BILL NUMBER: AB 17 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 15, 2012
AMENDED IN ASSEMBLY JANUARY 13, 2012
AMENDED IN ASSEMBLY MAY 11, 2011
INTRODUCED BY Assembly Member Davis
DECEMBER 6, 2010
An act to add and repeal Section 22204.5 of the Education Code,
relating to retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 17, as amended, Davis. Retirement: pension fund management.
The Teachers' Retirement Law establishes the State Teachers'
Retirement System in order to provide a financially sound plan for
the retirement, with adequate retirement allowances, for teachers in
public schools of the state, teachers in schools supported by the
state, and other persons employed in connection with the schools. The
plan and the system are administered by the Teachers' Retirement
Board.
This bill would require the Teachers' Retirement Board to
submit a report to the Legislature , on or before August
1, 2013, and annually each August 1 thereafter, on the
ethnicity and gender of to aggressively
participate in a legislative hearing on ethnic and gender diversity
in regards to the investment managers with whom it has
contracted in the immediately preceding fiscal year, and who
participate in managing its portfolios of external fund management
contracts, as specified. The bill would also require the board
to report to the Legislature , on or before August
1, 2013, and annually each August 1 thereafter, to participate
in a legislative hearing on the ethnicity and gender of the
brokerage firms with which it has contracted in the immediately
preceding fiscal year, and that provide brokerage services to the
fund's internally and externally managed investment management firms,
as specified. The bill would also require the board to
develop and report to the Legislature , on or before August
1, 2013, and annually each August 1 thereafter, to participate
in a legislative hearing for the purpose of developing a plan
and strategy for participation of emerging investment managers and
emerging brokerage firms. The bill would provide for the repeal of
these provisions on January 1, 2018. The bill would also make related
findings and declarations.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The California State Teachers' Retirement System has
approximately $130 billion in assets under its management.
(b) As the nation's leader in attracting private equity capital
and advancing innovation, California should also be the leader in
encouraging equal opportunity in our state pension fund utilization
of emerging investment managers and emerging brokerage firms.
SEC. 2. Section 22204.5 is added to the Education Code, to read:
22204.5. (a) (1) Notwithstanding Section 10231.5 of the
Government Code, on On or before August 1, 2013,
and annually on or before each August 1 thereafter, the
board shall report to the Legislature, comprehensively and
aggregately, on the ethnicity and gender of
aggressively participate in a legislative hearing on ethnic and
gender diversity in regards to the investment managers with
whom it has contracted in the immediately preceding fiscal year, and
who participate in managing its portfolio of external fund management
contracts, including all asset classes in which the fund has assets
allocated. The report shall identify board
shall testify in the legislative hearing on the ownership
composition of any privately owned investment firm, including ethnic
and gender breakdowns as well as the portfolio value amount and asset
class managed, in addition to fees paid to each investment manager.
The report board shall
separately include a discuss in the legislative
hearing the percentage breakdown by ethnicity and gender of
investment officer composition of contracted portfolio management
firms. The board shall report and further
testify before the Legislature regarding
strategic plans of promoting existing underlying emerging managers
from manager of manager structures to direct mandates.
(2) Notwithstanding Section 10231.5 of the Government
Code, on On or before August 1, 2013,
and annually on or before each August 1 thereafter, the
board shall also report, comprehensively and aggregately,
aggressively participate in a legislative hearing
on the ethnicity and gender of the brokerage firms with which
it has contracted in the immediately preceding fiscal year, and which
provide brokerage services to the fund's internally and externally
managed investment management firms in addition to the commissions
paid for trading equity securities and par value traded for fixed
income by product to each brokerage firm utilized by the fund.
Annually, the board shall testify at hearings before the
Legislature to discuss the reports required to be submitted by this
section.
(b) Notwithstanding Section 10231.5 of the Government
Code, on On or before August 1, 2013, and
annually on or before each August 1 thereafter, the board
shall develop and report to the Legislature a
also aggressively participate in a legislative hearing for the
purpose of developing a plan and strategy for participation of
emerging investment managers who manage internally and externally
managed assets in each asset class, and emerging brokerage firms that
execute securities on organized exchanges as selected agents. Any
percentages provided by the board shall be used as a reporting
threshold only, and not as a basis upon which to contract with any
given emerging investment manager or emerging brokerage firm.
(c) The board shall define the terms "emerging investment manager"
and "emerging brokerage firm" by regulation
through an administrative process for purposes of this section.
(d) Nothing in this section shall require the board to take action
as described in this section unless the board determines, in good
faith, that the action described in this section is consistent with
the fiduciary responsibilities of the board as described in Section
17 of Article XVI of the California Constitution.
(e) The reports required to be submitted by this section shall be
submitted in compliance with Section 9795 of the Government Code.
(f)
(d) This section shall remain in effect only until
January 1, 2018, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2018, deletes or
extends that date.