The Indiana House of Representatives will soon vote on a bill prohibiting the state from investing in or entering into contracts with companies that “boycott” fossil fuels, the main source of greenhouse gas emissions that have changed the earth’s climate.
House Bill 1224, authored by Rep. Ethan Manning and co-sponsored by Rep. Ed Soliday, would prohibit the state of Indiana from investing in financial companies or entering into contracts with companies that “boycott” fossil fuel.
The bill contains a wide-reaching definition of “boycott” that would include any refusal to deal with fossil fuel companies or simply limiting commercial relations with those companies.
By that definition, companies that have pledged to reduce their carbon footprints or achieve net zero emissions would be considered to be “boycotting” fossil fuel companies.
State agencies would have to get rid of the assets or cancel contracts from those companies, except under certain circumstances, or risk further action from the Office of the Indiana Attorney General.
Manning said the bill was meant to protect fossil fuel companies in Indiana from “discrimination” from large out-of-state banks, investment firms and insurance companies.
“It is my view that we cannot sit idly by and allow these companies to get away with harming Indiana energy companies, and Hoosiers themselves, by making poor decisions not based on financial returns but on some political philosophy and pressure from activists who don't care about the reliability or affordability of energy for Hoosiers.”
The Indiana Department of Administration said the legislation could further limit the already limited number of financial institutions that provide financial services to the state, like credit cards and fuel cards, as well as child support, unemployment and other social program benefits.
The Indiana Bankers Association said it opposed the bill, saying financial institutions should have the freedom to make their own business decisions.
“In our opinion, this is an anti-free market bill because the marketplace is serving the fossil fuels community at a pretty high level. There are banks that are making business decisions for a variety of reasons, but, talking to my banks, they continue to lend to the brown energy, the green energy, depending on the credit worthiness, regulatory risk and reputational risk,” said IBA chief policy officer Dax Denton.
Lawmakers amended the bill to exempt state-chartered banks and local governments from the bill.
The bill is part of a nationwide effort by the fossil fuel industry and organizations funded by them, like the American Legislative Exchange Council and the Heartland Institute, to push back against the trend of fossil fuel asset divestments that has been good for investors but has hurt the fossil fuel industry.
As the Center for Media and Democracy found, HB 1224 is almost identical to the Energy Discrimination Elimination Act model policy written by ALEC. The policy was scrubbed from the site, but preserved online.
Manning denied ever attending an ALEC conference during a hearing of the House Committee on Financial Institutions and Insurance, where model legislation is often presented, but dozens of Indiana lawmakers have been linked to the organization.
Those links may be part of the reason why Indiana and other states have been slow to begin transitioning away from fossil fuels, despite the lower costs and other benefits associated with renewable energy.
The full House could vote on the bill sometime this week.