AB 1743 - An Act to Amend Sections 7513.8, 82002, and 82039 Of, and to Add Sections 7513.86, 7513.87, 82025.3, 82047.3, and 86206 To, the Government Code, Relating to the Political Reform Act of 1974.

Political Reform Act of 1974: placement agents. 2009-2010 Legislature. View bill details
Author(s):
Summary:
Existing law regulates investments made by public pension and retirement systems and defines the term “placement agent” to mean a person or entity hired, engaged, or retained by an external manager, as defined, to raise money or investment from a public retirement system in California. Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of the lobbying… More
Existing law regulates investments made by public pension and retirement systems and defines the term “placement agent” to mean a person or entity hired, engaged, or retained by an external manager, as defined, to raise money or investment from a public retirement system in California. Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of the lobbying industry, including defining the term “lobbyist” and regulating the conduct of lobbyists. Among its provisions, the act requires lobbyists to register with the Secretary of State and to file periodic disclosure reports, and it prohibits lobbyists from engaging in certain activities, including accepting or agreeing to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action, as defined.

This bill would amend the existing definition of “placement agent” to mean a person, as defined, hired, engaged, or retained by, or serving for the benefit of or on behalf of, an external manager, as defined, to act as a finder, solicitor, marketer, consultant, broker, or other intermediary in connection with the offer or sale of the securities, assets, or services of an external manager to a public retirement system in California for compensation, and would exclude from that definition an employee, officer, director, equityholder, partner, member, or trustee of an external manager who spends 13 or more of his or her time, during a calendar year, managing the securities or assets owned, controlled, invested, or held by the external manager. The bill would define “placement agent” in a similar way for purposes of the Political Reform Act of 1974, except that the definition would be limited to an individual acting in connection with the offer or sale of the securities, assets, or services of an external manager to a state public retirement system in California and would not include employees, officers, or directors of specified external managers or of affiliates of those external managers. In addition, the bill would prohibit a person from acting as a placement agent in connection with any potential system investment made by a state public retirement system unless that person is registered as a lobbyist and is in full compliance with the Political Reform Act of 1974 as that act applies to lobbyists. The bill would also require a person acting as a placement agent in connection with any potential system investment made by a local public retirement system to file any applicable reports with a local government agency that requires lobbyists to register and file reports and to comply with any applicable requirements imposed by a local government agency. The bill would provide that an individual acting as a placement agent is a lobbyist for purposes of the Political Reform Act of 1974 and is thereby required to comply with all regulations and restrictions imposed on lobbyists by the act, and the bill would further expand the definition of “administrative action” for purposes of the act to include, with regard only to placement agents, the decision by any state agency to enter into a contract to invest state public retirement system assets on behalf of a state public retirement system. The bill would specify that a placement agent who is registered with the Securities and Exchange Commission and regulated by the Financial Industry Regulatory Authority is permitted to receive a payment of fees for contractual services provided to an investment manager, except to the extent that payment of fees is prohibited by the proscription on contingency payments to placement agents. Additionally, the bill would require the Public Employees’ Retirement System and the State Teachers’ Retirement System to each provide to the Legislature, not later than August 1, 2012, a report on the use of placement agents in connection with investments made by those retirement systems.

Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.

This bill would impose a state-mandated local program by creating additional crimes.

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.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 23 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act. Hide
 
Status:
The bill has become law (chaptered). 
Senate Committee on Public Employment and Retirement Vote: Do pass, but re-refer to the Committee on Elections, Reapportionmnt and Constitutional Amend

PASSED on June 23, 2010.

voted YES: 4 voted NO: 1
1 voted present/not voting

An Act to Amend Sections 7513.8, 82002, and 82039 Of, and to Add Sections 7513.86, 7513.87, 82025.3, 82047.3, and 86206 To, the Government Code, Relating to the Political Reform Act of 1974.

