EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0542*
HOUSE BILL 542
P6 2lr1038
CF SB 954
By: Delegate J. Lewis
Introduced and read first time: January 21, 2022
Assigned to: Appropriations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 3, 2022
CHAPTER ______
AN ACT concerning 1
State Retirement and Pension System – Investment Committee – Use of 2
Minority and Women–Owned Business Enterprises 3
(Diversity Among Asset Managers Act of 2022) 4
FOR the purpose of requiring the Investment Committee of the State Retirement Agency 5
to use minority business enterprises to provide a certain percentage of brokerage and 6
investment management services to the Board of Trustees for the State Retirement 7
and Pension System and to manage a certain percentage of system assets; requiring 8
the Investment Committee of the State Retirement Agency to assess the use of 9
minority business enterprises beginning on a certain date; requiring a certain 10
certification agency and the Governor’s Office of Small, Minority, and Women 11
Business Affairs, in consultation with certain entities, to study the brokerage and 12
investment services used by the State Retirement and Pension System to evaluate 13
whether remedial measures to assist minority and women–owned businesses would 14
comply with a certain court opinion and any subsequent federal or constitutional 15
requirements; and generally relating to the use of minority and women–owned 16
business enterprises in the State Retirement and Pension System. 17
BY repealing and reenacting, without amendments, 18
Article – State Personnel and Pensions 19
Section 21–116(a) 20
Annotated Code of Maryland 21
(2015 Replacement Volume and 2021 Supplement) 22
BY repealing and reenacting, with amendments, 23 2 HOUSE BILL 542
Article – State Personnel and Pensions 1
Section 21–116(d) 2
Annotated Code of Maryland 3
(2015 Replacement Volume and 2021 Supplement) 4
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – State Personnel and Pensions 7
21–116. 8
(a) By resolution, the Board of Trustees shall specify the powers of the Investment 9
Committee. 10
(d) (1) (i) Consistent with minority business purchasing standards 11
applicable to units of State government under the State Finance and Procurement Article 12
and consistent with the fiduciary duties of the Board of Trustees, the Board of Trustees 13
shall direct the Investment Committee to [attempt to] use [to the greatest extent feasible] 14
minority business enterprises to provide brokerage and investment management services 15
to the Board IN ACCORDANCE WITH S UBPARAGRAPH (II) OF THIS PARAGRAPH . 16
(ii) THE USE OF MINORITY B USINESS ENTERPRISES UNDER 17
SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL CONSIST OF: 18
1. AT LEAST 20% OF BROKERAGE AND INV ESTMENT 19
MANAGEMENT SERVICES TO THE BOARD; AND 20
2. MANAGEMENT OF AT LEA ST 20% OF THE ASSETS OF 21
THE SEVERAL SYSTEMS . 22
(III) (II) FOR THE FISCAL YEAR B EGINNING JULY 1, 2022, AND 23
EACH FISCAL YEAR THE REAFTER, THE BOARD OF TRUSTEES SHALL ASSESS THE USE 24
OF MINORITY BUSINESS ENTERPRISES AS REQUI RED UNDER THIS SUBSE CTION. 25
(IV) (III) For purposes of this subsection, brokerage and investment 26
management services shall include services relating to all allocated asset classes. 27
(2) (i) To assist it in achieving the [goal] GOALS described under 28
paragraph (1) of this subsection, the Investment Committee shall undertake measures to 29
remove any barriers that limit full participation by minority business enterprises in 30
brokerage and investment management services opportunities afforded under this title. 31
(ii) The measures undertaken by the Investment Committee shall 32
include the use of a wide variety of media, including the State Retirement Agency’s website, 33
to provide notice to a broad and varied range of potential providers about the brokerage 34 HOUSE BILL 542 3
and investment management services opportunities afforded by the State Retirement 1
Agency. 2
(3) In consultation with the Governor’s Office of Small, Minority, and 3
Women Business Affairs and the Investment Committee, the Board of Trustees shall 4
develop guidelines to assist the Investment Committee in identifying and evaluating 5
qualified minority business enterprises in order to help the State Retirement Agency 6
achieve the objective for greater use of minority business enterprises for brokerage and 7
investment management services. 8
(4) On or before September 1 each year, the Investment Committee shall 9
submit a report to the Board of Trustees, the Governor’s Office of Small, Minority, and 10
Women Business Affairs and, subject to § 2–1257 of the State Government Article, the 11
General Assembly on: 12
(i) the identity of the minority business enterprise brokerage and 13
investment management services firms used by the Investment Committee in the 14
immediately preceding fiscal year; 15
(ii) the percentage and dollar value of the assets that are under the 16
control of the Investment Committee that are under the investment control of minority 17
business enterprise brokerage and investment management services firm s for each 18
allocated asset class; and 19
(iii) the measures the Investment Committee undertook in the 20
immediately preceding fiscal year in accordance with paragraph (2)(ii) of this subsection. 21
SECTION 2. AND BE IT FURTHER ENACTED, That: 22
(a) The certification agency designated by the Board of Public Works under § 23
14–303(b) of the State Finance and Procurement Article and the Governor’s Office of Small, 24
Minority, and Women Business Affairs, in consultation with the State Retirement and 25
Pension System, the Office of the Attorney General, and the General Assembly, shall 26
initiate a study regarding the brokerage and investment services used by the State 27
Retirement and Pension System to evaluate whether the enactment of remedial measures 28
to assist minority and women–owned businesses in the brokerage and investment 29
management services industry and market would comply with the Croson decision and any 30
subsequent federal or constitutional requirements. 31
(b) The certification agency and the Governor’s Office of Small, Minority, and 32
Women Business Affairs shall submit the findings of the study required under subsection 33
(a) of this section to the Legislative Policy Committee, in accordance with § 2–1257 of the 34
State Government Article, on or before July 1, 2023, so that the General Assembly may 35
review the findings before the 2024 Session. 36
(c) The State Retirement and Pension System shall provide to the certification 37
agency any information deemed necessary to assess the need for remedial measures to 38 4 HOUSE BILL 542
assist minority and women–owned businesses in the brokerage and investment 1
management services industry and market. 2
(d) The Governor’s Office of Small, Minority, and Women Business Affairs, in 3
consultation with the certification agency and the Office of the Attorney General, shall 4
develop race– and gender–neutral approaches to address the needs of minority and 5
women–owned businesses in the brokerage and investment management services industry 6
and market and submit its report to the Legislative Policy Committee, in accordance with 7
§ 2–1257 of the State Government Article, on or before December 1, 2022, so that the 8
General Assembly may review, consider, and adopt race– and gender–neutral alternatives 9
to remedial measures that are not race and gender neutral. 10
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 11
July June 1, 2022. Section 2 of this Act shall remain effective for a period of 1 year and 1 12
month and, at the end of June 30, 2023, Section 2 of this Act, with no further action required 13
by the General Assembly, shall be abrogated and of no further force and effect. 14
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.