a fossil fuel company on or before July 1, 2030. The bill would temporarily suspend the above-described liquidation provision upon a good faith determination by the board that certain conditions materially impact normal market mechanisms for pricing assets, as specified, and would make this suspension provision inoperative on January 1, 2035. 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 California Constitution. This bill would require the boards, commencing February 1, 2024, and annually thereafter, to file a report with the Legislature and the Governor, containing specified information, including a list of fossil fuel companies of which the board has liquidated their investments. The bill would provide that board members and other officers and employees shall be held harmless and be eligible for indemnification in connection with actions taken pursuant to the bill's requirements, as specified.
June 22 hearing postponed by committee.
In Assembly. Read first time. Held at Desk.
Read third time. Passed. (Ayes 21. Noes 10. Page 3913.) Ordered to the Assembly.
Read second time. Ordered to third reading.
From committee: Do pass. (Ayes 4. Noes 2. Page 3786.) (May 19).
Set for hearing May 19.
May 2 hearing: Placed on APPR suspense file.
Set for hearing May 2.
Read second time and amended. Re-referred to Com. on APPR.
From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 8. Noes 2. Page 3437.) (April 19).
Set for hearing April 19.
Read second time and amended. Re-referred to Com. on JUD.
From committee: Do pass as amended and re-refer to Com. on JUD. (Ayes 3. Noes 1. Page 3309.) (April 4).
Set for hearing April 4.
Referred to Coms. on L., P.E. & R. and JUD.
From printer.
Article IV Section 8(a) of the Constitution and Joint Rule 55 dispensed with February 7, 2022, suspending the 30 calendar day requirement.
Introduced. Read first time. To Com. on RLS. for assignment. To print.
Bill Text Versions | Format |
---|---|
SB1173 | HTML |
02/17/22 - Introduced | |
04/06/22 - Amended Senate | |
04/21/22 - Amended Senate |
Document | Format |
---|---|
03/31/22- Senate Committee on Labor, Public Employment and Retirement | |
04/15/22- Senate Judiciary | |
04/29/22- Senate Appropriations | |
05/21/22- Sen. Floor Analyses |
Data on Open States is updated periodically throughout the day from the official website of the California State Legislature.
If you notice any inconsistencies with these official sources, feel free to file an issue.