AB 1743 — 2009-2010 Legislature

Summary
Existing law regulates investments made by public pension and retirement systems and defines the term “placement agent” to mean a person or entity hired, engaged, or retained by an external manager, as defined, to raise money or investment from a public retirement system in California. Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of the lobbying industry, including defining the term “lobbyist” and regulating the conduct of lobbyists. Among its provisions, the act requires lobbyists to register with the Secretary of State and to file periodic disclosure reports, and it prohibits lobbyists from engaging in certain activities, including accepting or agreeing to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action, as defined.

This bill would amend the existing definition of “placement agent” to mean a person, as defined, hired, engaged, or retained by, or serving for the benefit of or on behalf of, an external manager, as defined, to act as a finder, solicitor, marketer, consultant, broker, or other intermediary in connection with the… More
Existing law regulates investments made by public pension and retirement systems and defines the term “placement agent” to mean a person or entity hired, engaged, or retained by an external manager, as defined, to raise money or investment from a public retirement system in California. Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of the lobbying industry, including defining the term “lobbyist” and regulating the conduct of lobbyists. Among its provisions, the act requires lobbyists to register with the Secretary of State and to file periodic disclosure reports, and it prohibits lobbyists from engaging in certain activities, including accepting or agreeing to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action, as defined.

This bill would amend the existing definition of “placement agent” to mean a person, as defined, hired, engaged, or retained by, or serving for the benefit of or on behalf of, an external manager, as defined, to act as a finder, solicitor, marketer, consultant, broker, or other intermediary in connection with the offer or sale of the securities, assets, or services of an external manager to a public retirement system in California for compensation, and would exclude from that definition an employee, officer, director, equityholder, partner, member, or trustee of an external manager who spends 13 or more of his or her time, during a calendar year, managing the securities or assets owned, controlled, invested, or held by the external manager. The bill would define “placement agent” in a similar way for purposes of the Political Reform Act of 1974, except that the definition would be limited to an individual acting in connection with the offer or sale of the securities, assets, or services of an external manager to a state public retirement system in California and would not include employees, officers, or directors of specified external managers or of affiliates of those external managers. In addition, the bill would prohibit a person from acting as a placement agent in connection with any potential system investment made by a state public retirement system unless that person is registered as a lobbyist and is in full compliance with the Political Reform Act of 1974 as that act applies to lobbyists. The bill would also require a person acting as a placement agent in connection with any potential system investment made by a local public retirement system to file any applicable reports with a local government agency that requires lobbyists to register and file reports and to comply with any applicable requirements imposed by a local government agency. The bill would provide that an individual acting as a placement agent is a lobbyist for purposes of the Political Reform Act of 1974 and is thereby required to comply with all regulations and restrictions imposed on lobbyists by the act, and the bill would further expand the definition of “administrative action” for purposes of the act to include, with regard only to placement agents, the decision by any state agency to enter into a contract to invest state public retirement system assets on behalf of a state public retirement system. The bill would specify that a placement agent who is registered with the Securities and Exchange Commission and regulated by the Financial Industry Regulatory Authority is permitted to receive a payment of fees for contractual services provided to an investment manager, except to the extent that payment of fees is prohibited by the proscription on contingency payments to placement agents. Additionally, the bill would require the Public Employees’ Retirement System and the State Teachers’ Retirement System to each provide to the Legislature, not later than August 1, 2012, a report on the use of placement agents in connection with investments made by those retirement systems.

Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.

This bill would impose a state-mandated local program by creating additional crimes.

