Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2490

Introduced by Assembly Member Gatto

February 19, 2016

begin delete An act relating to pension system investments. end delete begin insert An act to amend Section 19522 of the Revenue and Taxation Code, relating to taxation. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2490, as amended, Gatto. begin delete Pension system investments. end delete begin insert Franchise Tax Board: federal tax law changes: report. end insert

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Existing law requires the Franchise Tax Board to submit to the Legislature, and to make available to the public, on or before January 10 of each year, a report on all of the changes to the Internal Revenue Code enacted into law in the prior year, as provided.

end insert begin insert

This bill would instead require that report to be submitted and made available on or before January 31 of each year. The bill would make other nonsubstantive changes.

end insert begin delete

The California Constitution grants the retirement board of a public pension or retirement system plenary authority and fiduciary responsibility for the investment of moneys and administration of the system. The constitution authorizes the Legislature to prohibit certain investments when it is in the public interest to do so and the prohibition satisfies standards of fiduciary care and loyalty. Existing law requires the Board of Administration of Public Employees’ Retirement System to provide an annual report to the Governor and the Legislature regarding its financial statements and investments for the fiscal year and a quarterly review of system assets to the Legislature.

end delete begin delete

This bill would state the intent of the Legislature to enact legislation that would require equity firms that contract for investment services with the Board of Administration of the Public Employees’ Retirement System and other pension systems to provide a clear accounting of clawbacks owed to the systems and to require the pension systems to track their clawbacks.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 19522 of the end insert begin insert Revenue and Taxation Code end insert
begin insert is amended to read: end insert

19522.  

(a) (1) (A) On or before begin delete the 10th end delete begin insert January 31 end insert of
begin delete January end delete each year, the Franchise Tax Board shall submit to the
Legislature a report on all changes to the Internal Revenue Code
enacted into law in the prior year. To the extent possible, the report
shall contain an estimate of the revenue effect of conforming
California law to each of those changes.

(B) In the event that changes to the Internal Revenue Code are
enacted after September 15 of any year, the report described in
subparagraph (A) shall be submitted to the Legislature within 120
days after signature by the President of the United States, rather
than begin delete the 10th of January. end delete begin insert January 31. end insert

(2) The report required by this section shall be made available
to the public.

(3) It is the intent of the Legislature that the policy committee
of each house of the Legislature hold at least one public hearing
on the report required by this section.

(b) For any introduced bill begin delete which end delete begin insert that end insert proposes changes in any
of the dates in Section 17024.5, the Franchise Tax Board shall
prepare a complete analysis of the bill begin delete which end delete begin insert that end insert describes all
changes to state law begin delete which end delete begin insert that end insert will automatically occur by
reference to federal law as of the changed date. The Franchise Tax
Board shall immediately update and supplement that analysis upon
any amendment to the bill. That analysis shall be made available
to the public and shall be submitted to the Legislature for
publication in the daily journal of each house of the Legislature.
The digest of the Legislative Counsel shall indicate that an analysis
of the bill shall be prepared by the Franchise Tax Board and printed
in the daily journal of each house of the Legislature.

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SECTION 1.  

It is the intent of the Legislature to enact
legislation that would require the equity firms that contract with
the Board of Administration of the Public Employees’ Retirement
System and other pension systems for the purpose of providing
investment services to provide a clear accounting of clawbacks
owed to the systems and to require the pension systems to track
their clawbacks.

end delete