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AB-2448 Investments: South Africa.(1993-1994)

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Assembly Bill No. 2448
CHAPTER 31

An act to amend Sections 7514 and 15364.21 of, to repeal Article 6 (commencing with Section 12261) of Chapter 3 of Part 2 of Division 3 of Title 2 of, and to repeal and add Chapter 5 (commencing with Section 16640) of Part 2 of Division 4 of Title 2 of, the Government Code, and to amend Sections 8276, 8277, 8278, and 8279 of the Public Utilities Code, relating to investments in South Africa, and declaring the urgency thereof, to take effect immediately.

[ Filed with Secretary of State  March 30, 1994. Approved by Governor  March 30, 1994. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 2448, Willie Brown. Investments: South Africa.
(1)  Existing law prohibits South African investments by public retirement systems.
This bill would delete that prohibition.
(2)  Existing law, with specified exceptions, prohibits the use of state trust fund money on or after January 1, 1987, to make additional or new investments or to renew existing investments in business firms that have business operations in South Africa or business arrangements with the government of South Africa or in financial institutions that make loans to any South African corporation or with the government of South Africa. Existing law requires a phased divestment by state trust funds of those proscribed South Africa-related investments. Existing law prohibits, effective January 1, 1991, state trust funds from making or holding any investment in any business firm with business operations in South Africa or business arrangements with the government of South Africa or any South African corporation or in any financial institution making or increasing loans or other extensions of credit to the government of South Africa or any South African corporation.
Existing law also prohibits the deposit of state moneys with financial institutions that, on or after January 1, 1987, make or increase loans or other extensions of credit, or provide funds for those purposes, to the government of South Africa.
This bill would repeal the provisions of law proscribing the investment of state trust fund moneys and state funds in South Africa-related investments.
This bill would also provide for indemnification from the General Fund by the State of California for present and former members of the governing board of any trust fund, present and former Regents of the University of California, officers and employees of the state or of the university, and investment managers under contract with the state or the university from all claims, demands, suits, actions, damages, judgments, and other costs, charges, and expenses sustained by them at any time by reason of any decision not to invest in business firms with business operations in South Africa or business arrangements with the government of South Africa, or not to invest in financial institutions extending credit to the government of South Africa or South African corporations, pursuant to the repealed provisions.
(3)  Existing law prohibits the California State World Trade Commission from providing assistance and information to the government of South Africa.
This bill would delete this prohibition.
(4)  Existing law, the implementation of which has been halted by a California appellate court, requires all corporations selling stocks in California to disclose on the prospectus whether or not the corporation, one or more of the corporation’s parent corporation or subsidiary corporation, or one or more of the corporation’s commonly owned corporations is doing business in South Africa or with any person or group located in South Africa.
This bill would repeal this inoperative disclosure requirement.
(5)  Existing law requires the Public Utilities Commission to prohibit any public utility that has any retirement funds invested in the government of South Africa or Libya, or in any corporation based in those countries, from including in its plant operating budget any losses incurred in those investments.
This bill would delete the reference to South Africa in these provisions.
(6)  This bill would declare that it is to take effect immediately as an urgency statute.

The people of the State of California do enact as follows:


SECTION 1.

 Section 7514 of the Government Code is amended to read:

7514.
 (a)  Notwithstanding any other provision of law except Chapter 7 (commencing with Section 16649.80) of Part 2 of Division 4 of Title 2, any state or local public retirement system may invest, subject to and consistent with the standard for prudent investment set forth in Section 17 of Article XVI of the California Constitution, its assets in the bonds or other evidences of indebtedness unconditionally guaranteed by any foreign government that has met the payments of similar bonds or other evidences of indebtedness when due.
(b)  A portion of the assets invested pursuant to this section may be used to purchase rated or unrated bonds, notes, or other instruments unconditionally guaranteed by Canada, Israel, or Mexico.

SEC. 2.

