BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1271|
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                              UNFINISHED BUSINESS


          Bill No:  SB 1271
          Author:   Romero (D)
          Amended:  8/9/10
          Vote:     27

           
           SENATE ELECTIONS, REAP. & CONST. AMEND. COMMITTEE  : 5-0,  
            04/20/10
          AYES: Hancock, Denham, DeSaulnier, Liu, Strickland

           SENATE APPROPRIATIONS COMMITTEE  : 9-0, 05/03/10
          AYES: Kehoe, Cox, Corbett, Leno, Price, Walters, Wolk,  
            Wyland, Yee
          NO VOTE RECORDED: Alquist, Denham

           SENATE FLOOR  :  30-0, 5/10/10
          AYES:  Aanestad, Alquist, Ashburn, Calderon, Cedillo,  
            Cogdill, Correa, Cox, DeSaulnier, Ducheny, Florez,  
            Hancock, Hollingsworth, Huff, Kehoe, Leno, Lowenthal,  
            Negrete McLeod, Padilla, Pavley, Price, Romero, Runner,  
            Simitian, Steinberg, Walters, Wolk, Wright, Wyland, Yee
          NO VOTE RECORDED:  Corbett, Denham, Dutton, Harman, Liu,  
            Oropeza, Strickland, Wiggins, Vacancy, Vacancy

           ASSEMBLY FLOOR  :  76-0, 8/23/10 - See last page for vote


           SUBJECT  :    Political Reform Act of 1974: conflict of  
          interest codes

           SOURCE  :     American Federation of State, County and  
          Municipal 
                      Employees
                                                           CONTINUED





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           DIGEST  :    This bill requires a board, commission, or  
          agency of a public pension or retirement system to attach  
          to its conflict of interest code an appendix that lists  
          each position for which an individual occupying that  
          position is required to file a statement of economic  
          interests as a public official who manages public  
          investments, as defined.  The bill further requires the  
          board, commission, or agency to post the appendix on its  
          Internet Web site.

           Assembly Amendments  make a clarify change. 

           ANALYSIS  :    Existing law, pursuant to the Political Reform  
          Act, requires each state and local government agency to  
          adopt and promulgate a conflict of interest code.  A  
          conflict of interest code must establish conflict of  
          interest standards for designated employees of the agency  
          and requires those employees to file periodic statements of  
          economic interest (SEIs) disclosing specified personal  
          financial information. 

          Existing law further requires specified public officials,  
          including officials who manage public investments, to also  
          file SEIs, but does not require those officials to be  
          specifically enumerated in the agency's conflict of  
          interest code.  

          This bill requires a board, commission, or agency of a  
          public pension or retirement system to attach to its  
          conflict of interest code an appendix that lists each  
          position for which an individual occupying that position is  
          required to file a SEI as a public official who manages  
          public investments. The bill further requires the board,  
          commission, or agency to post the appendix on its Internet  
          Web site.  

          This bill provides that for this purpose "public official  
          who manages public investments" includes a salaried or  
          unsalaried member of a committee, board, commission, or  
          other entity that exists as, or within, a governmental  
          agency and that possesses decision making authority.  








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          This bill provides that a committee, board, commission, or  
          other entity possesses decision making authority if any of  
          the following apply:

          1. The entity may make a final governmental decision.

          2. The entity may compel a governmental decision or prevent  
             a governmental decision, either by virtue of possessing  
             exclusive power to initiate the decision or by having  
             veto authority that may not be overridden.

          3. The entity makes substantive recommendations that are,  
             and over an extended period of time have been, regularly  
             approved, without significant amendment or modification,  
             by another public official or governmental agency.

          However, this bill provides that a committee, board,  
          commission, or other entity does not possess decision  
          making authority if it is formed for the sole purpose of  
          researching a subject and preparing a report or  
          recommendation for submission to another governmental  
          entity that has final decision making authority. 

