[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 606 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                 S. 606

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 4, 2021

  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 2021'' or the ``RESPOND Act 
of 2021''.

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) Three members shall be chosen from among 
                persons generally recognized for their impartiality, 
                knowledge, and experience in the field of labor 
                relations and pay policy.
                    (B) Six members shall be chosen from among persons 
                with expertise in local, national, or transnational 
                financing that seeks to support mitigation and 
                adaptation actions to combat climate change.
            (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 make investments in a manner 
        that helps ensure that the United States achieves 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, clean 
                energy, including possible 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 2 years 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 that 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 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.), 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 $2,000,000 for the Advisory Panel to comply 
with the requirements of the Federal Advisory Committee Act (5 U.S.C. 
App.), 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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