 Article 6 (commencing with Section 12261) of Chapter 3 of Part 2 of Division 3 of Title 2 of the Government Code is repealed.

SEC. 3.

 Section 15364.21 of the Government Code is amended to read:

15364.21.
 The service shall do all of the following consistent with federal law and national and state policy:
(a)  Consult with and coordinate all state government agencies with duties pertaining to international matters, including, but not limited to, the California State World Trade Commission, the State Offices of Trade and Investment, the State Energy Resources Conservation and Development Commission, and the Department of Food and Agriculture, in order to implement the provisions of this article.
(b)  Promote rapid global commercialization of California products and technologies by identifying and developing product and capital market linkages between California universities and colleges (including community colleges), private sector entities engaged in public/private partnerships with these universities and colleges, and their global private and public counterparts.
(c)  Contribute to the development of immediate and long-term policy strategies, in close consultation with the California Council on Science and Technology, the President of the University of California, the Chancellor of the California Community Colleges, and the Chancellor of the California State University, with attention to stimulating California’s economy towards meeting economic adjustment needs and fulfilling California’s yet untapped potential in the six areas of economic development as follows:
(1)  Employment generation.
(2)  Education and human resource development.
(3)  Export development.
(4)  Environmental remediation and preservation.
(5)  Entrepreneurship.
(6)  Equal access to knowledge.
(d)  Facilitate global market access for California enterprises by studying the feasibility of, and coordinating the development of, a statewide interactive electronic data base and network utilizing appropriate technologies such as CD-ROM (compact disk-read only memory) and on-line, recording global market needs and resources identified through various state and other sources, and linking these needs with the needs and capabilities of subscribing California enterprises. In studying the feasibility of, and coordinating the development of, the data base and network, the service shall work closely with the President of the University of California, the Chancellor of the California Community Colleges, and the Chancellor of the California State University, and with other California public and private universities and colleges, state and federal government agencies, and industry, including, but not limited to, the following:
(1)  The California Education Research and Federation Network headquartered at the San Diego Supercomputer Center, and affiliates, including the California Internet Federation, the Federation of American Research Networks, and the National Research and Education Network.
(2)  The Automated Trade Lead System project of the California State World Trade Commission, in association with the California State University at Fresno.
(3)  The Pacific Rim Commercial Exchange Project at the California State University at Sacramento.
(4)  The MEMEX Institute at the California State University at Chico.
(5)  The California Community Colleges ED-NET system.
(e)  Promote access for California enterprises in emerging growth opportunities in developed and developing economies and assist California enterprises in benefiting from the growth of free market forces in developing nations’ economies, including selected countries in Asia, Southern Africa, Central America, Latin America, the Caribbean, and Eastern Europe, by doing the following:
(1)  Providing assistance and information to private enterprises in these countries, and, with the approval of the United States Secretary of State, to their governments.
(2)  Providing support for and assisting, to the extent practicable, in soliciting private sector or other nonstate support and in-kind contributions on behalf of select teams of academicians, technical specialists, and professionals associated with California universities and colleges (including community colleges) for purposes of conducting extended stays and providing onsite technical assistance in regions and to entities indicated in paragraph (1). The service shall select teams on the merits of their ability to contribute to fulfilling the mandate of the service as stipulated in subdivisions (b) to (h), inclusive. While it is the intent of the Legislature that the selected teams be self-funding or funded by nonstate sources to the extent possible, the service may pay for travel expenses and increases in living expenses incurred by the teams. The service may also provide members of the teams with stipends for reports to the Legislature and Governor documenting the respective teams’ contributions to fulfilling the mandate of the service.
(3)  Providing technical assistance and information to California enterprises, leveraging existing public resources, and utilizing existing delivery systems, including, but not limited to, technical assistance and training networks such as the California Community Colleges Economic Development Network, among others.
(4)  Identifying and acting as the intermediary between foreign entities and California-based enterprises with products and services reflecting low, intermediate, and advanced technology capabilities, including, but not limited to, the following disciplines: electronics, biosciences, environmental sciences, commodity and specialty agriculture, food processing, computer hardware and software, telecommunications, and other manufacturing sectors.
(f)  Facilitate the transformation of the technological infrastructure of developing countries in order to generate demand for California exports, including California-based information services and technology-based products, among other related services and products, while meeting the needs of the peoples of developing countries in their pursuit of an improved quality of life.
(g)  Coordinate and focus existing public and private entities in California towards developing technological collaborations with counterparts throughout the world, with particular attention to Europe, Japan, the newly industrialized countries of Asia, Australia and nearby nations, and Canada, in addition to developing countries, in order to facilitate the export of California-based information services and technology-based products among other related services and products.
(h)  Develop immediate and long-term policy strategies regarding access to global markets for information services and technology-based products, among other related services and products, with attention to stimulating California’s economy towards meeting economic adjustment needs and fulfilling California’s yet untapped potential in the six areas of economic development specified in subdivision (c).

