HOUSE DOCKET, NO. 2335        FILED ON: 1/19/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2591

The Commonwealth of Massachusetts

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PRESENTED BY:

Jay D. Livingstone

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act requiring public pension fund divestment from ammunition and firearms.

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PETITION OF:

HOUSE DOCKET, NO. 2335        FILED ON: 1/19/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2591

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act requiring public pension fund divestment from ammunition and firearms.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. As used in this act the following words shall, unless the context clearly requires otherwise, have the following meanings:-

“Ammunition”, ammunition as defined in section 121 of chapter 140 of the General Laws, as amended by section 18 of the acts of 2017.

“Ammunition manufacturing company”, a company that derives more than 15 per cent of its revenues from the manufacture of ammunition offered for sale for non-law enforcement or non-military purposes.

“Ammunition retailing company”, a company that derives more than 15 per cent of its revenues from the sale of ammunition for non-law enforcement or non-military purposes.

“Board”, the Pension Reserves Investment Management Board established in section 23 of chapter 32 of the General Laws.

“Company”, a sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company or other entity or business association, including all wholly-owned subsidiaries, majority-owned subsidiaries, parent companies or affiliates of such entities or business associations that exist for profit-making purposes.

“Direct holdings”, all securities of a company held directly by the public fund or in an account or fund in which the public fund owns all shares or interests.

"Firearm", an assault weapon, firearm, large capacity weapon, machine gun, rifle, sawed-off shotgun, or shotgun as defined by section 121 of chapter 140 of the General Laws, as amended by section 18 of the acts of 2017.

“Firearm manufacturing company”, a company that derives more than 15 per cent of its revenues from the manufacture of firearms offered for sale for non-law enforcement or non-military purposes.

“Firearm retailing company”, a company that derives more than 15 per cent of its revenues from the sale of firearms for non-law enforcement or non-military purposes.

“Firearm Accessory”, a bump stock, large capacity feeding device, or trigger crank as defined in section 121 of chapter 140, as amended by section 18 of the acts of 2017.

“Firearm accessory manufacturing company”, a company that derives more than 15 per cent of its revenues from the manufacture of firearm accessories for sale for non-law enforcement or non-military purposes.

“Firearm accessory retailing company”, a company that derives more than 15 per cent of its revenues from the sale of firearm accessories for non-law enforcement or non-military purposes.

“Indirect holdings”, all securities of a company held in an account or fund, such as a mutual fund, managed by 1 or more persons not employed by the public fund, in which the public fund owns shares or interests together with other investors not subject to this act.

“Public fund”, the Pension Reserves Investment Trust or the Pension Reserves Investment Management Board charged with managing the pooled investment fund consisting of the assets of the state employees’ and teachers’ retirement systems as well as the assets of local retirement systems under the control of the board.

“Scrutinized company,” any ammunition, firearm or firearm accessory manufacturing or retailing companies.

SECTION 2. Notwithstanding any general or special law to the contrary, within 90 days of enactment, the public fund shall make its best efforts to facilitate the identification of all scrutinized companies in which the public fund has direct or indirect holdings. The identification of scrutinized companies shall be performed by an independent, third-party research firm selected by the public fund and based on the criteria set forth in this act.

By the first meeting of the public fund following the 90-day period, the public fund and shall assemble all scrutinized companies in which it has direct or indirect holdings into a scrutinized companies list. The public fund shall update the scrutinized companies list on a quarterly basis based on evolving information from the independent, third-party research firm.

SECTION 3. Notwithstanding any general or special law to the contrary, it shall be the settled policy of the public fund and of the board of the public fund not to invest in any ammunition, firearm or firearm accessory manufacturing or retailing companies. The public fund shall sell, redeem, divest or withdraw all publicly-traded securities of each company identified pursuant to section 2 of this act within 12 months after the company’s most recent appearance on the scrutinized companies list. This section shall not apply to indirect holdings in actively managed investment funds; provided, however, that the public fund shall submit letters to the managers of any such investment funds that contain companies identified pursuant to section 2 of this act, requesting that they remove such companies from the investment fund or create a similar actively managed fund with indirect holdings devoid of such companies.

SECTION 4. Notwithstanding any general or special law to the contrary, with respect to actions taken in compliance with this act, the public fund shall be exempt from any conflicting statutory or common law obligation, including any such obligations with respect to choice of asset managers, investment funds or investments for the public fund’s securities portfolios and all good faith determinations regarding companies identified pursuant to section 2 of this act.

SECTION 5. Notwithstanding any general or special law to the contrary, the public fund shall be permitted to cease divesting from companies identified pursuant to section 2 of this act, to reinvest in companies identified pursuant to section 2 of this act, or to continue to invest in companies pursuant to section 2 of this act from which it has not yet divested upon clear and convincing evidence showing that the value for all assets under management by the public fund becomes equal to or less than 99.5 per cent (50 basis points) of the hypothetical value of all assets under management by the public fund assuming no divestment for any company had occurred under said subsection. Cessation of divestment, reinvestment or any subsequent ongoing investment authorized by this section shall be strictly limited to the minimum steps necessary to avoid the contingency set forth in the preceding sentence.

For any cessation of divestment, and in advance of any cessation of divestment authorized by this subsection, the public fund shall provide a written report to the attorney general, the senate and house committees on ways and means and the joint committee on public service, updated annually thereafter as applicable, setting forth the reasons and justification, supported by clear and convincing evidence, for its decisions to cease divestment, to reinvest or to remain invested in companies identified pursuant to section 2.

SECTION 6. Present, future and former board members of the public fund, jointly and individually, state officers and employees, and investment managers under contract with the public fund shall be indemnified from the General Fund and held harmless by the Commonwealth from all claims, demands, suits, actions, damages, judgments, costs, charges and expenses, including court costs and attorney’s fees, and against all liability, losses, and damages of any nature whatsoever that these present, future, or former board members, officers, employees, or contract investment managers shall or may at any time sustain by reason of any decision to restrict, reduce, or eliminate investments in ammunition, firearm, or firearm accessory manufacturing or retailing companies.

SECTION 7. The public fund shall file a copy of the scrutinized companies list with the attorney general and with the clerks of the senate and the house of representatives within 30 days after the list is prepared. Annually thereafter, the public fund shall file a report with the attorney general and with the clerks of the senate and the house of representatives, that includes: (i) the most recent scrutinized companies list; (ii) all investments sold, redeemed, divested or withdrawn in compliance with this act within the preceding year; and (iii) all investments prohibited by this act from which the public fund has not yet divested.