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.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 23 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act. Hide
Learn More
At LegInfo.ca.gov
Title
An Act to Amend Sections 7513.8, 82002, and 82039 Of, and to Add Sections 7513.86, 7513.87, 82025.3, 82047.3, and 86206 To, the Government Code, Relating to the Political Reform Act of 1974.
Author(s)
Ed Hernandez
Co-Authors
Subjects
  • Political Reform Act of 1974: placement agents
Major Actions
Introduced2/08/2010
Referred to Committee
Passed Assembly Committee on Public Employees, Retirement and Social Security4/07/2010
Passed Assembly Committee on Elections and Redistricting4/20/2010
Passed Assembly Committee on Appropriations5/28/2010
Passed Assembly6/02/2010
Passed Senate Committee on Public Employment and Retirement6/23/2010
Passed Senate Committee on Elections, Reapportionment and Constitutional Amendments6/29/2010
Passed Senate Committee on Appropriations8/02/2010
Passed Senate8/30/2010
Passed Assembly8/31/2010
Presented to the governor (enrolled)9/15/2010
Became law (chaptered).9/30/2010
Bill History
Chamber/CommitteeMotionDateResult
select this voteAssembly Committee on Public Employees, Retirement and Social SecurityDo pass and be re-referred to the Committee on Elections and Redistricting.4/07/2010This motion PASSED the Assembly Committee on Public Employees, Retirement and Social Security
4 voted YES 1 voted NO 1 voted present/not voting
select this voteAssembly Committee on Elections and RedistrictingDo pass and be re-referred to the Committee on Appropriations.4/20/2010This motion PASSED the Assembly Committee on Elections and Redistricting
7 voted YES 0 voted NO 0 voted present/not voting
select this voteAssembly Committee on AppropriationsDo pass.5/28/2010This motion PASSED the Assembly Committee on Appropriations
11 voted YES 5 voted NO 1 voted present/not voting
select this voteAssemblyAB 1743 HERNANDEZ Assembly Third Reading6/02/2010This bill PASSED the Assembly
56 voted YES 8 voted NO 15 voted present/not voting
currently selectedSenate Committee on Public Employment and RetirementDo pass, but re-refer to the Committee on Elections, Reapportionmnt and Constitutional Amend6/23/2010This motion PASSED the Senate Committee on Public Employment and Retirement
4 voted YES 1 voted NO 1 voted present/not voting
select this voteSenate Committee on Elections, Reapportionment and Constitutional AmendmentsDo pass, but re-refer to the Committee on Appropriations.6/29/2010This motion PASSED the Senate Committee on Elections, Reapportionment and Constitutional Amendments
4 voted YES 0 voted NO 1 voted present/not voting
select this voteSenate Committee on AppropriationsDo pass as amended.8/02/2010This motion PASSED the Senate Committee on Appropriations
8 voted YES 0 voted NO 3 voted present/not voting
select this voteSenateAssembly 3rd Reading AB1743 Hernandez By Correa8/30/2010This bill PASSED the Senate
29 voted YES 7 voted NO 3 voted present/not voting
select this voteAssemblyAB 1743 Hernandez Concurrence in Senate Amendments8/31/2010This bill PASSED the Assembly
64 voted YES 13 voted NO 1 voted present/not voting
ActionDateDescription
Introduced2/08/2010
2/08/2010Read first time. To print.
2/09/2010From printer. May be heard in committee March 11.
2/25/2010Referred to Coms. on P.E.,R. & S.S. and E. & R.
3/17/2010From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E.,R. & S.S. Read second time and amended.
3/18/2010Re-referred to Com. on P.E.,R. & S.S.
4/07/2010From committee: Do pass, and re-refer to Com. on E. & R. Re-referred. (Ayes 4. Noes 1.) (April 7).
select this voteVote4/07/2010Do pass and be re-referred to the Committee on Elections and Redistricting.
select this voteVote4/20/2010Do pass and be re-referred to the Committee on Appropriations.
4/21/2010From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 7. Noes 0.) (April 20).
5/05/2010In committee: Hearing postponed by committee.
5/10/2010From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended.
5/11/2010Re-referred to Com. on APPR.
5/19/2010In committee: Hearing postponed by committee.
5/28/2010From committee: Do pass. (Ayes 11. Noes 5.) (May 28). Read second time. To third reading.
select this voteVote5/28/2010Do pass.
6/02/2010Read third time, passed, and to Senate. (Ayes 56. Noes 8. Page 5516.)
select this voteAssembly Vote on Passage6/02/2010AB 1743 HERNANDEZ Assembly Third Reading
6/03/2010In Senate. Read first time. To Com. on RLS. for assignment.
6/10/2010Referred to Coms. on P.E. & R. and E., R., & C.A.
6/17/2010From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on P.E. & R.
currently selectedVote6/23/2010Do pass, but re-refer to the Committee on Elections, Reapportionmnt and Constitutional Amend
6/24/2010From committee: Do pass, and re-refer to Com. on E., R., & C.A. Re-referred. (Ayes 4. Noes 1.) (June 23).
select this voteVote6/29/2010Do pass, but re-refer to the Committee on Appropriations.
6/30/2010From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 4. Noes 0.) (June 29).
select this voteVote8/02/2010Do pass as amended.
8/04/2010From committee: Amend, and do pass as amended. (Ayes 8. Noes 0.) (August 2).
8/05/2010Read second time and amended. Ordered to third reading.
8/17/2010Read third time, amended. To second reading.
8/18/2010Read second time. To third reading.
8/30/2010Read third time, passed, and to Assembly. (Ayes 29. Noes 7. Page 5003.)
select this voteSenate Vote on Passage8/30/2010Assembly 3rd Reading AB1743 Hernandez By Correa
8/31/2010In Assembly. Concurrence in Senate amendments pending. Senate amendments concurred in. To enrollment. (Ayes 64. Noes 13. Page 6933.)
select this voteAssembly Vote on Passage8/31/2010AB 1743 Hernandez Concurrence in Senate Amendments
9/15/2010Enrolled and to the Governor at 4:45 p.m.
9/30/2010Approved by the Governor.
9/30/2010Chaptered by Secretary of State - Chapter 668, Statutes of 2010.

