Signed by Governor Andy Beshear

Vote Smart's Synopsis:

Vote to concur with house amendments and pass a bill that requires the state treasurer to maintain and publish a list of financial companies that they believe are boycotting energy companies that deal in fossil fuels.

Highlights:

• Defines “company” as any, but not limited to, for-profit sole proprietorship, organization, association, corporation, joint venture, limited partnership, or other entity or business association, including a wholly owned subsidiary, parent company, or affiliate of those entities or business associations, that exists to make a profit (Sec. 2).

• Defines “direct holdings” as all securities of a financial company held directly by a state government entity in a fund or account where all the shares are owned by the government entity (Sec. 2).

• Defines “energy company boycott” as, but not limited to, a company that takes actions with the intention to inflict economic damage and does not commit to meet environmental standards (Sec. 2). 

• Defines “financial company” as any publicly traded financial services, banking, or investment company (Sec. 2).

• Defines “indirect holdings” as all securities of that specific financial company held in an account or fund (Sec. 2). 

• Defines “listed financial company” as any company listed by the Treasurer (Sec. 2).

• Defines “state governmental entity” as any of the following that make investments, deposits, or transactions exceeding 1 million dollars (Sec. 2):

• State board;

• Bureau;

• Cabinet;

• Commission;

• Department;

• Authority;

• Officer; or

• Other entities in the executive branch of state government.

• Exempts the Treasurer and state governmental entity from any statutory or common law obligations conflicts under this Act (Sec. 2).

• Specifies that a state governmental entity is not subject to requirements in Sections 1-4 of this Act if it is deemed inconsistent with its responsibilities (Sec. 2).

• Requires the Treasurer to prepare and maintain a list of all financial companies that are engaged in energy company boycotts and must provide the publication to each state governmental entity (Sec. 3).

• Specifies that the list must be updated annually or more often if deemed necessary (Sec. 3).

• Requires the Treasurer to review all information about financial companies (Sec. 3).

• Specifies that information can be provided by any of the following (Sec. 3):

• Commonwealth;

• Nonprofit organizations;

• Research firms;

• International organizations;

• Governmental entities; or

• Other organizations in the business of providing information relevant for investments.

• Authorizes the Treasurer to request written verification from a financial company stating it does not participate in energy company boycotts (Sec. 3).

• Specifies that if a company fails to provide written verification within 60 days of receiving the request, their engagement in energy company boycotts will be presumed (Sec. 3).

• Requires a list of companies engaging in energy company boycotts to be provided to the Legislative Research Commission and Attorney General and available to the public (Sec. 3).

• Authorizes the state governmental entity to disclose the financial companies the entity owns direct or indirect holdings within 30 days of receiving the list (Sec. 3).

• Specifies that state governmental entity must do, but not limited to, the following for companies identified (Sec. 3):

• Inform the company of its status;

• Warn the company of potential divestments by state governmental entities; and

• Offer the opportunity to clarify any activities relating to participation in energy company boycotts. 

• Prohibits any financial company from engaging in boycotts after 90 days from receiving notice (Sec. 3).

• Specifies that if a company ceases engagement within the 90-day period, the company will be removed from the list (Sec. 3).

• Authorizes state governmental entities to sell, redeem, divest, or withdraw all publicly traded securities of the financial company within 1 year (Sec. 3).

• Specifies that the divestment can be delayed if it is determined to be the best option by the governmental entity and a report regarding the delay is given to the Treasurer, Legislative Research Commission, and Attorney General (Sec. 3).

• Specifies that if divesting would result in a financial loss for the entity, it can be ceased (Sec. 3).

• Requires a state governmental entity report containing all securities sold, redeemed, divested, or withdrawn and any changes made be filed no later than December 1, 2023, and each December 1 thereafter (Sec. 4). 

• Authorizes the Attorney General or Treasurer to bring any civil action necessary to enforce this Act (Sec. 4). 

• Specifies that Section 5 applies to contracts between a governmental entity and a company of at least 10 full-time employees with a value of $100,000 or more from the entity’s public funds (Sec. 5). 

• Prohibits a governmental entity from entering a contract with a company that does not provide written verification that it will not engage in energy company boycotts (Sec. 5).

