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State lawmakers may tell California pension funds to divest from Dakota pipeline companies

 (William Kincaid / Bismarck Tribune)
(William Kincaid / Bismarck Tribune)

California lawmakers will consider a proposal next year to block the state's pension funds from investing in a controversial oil pipeline that is planned to cross North Dakota's Standing Rock Sioux Reservation.

The proposal, Assembly Bill 20 by Assemblyman Ash Kalra (D-San Jose), would require California's two public employee pension funds to divest any holdings in companies involved in the Dakota Access pipeline. The project, designed to carry some 30,000 barrels of oil a day from North Dakota oil fields to Illinois, has been the focus of large protests from Native American tribes, environmental and civil rights activists and veterans. On Sunday, the U.S. Army Corps of Engineers refused to approve a permit needed to complete the project.

Kalra said he traveled to the North Dakota reservation after winning the Nov. 8 election, to see the protests and the project up close.

"I think what's happening there is really part of a greater movement," he said in a phone interview. "And the greater movement is to move away from our continued investment into fossil fuels."

The bill introduced at the state Capitol on the first day of the Legislature's new session would give the two pension funds — the California Public Employees Retirement System and the California State Teachers Retirement System — until 2018 to make any changes needed to their multibillion-dollar investment portfolios.

A CalPERS spokesman confirmed Monday that the fund owns about 1.1 million shares of Energy Transfer Partners, the company involved in the pipeline project. Representatives of the teachers' fund, CalSTRS, didn't immediately reply to a request for comment.

Lawmakers have imposed rules on pension investments in the past, from bans involving companies that do business in Sudan and Iran to those producing thermal coal.

"As Californians, we must hold ourselves to a high standard line of conduct, including how we invest our pension funds," says the language of Kalra's bill.

Update 3:07 p.m. This story was updated with additional information on CalPERS' stock holdings and comments from Assemblyman Kalra.

This story was originally published at 12:07 p.m.

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