State Retirement and Pension System - Use of Minority and Women-Owned Business Enterprises (Diversity Among Asset Managers Act of 2022)
Impact
The enactment of HB 542 is expected to positively influence state laws by promoting diversity and inclusion within the state pension investment practices. It seeks to remove barriers that have historically limited access for minority businesses in the financial services sector, thereby facilitating a more equitable investment environment. The bill also introduces requirements for ongoing assessment and reporting, allowing for greater transparency and evaluation of the performance of minority-owned enterprises in managing public funds.
Summary
House Bill 542, known as the Diversity Among Asset Managers Act of 2022, aims to increase the participation of minority and women-owned business enterprises in the investment management and brokerage services provided to the State Retirement and Pension System. The bill mandates that at least 20% of brokerage and investment management services be sourced from minority business enterprises, as well as a minimum of 20% of the system's assets being managed by such firms. Furthermore, it requires the Investment Committee to assess minority business usage annually, ensuring accountability and progress towards these goals.
Sentiment
The sentiment around HB 542 appears largely positive, particularly among advocates for minority business interests and diversity in state contracts. Supporters praise the bill as a significant step towards correcting past inequalities in investment opportunities and fostering a more representative economic landscape. However, there may be some skepticism or concern among businesses not included under these classifications, fearing potential limitations in access to state contracts due to these new preferences.
Contention
Notable points of contention may stem from the logistics of implementing the requirements set forth in HB 542. Critics could argue about the potential for unintended consequences, such as claims of reverse discrimination or the effectiveness of the 20% thresholds. Moreover, the bill envisions a study to review compliance with constitutional requirements, which may bring further scrutiny and debate over the appropriateness and effectiveness of using race and gender classifications in state contracting policies.
An Act Expanding The Set-aside Program For Small Contractors And Minority Business Enterprises To Include Certain Brokerage And Investment Management Services.