California Senate Bill SB955 Amended / Bill

 BILL NUMBER: SB 955AMENDED BILL TEXT AMENDED IN SENATE MARCH 29, 2012 INTRODUCED BY Senators Pavley and Rubio  (   Principal coauthor:   Assembly Member   Alejo   )  (Coauthor: Senator DeSaulnier) (Coauthors: Assembly Members  Wieckowski   Ammiano,   Blumenfield,   Perea,   Solorio,   Wieckowski,  and Williams) JANUARY 5, 2012 An act to add Section  20211   7514.2  to the Government Code, relating to public employees' retirement. LEGISLATIVE COUNSEL'S DIGEST SB 955, as amended, Pavley. Public  Employees' Retirement System:   employees' retirement:  pension fund management.  Existing law establishes various public retirement systems, including, among others, the Public Employees' Retirement System (PERS), 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.   The Public Employees' Retirement Law creates the Public Employees' Retirement Fund, which is a trust fund created and administered solely for the benefit of the members and retired members of the Public Employees' Retirement System and their survivors and beneficiaries. The Board of Administration of the Public Employees' Retirement System has the exclusive control of the administration and investment of moneys in the retirement fund.  This bill would  require the board   authorize these public retirement system boards, consistent with their fiduciary duties and the standard for prudent investment,  to prioritize  an  investment in an in-state infrastructure project over  alternative   a comparable  out-of-state infrastructure  projects if the investment in the in-state project is consistent with the board's fiduciary duties to minimize the risk of loss and to maximize the rate of return   project  . Vote: majority. Appropriation: no. Fiscal committee:  yes   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 eight hundred million dollars ($800,000,000) in both public and private infrastructure, including, but not limited to, transportation, energy, natural resources, utilities, water, communications, and other social support services.  (5) Because CalPERS investments stem from contributions made by California's workers, those investments should remain in California to the maximum extent possible.   (5) The California State Teachers' Retirement System (CalSTRS) plans to invest up to five hundred- million dollars ($500,000,000) in infrastructure projects.  (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. (2) "Infrastructure" includes, but is not limited to, telecommunications, power, transportation, ports, petrochemical, and utilities. (b) The board may, subject to and consistent with its fiduciary duties and the standard for prudent investment set forth in Section 20190 of this 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 the 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.   SEC. 2.   Section 20211 is added to the Government Code, to read: 20211. (a) For the purposes of this section, "infrastructure" includes, but is not limited to, telecommunications, power, transportation, port, petrochemical, and utilities. (b) Except as provided in subdivision (d), the board shall prioritize an investment in an in-state infrastructure project over an alternative out-of-state infrastructure project if the investment in the in-state project is consistent with the board's fiduciary duties to minimize the risk of loss and to maximize the rate of return. (c) Except as provided in subdivision (d), the board may invest in out-of-state infrastructure projects only after having considered existing California infrastructure project proposals and determining that investment in the in-state projects would not be consistent with the board's fiduciary duties to its members when compared to out-of-state infrastructure projects. (d) Nothing in this section shall require the board to take action that is not consistent with its plenary authority and fiduciary responsibilities as described in Section 17 of Article XVI of the California Constitution.