BILL NUMBER: AB 246 CHAPTERED 10/08/07 CHAPTER 315 FILED WITH SECRETARY OF STATE OCTOBER 8, 2007 APPROVED BY GOVERNOR OCTOBER 8, 2007 PASSED THE SENATE AUGUST 30, 2007 PASSED THE ASSEMBLY APRIL 12, 2007 INTRODUCED BY Assembly Member Torrico FEBRUARY 1, 2007 An act to amend Sections 31459, 31459.1, and 31528 of the Government Code, relating to county employees' retirement. LEGISLATIVE COUNSEL'S DIGEST AB 246, Torrico. County employees' retirement: retirement boards. The County Employees Retirement Law of 1937 prohibits a member or employee of a retirement board from becoming an endorser, surety, or obligor on, or from having any personal interest in the making of an investment for the board, or in the gains or profits that accrue from those investments, except as specified. This bill would prohibit a member or employee of a retirement board or board of investments from selling or providing any investment product that would be considered an asset of the retirement fund to a retirement system established under that law. The bill would also make technical, nonsubstantive changes to these provisions. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 31459 of the Government Code is amended to read: 31459. (a) In a county in which a board of investments has been established pursuant to Section 31520.2: (1) As used in Sections 31453, 31453.5, 31454, 31454.1, 31454.5, 31472, 31510.1, 31510.3, 31510.6, 31588.1, 31589.1, 31591, 31592.3, 31594, 31595.1, 31595.9, 31596, 31596.1, 31601.1, 31607, 31625, 31784, and 31872, "board" means a board of investments. (2) As used in the first paragraph of Section 31592.2, "board" means a board of investments. (3) Sections 31510, 31510.4, 31510.8, 31522, 31523, 31524, 31525, 31528, 31529, 31529.5, 31595, 31680, and 31680.1 apply to both the board of retirement and board of investments, and "board" means both "board of retirement" and "board of investments." (b) In Article 17 (commencing with Section 31880) of this chapter, "board" means the Board of Administration of the Public Employees' Retirement System. (c) In all other cases, "board" means the board of retirement. SEC. 2. Section 31459.1 of the Government Code is amended to read: 31459.1. (a) In a county in which a board of investments has been established pursuant to Section 31520.2: (1) As used in Sections 31453, 31453.5, 31454, 31454.1, 31454.5, 31472, 31588.1, 31589.1, 31591, 31592.3, 31594, 31595.1, 31595.9, 31596, 31596.1, 31601.1, 31607, 31610, 31611, 31612, 31613, 31616, 31618, 31621.11, 31625, 31639.26, 31784, and 31872, "board" means board of investments. (2) As used in the first paragraph of Section 31592.2 and the first paragraph and subdivision (c) of the second paragraph of Section 31595, "board" means a board of investments. (3) Sections 31521, 31522, 31522.1, 31522.2, 31523, 31524, 31525, 31528, 31529, 31529.5, 31580.2, 31614, 31680, and 31680.1, apply to both the board of retirement and board of investments, and "board" means either or both the board of retirement and board of investments. (4) Subdivision (a) of Section 31526 and subdivisions (a) and (b) of the second paragraph of Section 31595 apply to both the board of retirement and board of investments, and "board" means either or both the board of retirement and board of investments. (b) In Article 17 (commencing with Section 31880) of this chapter, "board" means the Board of Administration of the Public Employees' Retirement System. (c) In all other cases, "board" means the board of retirement. (d) This section shall apply only in a county of the first class, as defined in Section 28020, as amended by Chapter 1204 of the Statutes of 1971, and Section 28022, as amended by Chapter 43 of the Statutes of 1961. SEC. 3. Section 31528 of the Government Code is amended to read: 31528. (a) Unless permitted by this chapter, a member or employee of the board shall not become an endorser, surety, or obligor on, or have any personal interest, direct or indirect, in the making of any investment for the board, or in the gains or profits accruing from those investments. A member or employee of the board shall not directly or indirectly, for himself or herself, or as an agent or partner of others, borrow or use any of the funds or deposits of the retirement system, except to make current and necessary payments authorized by the board. (b) A member or employee of the board shall not, directly or indirectly, by himself or herself, or as an agent or partner or employee of others, sell or provide any investment product that would be considered an asset of the fund, to any retirement system established pursuant to this chapter.