US Official News
March 5, 2015 Thursday
California State Legislature bill updates 03/03/2015; Assembly Bill
No. 1410 Introduced by Assembly Members Nazarian, Achadjian, and Wilk
Sacramento
California State Legislature has issued the following bill updates:
Assembly BillNo. 1410
Introduced by Assembly Members Nazarian, Achadjian, and Wilk
February 27, 2015
An act to amend Section 16642 of, and to add Section 7513.75 to, the
Government Code, relating to investments.
LEGISLATIVE COUNSEL’S DIGEST
AB 1410, as introduced, Nazarian. Public employees’ retirement:
investments: Turkish investment vehicles.
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 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 in Iran, as specified.
This bill would additionally prohibit the Public Employees’ Retirement
System and the State Teachers’ Retirement System from investing public
employee retirement funds in a Turkish investment vehicle, as
specified. The bill would require the Board of Administration of the
Public Employees’ Retirement System and the Teachers’ Retirement Board
of the State Teachers’ Retirement System to sell or transfer any
investments in a Turkish investment vehicle.
This bill would require these boards, on or before January 1, 2017,
and annually thereafter, to report to the Legislature any investments
in a Turkish investment vehicle and the sale or transfer of those
investments, subject to the fiduciary duty of these boards.
This 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 those retirement systems.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
P2 1
SECTION 1.
The Legislature finds and declares the following:
2(a)?The State of California has officially recognized the
3Armenian Genocide each year for decades and has repeatedly
4urged the Republic of Turkey to acknowledge the facts of the
5Armenian Genocide and work toward a just resolution, honor its
6obligations under international treaties and human rights laws, to
7end all forms of religious discrimination and persecution, and to
8return Christian church properties to their rightful owners.
9(b)?Genocide is defined by the United Nations as an act
10`committed with intent to destroy, in whole or in part, a national,
11ethnical, racial or religious group’.
12(c)?Genocide denial is widely viewed as among the final stages
13of genocide and serves to perpetuate the effects of genocide even
14after the active phases of extermination, massacres, forced marches,
15and deportation has ended.
16(d)?The government of Turkey has engaged and continues to
17engage in an ongoing campaign of genocide denial and historical
18revisionism by refusing to acknowledge its responsibility for the
19Armenian Genocide, refusing to compensate its victims, and
20actively pursuing a well-funded political lobbying campaign
21throughout the United States, including in California, to rewrite
22history and defeat legislation recognizing the Armenian Genocide.
23(e)?The government of Turkey has engaged and continues to
24engage in efforts to effect Armenian cultural erasure since the
25founding of the Republic of Turkey, including, but not limited to,
26ethnic cleansings and the destruction of sacred Armenian religious
27sites.
28(f)?Reference in Turkey by any scholar, journalist, or other
29person to the massacre and deportation of Armenians in 1915 to
301923, inclusive, as genocide can be criminally prosecuted under
31Article 301 of the Turkish Penal Code.
P3 1(g)?The State of California is home to the largest
2Armenian-American population in the United States, and
3Armenians living in California, most of whom are direct
4descendants of the survivors of the Armenian Genocide, have
5enriched our state through their leadership and contributions in
6business, agriculture, academia, government, and the arts, yet
7continue to suffer the effects of the continued denial campaign by
8the government of Turkey.
9(h)?The State of California, as the world’s eighth largest
10economy, and in accordance with principles of human rights and
11justice, has taken the lead in adopting legislation to divest from
12South Africa for its policy of apartheid, Sudan for its genocide in
13Darfur, and Iran for its support of international terrorism, imposing
14economic consequences upon regimes that engage in conduct and
15policy that violate human rights or constitute crimes against
16humanity.
17(i)?The State of California, through its Public Employees’
18Retirement System (PERS) and its State Teachers’ Retirement
19System (STRS), directly invests public funds in the government
20of Turkey, which then reaps profits while actively denying the
21Armenian Genocide, funding its continued campaign of denial, at
22least in part, through these investments in its economy.
23(j)?By investing public funds in the government of Turkey, the
24State of California as the embodiment of its citizens contradicts
25its longstanding, just position of recognizing the Armenian
26Genocide and urging the government of Turkey to acknowledge
27its responsibility and work toward a just resolution by honoring
28its obligations under international treaties and human rights laws,
29to end all forms of religious discrimination and persecution, and
30to return Christian church properties to their rightful owners.
31(k)?It is the government of Turkey, not the people of Turkey,
32that is responsible for Turkey’s continued egregious violations of
33human rights and active pursuit of genocide denial, cultural erasure,
34and historical revisionism.
