The Maine Senate has passed a bill that would require the state, including the $16.7 billion Maine Employees' Retirement System, Augusta, to divest from fossil fuels.
The legislation says the state treasurer’s office and the pension fund’s board of trustees may not invest any assets in fossil-fuel-related companies, including the 200 largest publicly traded companies with fossil fuel reserves; any company that has as its core business the exploration, extraction, refining, processing or distribution of fossil fuels, or the construction or operation of fossil fuel infrastructure; and the 30 largest publicly traded owners of coal-fired power plants.
The bill, which passed 19-13 on Tuesday, requires divestment by Jan. 1, 2026. It passed Maine’s House of Representatives 80-57 on June 3.
Exempt from the divestment are short-term investment funds that commingle commercial papers or futures, according to text of the bill.
Until the date of divestment, the state treasurer's office and the pension fund's board of trustees would be required to provide annual reports to a joint standing committee of the Maine Legislature in 2023, 2024 and 2025 regarding the progress of divestment.
In Feb. 10 testimony from MainePERS Executive Director Sandra J. Matheson posted on the pension fund's website, Ms. Matheson said the pension fund opposes the bill and divestment because the Maine Constitution "prohibits the investment of this money by MainePERS or the Legislature for any purpose other than to pay member pensions."
"Simply put," Ms. Matheson wrote, "MainePERS is entrusted and restricted by law to make investment decisions which are in the best financial interest and only the best financial interest of paying pensions."
According to a separate memo on MainePERS' website, the pension fund's total energy and utilities sector holdings totaled $1.27 billion as of Dec. 31, about 7.7% of the total fund at that time.
Representatives for Gov. Janet T. Mills could not be reached for further information whether she intends to sign the bill.