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SACRAMENTO, Calif. (KTXL) — State lawmakers moved forward on Monday with a bill that aims to cut state economic ties with Russia and Belarus. 

Senate Bill 1328 would ban state agencies and California’s retirement systems from transacting with, investing in or contracting with Russia or Belarus and companies that do business with those countries. The Senate Appropriations Committee placed it on its suspense file with a hearing set May 19.

“It’s part of a national, and to some degree and international, strategy to get Russia to end the violence, end the aggression,” said state Sen. David Cortese, D-San Jose.

The bill requires each board of the state’s retirement systems — also known as CalPERS and CalSTRS – to determine whether companies they invest in have business operations in Russia or Belarus, or supply military equipment to Russia or Belarus.

In the latest bill analysis, CalPERS told lawmakers about 69% of the publicly traded global companies in the fund’s global equity get revenue from Russia and or Belarus and could be subject to the divestment rules laid out in the bill.

The same applies to another 10%, or $14 billion, of its global fixed income portfolios.

At its April board meeting, CalPERS’s board voted to reject the bill, saying the bill is overly broad and would capture more than 3,000 companies in its portfolios.   

For the state teacher’s retirement system, the bill analysis showed its exposure in global equity and fixed-income investments deriving revenue from Russia total of $96 billion.

Both systems expect significant costs in the hundreds of millions of dollars each for investment losses, transaction, staffing and contracting costs if the bill is passed.

Neither retirement system has had a representative participate in any of the bill’s three hearings so far.

“It’s not going to upset the apple cart from a return on investment standpoint,” Cortese said.But they worry about the slippery slope. Today it’s Russia. Who’s it going to be next time. It’s just a different point of view.”

The bill has bipartisan support from 57 state lawmakers.

A spokesperson for CalSTRS said it’s seeking the board’s position on the legislation in its meeting Wednesday.