          The following public retirement agencies, among others,  
          falls under the purview of this bill:

            Alameda-Contra Costa Transit District Retirement Plan
            Alameda County Employees' Retirement Association
            Bart Investment Plans Committee
            City Of Concord Retirement System
            Contra Costa Employees' Retirement Association
            East Bay Municipal Utility District Retirement System
            Fresno City Employees' Retirement System
            Fresno City Fire & Police Retirement System
            Fresno County Employees' Retirement Association
            Imperial County Employees' Retirement System
            Kern County Employees' Retirement Association
            Los Angeles City Employees' Retirement System
            Los Angeles County Employees' Retirement Association
            Los Angeles County MTA Retirement Plan 
            Los Angeles Fire & Police Pension System
            Los Angeles Water and Power Employees' Retirement Plan
            Marin County Employees' Retirement Association
            Mendocino County Employees' Retirement Association







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            Merced County Employees' Retirement Association
            Oakland Municipal Employees' Retirement System
            Oakland Police & Fire Retirement System
            Orange County Employees' Retirement System
            Pasadena Fire & Police Retirement System
            Public Employees' Retirement System (CalPERS)
            Sacramento County Employees' Retirement System
            Sacramento Regional Transit District Retirement Plan
            San Bernardino County Employees' Retirement Association
            San Diego City Employees' Retirement System
            San Diego County Employees' Retirement Association
            San Francisco City & County Employees' Retirement System
            San Joaquin County Employees' Retirement Association
            San Jose Federated City Employees' Retirement System
            San Jose Police & Fire Department Retirement Plan
            San Luis Obispo County Pension Trust
            San Mateo County Employees' Retirement Association
            Santa Barbara County Employees' Retirement System
            Santa Clara Valley Transportation Authority/Amalgamated  
            Transit Union        
          
           Pension Plan
           
            Sonoma County Employees' Retirement Association
            Stanislaus County Employees' Retirement Association
            State of California Savings Plus Program
            State Teachers' Retirement System 
            Tulare County Employees' Retirement Association
            University Of California Retirement System
            Ventura County Employees' Retirement Association

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

                          Fiscal Impact (in thousands)

           Major Provisions                2010-11     2011-12     2012-13     
            Fund
                              
          Admin expenses              -----------minor,  
          absorbable--------          Specials*

          Admin expenses              ----unknown, likely less than  
          $50----      General**







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          *Teachers Retirement Fund and Public Employees Retirement  
          Fund          **Reimbursable State Mandate

           SUPPORT  :   (Verified  6/22/10)  (Per Asm. E & R Cmte.)

          American Federation of State, County and Municipal  
          Employees (source)
          Association of California Water Agencies
          California State Teachers' Retirement System
          Fair Political Practices Commission

           OPPOSITION  :    (Verified  6/22/10) (Per Asm. E & R Cmte.)

          Department of Finance

           ARGUMENTS IN SUPPORT  :    California's public retirement  
          systems (PRS) each have a governing body whose  
          responsibility is to administer the pension in a manner  
          that protects the interests of the pension members for whom  
          they have a fiduciary responsibility.  The Political Reform  
          Act requires state and local government agencies to adopt  
          and promulgate a Conflict of Interest Code.  The purpose of  
          this Conflict of Interest Code, with respect to public  
          employee retirement systems is to facilitate the disclosure  
          of the economic interests of public officials serving PRS  
          that may be materially affected by PRS's actions in which  
          they participate.  

          However, the Conflict of Interest code promulgated by some  
          PRS are extremely lax and/or do not encompass all those  
          persons who may be materially affected by the PRS actions  
          in which they actively participate in the decision-making  
          process, but do not vote.  Since these persons do not file  
          SEIs there is no way to determine if they have been  
          materially affected.  

          This bill encompasses those persons who participate in the  
          decision making process, but do not vote, requiring them to  
          file SEIs.

          The sponsor of this bill, the American Federation of State,  
          County and Municipal Employees writes, "AFSCME believes in  
          full transparency and disclosure for a public retirement  







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          board, commission, or agency.  It is vitally important  
          during this time of economic hardship that all public funds  
          are handled responsibly and invested with the best interest  
          of the state in mind.  SB 1271 would require an appendix be  
          attached to the public retirement board conflict of  
          interest code that lists all individuals on the board,  
          commission, or agency that are required to file a statement  
          of economic interests, regarding public investments.  It is  
          always sound practices to understand, and make public, each  
          possible financial interest of any public retirement board  
          member."

           ASSEMBLY FLOOR  : 
          AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill  
            Berryhill, Tom Berryhill, Block, Blumenfield, Bradford,  
            Brownley, Buchanan, Caballero, Charles Calderon, Carter,  
            Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,  
            DeVore, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,  
            Fuller, Gaines, Galgiani, Garrick, Gatto, Gilmore,  
            Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,  
            Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie  
            Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,  
            Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra  
            Strickland, Swanson, Torlakson, Torres, Torrico, Tran,  
            Villines, Yamada, John A. Perez
          NO VOTE RECORDED: Furutani, Norby, Vacancy, Vacancy


          DLW:do  8/24/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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