Full Bill Text

Vote Smart's Synopsis:

Vote to amend and pass a bill that requires the state treasurer to maintain and publish a list of financial companies that they believe are boycotting energy companies that deal in fossil fuels.

Highlights:

• Defines “company” as any, but not limited to, for-profit sole proprietorship, organization, association, corporation, joint venture, limited partnership, or other entity or business association, including a wholly owned subsidiary, parent company, or affiliate of those entities or business associations, that exists to make a profit (Sec. 2).

• Defines “direct holdings” as all securities of a financial company held directly by a state government entity in a fund or account where all the shares are owned by the government entity (Sec. 2).

• Defines “energy company boycott” as, but not limited to, a company that takes actions with the intention to inflict economic damage and does not commit to meet environmental standards (Sec. 2). 

• Defines “financial company” as any publicly traded financial services, banking, or investment company (Sec. 2).

• Defines “indirect holdings” as all securities of that specific financial company held in an account or fund (Sec. 2). 

• Defines “listed financial company” as any company listed by the Treasurer (Sec. 2).

• Defines “state governmental entity” as any of the following that make investments, deposits, or transactions exceeding 1 million dollars (Sec. 2):

• State board;

• Bureau;

• Cabinet;

• Commission;

• Department;

• Authority;

• Officer; or

• Other entities in the executive branch of state government.

• Exempts the Treasurer and state governmental entity from any statutory or common law obligations conflicts under this Act (Sec. 2).

• Specifies that a state governmental entity is not subject to requirements in Sections 1-4 of this Act if it is deemed inconsistent with its responsibilities (Sec. 2).

• Requires the Treasurer to prepare and maintain a list of all financial companies that are engaged in energy company boycotts and must provide the publication to each state governmental entity (Sec. 3).

• Specifies that the list must be updated annually or more often if deemed necessary (Sec. 3).

• Requires the Treasurer to review all information about financial companies (Sec. 3).

• Specifies that information can be provided by any of the following (Sec. 3):

• Commonwealth;

• Nonprofit organizations;

• Research firms;

• International organizations;

• Governmental entities; or

• Other organizations in the business of providing information relevant for investments.

• Authorizes the Treasurer to request written verification from a financial company stating it does not participate in energy company boycotts (Sec. 3).

• Specifies that if a company fails to provide written verification within 60 days of receiving the request, their engagement in energy company boycotts will be presumed (Sec. 3).

• Requires a list of companies engaging in energy company boycotts to be provided to the Legislative Research Commission and Attorney General and available to the public (Sec. 3).

• Authorizes the state governmental entity to disclose the financial companies the entity owns direct or indirect holdings within 30 days of receiving the list (Sec. 3).

• Specifies that state governmental entity must do, but not limited to, the following for companies identified (Sec. 3):

• Inform the company of its status;

• Warn the company of potential divestments by state governmental entities; and

• Offer the opportunity to clarify any activities relating to participation in energy company boycotts. 

• Prohibits any financial company from engaging in boycotts after 90 days from receiving notice (Sec. 3).

• Specifies that if a company ceases engagement within the 90-day period, the company will be removed from the list (Sec. 3).

• Authorizes state governmental entities to sell, redeem, divest, or withdraw all publicly traded securities of the financial company within 1 year (Sec. 3).

• Specifies that the divestment can be delayed if it is determined to be the best option by the governmental entity and a report regarding the delay is given to the Treasurer, Legislative Research Commission, and Attorney General (Sec. 3).

• Specifies that if divesting would result in a financial loss for the entity, it can be ceased (Sec. 3).

• Requires a state governmental entity report containing all securities sold, redeemed, divested, or withdrawn and any changes made be filed no later than December 1, 2023, and each December 1 thereafter (Sec. 4). 

• Authorizes the Attorney General or Treasurer to bring any civil action necessary to enforce this Act (Sec. 4). 

• Specifies that Section 5 applies to contracts between a governmental entity and a company of at least 10 full-time employees with a value of $100,000 or more from the entity’s public funds (Sec. 5). 

• Prohibits a governmental entity from entering a contract with a company that does not provide written verification that it will not engage in energy company boycotts (Sec. 5).

Full Bill Text