35(l)?PERS currently has investment holdings in bonds directly
36issued by the Republic of Turkey in excess of $185,000,000.
37(m)?STRS currently has investment holdings in bonds directly
38issued by the Republic of Turkey in excess of several hundred
39million dollars.
P4 1(n)?Investment in the Republic of Turkey enables its government
2to continue to deny justice to the Armenian people.
3(o)?Divesting these funds would ensure that the State of
4California is in no way complicit in the continued denial of the
5Armenian Genocide by the government of Turkey and would
6encourage said government to acknowledge the Armenian
7Genocide and to reach a fair and just resolution of reparations for
8the survivors of the Armenian Genocide.
9
SEC. 2.
Section 7513.75 is added to the Government Code, to
10read:
11
7513.75.
(a)?As used in this section, the following terms have
12the following meanings:
13(1)?`Board’ means the Board of Administration of the Public
14Employees’ Retirement System or the Teachers’ Retirement Board
15of the State Teachers’ Retirement System, as applicable.
16(2)?`Government of Turkey’ means the government of Turkey
17or its instrumentalities or political subdivisions. `Government of
18Turkey’ also includes any and all investment vehicles, government
19bonds, or financial institutions and entities that are owned,
20controlled, or operated by the government of Turkey.
21(3)?`Turkey’ means the Republic of Turkey or any territory
22 under the administration or control of Turkey.
23(4)? `Public employee retirement funds’ means the Public
24Employees’ Retirement Fund described in Section 20062 and the
25Teachers’ Retirement Fund described in Section 22167 of the
26Education Code.
27(b)?The board shall not invest public employee retirement funds
28in any investment vehicle in Turkey that meets either of the
29following criteria:
30(1)?The investment vehicle is issued by the government of
31Turkey.
32(2)?The investment vehicle is owned, controlled, or managed
33by the government of Turkey.
34(c)?On or before June 30, 2016, the board shall determine which
35Turkish investment vehicles are subject to divestment.
36(d)?After the determination described in subdivision (c), the
37board shall determine, by the next applicable board meeting, if a
38Turkish investment vehicle meets the criteria described in
39subdivision (b). If the board plans to invest or has investments in
40a company that meets the criteria described in subdivision (b), that
P5 1planned or existing investment shall be subject to subdivisions (g)
2and (h).
3(e)?Investments of the board in an investment vehicle that does
4not meet the criteria described in subdivision (b) are not subject
5to subdivision (h) if the company does not subsequently meet the
6criteria described in subdivision (b). The board shall identify the
7reasons why that investment vehicle does not satisfy the criteria
8described in subdivision (b) in the report to the Legislature
9described in subdivision (i).
10(f)?(1)?Notwithstanding subdivisions (d) and (e), if the board’s
11investment in a company described in subdivision (b) is limited
12to investment via an externally and actively managed commingled
13fund, the board shall contact that fund manager in writing and
14request that the fund manager remove that investment vehicle from
15the fund as described in subdivision (h). On or before June 30,
162016, if the fund or account manager creates a fund or account
17devoid of investment vehicles described in subdivision (b), the
18transfer of board investments from the prior fund or account to the
19fund or account devoid of the investment vehicles shall be deemed
20to satisfy subdivision (h).
21(2)?If the board’s investment in an investment vehicle described
22in subdivision (b) is limited to an alternative fund or account, the
23alternative fund or account manager creates an actively managed
24commingled fund that excludes investment vehicles described in
25subdivision (b), and the new fund or account is deemed to be
26financially equivalent to the existing fund or account, the transfer
27of board investments from the existing fund or account to the new
28fund or account shall be deemed to satisfy subdivision (h). If the
29board determines that the new fund or account is not financially
30equivalent to the existing fund, the board shall include the reasons
31for that determination in the report described in subdivision (i).
32(3)?The board shall make a good faith effort to identify any
33private equity investments that involve investment vehicles
34described in subdivision (b), or are linked to the government of
35Turkey. If the board determines that a private equity investment
36clearly involves an investment vehicle described in subdivision
37(b), or is linked to the government of Turkey, the board shall
38consider, at its discretion, if those private equity investments shall
39be subject to subdivision (h). If the board determines that a private
40equity investment clearly involves a company described in
P6 1subdivision (b), or is linked to the government of Turkey and the
2board does not take action as described in subdivision (h), the
3board shall include the reasons for its decision in the report
4described in subdivision (i).
