BILL NUMBER: SB 1928 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 7, 2000
AMENDED IN SENATE MAY 9, 2000
AMENDED IN SENATE APRIL 24, 2000
AMENDED IN SENATE MARCH 27, 2000
INTRODUCED BY Senator Haynes
FEBRUARY 24, 2000
An act to add Chapter 21.6 (commencing with Section 7521)
to Division 7 of Title 1 of the Government Code, relating
An act to add and repeal Section 7513.6 to the Government Code,
relating to public retirement fund investments.
LEGISLATIVE COUNSEL'S DIGEST
SB 1928, as amended, Haynes. Capital Markets Task Force
Board Public retirement fund investments: foreign
companies .
Under existing law, the retirement boards of public pension or
retirement systems have plenary authority over the investment of
pension funds, subject to their fiduciary duties to the members of
the system.
This bill would declare the Legislature's concern over
investments by the Public Employees' Retirement System in
about foreign companies that promote terrorism,
the proliferation of weapons of mass destruction, and the violation
of human rights. This bill pose threats to national
security, as specified, and would encourage the Board of
Administration of the Public Employees' Retirement System and the
Teachers' Retirement Board not to invest in foreign companies that
pose those threats to national security and human
rights and to have fund managers perform due
diligence with respect to potential investments in foreign companies,
as specified . This bill would establish the Capitol
Markets Task Force Board,as specified, that would make
recommendations to , until 2005, require the
Board of Administration of the Public Employees' Retirement System
and the Teachers' Retirement Board regarding national
security, human rights, and social concerns material to the
performance of investments to review publicly
available information, as specified, and report annually to the
Legislature regarding the respective systems' investments in foreign
companies doing business in certain countries, as specified .
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. (a) The Legislature is concerned about
SECTION 1. (a) The Legislature is concerned about foreign
companies that may pose threats to national security through
terrorism or the proliferation of weapons of mass destruction, as
documented by the federal government and the United States Congress.
The Legislature is also concerned about reports that some of these
companies may be using capital markets in the United States as a
source of funding for military development.
(b) The Teachers' Retirement Board and the Board of Administration
of the Public Employees' Retirement System are encouraged, to the
extent consistent with the fiduciary standards prescribed by Section
17 of Article XVI of the California Constitution and related
statutes, not to invest in foreign companies that pose those threats.
(c) The Teachers' Retirement Board and the Board of Administration
of the Public Employees' Retirement System are also encouraged, to
the extent consistent with the fiduciary standards prescribed by
Section 17 of Article XVI of the California Constitution and related
statutes, to have all internal and external fund managers perform due
diligence with respect to potential investments in foreign companies
that pose threats to the national security of the United States.
SEC. 2. Section 7513.6 is added to the Government Code, to read:
7513.6. (a) Effective July 1, 2001, and on or before July 1 of
each year thereafter, the Teachers' Retirement Board and the Board of
Administration of the Public Employees' Retirement System,
respectively, shall report to the Legislature regarding the extent to
which the assets of the State Teachers' Retirement System and the
Public Employees' Retirement System are invested, or were invested
during the prior calendar year, in foreign companies doing business
in countries that are on the Department of State's list of
terrorist-sponsoring nations or in companies that have been placed on
the Department of the Treasury's list of Foreign Asset Controls.
(b) To fulfill the requirements of this section, the Teachers'
Retirement Board and the Board of Administration of the Public
Employees' Retirement System, respectively, shall review, at a
minimum, publicly available corporate annual and financial reports
and information made available to the public by the Department of
State, the Department of the Treasury, the Department of Commerce,
the Central Intelligence Agency, Congressionally-mandated
commissions, and the State Auditor.
(c) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date. recent public Retirement System has
invested pension funds in foreign companies that may pose threats to
national security by promoting terrorism and the proliferation of
weapons of mass destruction, and has also invested in a foreign
company that is financially supporting a dictatorial regime in Sudan
that has been accused of abominable human rights violations,
including genocide and slavery.
(b) The Legislature encourages the Board of Administration of the
Public Employees' Retirement System and the Teachers' Retirement
Board, pursuant to the fiduciary standards prescribed by Section 17
of Article XVI of the California Constitution and related statutes,
not to invest in foreign companies that pose threats to national
security and fundamental human rights.
SEC. 2. Chapter 21.6 (commencing with Section 7521) is added to
Division 7 of Title 1 of the Government Code, to read:
CHAPTER 21.6. CAPITAL MARKETS TASK FORCE BOARD
7521. The Capital Markets Task Force Board is hereby established.
As used in this chapter, "board" shall mean the Capital Markets
Task Force Board. The board shall consist of the following elected
officials or their respective designated representatives:
(a) The Governor.
(b) The Treasurer.
(c) The Controller.
(d) The President pro Tempore of the Senate.
(e) The Speaker of the Assembly.
(f) The Minority Leader of the Senate.
(g) The Minority Leader of the Assembly.
7521.2. No member of the board shall have any direct personal
involvement or economic interest in any financial transaction with
the State Teachers' Retirement System or the Public Employees'
Retirement System while the member serves on the board or for one
year after the expiration or earlier termination of the member's term
on the board.
7521.4. (a) The members of the board shall annually elect a
chairperson of the board.
(b) The board shall meet no less than quarterly, but may meet at
the call of the chairperson.
(c) Notwithstanding any other provision of law, the members of the
board shall receive no salary, compensation, or reimbursement for
expenses related to their service on the board. The board shall not
employ any permanent staff.
(d) Any expenses incurred by the board shall be paid in equal
shares by the State Teachers' Retirement System and the Public
Employees' Retirement System.
7522. The board shall make recommendations to the Board of
Administration of the Public Employees' Retirement System and the
Teachers' Retirement Board with respect to the following:
(a) National security concerns.
(b) Human rights concerns.
(c) Social concerns material to the performance of investments.