Committee pauses consideration of broad divestment bill after constitutional, fiduciary and implementation concerns

The committee's work session on LD 13 83 spanned legal, constitutional, fiduciary and operational issues. Kristen (analyst) provided written materials: a history of prior Maine divestment laws, Attorney General inquiries, lists of other states' policies, MAGNINSKY-related federal materials and MainePERS' current investment lists. The bill as printed would prohibit state investment or procurement contracts with entities that operate in or benefit alleged perpetrator states or those determined by credible international bodies to have committed atrocities.

Representative Rafael Macias (sponsor) described amendments to define "credible entities" and to include fiduciary-consistency language. Attorney Bill Robichek explained past litigation involving state divestment laws and said federal preemption (when Congress regulates a subject) had overturned similar state laws; he also explained Maine's "exclusive benefit" constitutional clause for MainePERS and how statutory language can guide fiduciary interpretation.

MainePERS staff and trustees cautioned that the statute's breadth could conflict with constitutional and federal fiduciary duties and that implementation requires careful operational design. MainePERS representatives said the fund can perform screening using external experts but requested clarity on definitions and process. Board member Nick Foley and trustee representatives said the investment team and consultants (e.g., Cambridge Associates) have technical capacity to screen and could implement policies if statutory direction is clear.

Given the scope of issues raised—including AG opinions, possible litigation risk, pension-fund constraints, and the need for model language from other states—the committee voted to table LD 13 83 to allow time for the Attorney General, MainePERS actuarial analysis, and comparative-state documentation to be provided and studied. The committee scheduled further work and materials before resuming consideration.