5(g)?Except as described in subdivisions (e) and (f), the board,
6in the board’s capacity of shareholder or investor, shall notify any
7investment vehicle described in subdivision (d) that the investment
8vehicle is subject to subdivision (h) and permit that investment
9vehicle to respond to the board. The board shall request that the
10investment vehicle take substantial action to disassociate itself
11from the government of Turkey no later than 90 days from the date
12the board notified the investment vehicle under this subdivision.
13If the board determines that an investment vehicle has taken
14substantial action or has made sufficient progress toward substantial
15action before the expiration of that 90-day period, that investment
16vehicle shall not be subject to subdivision (h). The board shall, at
17intervals not to exceed 90 days, continue to monitor and review
18the progress of the investment vehicle until that investment vehicle
19has taken substantial action in Turkey. An investment vehicle that
20fails to complete substantial action within one year from the date
21of the initial notice by the board shall be subject to subdivision
22(h).
23(h)?If an investment vehicle described in subdivision (d) fails
24to complete substantial action by the time described in subdivision
25(g), the board shall take the following actions:
26(1)?The board shall not make additional or new investments or
27renew existing investments in that investment vehicle.
28(2)?The board shall liquidate the investments of the board in
29that investment vehicle no later than 18 months after this
30subdivision applies to that investment vehicle. The board shall
31liquidate those investments in a manner to address the need for
32investment vehicles to take substantial action in Turkey and
33consistent with the board’s fiduciary responsibilities as described
34in Section 17 of Article XVI of the California Constitution.
35(i)?On or before January 1, 2017, and every year thereafter, the
36board shall file a report with the Legislature. The report shall
37describe the following:
38(1)?A list of investments the board has in investment vehicles
39that satisfy the criteria in subdivision (b), including, but not limited
P7 1to, the issuer, by name, of the stock, bonds, securities, and other
2evidence of indebtedness.
3(2)?A detailed summary of the association between an
4investment vehicle described in paragraph (1) and the government
5of Turkey.
6(3)?Whether the board has reduced its investments in an
7investment vehicle that satisfies the criteria in subdivision (b).
8(4)? If the board has not completely reduced its investments in
9an investment vehicle that satisfies the criteria in subdivision (b),
10when the board anticipates that the board will reduce all
11investments in that investment vehicle or the reasons why a sale
12or transfer of investments is inconsistent with the fiduciary
13responsibilities of the board as described in Section 17 of Article
14XVI of the California Constitution.
15(5)?Any information described in subdivisions (d) and (e).
16(6)?A detailed summary of investments that were transferred to
17funds or accounts devoid of Turkish investment vehicles as
18described in subdivision (f).
19(7)?An annual calculation of any costs or investment losses or
20other financial results incurred in compliance with the provisions
21of this section.
22(j)?If the board voluntarily sells or transfers all of its investments
23in a Turkish investment vehicle in accordance with this section,
24this section shall not apply except that the board shall file a report
25with the Legislature related to that investment vehicle as described
26in subdivision (i).
27(k)?Nothing in this section shall require the board to take action
28as described in this section if the board determines, and adopts
29findings, in good faith and based on credible information available
30to the public, that the action described in this section would fail
31to satisfy the fiduciary responsibilities of the board as described
32in Section 17 of Article XVI of the California Constitution.
33(l)?This section shall be known, and may be cited, as the
34California Public Divest from Turkey to End the Perpetuation of
35the Armenian Genocide Act.
36
SEC. 3.
Section 16642 of the Government Code is amended
37to read:
38
16642.
Present, future, and former board members of the Public
39Employees’ Retirement System or the State Teachers’ Retirement
40System, jointly and individually, state officers and employees,
P8 1research firms described in subdivision (d) of Section 7513.6, and
2investment managers under contract with the Public Employees’
3Retirement System or the State Teachers’ Retirement System shall
4be indemnified from the General Fund and held harmless by the
5State of California from all claims, demands, suits, actions,
6damages, judgments, costs, charges and expenses, including court
7costs and attorney’s fees, and against all liability, losses, and
8damages of any nature whatsoever that these present, future, or
9former board members, officers, employees, research firms as
10described in subdivision (d) of Section 7513.6, or contract
11 investment managers shall or may at any time sustain by reason
12of any decision to restrict, reduce, or eliminate investments
13pursuant to Sectionsbegin delete 7513.6 and 7513.7.end deletebegin
insert 7513.6, 7513.7, and
147513.75.end insert
15
SEC. 4.
The provisions of this act are severable. If any
16provision of this act or its application is held invalid, that invalidity
17shall not affect other provisions or applications that can be given
18effect without the invalid provision or application.
From: Emil Lazarian | Ararat NewsPress
