AB 2337

Bill Subjects

Abstract

The California Constitution provides that the Legislature may by statute prohibit retirement board investments if it is in the public interest to do so, and providing that the prohibition satisfies specified fiduciary standards. Existing law prohibits the boards of the Public Employees' Retirement System and the State Teachers' Retirement System from investing public employee retirement funds in a company with active business operations in Sudan and Iran, as specified. Existing law also requires the boards of these retirement systems to sell or transfer any investments in a company with business operations in Sudan. Existing law requires the boards of these retirement systems to submit an annual report to the Legislature regarding any investments in a company with business operations in Sudan and the sale or transfer of those investments. Existing law requires the state to indemnify, from the General Fund, and hold harmless the present, former, and future board members, officers, and employees of, and investment managers under contract with, these retirement systems by reason of any decision to restrict, reduce, or eliminate investments in Sudan, as specified. This bill would additionally prohibit the boards of public pension or retirement systems, as defined, from investing public employee retirement funds in a company with business operations engaged in predatory investment practices, as defined, that rely on, or result in, the displacement of persons residing in rent-regulated housing, converting rent-regulated housing units to market rate units, or raising rents above regulated levels as determined by the appropriate governing authority, in order to generate profits to investors and would require the boards to establish a policy in regard to investing in rent-regulated housing, as specified. This bill would make related legislative findings and declarations. Existing law provides that a statute that imposes a requirement that a state agency submit a periodic report to the Legislature is inoperative on a date 4 years after the date the first report is due. This bill would, notwithstanding that requirement, require these boards to report annually to the Legislature regarding implementation and compliance of the above-described provisions and regarding compliance with the provisions of the rent-regulated housing investment policy. The bill would also require these boards to develop and implement, on or before June 30, 2011, and thereafter maintain, a policy that prohibits the investment of public employee retirement funds in predatory investment practices, as specified.