BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 1271
Author: Romero (D)
Amended: 8/9/10
Vote: 27
SENATE ELECTIONS, REAP. & CONST. AMEND. COMMITTEE : 5-0,
04/20/10
AYES: Hancock, Denham, DeSaulnier, Liu, Strickland
SENATE APPROPRIATIONS COMMITTEE : 9-0, 05/03/10
AYES: Kehoe, Cox, Corbett, Leno, Price, Walters, Wolk,
Wyland, Yee
NO VOTE RECORDED: Alquist, Denham
SENATE FLOOR : 30-0, 5/10/10
AYES: Aanestad, Alquist, Ashburn, Calderon, Cedillo,
Cogdill, Correa, Cox, DeSaulnier, Ducheny, Florez,
Hancock, Hollingsworth, Huff, Kehoe, Leno, Lowenthal,
Negrete McLeod, Padilla, Pavley, Price, Romero, Runner,
Simitian, Steinberg, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Corbett, Denham, Dutton, Harman, Liu,
Oropeza, Strickland, Wiggins, Vacancy, Vacancy
ASSEMBLY FLOOR : 76-0, 8/23/10 - See last page for vote
SUBJECT : Political Reform Act of 1974: conflict of
interest codes
SOURCE : American Federation of State, County and
Municipal
Employees
CONTINUED
SB 1271
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DIGEST : This bill requires a board, commission, or
agency of a public pension or retirement system to attach
to its conflict of interest code an appendix that lists
each position for which an individual occupying that
position is required to file a statement of economic
interests as a public official who manages public
investments, as defined. The bill further requires the
board, commission, or agency to post the appendix on its
Internet Web site.
Assembly Amendments make a clarify change.
ANALYSIS : Existing law, pursuant to the Political Reform
Act, requires each state and local government agency to
adopt and promulgate a conflict of interest code. A
conflict of interest code must establish conflict of
interest standards for designated employees of the agency
and requires those employees to file periodic statements of
economic interest (SEIs) disclosing specified personal
financial information.
Existing law further requires specified public officials,
including officials who manage public investments, to also
file SEIs, but does not require those officials to be
specifically enumerated in the agency's conflict of
interest code.
This bill requires a board, commission, or agency of a
public pension or retirement system to attach to its
conflict of interest code an appendix that lists each
position for which an individual occupying that position is
required to file a SEI as a public official who manages
public investments. The bill further requires the board,
commission, or agency to post the appendix on its Internet
Web site.
This bill provides that for this purpose "public official
who manages public investments" includes a salaried or
unsalaried member of a committee, board, commission, or
other entity that exists as, or within, a governmental
agency and that possesses decision making authority.
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This bill provides that a committee, board, commission, or
other entity possesses decision making authority if any of
the following apply:
1. The entity may make a final governmental decision.
2. The entity may compel a governmental decision or prevent
a governmental decision, either by virtue of possessing
exclusive power to initiate the decision or by having
veto authority that may not be overridden.
3. The entity makes substantive recommendations that are,
and over an extended period of time have been, regularly
approved, without significant amendment or modification,
by another public official or governmental agency.
However, this bill provides that a committee, board,
commission, or other entity does not possess decision
making authority if it is formed for the sole purpose of
researching a subject and preparing a report or
recommendation for submission to another governmental
entity that has final decision making authority.
The following public retirement agencies, among others,
falls under the purview of this bill:
Alameda-Contra Costa Transit District Retirement Plan
Alameda County Employees' Retirement Association
Bart Investment Plans Committee
City Of Concord Retirement System
Contra Costa Employees' Retirement Association
East Bay Municipal Utility District Retirement System
Fresno City Employees' Retirement System
Fresno City Fire & Police Retirement System
Fresno County Employees' Retirement Association
Imperial County Employees' Retirement System
Kern County Employees' Retirement Association
Los Angeles City Employees' Retirement System
Los Angeles County Employees' Retirement Association
Los Angeles County MTA Retirement Plan
Los Angeles Fire & Police Pension System
Los Angeles Water and Power Employees' Retirement Plan
Marin County Employees' Retirement Association
Mendocino County Employees' Retirement Association
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Merced County Employees' Retirement Association
Oakland Municipal Employees' Retirement System
Oakland Police & Fire Retirement System
Orange County Employees' Retirement System
Pasadena Fire & Police Retirement System
Public Employees' Retirement System (CalPERS)
Sacramento County Employees' Retirement System
Sacramento Regional Transit District Retirement Plan
San Bernardino County Employees' Retirement Association
San Diego City Employees' Retirement System
San Diego County Employees' Retirement Association
San Francisco City & County Employees' Retirement System
San Joaquin County Employees' Retirement Association
San Jose Federated City Employees' Retirement System
San Jose Police & Fire Department Retirement Plan
San Luis Obispo County Pension Trust
San Mateo County Employees' Retirement Association
Santa Barbara County Employees' Retirement System
Santa Clara Valley Transportation Authority/Amalgamated
Transit Union
Pension Plan
Sonoma County Employees' Retirement Association
Stanislaus County Employees' Retirement Association
State of California Savings Plus Program
State Teachers' Retirement System
Tulare County Employees' Retirement Association
University Of California Retirement System
Ventura County Employees' Retirement Association
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13
Fund
Admin expenses -----------minor,
absorbable-------- Specials*
Admin expenses ----unknown, likely less than
$50---- General**
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*Teachers Retirement Fund and Public Employees Retirement
Fund **Reimbursable State Mandate
SUPPORT : (Verified 6/22/10) (Per Asm. E & R Cmte.)
American Federation of State, County and Municipal
Employees (source)
Association of California Water Agencies
California State Teachers' Retirement System
Fair Political Practices Commission
OPPOSITION : (Verified 6/22/10) (Per Asm. E & R Cmte.)
Department of Finance
ARGUMENTS IN SUPPORT : California's public retirement
systems (PRS) each have a governing body whose
responsibility is to administer the pension in a manner
that protects the interests of the pension members for whom
they have a fiduciary responsibility. The Political Reform
Act requires state and local government agencies to adopt
and promulgate a Conflict of Interest Code. The purpose of
this Conflict of Interest Code, with respect to public
employee retirement systems is to facilitate the disclosure
of the economic interests of public officials serving PRS
that may be materially affected by PRS's actions in which
they participate.
However, the Conflict of Interest code promulgated by some
PRS are extremely lax and/or do not encompass all those
persons who may be materially affected by the PRS actions
in which they actively participate in the decision-making
process, but do not vote. Since these persons do not file
SEIs there is no way to determine if they have been
materially affected.
This bill encompasses those persons who participate in the
decision making process, but do not vote, requiring them to
file SEIs.
The sponsor of this bill, the American Federation of State,
County and Municipal Employees writes, "AFSCME believes in
full transparency and disclosure for a public retirement
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board, commission, or agency. It is vitally important
during this time of economic hardship that all public funds
are handled responsibly and invested with the best interest
of the state in mind. SB 1271 would require an appendix be
attached to the public retirement board conflict of
interest code that lists all individuals on the board,
commission, or agency that are required to file a statement
of economic interests, regarding public investments. It is
always sound practices to understand, and make public, each
possible financial interest of any public retirement board
member."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,
Fuller, Gaines, Galgiani, Garrick, Gatto, Gilmore,
Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, John A. Perez
NO VOTE RECORDED: Furutani, Norby, Vacancy, Vacancy
DLW:do 8/24/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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