BILL NUMBER: SB 955	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  MAY 17, 2012
	AMENDED IN SENATE  MARCH 29, 2012

INTRODUCED BY   Senators Pavley and Rubio
   (Principal coauthor: Assembly Member Alejo)
   (Coauthor: Senator DeSaulnier)
   (Coauthors: Assembly Members Ammiano, Blumenfield, Perea, Solorio,
Wieckowski, and Williams)

                        JANUARY 5, 2012

   An act to add Section 7514.2 to the Government Code, relating to
public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 955, as amended, Pavley. Public employees' retirement: pension
fund management.
   Existing law establishes  various public retirement
systems, including, among others,  the Public Employees'
Retirement System  (PERS),   and  the State
Teachers' Retirement System  (STRS), the Judges' Retirement
System II, and various county retirement systems pursuant to the
County Employees Retirement Law of 1937  . These systems
provide defined pension benefits to public employees based on age,
service credit, and final compensation. The California Constitution
confers upon the retirement boards of public retirement systems
plenary authority and fiduciary responsibility for the investment of
moneys of those systems.
   This bill would authorize these public retirement system boards,
consistent with their fiduciary duties and the standard for prudent
investment, to prioritize investment in an in-state infrastructure
project over a comparable out-of-state infrastructure project.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  (a) The Legislature finds and declares all of the
following:
   (1) Due to the current economic recession in which the residents
of the state and the nation as a whole find themselves,
infrastructure investment represents a significant opportunity to
spur job growth while improving California's infrastructure, which is
important to maintain business competitiveness.
   (2) While California may be emerging from the recession, over
2,000,000 Californians remain unemployed.
   (3) Investments in infrastructure can provide much needed
employment opportunities for Californians struggling to find work, as
well as provide a steady rate of return for investment funds that
invest in those projects.
   (4) The California Public Employees' Retirement System (CalPERS)
has announced plans to invest up to eight hundred million dollars
($800,000,000) in both public and private infrastructure, as defined
in the CalPERS Infrastructure Program Investment Policy.
   (5) The California State Teachers' Retirement System (CalSTRS) has
committed up to six hundred fifty million dollars ($650,000,000) to
infrastructure, in accordance with the CalSTRS Infrastructure Program
Investment Policy.
   (b) Accordingly, it is the intent of the Legislature in enacting
this act, consistent with the plenary authority and fiduciary
responsibilities of the retirement boards of public pension or
retirement systems under Section 17 of Article XVI of the California
Constitution, that those retirement boards that have specifically
targeted infrastructure investment policies prioritize investments in
projects located in California.
  SEC. 2.  Section 7514.2 is added to the Government Code, to read:
   7514.2.  (a) As used in this section, the following definitions
shall apply:
   (1) "Board" means the  retirement board of a public
pension or retirement system, as defined in subdivision (h) of
Section 17 of Article XVI of the California Constitution 
 Board of Administration of the Public Employees' Retirement
Board and the Teachers' Retirement Board  .
   (2) "Infrastructure" includes, but is not limited to,
telecommunications, power, transportation, ports, petrochemical, and
utilities.
   (b) A board may, subject to and consistent with its fiduciary
duties and the standard for prudent investment set forth in Section
20190 of this code, Section 22203 of the Education Code, and Section
17 of Article XVI of the California Constitution, prioritize
investment in an in-state infrastructure project over a comparable
out-of-state project.
   (c) The Legislature encourages each board to prioritize investment
in in-state infrastructure projects over alternative out-of-state
infrastructure projects if the investments in the in-state projects
are consistent with the board's fiduciary duties to minimize the risk
of loss and to maximize the rate of return.
   (d) Nothing in this section shall require a board to take action
that is inconsistent with its plenary authority and fiduciary
responsibilities, as described in Section 17 of Article XVI of the
California Constitution.