SEC. 4.

 Chapter 5 (commencing with Section 16640) of Part 2 of Division 4 of Title 2 of the Government Code is repealed.

SEC. 5.

 Chapter 5 (commencing with Section 16640) is added to Part 2 of Division 4 of Title 2 of the Government Code, to read:
CHAPTER  5. Indemnification

16640.
 Present and former members of the governing board of any trust fund, jointly and individually, state officers and employees, and investment managers under contract with the state shall be indemnified from the General Fund by the State of California from all claims, demands, suits, actions, damages, judgments, costs, charges, and expenses, including court costs and attorney’s fees, and against all liability, losses, and damages of any nature whatsoever that these present or former board members, officers, employees, or contract investment managers shall or may at any time have sustained by reason of any decision not to invest in business firms with business operations in South Africa or business arrangements with the government of South Africa, or any decision not to invest in financial institutions extending credit to the government of South Africa or South African corporations, pursuant to former Chapter 5 (commencing with Section 16640) of this part as it read prior to its repeal by the act adding this section.

16641.
 Present and former Regents of the University of California, jointly and individually, officers and employees of the University of California, and investment managers under contract with the University of California shall be indemnified from the General Fund by the State of California from all claims, demands, suits, actions, damages, judgments, costs, charges, and expenses, including court costs and attorney’s fees, and against all liability, losses, and damages of any nature whatsoever that these present or former regents, officers, employees, or contract investment managers shall or may at any time sustain by reason of any decision not to invest in business firms with business operations in South Africa or business arrangements with the government of South Africa, or any decision not to invest in financial institutions extending credit to the government of South Africa or South African corporations, pursuant to former Chapter 5 (commencing with Section 16640) of this part as it read prior to its repeal by the act adding this section.

SEC. 6.

 Section 8276 of the Public Utilities Code is amended to read:

8276.
 The commission shall prohibit any public utility that has any retirement funds invested in the government of Libya, or in any corporation based in that country, from including in its plant operating budget any losses incurred as a result of those investments.

SEC. 7.

 Section 8277 of the Public Utilities Code is amended to read:

8277.
 The commission shall require every public utility to provide the commission with a list of its retirement fund investments in the government of Libya, or in any corporation based in that country.

SEC. 8.

 Section 8278 of the Public Utilities Code is amended to read:

8278.
 The commission shall verify the accuracy of the information provided pursuant to Section 8277, and shall disallow any losses incurred as a result of investments in the government of Libya, or in any corporation based in that country, in establishing rates for the public utility.

SEC. 9.

 Section 8279 of the Public Utilities Code is amended to read:

8279.
 This article does not prevent the commission from applying this article to public utility retirement fund investments in other countries such as, but not limited to, Libya, if comparable conditions warrant that application.

SEC. 10.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order that the state may make investments in South Africa at the earliest possible time, it is necessary that this act take effect immediately.