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.

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

• Marty Block
• Bob Blumenfield
• Joan Buchanan
• Fiona Ma
• Anthony Portantino
• Lori Saldana
• Audra Strickland
• Elaine Alquist
• Lou Correa
• Loni Hancock
• Tony Strickland
• Lois Wolk
• Ted Lieu

Subjects

• Political Reform Act of 1974: placement agents

Major Actions

Introduced	2/08/2010
Referred to Committee
Passed Assembly Committee on Public Employees, Retirement and Social Security	4/07/2010
Passed Assembly Committee on Elections and Redistricting	4/20/2010
Passed Assembly Committee on Appropriations	5/28/2010
Passed Assembly	6/02/2010
Passed Senate Committee on Public Employment and Retirement	6/23/2010
Passed Senate Committee on Elections, Reapportionment and Constitutional Amendments	6/29/2010
Passed Senate Committee on Appropriations	8/02/2010
Passed Senate	8/30/2010
Passed Assembly	8/31/2010
Presented to the governor (enrolled)	9/15/2010
Became law (chaptered).	9/30/2010

Bill History

• All Votes
• All Actions

	Chamber/Committee	Motion	Date	Result
select this vote	Assembly Committee on Public Employees, Retirement and Social Security	Do pass and be re-referred to the Committee on Elections and Redistricting.	4/07/2010	This 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 vote	Assembly Committee on Elections and Redistricting	Do pass and be re-referred to the Committee on Appropriations.	4/20/2010	This motion PASSED the Assembly Committee on Elections and Redistricting 7 voted YES 0 voted NO 0 voted present/not voting
select this vote	Assembly Committee on Appropriations	Do pass.	5/28/2010	This motion PASSED the Assembly Committee on Appropriations 11 voted YES 5 voted NO 1 voted present/not voting
select this vote	Assembly	AB 1743 HERNANDEZ Assembly Third Reading	6/02/2010	This bill PASSED the Assembly 56 voted YES 8 voted NO 15 voted present/not voting
select this vote	Senate Committee on Public Employment and Retirement	Do pass, but re-refer to the Committee on Elections, Reapportionmnt and Constitutional Amend	6/23/2010	This motion PASSED the Senate Committee on Public Employment and Retirement 4 voted YES 1 voted NO 1 voted present/not voting
select this vote	Senate Committee on Elections, Reapportionment and Constitutional Amendments	Do pass, but re-refer to the Committee on Appropriations.	6/29/2010	This motion PASSED the Senate Committee on Elections, Reapportionment and Constitutional Amendments 4 voted YES 0 voted NO 1 voted present/not voting
select this vote	Senate Committee on Appropriations	Do pass as amended.	8/02/2010	This motion PASSED the Senate Committee on Appropriations 8 voted YES 0 voted NO 3 voted present/not voting
select this vote	Senate	Assembly 3rd Reading AB1743 Hernandez By Correa	8/30/2010	This bill PASSED the Senate 29 voted YES 7 voted NO 3 voted present/not voting
currently selected	Assembly	AB 1743 Hernandez Concurrence in Senate Amendments	8/31/2010	This bill PASSED the Assembly 64 voted YES 13 voted NO 1 voted present/not voting

	Action	Date	Description
	Introduced	2/08/2010
		2/08/2010	Read first time. To print.
		2/09/2010	From printer. May be heard in committee March 11.
		2/25/2010	Referred to Coms. on P.E.,R. & S.S. and E. & R.
		3/17/2010	From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E.,R. & S.S. Read second time and amended.
		3/18/2010	Re-referred to Com. on P.E.,R. & S.S.
		4/07/2010	From committee: Do pass, and re-refer to Com. on E. & R. Re-referred. (Ayes 4. Noes 1.) (April 7).
select this vote	Vote	4/07/2010	Do pass and be re-referred to the Committee on Elections and Redistricting.
select this vote	Vote	4/20/2010	Do pass and be re-referred to the Committee on Appropriations.
		4/21/2010	From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 7. Noes 0.) (April 20).
		5/05/2010	In committee: Hearing postponed by committee.
		5/10/2010	From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended.
		5/11/2010	Re-referred to Com. on APPR.
		5/19/2010	In committee: Hearing postponed by committee.
		5/28/2010	From committee: Do pass. (Ayes 11. Noes 5.) (May 28). Read second time. To third reading.
select this vote	Vote	5/28/2010	Do pass.
		6/02/2010	Read third time, passed, and to Senate. (Ayes 56. Noes 8. Page 5516.)
select this vote	Assembly Vote on Passage	6/02/2010	AB 1743 HERNANDEZ Assembly Third Reading
		6/03/2010	In Senate. Read first time. To Com. on RLS. for assignment.
		6/10/2010	Referred to Coms. on P.E. & R. and E., R., & C.A.
		6/17/2010	From 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.
select this vote	Vote	6/23/2010	Do pass, but re-refer to the Committee on Elections, Reapportionmnt and Constitutional Amend
		6/24/2010	From committee: Do pass, and re-refer to Com. on E., R., & C.A. Re-referred. (Ayes 4. Noes 1.) (June 23).
select this vote	Vote	6/29/2010	Do pass, but re-refer to the Committee on Appropriations.
		6/30/2010	From committee: Do pass, and re-refer to Com. on APPR. Re-referred. (Ayes 4. Noes 0.) (June 29).
select this vote	Vote	8/02/2010	Do pass as amended.
		8/04/2010	From committee: Amend, and do pass as amended. (Ayes 8. Noes 0.) (August 2).
		8/05/2010	Read second time and amended. Ordered to third reading.
		8/17/2010	Read third time, amended. To second reading.
		8/18/2010	Read second time. To third reading.
		8/30/2010	Read third time, passed, and to Assembly. (Ayes 29. Noes 7. Page 5003.)
select this vote	Senate Vote on Passage	8/30/2010	Assembly 3rd Reading AB1743 Hernandez By Correa
		8/31/2010	In Assembly. Concurrence in Senate amendments pending. Senate amendments concurred in. To enrollment. (Ayes 64. Noes 13. Page 6933.)
currently selected	Assembly Vote on Passage	8/31/2010	AB 1743 Hernandez Concurrence in Senate Amendments
		9/15/2010	Enrolled and to the Governor at 4:45 p.m.
		9/30/2010	Approved by the Governor.
		9/30/2010	Chaptered by Secretary of State - Chapter 668, Statutes of 2010.