Capitol Beat

PA Senate advances bill seeking to discourage divestments from Israel

The bill would prohibit state funds from divesting from Israel and penalize colleges and universities that seek to do the same.

state Sen. Steve Santarsiero

state Sen. Steve Santarsiero Commonwealth Media Services

Amid ongoing hostilities between Israel and Hamas in the Middle East, and growing tensions over the conflict in the United States, the Pennsylvania Senate passed legislation this week that aims to discourage efforts to divest from the State of Israel. 

The action in Harrisburg is the latest local development following the Oct. 7, 2023 attack against Israel that saw Hamas militants launch a cross-border attack on the country, killing more than 1,200 Israelis and taking more than 250 people hostage. Israel responded with a military siege that has, according to the Gaza Health Ministry, killed more than 35,000 Palestinians and prompted calls for a ceasefire from leaders around the globe. 

The bill approved this week, Senate Bill 1260, is sponsored by Democratic state Sen. Steve Santarsiero and backed by a bipartisan group of lawmakers in the Senate. It passed the Senate State Government Committee on Tuesday with a 9-2 vote, and the full Senate approved the bill on Thursday with a vote of 41-7.

Santarsiero, speaking about the bill prior to the committee vote, said the legislation would signal that the state stands in support of Israel.

“Israel is our reliable democratic ally in the Middle East. The Middle East is a part of the world that we know is very volatile. We’ve seen that volatility over the last 50 years. Having a democratic nation that we can count on both politically in global politics and economically is critically important to us,” he said.

He later added: “I think it’s important that the commonwealth show its support of its staunch democratic ally – that we, in fact, stand with Israel.” 

The bill comes on the heels of a push during this year’s primary election to cast protest votes in opposition to Israel’s ongoing military offensive in Gaza and after several Pennsylvania colleges and universities received national attention for protests that occurred on their campuses. 

Below, City & State breaks down how the law would work, who supports it and whether it has a path to becoming law in Pennsylvania. 

SB 1260 would prohibit public funds from boycotting and divesting from Israel

SB 1260 prohibits public funds in the commonwealth – a term that includes the State Employees’ Retirement Fund, the Public School Employees’ Retirement Fund, the Pennsylvania Municipal Retirement Fund and any other fund overseen by the state treasurer – from engaging in boycotts or divestments from Israel. 

In the leadup to the May primary election, a collection of advocacy organizations on the political left, including chapters of the Democratic Socialists of America, organized the “Uncommitted PA” campaign – a statewide push to convince voters to cast a protest vote against President Joe Biden in the primary election. 

As part of the campaign, advocates called for the state to divest from Israel, pointing to the state’s $56 million worth of investments in Israel Bonds, which is the U.S. underwriter of securities issued by Israel.

Pennsylvania Treasurer Stacy Garrity announced last October that the Treasury was investing an additional $20 million in Israel Bonds, bringing the state’s total investment to $56 million. Garrity has publicly backed the bill, and wrote in a June 24 letter to the Senate State Government Committee that the bill “would express Pennsylvania’s support for Israel, our strongest ally in the Middle East.”

“The bill is strong, and it was drafted thoughtfully,” Garrity wrote.

The bill is a direct response to the Palestinian-led Boycott, Divestment and Sanctions movement, also referred to as BDS, which advocates for boycotts, divestments and economic sanctions against the State of Israel. 

Colleges and universities would lose state funding if they divest from Israel

The legislation could also have significant impacts on colleges and universities in the state. 

The bill, if signed into law, would prohibit the state from providing state funding to colleges, universities and other institutions of higher learning that boycott or divest from Israel. Institutions that would be subject to the law include universities within the Pennsylvania State System of Higher Education, state-related universities, accredited private and independent colleges, as well as private licensed schools as defined under the state’s Private Licensed Schools Act. 

Protests against the ongoing Israel-Hamas war popped up at college campuses throughout the commonwealth this spring, including at the University of Pennsylvania and the University of Pittsburgh, prompting attention from public officials on both sides of the aisle.

Santarsiero, the prime sponsor of SB 1260, also referred to as the Stand With Israel Act, said prior to the Senate State Government Committee’s vote that the bill would not prevent colleges and universities from divesting or boycotting, noting that it would penalize institutions that choose divest.

“What that means is that there would be a consequence for taking an extreme step of divesting from or boycotting Israel. What it does not mean is that we are telling private institutions that they cannot take either those actions – they are certainly free to do so,” Santarsiero said. “There would simply be a consequence, as it pertains to the Commonwealth of Pennsylvania and the financial support that they would otherwise receive.” 

He added that the bill would not affect free speech, and would allow for protests on college campuses: “I think it’s important to note that this legislation, were it enacted into law, does not impact or inhibit anyone’s free speech rights under the First Amendment,” he said. “Students, faculty members, and administrators would still have the ability to speak their minds as it pertains to Israel or any other matter. So their ability to express themselves, to demonstrate, to protest would not be impacted by this legislation.”

The bill received bipartisan support in the Senate, earning 41 votes in favor and 7 votes in opposition. State Sen. Kristin Phillips-Hill, who co-sponsored the bill with Santarsiero, pointed to recent college protests as one reason to back the bill. She said the bill represents an opportunity to show Israel that it has support from the state of Pennsylvania. 

“Israel is the only true democracy in a very volatile region of the world, and when we turn our back on our ally in their most challenging moment, what message does that send to the world?” Phillips-Hill asked on the Senate floor. “We are the greatest nation in the world, and today is our moment, as a commonwealth, to show that we will always stand for our allies, and we will not be bullied or threatened in the face of adversity.”

Democratic state Sen. Art Haywood spoke in opposition to the bill, saying he had concerns about how it could impact free speech, and cited worries from the American Civil Liberties Union of Pennsylvania.

“I’m very concerned that this legislation will restrict some of the speech that some of my colleagues are so concerned about. According to the ACLU of Pennsylvania, this legislation raises constitutional concerns that will have a chilling effect and go against some of our First Amendment values,” Haywood said.

Ultimately, seven senators voted in opposition to the bill: Republican state Sen. Jarrett Coleman and Democratic state Sens. Tim Kearney, Katie Muth, Nikil Saval, Anthony H. Williams, Lindsey Williams and Haywood.

What comes next?

The bill still needs to be considered by the Pennsylvania House of Representatives and receive both a committee vote and a floor vote in order to advance to Gov. Josh Shapiro’s desk. 

A spokesperson for Shapiro said in a statement to City & State that the governor plans to sign the bill if it makes it to his desk. 

“The Commonwealth already has laws on the books that hold companies accountable if they pursue BDS policies. This bipartisan legislation is a natural next step to ensure BDS – and the antisemitism it promotes – doesn't spread on our college campuses, and the Governor supports the bill and would sign it into law if it reaches his desk," said Shapiro spokesperson Will Simons.

However, the bill would first have to pass the state House. A spokesperson for House Majority Leader Matt Bradford said they are currently reviewing the bill.

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