BILL NUMBER: SB 955	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 17, 2012
	AMENDED IN SENATE  MARCH 29, 2012

INTRODUCED BY   Senators Pavley and Rubio
   (Principal coauthor: Assembly Member Alejo)
   (Coauthor: Senator DeSaulnier)
   (Coauthors: Assembly Members Ammiano, Blumenfield, Perea, Solorio,
Wieckowski, and Williams)

                        JANUARY 5, 2012

   An act to add Section 7514.2 to the Government Code, relating to
public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 955, as amended, Pavley. Public employees' retirement: pension
fund management.
   Existing law establishes various public retirement systems,
including, among others, the Public Employees' Retirement System
(PERS), the State Teachers' Retirement System (STRS), the Judges'
Retirement System II, and various county retirement systems pursuant
to the County Employees Retirement Law of 1937. These systems provide
defined pension benefits to public employees based on age, service
credit, and final compensation. The California Constitution confers
upon the retirement boards of public retirement systems plenary
authority and fiduciary responsibility for the investment of moneys
of those systems.
   This bill would authorize these public retirement system boards,
consistent with their fiduciary duties and the standard for prudent
investment, to prioritize investment in an in-state infrastructure
project over a comparable out-of-state infrastructure project.
   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.  (a) The Legislature finds and declares all of the
following:
   (1) Due to the current economic recession in which the residents
of the state and the nation as a whole find themselves,
infrastructure investment represents a significant opportunity to
spur job growth while improving California's infrastructure, which is
important to maintain business competitiveness.
   (2) While California may be emerging from the recession, over
2,000,000 Californians remain unemployed.
   (3) Investments in infrastructure can provide much needed
employment opportunities for Californians struggling to find work, as
well as provide a steady rate of return for investment funds that
invest in those projects.
   (4) The California Public Employees' Retirement System (CalPERS)
has announced plans to invest  up to  eight hundred million
dollars ($800,000,000) in both public and private infrastructure,
 including, but not limited to, transportation, energy,
natural resources, utilities, water, communications, and other social
support services   as defined in the CalPERS
Infrastructure Program Investment Policy  .
   (5) The California State Teachers' Retirement System (CalSTRS)
 plans to invest up to five hundred- million dollars
($500,000,000) in infrastructure projects   has
committed up to six hundred fifty million dollars ($650,000,000) to
infrastructure, in accordance with the CalSTRS Infrastructure Program
Investment Policy  .
   (b) Accordingly, it is the intent of the Legislature in enacting
this act, consistent with the plenary authority and fiduciary
responsibilities of the retirement boards of public pension or
retirement systems under Section 17 of Article XVI of the California
Constitution, that those retirement boards that have specifically
targeted infrastructure investment policies prioritize investments in
projects located in California.
  SEC. 2.  Section 7514.2 is added to the Government Code, to read:
   7514.2.  (a) As used in this section, the following definitions
shall apply:
   (1) "Board" means the retirement board of a public pension or
retirement system, as defined in subdivision (h) of Section 17 of
Article XVI of the California Constitution.
   (2) "Infrastructure" includes, but is not limited to,
telecommunications, power, transportation, ports, petrochemical, and
utilities.
   (b)  The   A  board may, subject to and
consistent with its fiduciary duties and the standard for prudent
investment set forth in Section 20190 of this code  , Section
22203 of the Education Code,  and Section 17 of Article XVI of
the California Constitution, prioritize investment in an in-state
infrastructure project over a comparable out-of-state project.
   (c) The Legislature encourages  the   each
 board to prioritize investment in in-state infrastructure
projects over alternative out-of-state infrastructure projects if the
investments in the in-state projects are consistent with the board's
fiduciary duties to minimize the risk of loss and to maximize the
rate of return. 
   (d) Nothing in this section shall require a board to take action
that is inconsistent with its plenary authority and fiduciary
responsibilities, as described in Section 17 of Article XVI of the
California Constitution.