Amendment ID: S1973-4

Amendment 4

Fossil Fuel Divestment Commission

Mr. Downing moves to amend the bill by inserting at the end thereof the following section:-

SECTION X. Notwithstanding any general or special law to the contrary, there shall be a special commission to investigate and study the prospect of divesting the following from fossil fuel companies: 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.

The commission shall evaluate the feasibility of divestment, weighed against the potential increased risk that divestment may pose to the Commonwealth’s pension funds and retirees.

The commission shall consist of 11 members: 2 of whom shall be the chairs of the joint committee on public service, who shall co-chair the commission; 1 of whom shall be the treasurer, or the treasurer’s designee; 1 of whom shall be the executive director of the public employee retirement administration commission, or the director’s designee; 1 of whom shall be a member of the Retired State, County and Municipal Employees Association of Massachusetts; 1 of whom shall be an active member of a public employee union; 5 of whom shall be private citizens who shall not be members of any of the 105 contributory retirement systems, 1 of each of whom shall be appointed by the governor, the senate president, the speaker of the house and the minority leaders of the house and senate, based on the citizens’ expertise in finance, institutional investing, or climate science.

The commission shall consult with experts in the relevant fields and file a report of its recommendations. The report shall include, but not be limited to: (i) an analysis of the current and future environmental impact of fossil fuel companies; (ii) an analysis of the potential environmental and policy benefits derived from divestment; (iii) an estimate of how much risk, if any, will be incurred by divestment, expressed as a percentage of increased volatility; (iv) an analysis of the potential impact that divestment may have on the amortization schedules for the Commonwealth’s pension funds; (v) recommendations on how to define fossil fuel stocks; (vi) recommendations on potential exceptions to divestment for indirect holdings, particularly regarding exceptions for mutual funds and index funds that may invest in fossil fuel companies; (vii) analysis on the potential impact that divestment may pose to companies and employees based in the Commonwealth; (viii) analysis of the potential risks in maintaining holdings in fossil fuels; (ix) recommendations on effective administration and oversight of divestment.

The commission shall file a report of its recommendations, together with the actuarial analysis, if any, with the clerks of the house and senate and the chairs of the house and senate committee on ways and means not later than March 1, 2016.