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AB-2041 University of California: Office of the Chief Investment Officer.(2017-2018)

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Date Published: 06/18/2018 02:00 PM
AB2041:v96#DOCUMENT

Amended  IN  Senate  June 18, 2018
Amended  IN  Assembly  May 25, 2018
Amended  IN  Assembly  March 22, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2041


Introduced by Assembly Member Caballero
(Coauthors: Assembly Members Holden and Reyes)

February 06, 2018


An act to add Article 1.3 (commencing with Section 92603) to Chapter 6 of Part 57 of Division 9 of Title 3 of the Education Code, relating to the University of California.


LEGISLATIVE COUNSEL'S DIGEST


AB 2041, as amended, Caballero. University of California: Office of the Chief Investment Officer.
Existing law establishes the University of California, under the administration of the Regents of the University of California, as one of the segments of public postsecondary education in this state. Under existing law, the University of California provides instruction at 10 campuses, which are located in Berkeley, Davis, Irvine, Los Angeles, Merced, Riverside, San Diego, San Francisco, Santa Barbara, and Santa Cruz. The regents have established the Office of the Chief Investment Officer (OCIO) and have assigned to that office the task of responsibly investing various funds of the university, including, but not limited to, endowment and pension funds.
This bill would strongly urge the regents to require the OCIO to use best reasonable efforts to encourage diversity, to urge request partner firms to use best reasonable efforts to encourage diversity, and to launch an emerging manager programs. program. The bill would also require the OCIO to submit, on or before January 1, 2020, a report to the chairs of the appropriate policy committees of each house of the Legislature that includes specified information relating to the issues raised in this bill. any requirements the regents direct the OCIO to perform pursuant to the bill.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) Diversity is the key to the competitiveness of the venture capital industry in the United States.
(2) Despite the demonstrated importance of diversity, the industry has not kept pace in investing in people of diverse backgrounds.
(3) Women, ethnic minorities, members of the LGBTQ community, persons with disabilities, veterans, and immigrants, among other groups, are all underrepresented both in the venture capital industry and in the executive ranks of venture-backed companies.
(4) Members of the National Venture Capital Association have addressed these issues by announcing a pledge to take concrete measures to bring greater diversity to the industry.
(5) Venture capital firms that recognize the competitive value of investing in women and minority founders and bringing diverse talent into their investment teams will lead the way to industry success in the 21st century.
(6) The University of California, through its Office of the Chief Investment Officer (OCIO), is tasked with the responsible investment of over one hundred billion dollars in pension and endowment funds.
(b) Therefore, it is the intent of the Legislature to enact legislation to urge the OCIO to use best efforts to encourage diversity, including working towards diversity in its own hiring and in considering firms for investments. It is also the intent of the Legislature to enact legislation to require the OCIO to report to the public how it is addressing these issues in investing the funds that the people of California have placed under its stewardship.

SEC. 2.

 Article 1.3 (commencing with Section 92603) is added to Chapter 6 of Part 57 of Division 9 of Title 3 of the Education Code, to read:
Article  1.3. Office of the Chief Investment Officer

92603.
 (a) The regents are strongly urged to require the direct their Office of the Chief Investment Officer (OCIO) to do all of the following:
(1) Use best reasonable efforts to encourage diversity, including such as implementing a hiring strategy that requires that candidates from underrepresented groups be given full consideration whenever an OCIO position is to be filled.
(2) Urge Request partner firms to it invests in use best reasonable efforts to encourage diversity, including such as implementing a hiring strategy that requires that candidates from underrepresented groups be given full consideration whenever a position is filled.
(3) Launch an emerging manager programs. program. The OCIO shall define the term “emerging manager” for the purpose of this section.
(4) Encourage startup firms to increase efforts to develop diverse executive teams and to maximize efforts to recruit diverse managerial talent. talent, as applicable.

(5)Create an advisory committee to provide guidance on diversifying its investment strategy.

(b) The OCIO shall submit a report to the chairs of the appropriate policy committees of each house of the Legislature, on or before January 1, 2020, describing its actions and plans for progress addressing the issues raised in requirements of the regents set forth in subdivision (a). The report shall also include pertinent statistics setting forth the OCIO’s internal diversity metrics of the OCIO’s current investments. metrics. The report required by this section shall comply with Section 9795 of the Government Code.
(c) Nothing in this section shall require the regents or the OCIO to take action that is inconsistent with its fiduciary duties.