wa-law.org > bill > 2025-26 > SB 5439 > Original Bill
The legislature finds that because burning coal releases several carcinogenic toxins and pollutants, it is the dirtiest way to produce electricity. It also finds that investments in coal-fired resources contribute to climate change, damage the environment, air, water, and soil, and disproportionately harm the health of vulnerable populations and overburdened communities.
The legislature further finds that Washington has committed to decarbonizing its energy sector by requiring that each electric utility eliminate coal-fired resources from its allocation of electricity by December 31, 2025. To support the elimination of coal-fired electricity generation and protect ratepayers, the legislature has required the utilities and transportation commission to accelerate depreciation schedules for coal-fired resources owned by investor-owned utilities by no later than the end of 2025.
The legislature further finds that the state investment board maintains investments in coal assets at a time when governments, public pension funds, and institutional investors, including CalPERS, CalSTRS, the New York state common retirement fund, the New York city employees' retirement system, and the Oregon public employees retirement fund have committed to divesting from coal. The legislature further finds that the state investment board has developed a climate blueprint to guide investment decisions that impact and are impacted by climate change while fulfilling its mission of maximizing returns at a prudent level of risk for the benefit of beneficiaries.
Therefore, the legislature intends to protect public health and the environment and align with Washington's clean energy goals by divesting all funds under management by the state investment board from thermal coal.
The definition of "thermal coal company" under section 3 of this act is based on definitions developed by the Urgewald organization as they existed on January 1, 2025.
Beginning January 1, 2030, the department must annually review the definition of "thermal coal company" under section 3 of this act as compared to the definition used by the Urgewald organization at the time of the review and report meaningful changes to the relevant environmental committees of the legislature, and the legislature shall consider updating the definition of "thermal coal company."
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Clean energy" means both nonemitting electric generation and electricity from renewable resources as described in RCW 19.405.020.
"Global coal exit list" means the list of coal industry participants identified by the Urgewald organization.
"Subject investment funds" means all funds under management by the state investment board.
"Thermal coal company" means a company, or parent or subsidiary of a company:
From the mining, power, and services sector that derives at least 10 percent of its annual revenue from activities related to thermal coal;
From the utility sector that generates 10 percent or more of its power from coal based on actual generation or installed capacity;
Whose annual thermal coal production is equal to or greater than 10,000,000 tons of coal;
Whose installed coal-fired capacity generation is equal to or greater than five gigawatts;
Planning to develop new coal-fired power capacity of at least 100 megawatts prorated;
Engaged in coal exploration activities or planning to expand their coal mines; or
Involved in the development or expansion of coal transportation assets or other infrastructure dedicated to support coal extraction, transportation, and coal-to-gas facilities.
Except as provided in section 6 of this act:
Beginning on the effective date of this section, the state investment board will not make new investments in any thermal coal company, or any fund containing a thermal coal company.
By January 1, 2030, the state investment board must ensure that moneys in subject investment funds are not invested in any thermal coal company, or any fund containing a thermal coal company.
To the greatest extent practicable, divestment and reinvestment of moneys in subject investment funds under this section must be accomplished without monetary loss to the funds through reasonable, prudent, and productive investments in companies generating returns that are comparable to the returns generated by the companies subject to divestment.
The state investment board shall make reasonable efforts to investigate all companies in which the state investment board has invested or may invest moneys in subject investment funds to determine whether any of those companies are thermal coal companies.
If the state investment board determines that subject investment funds are invested in a publicly traded company that is a thermal coal company as defined in section 2 of this act, the state investment board shall give notice to the company that the state investment board will withdraw moneys in subject investment funds that are invested in the company as long as the company is a thermal coal company.
The state investment board may use the global coal exit list to identify thermal coal companies for the purpose of sections 3 through 6 of this act.
The state investment board may consult with managers of public employee pension funds in other states, including California, Oregon, and New York, regarding thermal coal companies from which those funds have been divested.
The state investment board may retain an investment in a thermal coal company if the company demonstrates that it is transitioning to clean energy on a reasonable timeline.
The state investment board may adopt rules to define a reasonable timeline for such a transition. The rules may reflect the guidelines of the United Nations intergovernmental panel on climate change regarding necessary decreases in greenhouse gas emissions.
The state investment board shall monitor thermal coal companies transitioning to clean energy to ensure that they are on track to meet emissions reduction targets.
The state investment board shall report to the legislature on actions to divest from thermal coal companies pursuant to sections 3 through 6 of this act by December 15, 2025, and each year thereafter. Annual reports must be made under this section until no moneys in subject investment funds are invested in thermal coal companies. The state investment board shall make reports under this section publicly available on its website and may include the information in its annual sustainability report.