BILL NUMBER: AB 873	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Furutani

                        FEBRUARY 17, 2011

   An act to add Section 7508.6 to the Government Code, relating to
public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 873, as introduced, Furutani. Public employees' retirement:
pension fund management.
   The Public Employees' Retirement Law creates the Public Employees'
Retirement Fund, which is a trust fund created and administered
solely for the benefit of the members and retired members of this
system and their survivors and beneficiaries. The Board of
Administration of the Public Employees' Retirement System (PERS) has
the exclusive control of the administration and investment of the
retirement fund.
   The Teachers' Retirement Law establishes the State Teachers'
Retirement System (STRS) in order to provide a financially sound plan
for the retirement, with adequate retirement allowances, for
teachers in public schools of the state, teachers in schools
supported by the state, and other persons employed in connection with
the schools. The plan and the system are administered by the
Teachers' Retirement Board.
   This bill would prohibit an individual, who was a member of the
retirement board of PERS or STRS or an administrator, executive
officer, investment officer, or general counsel of the system, from
accepting employment, within 2 years after separation from the
system, with any employer with which the individual participated
personally and substantially with contracts or investments valued
greater than $10 million any time in the previous 5 years while the
individual was employed by, or served on the board of, the system, as
specified. The bill would except from that prohibition a former
employee of PERS or STRS working for any entity whose principal
market is unrelated to the individual's prior service.
   The bill would also prohibit an individual from, for 2 years after
separation from the system, accepting employment with any placement
agent who has successfully placed an investment with either PERS or
STRS during the prior 10 years.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The flow of skills between the public and private sector
promotes efficiency and collaboration between both sectors and is
essential to the success of many government programs.
   (b) The trading of information acquired as a government employee
and unavailable to members of the general public, for the purpose of
personal enrichment, undermines taxpayer investments and public
confidence in those investments.
  SEC. 2.  Section 7508.6 is added to the Government Code, to read:
   7508.6.  (a) (1) An individual described in paragraph (2) shall
not, for two years after separation from a system, accept employment
with any employer with which the individual participated personally
and substantially with system contracts or investments valued greater
than ten million dollars ($10,000,000) any time in the previous five
years while the individual was employed by, or serving on the board
of, the system.
   (2) Paragraph (1) shall apply to any individual who was a member
of the retirement board of a system, or an administrator, executive
officer, investment officer, or general counsel of a system.
   (b) The prohibition in subdivision (a) includes, but is not
limited to, any individual who participate personally and
substantially in system investments or contracts in excess of ten
million dollars ($10,000,000) when any of the following apply:
   (1) The decision to award a modification of a contract or
subcontract was in excess of ten million dollars ($10,000,000).
   (2) The decision to award a task order or delivery order was in
excess of ten million dollars ($10,000,000).
   (3) The decision to establish overhead or other rates was valued
in excess of ten million dollars ($10,000,000).
   (4) The decision to approve issuing a payment or payments was in
excess of ten million dollars ($10,000,000).
   (5) The decision to pay or settle a claim was in excess of ten
million dollars ($10,000,000).
   (c) The prohibition in subdivision (a) shall not prohibit a former
employee of a system from working for any entity whose principal
market is unrelated to the individual's prior service.
   (d) Notwithstanding subdivision (a), an individual shall not, for
two years after separation from a system, accept employment with any
placement agent, as defined by subdivision (d) of Section 7513.8, who
has successfully placed an investment with either system during the
prior 10 years.
   (e) For the purposes of this section, "system" means the Public
Employees' Retirement System or the State Teachers' Retirement
System.