LAWRENCE J. HOGAN, JR., Governor Ch. 641
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Chapter 641
(House Bill 542)
AN ACT concerning
State Retirement and Pension System – Investment Committee – Use of
Minority and Women–Owned Business Enterprises
(Diversity Among Asset Managers Act of 2022)
FOR the purpose of requiring the Investment Committee of the State Retirement Agency
to use minority business enterprises to provide a certain percentage of brokerage and
investment management services to the Board of Trustees for the State Retirement
and Pension System and to manage a certain percentage of system assets; requiring
the Investment Committee of the State Retirement Agency to assess the use of
minority business enterprises beginning on a certain date; requiring a certain
certification agency and the Governor’s Office of Small, Minority, and Women
Business Affairs, in consultation with certain entities, to study the brokerage and
investment services used by the State Retirement and Pension System to evaluate
whether remedial measures to assist minority and women–owned businesses would
comply with a certain court opinion and any subsequent federal or constitutional
requirements; and generally relating to the use of minority and women–owned
business enterprises in the State Retirement and Pension System.
BY repealing and reenacting, without amendments,
Article – State Personnel and Pensions
Section 21–116(a)
Annotated Code of Maryland
(2015 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, with amendments,
Article – State Personnel and Pensions
Section 21–116(d)
Annotated Code of Maryland
(2015 Replacement Volume and 2021 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – State Personnel and Pensions
21–116.
(a) By resolution, the Board of Trustees shall specify the powers of the Investment
Committee.
Ch. 641 2022 LAWS OF MARYLAND
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(d) (1) (i) Consistent with minority business purchasing standards
applicable to units of State government under the State Finance and Procurement Article
and consistent with the fiduciary duties of the Board of Trustees, the Board of Trustees
shall direct the Investment Committee to [attempt to] use [to the greatest extent feasible]
minority business enterprises to provide brokerage and investment management services
to the Board IN ACCORDANCE WITH S UBPARAGRAPH (II) OF THIS PARAGRAPH .
(ii) THE USE OF MINORITY B USINESS ENTERPRISES UNDER
SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL CONSIST OF:
1. AT LEAST 20% OF BROKERAGE AND INV ESTMENT
MANAGEMENT SERVICES TO THE BOARD; AND
2. MANAGEMENT OF AT LEA ST 20% OF THE ASSETS OF
THE SEVERAL SYSTEMS .
(III) (II) FOR THE FISCAL YEAR B EGINNING JULY 1, 2022, AND
EACH FISCAL YEAR THE REAFTER, THE BOARD OF TRUSTEES SHALL ASSESS THE USE
OF MINORITY BUSINESS ENTERPRISES AS REQUI RED UNDER THIS SUBSE CTION.
(IV) (III) For purposes of this subsection, brokerage and investment
management services shall include services relating to all allocated asset classes.
(2) (i) To assist it in achieving the [goal] GOALS described under
paragraph (1) of this subsection, the Investment Committee shall undertake measures to
remove any barriers that limit full participation by minority business enterprises in
brokerage and investment management services opportunities afforded under this title.
(ii) The measures undertaken by the Investment Committee shall
include the use of a wide variety of media, including the State Retirement Agency’s website,
to provide notice to a broad and varied range of potential providers about the brokerage
and investment management services opportunities afforded by the State Retirement
Agency.
(3) In consultation with the Governor’s Office of Small, Minority, and
Women Business Affairs and the Investment Committee, the Board of Trustees shall
develop guidelines to assist the Investment Committee in identifying and evaluating
qualified minority business enterprises in order to help the State Retirement Agency
achieve the objective for greater use of minority business enterprises for brokerage and
investment management services.
(4) On or before September 1 each year, the Investment Committee shall
submit a report to the Board of Trustees, the Governor’s Office of Small, Minority, and
Women Business Affairs and, subject to § 2–1257 of the State Government Article, the
General Assembly on: LAWRENCE J. HOGAN, JR., Governor Ch. 641
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(i) the identity of the minority business enterprise brokerage and
investment management services firms used by the Investment Committee in the
immediately preceding fiscal year;
(ii) the percentage and dollar value of the assets that are under the
control of the Investment Committee that are under the investment control of minority
business enterprise brokerage and investment management services firms for each
allocated asset class; and
(iii) the measures the Investment Committee undertook in the
immediately preceding fiscal year in accordance with paragraph (2)(ii) of this subsection.
SECTION 2. AND BE IT FURTHER ENACTED, That:
(a) The certification agency designated by the Board of Public Works under §
14–303(b) of the State Finance and Procurement Article and the Governor’s Office of Small,
Minority, and Women Business Affairs, in consultation with the State Retirement and
Pension System, the Office of the Attorney General, and the General Assembly, shall
initiate a study regarding the brokerage and investment services used by the State
Retirement and Pension System to evaluate whether the enactment of remedial measures
to assist minority and women–owned businesses in the brokerage and investment
management services industry and market would comply with the Croson decision and any
subsequent federal or constitutional requirements.
(b) The certification agency and the Governor’s Office of Small, Minority, and
Women Business Affairs shall submit the findings of the study required under subsection
(a) of this section to the Legislative Policy Committee, in accordance with § 2–1257 of the
State Government Article, on or before July 1, 2023, so that the General Assembly may
review the findings before the 2024 Session.
(c) The State Retirement and Pension System shall provide to the certification
agency any information deemed necessary to assess the need for remedial measures to
assist minority and women–owned businesses in the brokerage and investment
management services industry and market.
(d) The Governor’s Office of Small, Minority, and Women Business Affairs, in
consultation with the certification agency and the Office of the Attorney General, shall
develop race– and gender–neutral approaches to address the needs of minority and
women–owned businesses in the brokerage and investment management services industry
and market and submit its report to the Legislative Policy Committee, in accordance with
§ 2–1257 of the State Government Article, on or before December 1, 2022, so that the
General Assembly may review, consider, and adopt race– and gender–neutral alternatives
to remedial measures that are not race and gender neutral.
Ch. 641 2022 LAWS OF MARYLAND
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SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
July June 1, 2022. Section 2 of this Act shall remain effective for a period of 1 year and 1
month and, at the end of June 30, 2023, Section 2 of this Act, with no further action required
by the General Assembly, shall be abrogated and of no further force and effect.
Enacted under Article II, § 17(c) of the Maryland Constitution, May 29, 2022.