BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 205|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 205
Author: Pan (D)
Amended: As introduced
Vote: 21
SENATE PUBLIC EMPLOY. & RETIRE. COMM. : 5-0, 6/10/13
AYES: Beall, Walters, Block, Gaines, Yee
ASSEMBLY FLOOR : 55-20, 5/13/13 - See last page for vote
SUBJECT : Public employees' retirement: pension fund
management
SOURCE : Service Employees International Union
DIGEST : This bill adds the board of retirement or board of
investments of a retirement system established under the County
Employees' Retirement Law of 1937 ('37 Act) to the list of
public retirement system boards that are authorized to
prioritize investment in in-state infrastructure projects over
alternative out-of-state projects if the investments are
consistent with the board's fiduciary responsibility.
ANALYSIS :
Existing law:
1.Provides, under the state Constitution by Proposition 162, the
California Pension Protection Act of 1992, that the boards of
California's public retirement systems have plenary authority
CONTINUED
AB 205
Page
2
and fiduciary responsibility for investment of monies and
administration of the system. Under Proposition 162, the
Legislature retained its authority to, by statute, prohibit
certain investments by a retirement board, where it is in the
public interest to do so, and provided that the prohibition
satisfies the standards of fiduciary care and loyalty required
of a retirement board pursuant to this section.
2.As enacted by SB 955 (Pavley and Rubio, Chapter 760, Statutes
of 2012),
A. Permits the California Public Employees' Retirement
System (CalPERS) and the California State Teachers'
Retirement System (CalSTRS) to prioritize investments in
in-state infrastructure projects over alternative
out-of-state projects if the investments are consistent
with each system's fiduciary responsibility.
B. Defines infrastructure to include telecommunications,
power, transportation, ports, petrochemicals, and
utilities.
C. States the Legislature's intent to encourage each board
to prioritize investment in in-state infrastructure
projects over comparable out-of-state infrastructure
projects.
D. Specifies that nothing in the bill requires CalPERS or
CalSTRS to take action that is inconsistent with its
plenary authority and fiduciary responsibilities.
3.Establishes the'37 Act, which governs 20 independent county
retirement systems.
This bill adds the '37 Act retirement systems to the statute
encouraging public retirement systems to prioritize investments
in in-state infrastructure projects.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/12/13)
Service Employees International Union (SEIU) (source)
CONTINUED
AB 205
Page
3
American Federation of State, County and Municipal Employees,
AFL-CIO
Glendale City Employees' Association
Organization of SMUD Employees
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
ARGUMENTS IN SUPPORT : According to the sponsor, SEIU, "AB 205
would authorize the '37 Act retirement systems to give
preference to infrastructure investments in California when
determining which investments to participate in. At the urging
of SEIU and other public employee organizations, CalPERS and
CalSTRS have both dedicated investment resources toward
investment in California infrastructure. CalPERS has set aside
$800 million to be directly invested in projects that create
California jobs in our communities."
ASSEMBLY FLOOR : 55-20, 5/13/13
AYES: Achadjian, Alejo, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Ch�vez, Chesbro, Cooley, Daly, Dickinson,
Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gordon,
Gorell, Gray, Hall, Roger Hern�ndez, Jones-Sawyer, Levine,
Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Olsen, Pan,
Perea, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas,
Skinner, Stone, Ting, Torres, Weber, Wieckowski, Williams,
Yamada, John A. P�rez
NOES: Bigelow, Conway, Dahle, Donnelly, Beth Gaines, Grove,
Hagman, Harkey, Jones, Linder, Logue, Maienschein, Mansoor,
Melendez, Morrell, Nestande, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Allen, Ammiano, Holden, Lowenthal, Vacancy
JL:ej 6/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED
AB 205
Page
4
CONTINUED