7513.75.
(a) As used in this section, the following terms have the following meanings:(1) “Board” means the Board of Administration of the Public Employees’ Retirement System or the Teachers’ Retirement Board of the State Teachers’ Retirement System, as applicable.
(2) “Government of Turkey” means the government of Turkey or its instrumentalities or political subdivisions. “Government of Turkey” also includes any and all investment vehicles, government bonds, or financial institutions and entities that are owned, controlled, or operated by the government of Turkey.
(3) “Turkey” means the Republic of Turkey or any territory
under the administration or control of Turkey.
(4) “Public employee retirement funds” means the Public Employees’ Retirement Fund described in Section 20062 and the Teachers’ Retirement Fund described in Section 22167 of the Education Code.
(b) The board shall not invest public employee retirement funds in any investment vehicle in Turkey that meets either of the following criteria:
(1) The investment vehicle is issued by the government of Turkey.
(2) The investment vehicle is owned, controlled, or managed by the government of Turkey.
(c) On or before June 30, 2016, the board shall determine which Turkish investment vehicles are subject to divestment.
(d) After the determination described in subdivision (c), the board shall determine, by the next applicable board meeting, if a Turkish investment vehicle meets the criteria described in subdivision (b). If the board plans to invest or has investments in a company that meets the criteria described in subdivision (b), that planned or existing investment shall be subject to subdivisions (g) and (h).
(e) Investments of the board in an investment vehicle that does not meet the criteria described in subdivision (b) are not subject to subdivision (h) if the company does not subsequently meet the criteria described in subdivision (b). The board shall identify the reasons why that investment vehicle does not satisfy the criteria described in subdivision (b) in the report to the Legislature described in subdivision (i).
(f) (1) Notwithstanding subdivisions (d) and (e), if the board’s investment in a company described in subdivision (b) is limited to investment via an externally and actively managed commingled fund, the board shall contact that fund manager in writing and request that the fund manager remove that investment vehicle from the fund as described in subdivision (h). On or before June 30, 2016, if the fund or account manager creates a fund or account devoid of investment vehicles described in subdivision (b), the transfer of board investments from the prior fund or account to the fund or account devoid of the investment vehicles shall be deemed to satisfy subdivision (h).
(2) If the board’s investment in an investment vehicle described in subdivision (b) is limited to an alternative fund or account, the alternative fund or account manager creates an actively managed commingled fund that excludes investment vehicles
described in subdivision (b), and the new fund or account is deemed to be financially equivalent to the existing fund or account, the transfer of board investments from the existing fund or account to the new fund or account shall be deemed to satisfy subdivision (h). If the board determines that the new fund or account is not financially equivalent to the existing fund, the board shall include the reasons for that determination in the report described in subdivision (i).
(3) The board shall make a good faith effort to identify any private equity investments that involve investment vehicles described in subdivision (b), or are linked to the government of Turkey. If the board determines that a private equity investment clearly involves an investment vehicle described in subdivision (b), or is linked to the government of Turkey, the board shall consider, at its discretion, if those private equity investments shall be subject to subdivision (h).
If the board determines that a private equity investment clearly involves a company described in subdivision (b), or is linked to the government of Turkey and the board does not take action as described in subdivision (h), the board shall include the reasons for its decision in the report described in subdivision (i).
(g) Except as described in subdivisions (e) and (f), the board, in the board’s capacity of shareholder or investor, shall notify any investment vehicle described in subdivision (d) that the investment vehicle is subject to subdivision (h) and permit that investment vehicle to respond to the board. The board shall request that the investment vehicle take substantial action to disassociate itself from the government of Turkey no later than 90 days from the date the board notified the investment vehicle under this subdivision. If the board determines that an investment vehicle has taken substantial action or has made sufficient
progress toward substantial action before the expiration of that 90-day period, that investment vehicle shall not be subject to subdivision (h). The board shall, at intervals not to exceed 90 days, continue to monitor and review the progress of the investment vehicle until that investment vehicle has taken substantial action in Turkey. An investment vehicle that fails to complete substantial action within one year from the date of the initial notice by the board shall be subject to subdivision (h).
(h) If an investment vehicle described in subdivision (d) fails to complete substantial action by the time described in subdivision (g), the board shall take the following actions:
(1) The board shall not make additional or new investments or renew existing investments in that investment vehicle.
(2) The board shall
liquidate the investments of the board in that investment vehicle no later than 18 months after this subdivision applies to that investment vehicle. The board shall liquidate those investments in a manner to address the need for investment vehicles to take substantial action in Turkey and consistent with the board’s fiduciary responsibilities as described in Section 17 of Article XVI of the California Constitution.
(i) On or before January 1, 2017, and every year thereafter, the board shall file a report with the Legislature. The report shall describe the following:
(1) A list of investments the board has in investment vehicles that satisfy the criteria in subdivision (b), including, but not limited to, the issuer, by name, of the stock, bonds, securities, and other evidence of indebtedness.
(2) A detailed summary of
the association between an investment vehicle described in paragraph (1) and the government of Turkey.
(3) Whether the board has reduced its investments in an investment vehicle that satisfies the criteria in subdivision (b).
(4) If the board has not completely reduced its investments in an investment vehicle that satisfies the criteria in subdivision (b), when the board anticipates that the board will reduce all investments in that investment vehicle or the reasons why a sale or transfer of investments is inconsistent with the fiduciary responsibilities of the board as described in Section 17 of Article XVI of the California Constitution.
(5) Any information described in subdivisions (d) and (e).
(6) A detailed summary of investments that were
transferred to funds or accounts devoid of Turkish investment vehicles as described in subdivision (f).
(7) An annual calculation of any costs or investment losses or other financial results incurred in compliance with the provisions of this section.
(j) If the board voluntarily sells or transfers all of its investments in a Turkish investment vehicle in accordance with this section, this section shall not apply except that the board shall file a report with the Legislature related to that investment vehicle as described in subdivision (i).
(k) Nothing in this section shall require the board to take action as described in this section if the board determines, and adopts findings, in good faith and based on credible information available to the public, that the action described in this section would fail to satisfy
the fiduciary responsibilities of the board as described in Section 17 of Article XVI of the California Constitution.
(l) This section shall be known, and may be cited, as the California Public Divest from Turkey to End the Perpetuation of the Armenian Genocide Act.