CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Assembly Bill No. 679Introduced by Assembly Member CooleyFebruary 15, 2017 An act to amend Section 20203 of the Government Code, relating to public employees retirement. LEGISLATIVE COUNSEL'S DIGESTAB 679, as introduced, Cooley. Public employees retirement: investments: security loans.The Public Employees Retirement Law (PERL) creates the Public Employees Retirement System (PERS) for the provision of pension benefits to members. PERL grants the Board of Administration of PERS exclusive control of and fiduciary responsibility for the investment of the Public Employees Retirement Fund, and authorizes the board to enter into specific types of security loan agreements, whereby a legal owner (the lender) agrees to lend specific marketable corporate or government securities for no more than one year, and the lender retains the right to collect from the borrower all dividends, interest, premiums, rights, and other distributions.This bill would require a borrower with respect to any security loan agreement to provide the board with collateral in the form of cash, United States government debt securities, or other specified forms of collateral, and would require that the amount of the collateral be at least 102% of the market value of the loaned securities.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 20203 of the Government Code is amended to read:20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.
CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Assembly Bill No. 679Introduced by Assembly Member CooleyFebruary 15, 2017 An act to amend Section 20203 of the Government Code, relating to public employees retirement. LEGISLATIVE COUNSEL'S DIGESTAB 679, as introduced, Cooley. Public employees retirement: investments: security loans.The Public Employees Retirement Law (PERL) creates the Public Employees Retirement System (PERS) for the provision of pension benefits to members. PERL grants the Board of Administration of PERS exclusive control of and fiduciary responsibility for the investment of the Public Employees Retirement Fund, and authorizes the board to enter into specific types of security loan agreements, whereby a legal owner (the lender) agrees to lend specific marketable corporate or government securities for no more than one year, and the lender retains the right to collect from the borrower all dividends, interest, premiums, rights, and other distributions.This bill would require a borrower with respect to any security loan agreement to provide the board with collateral in the form of cash, United States government debt securities, or other specified forms of collateral, and would require that the amount of the collateral be at least 102% of the market value of the loaned securities.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION
Assembly Bill No. 679
Introduced by Assembly Member CooleyFebruary 15, 2017
Introduced by Assembly Member Cooley
February 15, 2017
An act to amend Section 20203 of the Government Code, relating to public employees retirement.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 679, as introduced, Cooley. Public employees retirement: investments: security loans.
The Public Employees Retirement Law (PERL) creates the Public Employees Retirement System (PERS) for the provision of pension benefits to members. PERL grants the Board of Administration of PERS exclusive control of and fiduciary responsibility for the investment of the Public Employees Retirement Fund, and authorizes the board to enter into specific types of security loan agreements, whereby a legal owner (the lender) agrees to lend specific marketable corporate or government securities for no more than one year, and the lender retains the right to collect from the borrower all dividends, interest, premiums, rights, and other distributions.This bill would require a borrower with respect to any security loan agreement to provide the board with collateral in the form of cash, United States government debt securities, or other specified forms of collateral, and would require that the amount of the collateral be at least 102% of the market value of the loaned securities.
The Public Employees Retirement Law (PERL) creates the Public Employees Retirement System (PERS) for the provision of pension benefits to members. PERL grants the Board of Administration of PERS exclusive control of and fiduciary responsibility for the investment of the Public Employees Retirement Fund, and authorizes the board to enter into specific types of security loan agreements, whereby a legal owner (the lender) agrees to lend specific marketable corporate or government securities for no more than one year, and the lender retains the right to collect from the borrower all dividends, interest, premiums, rights, and other distributions.
This bill would require a borrower with respect to any security loan agreement to provide the board with collateral in the form of cash, United States government debt securities, or other specified forms of collateral, and would require that the amount of the collateral be at least 102% of the market value of the loaned securities.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 20203 of the Government Code is amended to read:20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 20203 of the Government Code is amended to read:20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.
SECTION 1. Section 20203 of the Government Code is amended to read:
### SECTION 1.
20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.
20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.
20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.
20203. (a) Notwithstanding any other provision of the law, the board may enter into security loan agreements pursuant to Division 8 (commencing with Section 7600) of Title 1 with respect to securities in which the board is authorized by law to invest.
(b) In any security loan agreement made pursuant to subdivision (a), the borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, public equity securities, and international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities.