[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3922 Introduced in Senate (IS)]
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118th CONGRESS
2d Session
S. 3922
To require the Board of Governors of the Federal Reserve System and the
Securities and Exchange Commission to issue an annual report to
Congress projecting and accounting for the economic costs directly and
indirectly caused by the impacts of climate change, to require the
Federal Retirement Thrift Investment Board to establish a Federal
Advisory Panel on the Economics of Climate Change, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 12, 2024
Mr. Merkley introduced the following bill; which was read twice and
referred to the Committee on Homeland Security and Governmental Affairs
_______________________________________________________________________
A BILL
To require the Board of Governors of the Federal Reserve System and the
Securities and Exchange Commission to issue an annual report to
Congress projecting and accounting for the economic costs directly and
indirectly caused by the impacts of climate change, to require the
Federal Retirement Thrift Investment Board to establish a Federal
Advisory Panel on the Economics of Climate Change, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Restructuring Environmentally Sound
Pensions in Order to Negate Disaster Act of 2024'' or the ``RESPOND Act
of 2024''.
SEC. 2. CLIMATE CHANGE ECONOMIC COST REPORT.
Not later than 1 year after the date of enactment of this Act, and
annually thereafter, the Board of Governors of the Federal Reserve
System and the Securities and Exchange Commission shall jointly submit
to Congress a report that projects and accounts for the economic costs
directly and indirectly caused by the impacts of climate change, which
shall include an analysis of--
(1) the effects that climate change has on the labor
market, economic growth, public health, and other broad areas
of the economy of the United States;
(2) property and land damage from rising sea levels and
extreme weather; and
(3) the costs associated with natural disaster relief and
mitigation.
SEC. 3. FEDERAL ADVISORY PANEL ON THE ECONOMICS OF CLIMATE CHANGE.
(a) Establishment.--The Federal Retirement Thrift Investment Board
(referred to in this section as the ``Board'') shall establish a panel
to be known as the ``Federal Advisory Panel on the Economics of Climate
Change'' (referred to in this section as the ``Advisory Panel'').
(b) Membership.--
(1) In general.--The Advisory Panel shall consist of 9
members, appointed by the Board as follows:
(A) 3 members shall be chosen from among
individuals generally recognized for impartiality,
knowledge, and experience in the field of labor
relations and pay policy.
(B) 6 members shall be chosen from among
individuals with expertise in local, national, or
transnational financing that seeks to insulate
financial holdings from climate-related risks and
losses.
(2) Limitation.--Not more than 3 members of the Advisory
Panel may represent a single employee organization, council,
federation, alliance, association, or affiliation of employee
organizations.
(3) Chair.--The Board shall select a member of the Advisory
Panel appointed under paragraph (1)(A) to serve as the Chair of
the Advisory Panel.
(4) Compensation.--
(A) In general.--A member of the Advisory Panel--
(i) may not receive pay by reason of the
service of the member on the Advisory Panel;
and
(ii) shall not be considered to be an
employee of the Federal Government solely
because of the service of the member on the
Advisory Panel.
(B) Expenses.--Notwithstanding subparagraph (A), a
member of the Advisory Panel appointed under paragraph
(1)(A) may be paid expenses in accordance with section
5703 of title 5, United States Code.
(c) Duties.--The Advisory Panel shall--
(1) advise the Board on how, consistent with the fiduciary
duties of the Board, the Board can implement investment
strategies in a manner that aligns with the goal of the United
States to achieve net zero greenhouse gas emissions not later
than 2050;
(2) identify possible investment opportunities in clean and
renewable energy and other emerging industries that would
maximize returns;
(3) produce a comparative analysis comparing the fiduciary
efficacy and responsibility of existing investment practices of
the Board with the investment strategies described in paragraph
(1); and
(4) advise the Board on how to identify, assess, and manage
the investment risks and opportunities of climate change and
prepare for a transition to a low-carbon economy.
(d) Examination.--
(1) In general.--In carrying out the duties of the Advisory
Panel under subsection (c), the Advisory Panel shall examine
the following:
(A) Economic and policy challenges facing the
fossil fuel industry over the short, medium, and long
term.
(B) Quantitative and qualitative analysis and
modeling of the economic impact of climate change on
Federal employee retirement programs, including
diversification of investments, risk tolerance, future
economic and workforce trends, new opportunities,
expected losses, and returns.
(C) The current state of, and outlook for, low- and
zero-carbon investment opportunities.
(D) The experiences, including performance
analyses, of other pension funds and investors that
have undertaken concerted strategic efforts to divest
from fossil fuel holdings in order to maximize the
efficacy and stability of their assets while minimizing
their climate-related risk exposure.
