St. Paul, MN - In response to Russia’s invasion of Ukraine, today the Minnesota House passed broadly bipartisan legislation divesting Minnesota’s state pensions of Russian and Belarusian assets, and codifying Governor Walz’s Executive Order barring Minnesota from contracting with Russian companies. The bill passed unanimously.
State Representative Luke Frederick (DFL-Mankato) reacted:
“Today, the Minnesota House of Representatives showed support for Ukraine by sanctioning Russia. Our action today is another step, among others taken by many governments and entities, that Minnesotans won’t sit by while Russia wages a violent takeover. This is a terrible situation, and many have felt helpless, but today we acted to hit the Russian government and oligarchs in their pocketbooks. I’m hopeful these and other steps will lead to a peaceful resolution and an end to the destruction and loss of life.”
The legislation requires Minnesota, primarily the State Board of Investment (SBI), to divest of its direct holdings of Russian and Belarusian assets. Lawmakers included Belarus in the legislation due to its government’s complicity in the Russian invasion. Prior to the invasion of Ukraine, the estimated worth of Minnesota's state pension fund investments in Russia was approximately $53 million.
The bill mainly affects the state pension funds and other state-owned investment products that SBI administers as well. This requirement to divest does not apply to indirect holdings in investment funds, nor does it affect local or county governments except to the extent that they allow SBI to manage their investments. The action against Russia and Belarus is like prior sanctions Minnesota has set against Iranian and Sudanese interests.
Under the bill, SBI must liquidate 50% of prohibited assets within nine months of the effective date, with 100% liquidated within 15 months. The bill also regulates state agency contracts with Russia and Belarus as well as with Russian and Belarusian interests. The bill requires state agencies to review existing contracts to determine which are with Russian and Belarusian entities, terminate those contracts to the extent practicable, and refrain from entering new contracts with Russian and Belarusian entities.
Video recording of today’s floor debate can be found on the House Public Information YouTube channel.