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S3467
SENATE, No. 3467
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 12, 2026
Sponsored by:
Senator� JAMES BEACH
District 6 (Burlington and Camden)
SYNOPSIS
���� Prohibits investment of pension and annuity funds by
State in entities that avoid Superfund obligations to State.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning the investment by the State of
pension and annuity funds in entities that avoid their Superfund obligations to
the State and supplementing P.L.1950, c.270 (C.52:18A-79 et seq.).
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� The Legislature finds
and declares that:
���� The federal Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), commonly
known as Superfund, provides for the cleanup of some of the nation�s most
contaminated hazardous waste sites by assigning responsibility for the expense of
the cleanup to the entity that caused the contamination, so that taxpayers and
residents are not forced to pay for very costly remediation.
���� Because New Jersey has a long
history of chemical and other industrial manufacturing, the State has more
Superfund sites than any other state in the country, making cleanup and
remediation of these Superfund sites particularly critical for the well-being
of the State�s residents.
���� One example of a Superfund
site in the State is the site in Newark where, for several decades, Diamond
Alkali Company, purchased later by Maxus Energy Corporation, manufactured
agricultural chemicals, including the herbicide known as Agent Orange.� The United
States Environmental Protection Agency (EPA) found high levels of dioxin at the
Diamond Alkali facility and placed the site on the Superfund National
Priorities List in 1984.� Several other hazardous substances and semi-volatile
and volatile compounds were also discovered at the site.
���� The hazardous substances and
semi-volatile and volatile compounds have contaminated the environment at and
around the site, including the soil, groundwater, air, surface water, and
building structures at the site, as well as caused widespread contamination in
the Passaic River.� The contamination in the river is so severe that there are
prohibitions and advisories on fish and crab consumption in the area.
���� Subsequent to the designation
of the Superfund site, the Argentinian state-owned oil company, YPF S.A.,
acquired Maxus Energy Corporation.
���� In March 2016, the EPA
announced its finding that remediation of the Diamond Alkali site would cost
$1.38 billion.
���� Three months following the
EPA�s announcement, YPF S.A. placed Maxus Energy Corporation into bankruptcy,
ultimately stripping it of its assets and rendering it unable to fulfill its
Superfund obligations for the Diamond Alkali site.� Nevertheless, YPF S.A.
remains a profitable business.
���� New Jersey has a significant
interest in ensuring these Superfund sites no longer pose a threat to its
residents, and if responsible parties are able to avoid the expense of a
cleanup of Superfund sites without consequence, then the State should not allow
those parties to continue to profit from the State�s investments.
���� By prohibiting the Department
of the Treasury from investing in these entities, responsible parties that
avoid their Superfund obligations may realize their actions are not without
consequence and perhaps will be deterred from doing so in the future.
���� 2.��� a.� Notwithstanding any
provision of law to the contrary, no assets of any pension or annuity fund
under the jurisdiction of the Division of Investment in the Department of the
Treasury, or its successor, shall be invested in any business, or country or its
instrumentality, or business affiliate, if that business has been identified as
a responsible party, with or without adjudication or other finding of
responsibility, by the United States Environmental Protection Agency in
accordance with the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), 42 U.S.C. s.9601 et seq., for a Superfund site in the
State, upon that business entity, country or country�s instrumentalities filing
for bankruptcy rendering that business, or country, or country�s
instrumentality incapable of complying with its obligations, in whole or in
part, for a Superfund site in the State for which it has been identified as a
responsible party, when that bankruptcy filing is in direct anticipation of or
in direct response to a finding of responsibility by the United States
Environmental Protection Agency in accordance with CERCLA for a Superfund site
in the State.
���� As used in this act, �business
affiliate� means an entity that directly or indirectly owns, controls, or holds
with power to vote 20 percent or more of the outstanding voting securities of
the debtor, other than an entity that holds such securities (1) in a fiduciary
or agency capacity without sole discretionary power to vote on such securities;
or (2) solely to secure a debt if that entity has not in fact exercised the
power to vote.
���� b.��� The Director of the
Division of Investment, after consulting with an independent research firm,
shall take appropriate action to sell, redeem, divest, or withdraw investments
held in violation of subsection a. of this section.� This section shall not be construed
to require the premature or otherwise imprudent sale, redemption, divestment,
or withdrawal of an investment, but such sale, redemption, divestment, or
withdrawal shall be completed not later than three years following the
effective date of this act, P.L. , c. (C. ) (pending
before the Legislature as this bill) or initial identification of a business,
or country, or country�s instrumentality in accordance with this section.� Upon
identification, and prior to any sale, redemption, divestment, or withdrawal of
an investment, the director shall notify the business, or country, or country�s
instrumentality that it is in violation of this act, P.L.��� , c.��� (C.�������
) (pending before the Legislature as this bill), and inform the business of the
appeal process.
���� c.���� Within 180 days after
the effective date of this act, P.L. , c. (C. ) (pending
before the Legislature as this bill), the Director of the Division of
Investment shall file with the Legislature, pursuant to section 2 of P.L.1991,
c.164 (C.52:14-19.1), a report of all investments held as of the effective date
that are in violation of subsection a. of this section.� Every year thereafter,
the director shall report on all investments sold, redeemed, divested, or
withdrawn in compliance with subsection b. of this section.
���� Each report after the initial
report shall provide a description of the progress that the division has made
since the previous report and since the enactment of this act, P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) in implementing
subsection b. of this section.
���� d.��� The members of the State
Investment Council, jointly and individually, and State officers and employees
involved therewith, shall be indemnified and held harmless by the State of New
Jersey from all claims, demands, suits, actions, damages, judgments, costs,
charges, and expenses, including court costs and attorney's fees, and against
all liability, losses, and damages that these council members, and State
officers and employees, may sustain by reason of any decision to restrict,
reduce, or eliminate investments pursuant to this act.
���� 3.��� This act shall take
effect immediately.
STATEMENT
���� This bill prohibits the
investment of New Jersey public employee retirement funds in any business,
country, country�s instrumentality, or business affiliate that avoids its
Superfund obligations to the State.
���� The bill prohibits the
investment of any pension or annuity fund asset under the jurisdiction of the
Division of Investment in the Department of the Treasury in any business,
country, country�s instrumentality, or business affiliate, if that business has
been identified as a responsible party by the United States Environmental
Protection Agency, in accordance with the federal� Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) for a Superfund site in the
State, and if that business, country or country�s instrumentality filed for
bankruptcy rendering it incapable of complying with its obligations with
respect to a Superfund site in the State for which it has been identified as a
responsible party.� This prohibition applies if the bankruptcy filing is in
direct anticipation of or in direct response to a finding of responsibility by
the United States Environmental Protection Agency in accordance with CERCLA for
a Superfund site in the State.
���� The bill requires that
divestment occur within three years of the bill�s effective date or within
three years of an initial identification of a business, country, or country�s
instrumentality that it is in violation of the bill.� The bill requires the director
to notify the business, country, or country�s instrumentality that it is in
violation of the bill, and to inform the business of the appeal process, prior
to taking any action to divest prohibited investments.
���� The bill requires the director
to file a report with the Legislature of all investments held in violation of
the bill within 180 days of the bill�s effective date.� Every year thereafter,
the director is required to report on all investments divested in accordance
with the bill.
���� The bill requires the State to
indemnify and hold harmless members and employees of the State Investment
Council from all claims, liability, losses, and damages that council members,
and State officers and employees, may sustain because of a decision to divest
investments prohibited by the bill.