BILL NUMBER: SB 574 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Pan
( Coauthor: Senator Cannella
)
FEBRUARY 26, 2015
An act to amend Section 6254.26 of the Government Code, relating
to public records.
LEGISLATIVE COUNSEL'S DIGEST
SB 574, as amended, Pan. Public records: public investment funds:
disclosure.
Existing law, the California Public Records Act, requires state
agencies and local agencies to make public
records, as defined, available for inspection, subject to specified
criteria, and with specified exceptions. Existing law excludes from
disclosure specified records of public investment funds,
funds regarding alternative investments, as
defined, unless the information in the records has already been
publicly released by the keeper of the information. Notwithstanding
this exclusion, existing law provides that certain types of
information contained in records regarding alternative investments in
which public investment funds invest are subject to disclosure under
the act, and provides that these records are
the information is not to be considered a trade secret exempt
from disclosure.
This bill would also subject records with those types of
information regarding alternative investments that are in the
constructive possession of, or are otherwise accessible or obtainable
by, a public investment fund to disclosure under the act and require
a public investment fund to obtain and disclose those records.
By increasing the duties of local public investment funds, this
bill would impose a state-mandated local program.
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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
The California Constitution requires local agencies, for the
purpose of ensuring public access to the meetings of public bodies
and the writings of public officials and agencies, to comply with a
statutory enactment that amends or enacts laws relating to public
records or open meetings and contains findings demonstrating that the
enactment furthers the constitutional requirements relating to this
purpose.
This bill would make legislative findings to that effect.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6254.26 of the Government Code is amended to
read:
6254.26. (a) Notwithstanding any provision of this chapter or
other law, the following records regarding alternative investments in
which public investment funds invest shall not be subject to
disclosure pursuant to this chapter, unless the information has
already been publicly released by the keeper of the information:
(1) Due diligence materials that are proprietary to the public
investment fund or the alternative investment vehicle.
(2) Quarterly and annual financial statements of alternative
investment vehicles.
(3) Meeting materials of alternative investment vehicles.
(4) Records containing information regarding the portfolio
positions in which alternative investment funds invest.
(5) Capital call and distribution notices.
(6) Alternative investment agreements and all related documents.
(b) Notwithstanding subdivision (a), the following information
contained in records described in subdivision (a) regarding
alternative investments in which public investment funds invest shall
be subject to disclosure disclosure,
shall be obtained and disclosed by a public investment fund pursuant
to this chapter, and shall not be considered a trade secret exempt
from disclosure:
(1) The name, address, and vintage year of each alternative
investment vehicle.
(2) The dollar amount of the commitment made to each alternative
investment vehicle by the public investment fund since inception.
(3) The dollar amount of cash contributions made by the public
investment fund to each alternative investment vehicle since
inception.
(4) The dollar amount, on a fiscal yearend basis, of cash
distributions received by the public investment fund from each
alternative investment vehicle.
(5) The dollar amount, on a fiscal yearend basis, of cash
distributions received by the public investment fund plus remaining
value of partnership assets attributable to the public investment
fund's investment in each alternative investment vehicle.
(6) The net internal rate of return of each alternative investment
vehicle since inception.
(7) The investment multiple of each alternative investment vehicle
since inception.
(8) The dollar amount of the total management fees and costs paid
on an annual fiscal yearend basis, by the public investment fund to
each alternative investment vehicle.
(9) The dollar amount of cash profit received by public investment
funds from each alternative investment vehicle on a fiscal year-end
basis.
(c) For purposes of this section, the following definitions shall
apply:
(1) "Alternative investment" means an investment in a private
equity fund, venture fund, hedge fund, or absolute return fund.
(2) "Alternative investment vehicle" means the limited
partnership, limited liability company, or similar legal structure
through which the public investment fund invests in portfolio
companies.
(3) "Portfolio positions" means individual portfolio investments
made by the alternative investment vehicles.
(4) "Public investment fund" means any public pension or
retirement system, and any public endowment or foundation.
(5) "Records" includes public records described in Section 6252
and records relating to the conduct of the public's business that are
in the constructive possession of, or otherwise accessible or
obtainable by, a public investment fund.
SEC. 2. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SEC. 2. The Legislature finds and declares that
Section 1 of this act, which amends Section 6254.26 of the Government
Code, furthers, within the meaning of paragraph (7) of subdivision
(b) of Section 3 of Article I of the California Constitution, the
purposes of that constitutional section as it relates to the right of
public access to the meetings of local public bodies or the writings
of local public officials and local agencies. Pursuant to paragraph
(7) of subdivision (b) of Section 3 of Article I of the California
Constitution, the Legislature makes the following findings:
Increased information about the performance of alternative
investments collected by local agencies, that could be leveraged by
the public to more efficiently access and better monitor the
investment performance of an agency's portfolio, would be made
available to the public under the act in furtherence of the purpose
of Section 3 of Article I of the California Constitution.
SEC. 3. 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 under this act would result from a
legislative mandate that is within the scope of paragraph (7) of
subdivision (b) of Section 3 of Article I of the California
Constitution.