BILL NUMBER: SB 574 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 16, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Pan
(Coauthor: Senator Cannella)
FEBRUARY 26, 2015
An act to amend Section 6254.26 92032
of the Government Education Code,
relating to public records. postsecondary
education.
LEGISLATIVE COUNSEL'S DIGEST
SB 574, as amended, Pan. Public records: public
investment funds: disclosure. University of
California: regent meetings: closed meetings.
Existing law generally requires meetings of the Regents of the
University of California to be conducted in accordance with the
Bagley-Keene Open Meeting Act, unless otherwise provided. Existing
law further authorizes the Regents of the University of California to
conduct closed sessions to discuss specified matters, including,
among others, matters involving the purchase or sale of investments
for endowment and pension funds.
This bill would specify that the provisions authorizing the
regents to conduct a closed meeting to discuss matters involving the
purchase of sale of investments for endowment and pension funds do
not apply to investments in a private equity fund, venture fund,
hedge fund, or absolute return fund unless the regents have received
from the fund, and disclosed to the public, certain information set
forth in specified provisions of the California Public Records Act.
Existing law, the California Public Records Act, requires state
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 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 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 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 no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 92032 of the
Education Code is amended to read:
92032. Notwithstanding Article 9 (commencing with Section 11120)
of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
Code:
(a) The Regents of the University of California, as occasioned by
necessity, may hold special meetings. The regents shall give public
notice for these meetings. This notice shall be given by means of a
notice hand delivered or mailed to each newspaper of general
circulation and television or radio station that has requested notice
in writing, so that the notice may be published or broadcast at
least 72 hours before the time of the meeting. The notice shall
specify the time, place, and agenda of the special meeting. The
regents shall not consider any business not included in the agenda
portion of the notice. Failure to comply with this subdivision shall
not be excused by the fact that no action was taken at the special
meeting.
(b) The Regents of the University of California may conduct closed
sessions when they meet to consider or discuss any of the following
matters:
(1) Matters affecting national security.
(2) The conferring of honorary degrees or other honors or
commemorations.
(3) Matters involving gifts, devises, and bequests.
(4) (A) Matters involving the purchase or
sale of investments for endowment and pension funds.
(B) This paragraph shall not apply to investments in a private
equity fund, venture fund, hedge fund, or absolute return fund,
unless the regents have received from the fund, and disclosed to the
public, the information specified in subdivision (b) of Section
6254.26 of the Government Code.
(5) Matters involving litigation, when discussion in open session
concerning those matters would adversely affect, or be detrimental
to, the public interest.
(6) The acquisition or disposition of property, if discussion of
these matters in open session could adversely affect the regents'
ability to acquire or dispose of the property on the terms and
conditions they deem to be in the best public interest.
(7) (A) Matters concerning the appointment, employment,
performance, compensation, or dismissal of university officers or
employees, excluding individual regents other than the president of
the university.
(B) (i) Action taken by a committee of the regents, and final
action by the full board of regents, on a proposal for the
compensation package of the following executive officers shall occur
in an open session of each of those bodies, and shall include a
disclosure of the compensation package and rationale for the action:
(I) The President of the University of California.
(II) The chancellor of an individual campus.
(III) A vice president.
(IV) The treasurer or the assistant treasurer.
(V) The general counsel.
(VI) The regents' secretary.
(ii) Members of the public shall be afforded the opportunity to
address the committee and full board on the proposal during or before
consideration of the action item.
(C) Discussion by a committee of the regents of, and action on, an
executive compensation program or policy, and any final action by
the full board of regents on that program or policy, shall occur in
open session of each of those bodies.
(D) Compensation for the principal officers of the regents and the
officers of the university shall include salary, benefits,
perquisites, severance payments (except those made in connection with
a dismissal or a litigation settlement), retirement benefits, or any
other form of compensation.
(8) Matters relating to complaints or charges brought against
university officers or employees, excluding individual regents other
than the president of the university, unless the officer or employee
requests a public hearing.
(c) While a witness is being examined during any open or closed
session, any or all other witnesses in the investigation may be
excluded from the proceedings by the regents.
(d) Committees of the regents may conduct closed sessions on
Medi-Cal contract negotiations.
(e) The nominating committee of the regents may conduct closed
sessions held for the purpose of proposing officers of the board and
members of the board's various committees.
(f) Committees of the regents may conduct closed sessions held for
the purpose of proposing a student regent.
(g) The regents shall not be required to give public notice of
meetings of special search or selection committees held for the
purpose of conducting interviews for university officer positions.
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, 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. 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.