HF 4779

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/08/2022 12:27pm

A bill for an act
relating to state government; prohibiting the State Board of Investment from
investing in certain assets that exclude Minnesota-based energy or natural resources
companies or Minnesota-based agricultural or livestock companies; requiring
divestment of these assets; prohibiting certain types of discrimination in financial
services; providing civil penalties; requiring annual reports; proposing coding for
new law in Minnesota Statutes, chapters 11A; 46.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [11A.245] INVESTMENTS THAT DISCRIMINATE AGAINST CERTAIN
MINNESOTA-BASED ENERGY OR NATURAL RESOURCES, AGRICULTURAL,
OR LIVESTOCK COMPANIES.
new text end

new text begin Subdivision 1. new text end

new text begin Investments that discriminate against certain Minnesota-based energy
or natural resources, agricultural, or livestock companies; divestment required. new text end

new text begin (a)
The state board must not invest in assets that intentionally exclude Minnesota-based energy
or natural resources companies or Minnesota-based agricultural or livestock companies to
further the asset's environmental-, social-, or governance-based grade or rating. The state
board must sell, redeem, or withdraw, in a fiscally prudent manner and consistent with
applicable laws and regulations not in conflict with this section, all direct holdings of assets
not in compliance with this requirement.
new text end

new text begin (b) At least quarterly, the director must report to the state board on the status of any
actions taken under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Schedule. new text end

new text begin To the extent practicable, the sale, redemption, or withdrawal of
assets under subdivision 1 must be completed according to the following schedule:
new text end

new text begin (1) at least 50 percent of any direct holdings must be removed from the state board's
assets under management by nine months after the effective date of this section; and
new text end

new text begin (2) 100 percent of any direct holdings must be removed from the state board's assets
under management within 15 months after the effective date of this section.
new text end

new text begin Subd. 3. new text end

new text begin Excluded securities. new text end

new text begin Subdivision 2 does not apply to indirect holdings in
actively managed investment funds. The state board must submit letters to the managers of
investment funds containing assets that would otherwise be subject to sale, redemption, or
withdrawal under subdivision 1 requesting the managers to consider removing those assets
from the fund or to create a similar actively managed fund with indirect holdings that do
not include those assets. If a manager creates a similar fund, the state board shall promptly
replace all applicable investments with investments in the similar fund consistent with
prudent investing standards. For purposes of this section, private equity funds shall be
deemed to be actively managed investment funds.
new text end

new text begin Subd. 4. new text end

new text begin Report. new text end

new text begin By January 15 of each calendar year, the state board shall submit a
report to the chairs and ranking minority members of the legislative committees and divisions
with jurisdiction over the state board. The report must include:
new text end

new text begin (1) a list of all investments sold, redeemed, or withdrawn in compliance with subdivision
1; and
new text end

new text begin (2) a description of any progress made under subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Other legal obligations. new text end

new text begin The state board, including its executive director and
staff, is exempt from any statutory or common law obligations that conflict with actions
taken in compliance with this section, including all good-faith determinations regarding
companies as required by this section and any obligations regarding the choice of asset
managers, investment funds, or investments for the state board's securities portfolios.
new text end

new text begin Subd. 6. new text end

new text begin Severability. new text end

new text begin The provisions of this section are severable. If any provision of
this section or its application is held invalid, that invalidity does not affect other provisions
or applications that can be given effect without the invalid provision or application.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [46.36] DISCRIMINATION PROHIBITED.
new text end

new text begin Subdivision 1. new text end

new text begin Discrimination prohibited. new text end

new text begin (a) A bank, credit union, financial institution,
payment processor, savings and loan association, or trust company shall not refuse to provide
financial services of any kind to, refrain from continuing to provide existing financial
services to, terminate existing financial services with, or otherwise discriminate in the
provision of financial services against a person solely based on the following:
new text end

new text begin (1) the person's political affiliation; or
new text end

new text begin (2) any value-based or impact-based criteria, including but not limited to social credit
scores or environmental, social, and governance credit factors.
new text end

new text begin (b) Notwithstanding any other provision to the contrary, a financial institution may offer
investments, products, or services to a potential customer or investor based on subjective
standards only if the standards are fully disclosed and explained to the potential customer
or investor before entering into a contract for the investment, product, or service. The
financial institution shall obtain a signature from the potential customer or investor attesting
that the financial institution has disclosed and explained the subjective standards being used
by the financial institution.
new text end

new text begin (c) This section must not be construed in any manner that would interfere with a financial
institution's ability to discontinue or refuse to conduct business with a person when the
action is necessary for the physical safety of the financial institution's employees.
new text end

new text begin (d) The legislature declares that the practice of discriminating against a person or entity
in this state based upon the person's or entity's social credit score or any other valuation
based on environmental, social, and governmental credit factors is a matter of statewide
concern and that discrimination based on such scores and metrics is not only a threat to the
rights and proper privileges of this state's inhabitants but menaces the institutions and
foundation of a free democratic state and threatens the peace, order, health, safety, and
general welfare of this state and its inhabitants.
new text end

new text begin Subd. 2. new text end

new text begin Civil penalty. new text end

new text begin A person who is refused services by a bank, credit union, financial
institution, payment processor, savings and loan association, or trust company as described
in subdivision 1 may bring an action for injunctive relief and a civil penalty of $10,000. If
a court finds a violation of subdivision 1, the court must assess a civil penalty of $10,000
on the bank, credit union, financial institution, payment processor, savings and loan
association, or trust company.
new text end