Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H2676 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 1469 FILED ON: 1/18/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 2676
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Erika Uyterhoeven
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act concerning investments of the Massachusetts Pension Reserve Investment Management
13	13	(PRIM).
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :DATE ADDED:Erika Uyterhoeven27th Middlesex1/17/2023 1 of 5
17	17	HOUSE DOCKET, NO. 1469 FILED ON: 1/18/2023
18	18	HOUSE . . . . . . . . . . . . . . . No. 2676
19	19	By Representative Uyterhoeven of Somerville, a petition (accompanied by bill, House, No.
20	20	2676) of Erika Uyterhoeven relative to certain investments of the Massachusetts Pension Reserve
21	21	Investment Management. Public Service.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE HOUSE, NO. 2791 OF 2021-2022.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Third General Court
27	27	(2023-2024)
28	28	_______________
29	29	An Act concerning investments of the Massachusetts Pension Reserve Investment Management
30	30	(PRIM).
31	31	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
32	32	of the same, as follows:
33	33	1 Chapter 32 of the General Laws is hereby amended by adding the following section:
34	34	2 For domestic equity investments in the private real estate, private equity, and private
35	35	3infrastructure asset classes, including partnerships, joint ventures, co-investment vehicles,
36	36	4commingled investments, and direct investments entered into after the enactment of this bill in
37	37	5which MassPRIM has an equity interest greater than 50 percent, either directly or through one or
38	38	6more external managers, the Chief Investment Officer (CIO) or the external manager shall
39	39	7require that all developers and operators of enterprises thus financed must as a condition of the
40	40	8pension system’s funding of the investment agree to, and abide by, the following requirements:
41	41	9with respect to any construction-related activities financed by the investment, to use good faith 2 of 5
42	42	10efforts to ensure that responsible contractors are included in the bidding by, and selection of, all
43	43	11contractors and subcontractors at any tier performing any construction, delivery to the job site of
44	44	12major construction materials, maintenance, repair, or restoration, including, without limitation,
45	45	13alterations, additions, improvements, painting, installations of fixtures, mechanical, electrical,
46	46	14plumbing, or with respect to any other construction or installation-related work, and structures,
47	47	15equipment and systems fabricated for a specific job site.
48	48	16 A contractor shall be excluded from bidding on projects if such contractor or any of its
49	49	17senior officials has been debarred in the 36 months preceding the bidding deadline by a
50	50	18governmental authority for failure to pay prevailing wages or benefits on any prior job for which
51	51	19it is required by law. A responsible contractor is one which: submits to the property or external
52	52	20manager a responsible contractor self-certification on a form acceptable to the CIO;
53	53	21communicates and furnishes this section to subcontractors; provides the CIO and the external
54	54	22manager with responsible contractor documentation; selects subcontractors in a manner
55	55	23consistent with this section; and pays workers fair wages and fair benefits including employer-
56	56	24supported family health care coverage, pension benefits and state registered apprenticeship
57	57	25training programs, based on relevant market factors that include the nature and location of the
58	58	26project, comparable job or trade classifications, and the scope and complexity of the work.
59	59	27 With respect to any long-term operations financed by the investment, that any operator of
60	60	28such operations shall make a good faith effort to secure an agreement with a bona fide labor
61	61	29organization requesting to enter in to such an agreement solely with respect to such operations in
62	62	30which the labor organization agrees not to strike, picket, boycott, or take economic action against
63	63	31the operations for the duration of the investment. A bona fide labor organization is one which is a 3 of 5
64	64	32member of either the AFL-CIO or Change to Win, and has at least 100 collective bargaining
65	65	33agreements or 50,000 members in the same industry as the long- term operations.
66	66	34 For domestic equity investments in the private real estate, private equity and private
67	67	35infrastructure asset classes, including partnerships, joint ventures, co-investment vehicles,
68	68	36commingled investments, and direct investments entered into after the enactment of this bill, in
69	69	37which the Mass PRIM has an equity interest equal to or less than 50 percent, the CIO shall
70	70	38encourage external managers to follow the practices of this section and shall give preference in
71	71	39the selection of external managers and placement of additional investments to those which
72	72	40provide the best level of return at an acceptable level of risk and follow such practices.
73	73	41 The CIO of Mass PRIM shall not approve any investment that has the potential to
74	74	42eliminate public sector jobs, would pose a reputational risk to the State-administered retirement
75	75	43systems, or could bring public or regulatory scrutiny to the retirement systems.
76	76	44 Before presenting any investment to Mass PRIM for possible investment, the CIO shall
77	77	45identify any features of the proposed investment that could potentially lead to significant loss of
78	78	46public sector jobs, pose reputational risks, or subject the retirement systems to regulatory
79	79	47scrutiny.
80	80	48 The CIO, subject to the direction of Mass PRIM’s Board, shall exercise due diligence in
81	81	49the selection of external managers. The CIO shall consider at least the following factors about
82	82	50the external manager and companies in its current and historical portfolios: any violations, fines,
83	83	51citations, or findings by a state or federal regulatory agency, including but not limited to,
84	84	52environmental fines and violations, unfair labor practices, or OSHA fines and violations; the
85	85	53record of securing labor peace agreements with labor organizations; disputes with labor 4 of 5
86	86	54organizations in the previous five years and the outcomes of such disputes; any complaints about
87	87	55the external manager, its portfolio companies or construction contractors received from
88	88	56concerned citizens or organizations; and whether the external manager proposes an investment
89	89	57strategy that is premised on, or has the potential to create, significant public sector job loss.
90	90	58 Prospective external managers and their portfolio companies shall be of good character
91	91	59and shall have demonstrated observance of local, state, and national laws (including, by way of
92	92	60illustration, those related to insurance, taxes, labor, anti- discrimination, environmental, and
93	93	61occupational health and safety). External managers and their portfolio companies shall be
94	94	62evaluated for their record of compliance with the policies, including any responsible contractor
95	95	63policies of public pension plans for which they serve or have served as external managers and
96	96	64shall be required to disclose any instances of non-compliance with such policies and to certify
97	97	65that they and their portfolio companies are not out of compliance with any such policies at the
98	98	66time of any proposed investment by Mass PRIM. External managers shall have demonstrated a
99	99	67past practice of, and capacity for, managing risks, including, without limitation, investment risks,
100	100	68interest rate risks, compliance risks, the risk of labor disputes, and the risk of malfeasance or
101	101	69ineptitude on the part of contractors, subcontractors, or operators. Whenever possible, external
102	102	70managers shall be chosen by competitive bidding and evaluated on their likelihood of producing
103	103	71competitive, risk-adjusted rates of return.
104	104	72 The report of Mass PRIM on the performance of external managers shall include
105	105	73identification of all investments held as of the date of the report that are in violation of Section
106	106	74106 of Chapter 32 of the M.G.L. Mass PRIM and the CIO may take appropriate action to sell,
107	107	75redeem, divest, or withdraw any investment held in violation of Section 106 of Chapter 32 of the
108	108	76M.G.L., when efforts to cure the violation are unsuccessful. This section shall not be construed to 5 of 5
109	109	77authorize the premature or otherwise imprudent sale, redemption, divestment, or withdrawal of
110	110	78an investment.
111	111	79 This act shall take effect 180 days following the date of enactment except the CIO may
112	112	80take any anticipatory administrative action in advance as shall be necessary for the
113	113	81implementation of this act.