(E) Strategic options to address climate-related
investment risks through further efforts to divest from
fossil fuel holdings, including--
(i) transitioning to a low-carbon or
carbon-free benchmark index for all public
equities;
(ii) divesting from significant fossil fuel
holdings that are not responsible fiduciary
investments for beneficiaries; and
(iii) exploring the use of organizations to
de-risk investments in carbon dependent funds.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Advisory Panel shall submit to the
Board a report containing the findings of the Advisory Panel,
including the results of the examinations performed under
paragraph (1).
(e) Consultation With FEMA.--The Advisory Panel shall, in preparing
the report required under subsection (d)(2), consult with the
Administrator of the Federal Emergency Management Agency on any matters
within the jurisdiction of the Federal Emergency Management Agency.
(f) Review of Report.--
(1) In general.--If the Board, after reviewing the report
submitted by the Advisory Panel under subsection (d)(2),
determines that it would be financially profitable, and
consistent with the fiduciary duties of the Board, to implement
low-carbon investment strategies, the Board shall establish a
plan to transition the investment practices of the Board
accordingly.
(2) Report to congress.--The Board shall submit to
Congress, including to the Office of the Law Revision Counsel
of the House of Representatives, a report regarding the
determination of the Board under paragraph (1), including if
the Board is unable to determine that it would be financially
profitable, and consistent with the fiduciary duties of the
Board, to implement low-carbon investment strategies.
(g) Termination.--Notwithstanding section 1013 of title 5, United
States Code, the Advisory Panel shall terminate upon submitting the
report required under subsection (d)(2).
(h) Authorization of Appropriations.--There are authorized to be
appropriated not more than $500,000 for the Advisory Panel to comply
with the requirements of chapter 10 of title 5, United States Code,
including by ensuring that the Advisory Panel will have--
(1) adequate staff and quarters; and
(2) funds available to meet the other necessary expenses of
the Advisory Panel.
SEC. 4. CLIMATE CHOICE STOCK INDEX FUND.
(a) In General.--Section 8438 of title 5, United States Code, is
amended--
(1) in subsection (a)--
(A) by redesignating paragraphs (4) through (10) as
paragraphs (7) through (13), respectively;
(B) by redesignating paragraphs (1), (2), and (3)
as paragraphs (2), (4), and (5), respectively;
(C) by inserting before paragraph (2), as so
redesignated, the following:
``(1) the term `Climate Choice Stock Index Fund' means the
Climate Choice Stock Index Fund established under subsection
(b)(1)(G);'';
(D) by inserting after paragraph (2), as so
redesignated, the following:
``(3) the term `entity' means any sole proprietorship,
organization, association, corporation, partnership, joint
venture, limited partnership, limited liability partnership,
limited liability company, or other business association,
including any wholly-owned subsidiary, majority-owned
subsidiary, parent-country national, or affiliate of the
business association, that exists for the purpose of making
profit;''; and
(E) by inserting after paragraph (5), as so
redesignated, the following:
``(6) the term `fossil fuel entity' means any entity--
``(A) with proven carbon reserves; or
``(B) that explores for, extracts, processes,
refines, or transmits coal, oil, gas, oil shale, or tar
sands;''; and
(2) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (E), by striking
``and'' at the end;
(ii) in subparagraph (F), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(G) a Climate Choice Stock Index Fund as provided in
paragraph (6).''; and
(B) by adding at the end the following:
``(6)(A) The Board shall select an index which is a
commonly recognized index comprised of common stock.
``(B) The historical performance of the index selected
under subparagraph (A) shall be comparable to that of the other
investment funds and options available under this subsection.
``(C) The Climate Choice Stock Index Fund shall be invested
in a portfolio that is designed--
``(i) to replicate the performance of the index
selected under subparagraph (A);
``(ii) such that, to the extent practicable, the
percentage of the Climate Choice Stock Index Fund that
is invested in each stock is the same as the percentage
determined by dividing the aggregate market value of
all shares of that stock by the aggregate market value
of all shares of all stocks included in the index
selected under subparagraph (A); and
``(iii) to ensure that no investment in the
portfolio is an investment with respect to a fossil
fuel entity.''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect--
(1) only if the Federal Retirement Thrift Investment Board,
in the report submitted under section 3(f)(2), indicates that
the Board is unable to determine that it would be financially
profitable, and consistent with the fiduciary duties of the
Board, to implement low-carbon investment strategies; and
(2) on the date on which the Board submits the report
described in paragraph (1).
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