Average contributions given to Senators from interest groups that…

supported this motion

opposed this motion

$8,751
$250
YES$9,001
86% less
$1,240
$0
NO$1,240
11 Organizations Supported and 4 Opposed; See Which Ones

Organizations that took a position on
An Act to Amend Sections 7513.8, 82002, and 82039 Of, and to Add Sections 7513.86, 7513.87, 82025.3, 82047.3, and 86206 To, the Government Code, Relating to the Political Reform Act of 1974.: Do pass, but re-refer to the Committee on Elections, Reapportionmnt and Constitutional Amend

11 organizations supported this motion

Association of California Water Agencies
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
California Secretary of State
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
California Special Districts Association
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
California State Association of Counties
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
California State Employees Association
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
California State Teachers' Retirement System
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
California State Treasurer
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
CalPERS Board of Administration
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
Cartica Management, LLC
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
Faculty Association of California Community Colleges
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
State Controller John Chiang
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.

4 organizations opposed this motion

California Bankers Association
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
Champlain Advisers, Llc
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
Securities Industry and Financial Markets Association
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.
Third Party Marketers Association
Senate Rules Committee (2010, June 23). Bill Analysis. Retrieved January 18, 2011, from Leg. Info.

Need proof?

View citations of support and opposition

Includes reported contributions to campaigns of Senators in office on day of vote, from interest groups invested in the vote according to MapLight, January 1, 2007 – December 31, 2010.
Contributions data source: FollowTheMoney.org

Contributions by Legislator

Namesort iconPartyDistrict$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Roy AshburnRCA-18$0$0Not Voting
Ellen CorbettDCA-10$52,550$0Yes
Lou CorreaDCA-34$51,600$23,105Yes
Denise DuchenyDCA-40$0$0Yes
Dennis HollingsworthRCA-36$1,000$1,240No
Carol LiuDCA-21$54,600$12,900Yes

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Legislator Filters
Show All
NamePartyDistrict$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Roy AshburnRCA-18$0$0Not Voting
Ellen CorbettDCA-10$52,550$0Yes
Lou CorreaDCA-34$51,600$23,105Yes
Denise DuchenyDCA-40$0$0Yes
Dennis HollingsworthRCA-36$1,000$1,240No
Carol LiuDCA-21$54,600$12,900Yes

Interest Groups that supported this motion

$ Donated
State & local government employee unions$97,250
Teachers unions$47,900
Water utilities$13,400
Civil servant/public employee$1,100
Public official (elected or appointed)$100
Municipal & county government organizations$0
Security brokers & investment companies$0

Interest Groups that opposed this motion

$ Donated
Commercial banks & bank holding companies$36,244
Securities, commodities & investment$1,000
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