BILL NUMBER: AB 2364	CHAPTERED  08/23/04

	CHAPTER  266
	FILED WITH SECRETARY OF STATE  AUGUST 23, 2004
	APPROVED BY GOVERNOR  AUGUST 23, 2004
	PASSED THE SENATE  AUGUST 11, 2004
	PASSED THE ASSEMBLY  MAY 26, 2004
	AMENDED IN ASSEMBLY  MAY 24, 2004
	AMENDED IN ASSEMBLY  APRIL 26, 2004
	AMENDED IN ASSEMBLY  APRIL 12, 2004

INTRODUCED BY   Assembly Member Correa

                        FEBRUARY 19, 2004

   An act to add Section 7514.3 to the Government Code, relating to
state pension systems, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2364, Correa.   State pension systems:  credit enhancement.
   Existing law declares that the retirement boards of public pension
and retirement systems have fiduciary responsibility over the assets
of the public pension or retirement system.
   This bill would authorize  state pension systems to establish
credit enhancement programs to assist issuers of municipal and public
finance debt, as specified.
   The bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 7514.3 is added to the Government Code, to
read:
   7514.3.  Notwithstanding any other provision of law,  state
pension systems may, subject to and consistent with their fiduciary
duties and the standard for prudent investment set forth in Section
20190 of this code and Section 17 of Article XVI of the California
Constitution, establish credit enhancement programs to assist
entities of state and local government and other issuers of municipal
and public finance debt to secure more favorable financing terms
through a variety of types of credit enhancement including, but not
limited to, enhancement of the credit of bonds, notes, and other
indebtedness.  Any credit enhancement program shall comply with the
requirements of Section 503 of the Internal Revenue Code.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order that  state retirement systems may establish credit
enhancement programs during this period of fiscal crisis, it is
necessary that this act take effect immediately.