As promised, Assemblyman Travis Allen (R-Huntington Beach) has brought a bill to the California legislature that, if passed, would bar state pensions and trust funds from investing in companies that economically discriminate against Israel. It also would bar the state from entering into most contracts with such companies.
Introduced Jan. 4, AB 1551 would direct the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) — the nation’s largest public employee and teachers’ retirement systems — to divest any of their combined portfolio of nearly $500 billion from companies that refuse to do business in either Israel proper or Israeli-controlled territories.
Existing state law already bars California funds from investing in firms that abide by the Arab League’s economic boycott of Israel. AB 1551 would effectively apply this to companies that comply with the growing Boycott, Divestment and Sanctions (BDS) movement, which seeks to economically isolate Israel from global commerce.
Allen previously told the Journal he expects his legislation to pass with wide bipartisan support.
“It is unconscionable for our state to do business with companies that play politics and boycott our critical allies,” Allen said in a press release.
Spokespeople for CalPERS and CalSTRS previously said they will review the legislation and determine how their portfolios might be affected by the proposed law. Both funds previously opposed a bill by Sen. Joel Anderson (R-San Diego) that orders the state’s funds to divest from any company that does at least $20 million in business with Iran’s petroleum or natural gas industries. It took a few years after its 2007 passage for those funds to divest from 13 companies that fell under the law’s provisions.
Allen also is proposing to amend California’s Public Contract Code to stipulate that any state contract in excess of $10,000 cannot be entered into with a company or individual that economically discriminates against Israel, unless the bid of that party is at least 20 percent lower than the next-lowest bidder.
