California 2017-2018 Regular Session

California Assembly Bill AB679 Compare Versions

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Version 2 (New)

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1		-	Assembly Bill No. ~~679 CHAPTER 198~~ An act to amend Section 20203 of the Government Code, relating to public employees retirement. ~~[ Approved by Governor September 01, 2017. Filed with Secretary of State September 01, 2017. ]~~ LEGISLATIVE COUNSEL'S DIGESTAB 679, 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. Existing law grants the board the authority to enter into these agreements pursuant to specific provisions covering security loan agreements by state agencies.This bill would delete the above reference to the security loan provisions for state agencies, thereby providing the board with separate authority to enter into security loan agreements. The bill would require a borrower 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 or an amount consistent with market practice, whichever is greater. The bill would require the board to revalue the collateral to current market value on each business day or as frequently as industry practices require. The bill would prohibit the total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds from exceeding 25% of the assets of the retirement fund.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. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
	1	+	Enrolled August 22, 2017 Passed IN Senate July 13, 2017 Passed IN Assembly August 21, 2017 Amended IN Senate June 08, 2017 Amended IN Assembly April 17, 2017 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, 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. Existing law grants the board the authority to enter into these agreements pursuant to specific provisions covering security loan agreements by state agencies.This bill would delete the above reference to the security loan provisions for state agencies, thereby providing the board with separate authority to enter into security loan agreements. The bill would require a borrower 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 or an amount consistent with market practice, whichever is greater. The bill would require the board to revalue the collateral to current market value on each business day or as frequently as industry practices require. The bill would prohibit the total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds from exceeding 25% of the assets of the retirement fund.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. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
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3		-	Assembly Bill No. 679 CHAPTER 198 An act to amend Section 20203 of the Government Code, relating to public employees retirement. [ Approved by Governor September 01, 2017. Filed with Secretary of State September 01, 2017. ] LEGISLATIVE COUNSEL'S DIGESTAB 679, 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. Existing law grants the board the authority to enter into these agreements pursuant to specific provisions covering security loan agreements by state agencies.This bill would delete the above reference to the security loan provisions for state agencies, thereby providing the board with separate authority to enter into security loan agreements. The bill would require a borrower 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 or an amount consistent with market practice, whichever is greater. The bill would require the board to revalue the collateral to current market value on each business day or as frequently as industry practices require. The bill would prohibit the total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds from exceeding 25% of the assets of the retirement fund.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
	3	+	Enrolled August 22, 2017 Passed IN Senate July 13, 2017 Passed IN Assembly August 21, 2017 Amended IN Senate June 08, 2017 Amended IN Assembly April 17, 2017 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, 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. Existing law grants the board the authority to enter into these agreements pursuant to specific provisions covering security loan agreements by state agencies.This bill would delete the above reference to the security loan provisions for state agencies, thereby providing the board with separate authority to enter into security loan agreements. The bill would require a borrower 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 or an amount consistent with market practice, whichever is greater. The bill would require the board to revalue the collateral to current market value on each business day or as frequently as industry practices require. The bill would prohibit the total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds from exceeding 25% of the assets of the retirement fund.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
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	5	+	Enrolled August 22, 2017 Passed IN Senate July 13, 2017 Passed IN Assembly August 21, 2017 Amended IN Senate June 08, 2017 Amended IN Assembly April 17, 2017
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	7	+	Enrolled August 22, 2017
	8	+	Passed IN Senate July 13, 2017
	9	+	Passed IN Assembly August 21, 2017
	10	+	Amended IN Senate June 08, 2017
	11	+	Amended IN Assembly April 17, 2017
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	13	+	CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION
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5	15		Assembly Bill No. 679
6		-	CHAPTER 198
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	17	+	Introduced by Assembly Member CooleyFebruary 15, 2017
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	19	+	Introduced by Assembly Member Cooley
	20	+	February 15, 2017
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8	22		An act to amend Section 20203 of the Government Code, relating to public employees retirement.
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10		-	[ Approved by Governor September 01, 2017. Filed with Secretary of State September 01, 2017. ]
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12	24		LEGISLATIVE COUNSEL'S DIGEST
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14	26		## LEGISLATIVE COUNSEL'S DIGEST
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16	28		AB 679, Cooley. Public employees retirement: investments: security loans.
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18	30		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. Existing law grants the board the authority to enter into these agreements pursuant to specific provisions covering security loan agreements by state agencies.This bill would delete the above reference to the security loan provisions for state agencies, thereby providing the board with separate authority to enter into security loan agreements. The bill would require a borrower 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 or an amount consistent with market practice, whichever is greater. The bill would require the board to revalue the collateral to current market value on each business day or as frequently as industry practices require. The bill would prohibit the total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds from exceeding 25% of the assets of the retirement fund.
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20	32		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. Existing law grants the board the authority to enter into these agreements pursuant to specific provisions covering security loan agreements by state agencies.
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22	34		This bill would delete the above reference to the security loan provisions for state agencies, thereby providing the board with separate authority to enter into security loan agreements. The bill would require a borrower 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 or an amount consistent with market practice, whichever is greater. The bill would require the board to revalue the collateral to current market value on each business day or as frequently as industry practices require. The bill would prohibit the total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds from exceeding 25% of the assets of the retirement fund.
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24	36		## Digest Key
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26	38		## Bill Text
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28	40		The people of the State of California do enact as follows:SECTION 1. Section 20203 of the Government Code is amended to read:20203. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
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30	42		The people of the State of California do enact as follows:
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32	44		## The people of the State of California do enact as follows:
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34	46		SECTION 1. Section 20203 of the Government Code is amended to read:20203. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
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36	48		SECTION 1. Section 20203 of the Government Code is amended to read:
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38	50		### SECTION 1.
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40	52		20203. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
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42	54		20203. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
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44	56		20203. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.
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48	60		20203. Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:
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50	62		(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, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.
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52	64		(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.
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54	66		(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.
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56	68		(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.