RESPOND Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 1618 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 Advi- sory Panel on the Economics of Climate Change, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 8, 2021 Mr. CLEAVER (for himself, Ms. TLAIB, Ms. BUSH, Mr. KHANNA, Ms. NOR- TON, Mr. LEVIN of California, Ms. PRESSLEY, and Ms. JAYAPAL) intro- duced the following bill; which was referred to the Committee on Over- sight and Reform, and in addition to the Committee on Financial Serv- ices, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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 es- tablish a Federal Advisory Panel on the Economics of Climate Change, and for other purposes. VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 1618 IH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Restructuring Environ- 4 mentally Sound Pensions in Order to Negate Disaster Act 5 of 2021’’ or the ‘‘RESPOND Act of 2021’’. 6 SEC. 2. CLIMATE CHANGE ECONOMIC COST REPORT. 7 Not later than 1 year after the date of enactment 8 of this Act, and annually thereafter, the Board of Gov- 9 ernors of the Federal Reserve System and the Securities 10 and Exchange Commission shall jointly submit to Con- 11 gress a report that projects and accounts for the economic 12 costs directly and indirectly caused by the impacts of cli- 13 mate change, which shall include an analysis of— 14 (1) the effects that climate change has on the 15 labor market, economic growth, public health, and 16 other broad areas of the economy of the United 17 States; 18 (2) property and land damage from rising sea 19 levels and extreme weather; and 20 (3) the costs associated with natural disaster 21 relief and mitigation. 22 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 1618 IH SEC. 3. FEDERAL ADVISORY PANEL ON THE ECONOMICS OF 1 CLIMATE CHANGE. 2 (a) ESTABLISHMENT.—The Federal Retirement 3 Thrift Investment Board (referred to in this section as the 4 ‘‘Board’’) shall establish a panel to be known as the ‘‘Fed- 5 eral Advisory Panel on the Economics of Climate Change’’ 6 (referred to in this section as the ‘‘Advisory Panel’’). 7 (b) MEMBERSHIP.— 8 (1) IN GENERAL.—The Advisory Panel shall 9 consist of 9 members, appointed by the Board as fol- 10 lows: 11 (A) Three members shall be chosen from 12 among persons generally recognized for their 13 impartiality, knowledge, and experience in the 14 field of labor relations and pay policy. 15 (B) Six members shall be chosen from 16 among persons with expertise in local, national, 17 or transnational financing that seeks to support 18 mitigation and adaptation actions to combat cli- 19 mate change. 20 (2) LIMITATION.—Not more than 3 members of 21 the Advisory Panel may represent a single employee 22 organization, council, federation, alliance, associa- 23 tion, or affiliation of employee organizations. 24 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 1618 IH (3) CHAIR.—The Board shall select a member 1 of the Advisory Panel appointed under paragraph 2 (1)(A) to serve as the Chair of the Advisory Panel. 3 (4) COMPENSATION.— 4 (A) IN GENERAL.—A member of the Advi- 5 sory Panel— 6 (i) may not receive pay by reason of 7 the service of the member on the Advisory 8 Panel; and 9 (ii) shall not be considered to be an 10 employee of the Federal Government solely 11 because of the service of the member on 12 the Advisory Panel. 13 (B) EXPENSES.—Notwithstanding sub- 14 paragraph (A), a member of the Advisory Panel 15 appointed under paragraph (1)(A) may be paid 16 expenses in accordance with section 5703 of 17 title 5, United States Code. 18 (c) DUTIES.—The Advisory Panel shall— 19 (1) advise the Board on how, consistent with 20 the fiduciary duties of the Board, the Board can 21 make investments in a manner that helps ensure 22 that the United States achieves net zero greenhouse 23 gas emissions not later than 2050; 24 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 1618 IH (2) identify possible investment opportunities in 1 clean and renewable energy and other emerging in- 2 dustries that would maximize returns; 3 (3) produce a comparative analysis comparing 4 the fiduciary efficacy and responsibility of existing 5 investment practices of the Board with the invest- 6 ment strategies described in paragraph (1); and 7 (4) advise the Board on how to identify, assess, 8 and manage the investment risks and opportunities 9 of climate change and prepare for a transition to a 10 low-carbon economy. 11 (d) EXAMINATION.— 12 (1) IN GENERAL.—In carrying out the duties of 13 the Advisory Panel under subsection (c), the Advi- 14 sory Panel shall examine the following: 15 (A) Economic and policy challenges facing 16 the fossil fuel industry over the short, medium, 17 and long term. 18 (B) Quantitative and qualitative analysis 19 and modeling of the economic impact of climate 20 change on Federal employee retirement pro- 21 grams, including diversification of investments, 22 risk tolerance, future economic and workforce 23 trends, new opportunities, expected losses, and 24 returns. 25 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 1618 IH (C) The current state of, and outlook for, 1 clean energy, including possible investment op- 2 portunities. 3 (D) The experiences, including perform- 4 ance analyses, of other pension funds and inves- 5 tors that have undertaken concerted strategic 6 efforts to divest from fossil fuel holdings in 7 order to maximize the efficacy and stability of 8 their assets while minimizing their climate-re- 9 lated risk exposure. 10 (E) Strategic options to address climate- 11 related investment risks through further efforts 12 to divest from fossil fuel holdings, including— 13 (i) transitioning to a low-carbon or 14 carbon-free benchmark index for all public 15 equities; 16 (ii) divesting from significant fossil 17 fuel holdings that are not responsible fidu- 18 ciary investments for beneficiaries; and 19 (iii) exploring the use of organizations 20 to de-risk investments in carbon dependent 21 funds. 22 (2) REPORT.—Not later than 2 years after the 23 date of enactment of this Act, the Advisory Panel 24 shall submit to the Board a report containing the 25 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 1618 IH findings of the Advisory Panel, including the results 1 of the examinations performed under paragraph (1). 2 (e) CONSULTATION WITH FEMA.—The Advisory 3 Panel shall, in preparing the report required under sub- 4 section (d)(2), consult with the Administrator of the Fed- 5 eral Emergency Management Agency on any matters with- 6 in the jurisdiction of that Agency. 7 (f) REVIEW OF REPORT.— 8 (1) IN GENERAL.—If the Board, after reviewing 9 the report submitted by the Advisory Panel under 10 subsection (d)(2), determines that it would be finan- 11 cially profitable, and consistent with the fiduciary 12 duties of the Board, to implement low-carbon invest- 13 ment strategies, the Board shall establish a plan to 14 transition the investment practices of the Board ac- 15 cordingly. 16 (2) REPORT TO CONGRESS.—The Board shall 17 submit to Congress, including to the Office of the 18 Law Revision Counsel of the House of Representa- 19 tives, a report regarding the determination of the 20 Board under paragraph (1), including if the Board 21 is unable to determine that it would be financially 22 profitable, and consistent with the fiduciary duties of 23 the Board, to implement low-carbon investment 24 strategies. 25 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 1618 IH (g) TERMINATION.—Notwithstanding section 14 of 1 the Federal Advisory Committee Act (5 U.S.C. App.), the 2 Advisory Panel shall terminate upon submitting the report 3 required under subsection (d)(2). 4 (h) AUTHORIZATION OF APPROPRIATIONS.—There 5 are authorized to be appropriated not more than 6 $2,000,000 for the Advisory Panel to comply with the re- 7 quirements of the Federal Advisory Committee Act (5 8 U.S.C. App.), including by ensuring that the Advisory 9 Panel will have— 10 (1) adequate staff and quarters; and 11 (2) funds available to meet the other necessary 12 expenses of the Advisory Panel. 13 SEC. 4. CLIMATE CHOICE STOCK INDEX FUND. 14 (a) IN GENERAL.—Section 8438 of title 5, United 15 States Code, is amended— 16 (1) in subsection (a)— 17 (A) by redesignating paragraphs (4) 18 through (10) as paragraphs (7) through (13), 19 respectively; 20 (B) by redesignating paragraphs (1), (2), 21 and (3) as paragraphs (2), (4), and (5), respec- 22 tively; 23 (C) by inserting before paragraph (2), as 24 so redesignated, the following: 25 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 1618 IH ‘‘(1) the term ‘Climate Choice Stock Index 1 Fund’ means the Climate Choice Stock Index Fund 2 established under subsection (b)(1)(G);’’; 3 (D) by inserting after paragraph (2), as so 4 redesignated, the following: 5 ‘‘(3) the term ‘entity’ means any sole propri- 6 etorship, organization, association, corporation, part- 7 nership, joint venture, limited partnership, limited li- 8 ability partnership, limited liability company, or 9 other business association, including any wholly 10 owned subsidiary, majority-owned subsidiary, par- 11 ent-country national, or affiliate of the business as- 12 sociation, that exists for the purpose of making prof- 13 it;’’; and 14 (E) by inserting after paragraph (5), as so 15 redesignated, the following: 16 ‘‘(6) the term ‘fossil fuel entity’ means any en- 17 tity— 18 ‘‘(A) with proven carbon reserves; or 19 ‘‘(B) that explores for, extracts, processes, 20 refines, or transmits coal, oil, gas, oil shale, or 21 tar sands;’’; and 22 (2) in subsection (b)— 23 (A) in paragraph (1)— 24 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 1618 IH (i) in subparagraph (E), by striking 1 ‘‘and’’ at the end; 2 (ii) in subparagraph (F), by striking 3 the period at the end and inserting ‘‘; 4 and’’; and 5 (iii) by adding at the end the fol- 6 lowing: 7 ‘‘(G) a Climate Choice Stock Index Fund 8 as provided in paragraph (6).’’; and 9 (B) by adding at the end the following: 10 ‘‘(6)(A) The Board shall select an index which 11 is a commonly recognized index comprised of com- 12 mon stock. 13 ‘‘(B) The historical performance of the index 14 selected under subparagraph (A) shall be comparable 15 to that of the other investment funds and options 16 available under this subsection. 17 ‘‘(C) The Climate Choice Stock Index Fund 18 shall be invested in a portfolio that is designed— 19 ‘‘(i) to replicate the performance of the 20 index selected under subparagraph (A); 21 ‘‘(ii) such that, to the extent practicable, 22 the percentage of the Climate Choice Stock 23 Index Fund that is invested in each stock is the 24 same as the percentage determined by dividing 25 VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 1618 IH the aggregate market value of all shares of that 1 stock by the aggregate market value of all 2 shares of all stocks included in the index se- 3 lected under subparagraph (A); and 4 ‘‘(iii) to ensure that no investment in the 5 portfolio is an investment with respect to a fos- 6 sil fuel entity.’’. 7 (b) EFFECTIVE DATE.—The amendments made by 8 subsection (a) shall take effect— 9 (1) only if the Federal Retirement Thrift In- 10 vestment Board, in the report submitted under sec- 11 tion 3(f)(2), indicates that the Board is unable to 12 determine that it would be financially profitable, and 13 consistent with the fiduciary duties of the Board, to 14 implement low-carbon investment strategies; and 15 (2) on the date on which the Board submits the 16 report described in paragraph (1). 17 Æ VerDate Sep 11 2014 03:48 Apr 30, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H1618.IH H1618 kjohnson on DSK79L0C42PROD with BILLS