Representative
Howitt’s bill would direct the Pension Reserves Investment Management Board (PRIM)
to contract with an independent third party to develop a list of scrutinized
companies that have engaged in politically-motivated actions designed to penalize,
inflict economic harm, or otherwise restrict commercial relations with the
State of Israel. The PRIM Board would be
required to remove all investments from companies appearing on this list, which
would be created within 90 days of the bill’s passage and subsequently updated
on a quarterly basis.
“This
bill is designed to put companies on notice that if they choose to pursue
anti-Israeli policies, the state of Massachusetts will refuse to be a part of
it and will not allow its pension assets to be used to help finance such
reprehensible actions,” said Representative Howitt. “This will send a clear and unequivocal
message that the Commonwealth in no way condones policies that are detrimental
to the State of Israel or its right to exist.”
The
divestment bill was filed in response to the so-called BDS movement (boycott,
divestment and sanctions), a pro-Palestinian campaign that seeks to isolate
Israel, both financially and politically.
Similar divestment legislation has been enacted this year in Illinois
and South Carolina, while other states – including New York – have recently filed
their own versions.
Representative
Howitt’s bill includes a timeline requiring the PRIM Board to divest 50% of its
assets from scrutinized companies appearing on the list within 6 months, and
100% if its investment holdings within 12 months. Once divestment proceedings are underway, the
PRIM Board must also send letters of recommendation to fund managers
requesting, but not requiring, that they either remove companies with indirect
holdings from the fund, or create similar investment funds that do not include companies
with indirect holdings.
After
the initial list of scrutinized companies is created, the PRIM Board will have
30 days to file a report with the clerks of the Massachusetts Senate and House
of Representatives. The board will then
be required to file annual reports detailing the most recent scrutinized
companies list, all divested assets, and a list of scrutinized companies the
Commonwealth has yet to divest from at the time of the report’s filing, as well
as updates on the creation of new any funds that exclude indirect holdings.
The
bill also calls for greater transparency by requiring the PRIM Board to fully disclose,
on a semiannual basis, any decision to end divestment in, or to reinvest in, a
company that previously appeared on the list of scrutinized companies. Written notification must be provided to the
Attorney General’s office, the Senate and House Ways & Means Committees,
and the Joint Committee on Public Service stating the reasons and evidence used
for ending divestment or reinvesting in these companies.
Representative
Howitt is currently circulating the bill for additional co-sponsors, and hopes
to draw strong bipartisan support from his colleagues in the Legislature.
