BILL NUMBER: AB 382 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 19, 2013
AMENDED IN ASSEMBLY APRIL 30, 2013
AMENDED IN ASSEMBLY APRIL 15, 2013
INTRODUCED BY Assembly Member Mullin
FEBRUARY 14, 2013
An act to amend Sections 54956.81 and
Section 54957.5 of the Government Code, relating to state and
local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 382, as amended, Mullin. State and local government:
alternative investments: public access.
Existing law, the California Public Records Act, requires state
agencies and local agencies to make public records available for
inspection, subject to specified criteria, and with specified
exceptions. Existing law excludes from disclosure records of public
investment funds regarding alternative investments, as defined,
unless the information has already been publicly released by the
keeper of the information. Existing law defines an alternative
investment to mean an investment in a private equity fund, venture
fund, hedge fund, or absolute return fund.
Existing law, the Ralph M. Brown Act, requires the meetings of the
legislative body of a local agency to be conducted openly and
publicly, with specified exceptions. Existing law makes agendas
of public meetings and other writings distributed to the
members of the governing board disclosable public records, with
certain exceptions. Existing law authorizes the legislative
body of a local agency that invests pension funds to hold a meeting
in closed session to consider the purchase or sale of particular,
specific pension fund investments.
This bill would further authorize the legislative body of
a local agency that invests pension funds to hold a meeting in
closed session to consider information related to alternative
investments and alternative investment vehicles, as specified
include prescribed documents dealing with alternative
investments within the exceptions to the requirement for disclosure
of documents rela ted to public meetings .
Existing constitutional provisions require that a statute that
limits the right of access to the meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by the limitation and the need
for protecting that interest.
This bill would make legislative findings to that effect.
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. Section 54956.81 of the Government
Code is amended to read:
54956.81. Notwithstanding any other provision of this chapter, a
legislative body of a local agency that invests pension funds may
hold a closed session to consider the purchase or sale of particular,
specific pension fund investments or the information set forth in
subdivision (a) of Section 6254.26. All investment transaction
decisions made during the closed session shall be made by rollcall
vote entered into the minutes of the closed session as provided in
subdivision (a) of Section 54957.2.
SEC. 2. SECTION 1. Section 54957.5
of the Government Code is amended to read:
54957.5. (a) Notwithstanding Section 6255 or any other law,
agendas of public meetings and any other writings, when distributed
to all, or a majority of all, of the members of a legislative body of
a local agency by any person in connection with a matter subject to
discussion or consideration at an open meeting of the body, are
disclosable public records under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title
1), and shall be made available upon request without delay. However,
this section shall not include any writing exempt from public
disclosure under Section 6253.5, 6254, 6254.3, 6254.7, 6254.15,
6254.16, 6254.22, or 6254.26.
(b) (1) If a writing that is a public record under subdivision
(a), and that relates to an agenda item for an open session of a
regular meeting of the legislative body of a local agency, is
distributed less than 72 hours prior to that meeting, the writing
shall be made available for public inspection pursuant to paragraph
(2) at the time the writing is distributed to all, or a majority of
all, of the members of the body.
(2) A local agency shall make any writing described in paragraph
(1) available for public inspection at a public office or location
that the agency shall designate for this purpose. Each local agency
shall list the address of this office or location on the agendas for
all meetings of the legislative body of that agency. The local agency
also may post the writing on the local agency's Internet Web site in
a position and manner that makes it clear that the writing relates
to an agenda item for an upcoming meeting.
(3) This subdivision shall become operative on July 1, 2008.
(c) Writings that are public records under subdivision (a) and
that are distributed during a public meeting shall be made available
for public inspection at the meeting if prepared by the local agency
or a member of its legislative body, or after the meeting if prepared
by some other person. These writings shall be made available in
appropriate alternative formats upon request by a person with a
disability, as required by Section 202 of the Americans with
Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal
rules and regulations adopted in implementation thereof.
(d) This chapter shall not be construed to prevent the legislative
body of a local agency from charging a fee or deposit for a copy of
a public record pursuant to Section 6253, except that a surcharge
shall not be imposed on persons with disabilities in violation of
Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C.
Sec. 12132), and the federal rules and regulations adopted in
implementation thereof.
(e) This section shall not be construed to limit or delay the
public's right to inspect or obtain a copy of any record required to
be disclosed under the requirements of the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of
Title 1).This chapter shall not be construed to require a legislative
body of a local agency to place any paid advertisement or any other
paid notice in any publication.
SEC. 3. SEC. 2. The Legislature
finds and declares that Sections 1 and 2
Section 1 of this act, which amend
Sections 54956.81 and amends Section 54957.5 of
the Government Code, impose imposes a
limitation on the public's right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes the
following findings to demonstrate the interest protected by this
limitation and the need for protecting that interest:
It is in the public interest to ensure that disclosure
requirements in the Ralph M. Brown Act are consistent with those in
the California Public Records Act. When Section
6254.26 was added to the Government Code, the following findings were
made, which are applicable with equal force to this measure:
(a) Access to information concerning the conduct of the people's
business is a fundamental and necessary right of every person in this
state pursuant to subdivision (b) of Section 3 of Article I of the
California Constitution and Section 6250 of the Government Code. The
public has a paramount interest in knowing how public money is spent
and invested.
(b) Public pension and retirement systems and public endowments
and foundations have a fiduciary duty to invest the assets of these
funds with care, skill, prudence, and diligence. This fiduciary duty
includes diversifying the investment of assets in a manner so as to
minimize the risk of loss and maximize the rate of return. Investment
in high performing alternative investments is a component of
diversifying the pension assets and maximizing the rate of return.
(c) At the same time, a certain narrow class of public
investments, alternative investments, involves some information that
historically has been kept confidential because confidentiality is
essential to their success. The disclosure of certain information
pertaining to alternative investments could be harmful to generating
sustainable and profitable rates of return for the investments of the
pension or retirement system and of the public endowment or
foundation. Public pension systems desire to invest a portion of
their portfolio in alternative investments to boost return.
(d) Following recent litigation seeking to require public pension
funds and retirement systems and public endowments or foundations to
disclose certain information about alternative investments, the funds
risk being excluded from participation in certain alternative
investments. Exclusion from investing pension or retirement system
assets in alternative investments may impose substantial costs on
state public pension funds and the public employees who are their
beneficiaries.
(e) It is the intent of this legislation to balance the public's
right of access to information and the ability of public pension
funds to continue to invest in alternative investment funds. It is
also the intent of this legislation to allow the public to monitor
the performance of public investments; for public bodies to avoid
payment of excessive fees to private individuals or companies; and
for the public to be able to know the principals involved in
management of alternative investment funds in which public investment
funds have invested so that conflicts of interest on the part of
public officials can be avoided. This legislation is not intended to
reverse the general presumption of access and openness of the
California Public Records Act and subdivision (b) of Section 3 of
Article I of the California Constitution.
(f) It is not the intent of this legislation to overrule or
invalidate any court orders in or stipulated resolutions of prior
litigation relating to any public entity's obligation to disclose
information about its alternative investments to narrow the
information disclosed as a result of those decisions, or in any other
way to apply retroactively. It is, rather, the intent of this
legislation to establish predictability about what should and should
not be disclosed regarding private equity funds so that public
pension funds will be able to continue to invest in private equity
funds.