ASSEMBLY, No. 2050

STATE OF NEW JERSEY

INTRODUCED MAY 30, 1996

By Assemblywoman TURNER

An Act concerning the investment of certain public employee pension funds and supplementing Title 52 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Notwithstanding any provision of law to the contrary, no assets of any pension or annuity fund under the jurisdiction of the Division of Investment in the Department of the Treasury shall be invested in the stocks, securities or other obligations of any corporation or other entity engaging in the manufacture or wholesale distribution of tobacco products.

    2. The State Investment Council and the Director of the Division of Investment shall take appropriate action to sell, redeem, divest or withdraw any investment held in violation of the provisions of this act. Nothing in this act shall be construed to require the premature or otherwise imprudent sale, redemption, divestment or withdrawal of an investment, but such sale, redemption, divestment or withdrawal shall be completed not later than three years following the effective date of this act.

    3. Within 30 days after the effective date of this act, the Director of the Division of Investment shall file with the Legislature a list of all investments held as of the effective date of this act which are in violation of the provisions of this act. Every three months thereafter, and until all of these investments are sold, redeemed, divested or withdrawn, the director shall file with the Legislature a list of the remaining investments. The director shall include with the first such list, and with the lists to be filed at six month intervals thereafter: a. a report of the progress which the division has made since the previous report and since the enactment of this act in implementing the provisions of section 2 of this act, and b. an analysis of the fiscal impact of the implementation of those provisions upon the total value of and return on the investments affected, taking all possible account of the investment decisions which would have been made had this act not been enacted, and including an assessment of any increase or decrease, as the result of the implementation of those provisions and not as the result of market forces, in the overall investment quality and degree of risk characteristic of the pension and annuity funds' portfolio.

    4. This act shall take effect immediately.

STATEMENT

    This bill prohibits investment of the assets of any public pension or annuity fund under the jurisdiction of the Director of the Division of Investment in the Department of the Treasury in the stocks, securities or other obligations of any corporation or other entity engaged in the manufacture or wholesale distribution of tobacco or tobacco products. The bill provides that existing investments in such businesses will be divested within three years of the bill's effective date. It also requires the Director of the Division of Investment to file periodic reports with the Legislature which describe the progress made in divesting these assets and analyze the fiscal impact on the pension and annuity funds.

    The purpose of the bill is to prevent public pension funds from being used to support the manufacture and distribution of a product which is known to be harmful. Several other states (including Maryland, West Virginia, New York and Texas) have already divested, or are considering divesting, pension fund investments in the tobacco industry.

Prohibits investment of certain public employee pension funds in tobacco manufacturers and distributors; provides for divestiture of existing holdings in such businesses.