California 2019-2020 Regular Session Status: In Committee

AB 2780 — Public employee retirement systems: prohibited investments: Turkey and Azerbaijan.

Last action — Re-referred to Com. on P.E. & R.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Assembly
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2019-2020 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

The California Constitution grants the retirement board of a public employee retirement system plenary authority and fiduciary responsibility for investment of moneys and administration of the retirement fund and system. The California Constitution qualifies this grant of powers by reserving to the Legislature the authority to prohibit investments if it is in the public interest and the prohibition satisfies standards of fiduciary care and loyalty required of a retirement board. Existing law prohibits the boards of administration of the Public Employees' Retirement System and the State Teachers' Retirement System from making investments in certain countries and in thermal coal companies, as specified, subject to the boards' plenary authority and fiduciary responsibility for investment of moneys and administration of the systems. Existing law, upon the passage of a federal law imposing sanctions on the government of Turkey for failure to officially acknowledge its responsibility for the Armenian Genocide, also prohibits the boards of administration of the Public Employees' Retirement System and the State Teachers' Retirement System, from making additional or new investments, or renewing existing investments, of public employee retirement funds in an investment vehicle in the government of Turkey that is issued by the government of Turkey or that is owned by the government of Turkey. Existing law requires the boards to liquidate existing investments in the government of Turkey within 18 months of the passage of the above-described federal law. This bill, upon the passage of a federal law imposing sanctions on the government of Turkey for imposing an economic blockade of Armenia, would prohibit the boards of specified public pension or retirement systems from making additional or new investments or renew existing investments of public employee retirement funds in any investment vehicle that is issued or owned by the government of Azerbaijan or Turkey. The bill would require the boards to liquidate investments in the government of Azerbaijan or Turkey within 18 months of the passage of the above-described law. The bill would not apply the above provisions to an investment vehicle if the governing body of the financial institution issuing the investment vehicle, by resolution, adopts a policy not to renew existing, expand existing, or engage in new, discriminatory practices in furtherance of or in compliance with the economic blockade of Armenia by the governments of Turkey and Azerbaijan. The bill would require a copy of the resolution to be submitted to the Treasurer and the chief administrative officer of each public employee retirement fund, accompanied by a certification, under penalty of perjury, that the adopted policy is being complied with by the financial institution. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The bill would also require these boards to make specified reports to the Legislature and the Governor regarding these actions within one year of the passage of a federal law imposing those sanctions on the government of Azerbaijan or Turkey. The bill would specify that its provisions do not require a board to take any action that the board determines in good faith is inconsistent with its constitutional fiduciary responsibilities to the retirement system. The bill would 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, the boards, in connection with actions relating to these investments. The bill would repeal the above-described prohibited investment and reporting provisions on January 1, 2026, or if a determination is made by the Legislature, the Department of State, the Congress of the United States, or another appropriate federal agency that the government of either Turkey or both Turkey and Azerbaijan has adopted a policy to cease their economic blockade of Armenia. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.

Bill Text

Action History

  1. Re-referred to Com. on P.E. & R.

  2. From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E. & R. Read second time and amended.

  3. Referred to Com. on P.E. & R.

  4. From printer. May be heard in committee March 22.

  5. Read first time. To print.

Sponsors

  • Holden · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 121 not signed on

Sponsors (1)

  • Holden

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Subjects

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Frequently asked questions

What does AB 2780 do?
The California Constitution grants the retirement board of a public employee retirement system plenary authority and fiduciary responsibility for investment of moneys and administration of the retirement fund and system. The California Constitution qualifies this grant of powers by reserving to the Legislature the authority to prohibit investments if it is in the public interest and the prohibition satisfies standards of fiduciary care and loyalty required of a retirement board. Existing law prohibits the boards of administration of the Public Employees' Retirement System and the State Teachers' Retirement System from making investments in certain countries and in thermal coal companies, as specified, subject to the boards' plenary authority and fiduciary responsibility for investment of moneys and administration of the systems. Existing law, upon the passage of a federal law imposing sanctions on the government of Turkey for failure to officially acknowledge its responsibility for the Armenian Genocide, also prohibits the boards of administration of the Public Employees' Retirement System and the State Teachers' Retirement System, from making additional or new investments, or renewing existing investments, of public employee retirement funds in an investment vehicle in the government of Turkey that is issued by the government of Turkey or that is owned by the government of Turkey. Existing law requires the boards to liquidate existing investments in the government of Turkey within 18 months of the passage of the above-described federal law. This bill, upon the passage of a federal law imposing sanctions on the government of Turkey for imposing an economic blockade of Armenia, would prohibit the boards of specified public pension or retirement systems from making additional or new investments or renew existing investments of public employee retirement funds in any investment vehicle that is issued or owned by the government of Azerbaijan or Turkey. The bill would require the boards to liquidate investments in the government of Azerbaijan or Turkey within 18 months of the passage of the above-described law. The bill would not apply the above provisions to an investment vehicle if the governing body of the financial institution issuing the investment vehicle, by resolution, adopts a policy not to renew existing, expand existing, or engage in new, discriminatory practices in furtherance of or in compliance with the economic blockade of Armenia by the governments of Turkey and Azerbaijan. The bill would require a copy of the resolution to be submitted to the Treasurer and the chief administrative officer of each public employee retirement fund, accompanied by a certification, under penalty of perjury, that the adopted policy is being complied with by the financial institution. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The bill would also require these boards to make specified reports to the Legislature and the Governor regarding these actions within one year of the passage of a federal law imposing those sanctions on the government of Azerbaijan or Turkey. The bill would specify that its provisions do not require a board to take any action that the board determines in good faith is inconsistent with its constitutional fiduciary responsibilities to the retirement system. The bill would 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, the boards, in connection with actions relating to these investments. The bill would repeal the above-described prohibited investment and reporting provisions on January 1, 2026, or if a determination is made by the Legislature, the Department of State, the Congress of the United States, or another appropriate federal agency that the government of either Turkey or both Turkey and Azerbaijan has adopted a policy to cease their economic blockade of Armenia. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.
Who sponsors AB 2780?
AB 2780 is sponsored by Holden.
What is the current status of AB 2780?
This bill died with 2019-2020 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 2780?
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