BILL NUMBER: AB 873	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 14, 2011

INTRODUCED BY   Assembly Member Furutani
    (   Coauthor:   Assembly Member  
Allen   ) 

                        FEBRUARY 17, 2011

   An act to add  Section 7508.6   Sections
87408, 87409, and 87410  to the Government Code, relating to
 public employees' retirement   the Political
Reform Act of 1974  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 873, as amended, Furutani.  Public employees'
retirement: pension fund management.   Political Reform
Act of 1974: postgovernment employment restrictions. 
   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.  
   The Political Reform Act of 1974 imposes specified restrictions on
the postgovernment employment activities of elected state officers
and designated employees of state administrative agencies, including
prohibiting those individuals from representing another person, by
means of an appearance or communication, before a state
administrative agency for the purpose of influencing specified
actions for a period of one year after leaving state service. 

   This bill would prohibit members of the Board of Administration of
PERS, members of the Teachers' Retirement Board, and specified
officers and employees of PERS and STRS from engaging in certain
employment activities after leaving service with PERS or STRS.
Specifically, the bill would prohibit those individuals from
representing another person, by means of an appearance or
communication, before PERS or STRS for the purpose of influencing
specified actions for a period of 4 years after leaving service with
PERS or STRS. The bill would also prohibit those individuals from
assisting a business entity, for a period of 2 years after leaving
service with PERS or STRS, to perform, implement, or execute a
contract if the individuals participated in awarding, negotiating, or
administering a contract of greater than $10,000,000 with that
business entity within 2 years prior to leaving service with PERS or
STRS. In addition, the bill would prohibit those individuals from
accepting compensation for providing services as a placement agent,
for a period of 10 years after leaving service with PERS or STRS, in
connection with investments or other business of PERS or STRS. 

   Existing law makes a knowing or willful violation of the Political
Reform Act of 1974 a misdemeanor and subjects offenders to criminal
penalties.  
   This bill would impose a state-mandated local program by creating
additional crimes.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   The Political Reform Act of 1974, an initiative measure, provides
that the Legislature may amend the act to further the act's purposes
upon a 2/3 vote of each house and compliance with specified
procedural requirements.  
   This bill would declare that it furthers the purposes of the act.

   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee:  no   yes  .
State-mandated local program:  no   yes  .


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

   SECTION 1.    Section 87408 is added to the 
 Government Code   , to read:  
   87408.  (a) A member of the Board of Administration of the Public
Employees' Retirement System, an individual in a position designated
in subdivision (a) or (e) of Section 20098 or in an equivalent senior
management position, or an information technology or health benefits
manager with a career executive assignment designation with the
Public Employees' Retirement System, for a period of four years after
leaving that office or position, shall not, for compensation, act as
an agent or attorney for, or otherwise represent, any other person,
except the state, by making a formal or informal appearance before,
or an oral or written communication to, the Public Employees'
Retirement System, or an officer or employee thereof, if the
appearance or communication is made for the purpose of influencing
administrative or legislative action, or influencing an action or
proceeding involving the issuance, amendment, awarding, or revocation
of a permit, license, grant, or contract, or the sale or purchase of
goods or property.
   (b) A member of the Teachers' Retirement Board, an individual in a
position designated in subdivision (a) or (d) of Section 22212.5 of
the Education Code, or an information technology manager with a
career executive assignment designation with the State Teachers'
Retirement System, for a period of four years after leaving that
office or position, shall not, for compensation, act as an agent or
attorney for, or otherwise represent, any other person, except the
state, by making a formal or informal appearance before, or an oral
or written communication to, the State Teachers' Retirement System,
or an officer or employee thereof, if the appearance or communication
is made for the purpose of influencing administrative or legislative
action, or influencing an action or proceeding involving the
issuance, amendment, awarding, or revocation of a permit, license,
grant, or contract, or the sale or purchase of goods or property.

   SEC. 2.    Section 87409 is added to the  
Government Code   , to read:  
   87409.  (a) A member of the Board of Administration of the Public
Employees' Retirement System, an individual in a position designated
in subdivision (a) or (e) of Section 20098 or in an equivalent senior
management position, or an information technology or health benefits
manager with a career executive assignment designation with the
Public Employees' Retirement System, for a period of two years after
leaving that office or position, shall not assist a business entity
to perform, implement, or execute a contract if, during the period of
two years prior to leaving that office or position, the individual
participated, as an official or employee of the Public Employees'
Retirement System, in the award, negotiation, or administration of a
contract, or an amendment to a contract, that has or had a value of
greater than ten million dollars ($10,000,000) and to which that
business entity is or was a party.
   (b) A member of the Teachers' Retirement Board, an individual in a
position designated in subdivision (a) or (d) of Section 22212.5 of
the Education Code, or an information technology manager with a
career executive assignment designation with the State Teachers'
Retirement System, for a period of two years after leaving that
office or position, shall not assist a business entity to perform,
implement, or execute a contract if, during the period of two years
prior to leaving that office or position, the individual
participated, as an official or employee of the State Teachers'
Retirement System, in the award, negotiation, or administration of a
contract, or an amendment to a contract, that had a value of greater
than ten million dollars ($10,000,000) and to which that business
entity was or is a party.
   (c) For purposes of this section:
   (1) "Administration of a contract" means the management,
direction, or oversight of a contract, including evaluation of the
contractor's performance.
   (2) "Business entity" has the same meaning as set forth in Section
82005, and includes a parent or subsidiary of a business entity.
   (3) A contract to which a business entity is or was a party has a
value of greater than ten million dollars ($10,000,000) if the
business entity received or will receive more than ten million
dollars ($10,000,000) in revenue during the term of the contract as a
result of the contract.
   (4) Notwithstanding paragraph (3), with respect to a business
entity that is an external manager and that receives a performance
fee, a contract to which the business entity is or was a party is
presumed to have a value of greater than ten million dollars
($10,000,000) if the external manager managed or manages fifty
million dollars ($50,000,000) or more in an investment fund or
managed or manages, pursuant to contract, a portfolio of securities
or other assets valued at two hundred fifty million dollars
($250,000,000) or more. 
   SEC. 3.    Section 87410 is added to the  
Government Code   , to read:  
   87410.  (a) A member of the Board of Administration of the Public
Employees' Retirement System or an individual in a position
designated in subdivision (a) or (e) of Section 20098, for a period
of 10 years after leaving that office or position, shall not accept
compensation for providing services as a placement agent in
connection with investments or other business of the Public Employees'
Retirement System.
   (b) A member of the Teachers' Retirement Board or an individual in
a position designated in subdivision (a) or (d) of Section 22212.5
of the Education Code, for a period of 10 years after leaving that
office or position, shall not accept compensation for providing
services as a placement agent in connection with investments or other
business of the State Teachers' Retirement System. 
   SEC. 4.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution. 
   SEC. 5.    The Legislature finds and declares that
this bill furthers the purposes of the Political Reform Act of 1974
within the meaning of subdivision (a) of Section 81012 of the
Government Code.  
  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.