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AB-1019 Public employee retirement systems: prohibited investments: Turkey.(2021-2022)

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Date Published: 02/18/2021 09:00 PM
AB1019:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1019


Introduced by Assembly Member Holden

February 18, 2021


An act to add Section 7513.73 to the Government Code, relating to public employee retirement systems.


LEGISLATIVE COUNSEL'S DIGEST


AB 1019, as introduced, Holden. Public employee retirement systems: prohibited investments: Turkey.
Existing California Constitution provisions grant the retirement board of a public employee retirement system plenary authority and fiduciary responsibility for investment of moneys and administration of the retirement fund and system. These provisions qualify this grant of powers by reserving to the Legislature the authority to prohibit investments if it is in the public interest and the prohibition satisfies standards of fiduciary care and loyalty required of a retirement board.
Existing law, upon the passage of a federal law that imposes sanctions on the government of Turkey for failure to officially acknowledge its responsibility for the Armenian Genocide, prohibits the boards of administration of the Public Employees’ Retirement System and the State Teachers’ Retirement System from making additional or new investments, or renewing existing investments, of public employee retirement funds in an investment vehicle in the government of Turkey that is issued by the government of Turkey or that is owned by the government of Turkey. Existing law repeals the above-described provision on January 1, 2025, or upon a determination by the board, the United States Department of State, the Congress of the United States, or another appropriate federal agency that the government of Turkey has officially acknowledged its responsibility for the Armenian Genocide, whichever occurs first.
This bill would, in addition, prohibit state trust moneys from being used to make additional or new investments or to renew existing investments in investment vehicles issued or owned by the government of Turkey, unless the government adopts a policy to acknowledge the Armenian Genocide and embark on a path of affording justice to its victims. The bill would define “state trust moneys” to mean funds administered by specified state employee retirement funds, including the Public Employees’ Retirement Fund and the Legislators’ Retirement Fund.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares the following:
(a) The State of California has officially recognized the Armenian Genocide each year for decades and has repeatedly urged the Republic of Turkey to acknowledge the facts of the Armenian Genocide and work toward a just resolution, honor its obligations under international treaties and human rights laws, end all forms of religious discrimination and persecution, and return Christian church properties to their rightful owners.
(b) Genocide is defined by the United Nations as an act “committed with intent to destroy, in whole or in part, a national, ethnical, racial, or religious group.”
(c) Genocide denial is widely viewed as among the final stages of genocide and serves to perpetuate the effects of genocide even after the active phases of extermination, massacres, forced marches, and deportation have ended.
(d) The government of Turkey has engaged, and continues to engage in, an ongoing campaign of genocide denial and historical revisionism by refusing to acknowledge its responsibility for the Armenian Genocide, refusing to compensate its victims, and actively pursuing a well-funded political lobbying campaign throughout the United States, including in California, to rewrite history and defeat legislation recognizing the Armenian Genocide.
(e) The government of Turkey has engaged, and continues to engage, in efforts to effect Armenian cultural erasure since the founding of the Republic of Turkey, including, but not limited to, ethnic cleansings and the destruction of sacred Armenian religious sites.
(f) A reference in Turkey by any scholar, journalist, or other person to the massacre and deportation of Armenians in 1915 to 1923, inclusive, as genocide can be criminally prosecuted under Article 301 of the Turkish Penal Code.
(g) California is home to the largest Armenian American population in the United States, and Armenians living in California, most of whom are direct descendants of the survivors of the Armenian Genocide, have enriched our state through their leadership and contributions in business, agriculture, academia, government, and the arts, yet continue to suffer the effects of the continued denial campaign by the government of Turkey.
(h) On October 29, 2019, the United States House of Representatives, by a near unanimous vote of 405-11, passed House Resolution 296 affirming the United States record on the Armenian Genocide, in which it explicitly stated that “It is the sense of the House of Representatives that it is the policy of the United States to (1) commemorate the Armenian Genocide through official recognition and remembrance; (2) reject efforts to enlist, engage, or otherwise associate the United States Government with denial of the Armenian Genocide or any other genocide; and (3) encourage education and public understanding of the facts of the Armenian Genocide, including the United States role in the humanitarian relief effort, and the relevance of the Armenian Genocide to modern-day crimes against humanity.”
(i) On December 12, 2019, the United States Senate, by unanimous vote, passed Senate Resolution 150 expressing the sense of the Senate that it is the policy of the United States to commemorate the Armenian Genocide through official recognition and remembrance, explicitly stating that “It is the sense of the Senate that it is the policy of the United States (1) to commemorate the Armenian Genocide through official recognition and remembrance; (2) to reject efforts to enlist, engage, or otherwise associate the United States Government with denial of the Armenian Genocide or any other genocide; and (3) to encourage education and public understanding of the facts of the Armenian Genocide, including the role of the United States in humanitarian relief efforts, and the relevance of the Armenian Genocide to modern-day crimes against humanity.”
(j) On September 27, 2020, the Armenian Nation residing in the Republic of Armenia and the Republic of Artsakh were attacked by the Republics of Turkey and Azerbaijan during a war which lasted until a cessation of hostilities agreement was signed on November 9, 2020. Said attacks were a continuation of the same pan-Turkic policies which led to the Armenian Genocide of 1915 and were executed with an intent to annihilate Armenian presence from the region.
(k) On December 14, 2020, pursuant to an act of Congress in the Fiscal Year 2021 National Defense Authorization Act, the United States imposed sanctions on Turkey under the Countering America’s Adversaries Through Sanctions Act (CAATSA) for its purchase of Russia’s S-400 missile defense system, which was found to be against the national security interests of the United States.
(l) Based on the actions of the federal government, described in subdivisions (h), (i) , (j) and (k), acknowledging the Armenian Genocide, rejecting Turkey’s ongoing denial of the Armenian Genocide, ending the United State’s complicity in Turkey’s denial of the Armenian Genocide, and sanctioning Turkey for acting against United States national security interests, United States policy toward Turkey is unambiguous and is sufficient to justify the divestment of California’s public funds from Turkish Government investment vehicles set forth in this act.
(m) California, as the world’s fifth largest economy as of February 2020, and in accordance with principles of human rights and justice, has taken the lead in adopting legislation to divest from South Africa for its policy of apartheid, Sudan for its genocide in Darfur, and Iran for its support of international terrorism, imposing economic consequences upon regimes that engage in conduct and policy that violate human rights or constitute crimes against humanity.
(n) It is the government of Turkey, not the people of Turkey, that is responsible for the continued egregious violations of human rights and active pursuit of genocide denial, cultural erasure, economic harm, and historical revisionism.
(o) The investment of California’s public funds in Turkish Government investment vehicles enables the Turkish Government to continue to implement its ongoing campaign of genocide denial and denial of justice to the Armenian people and other victims of the Armenian Genocide.
(p) Divesting funds held in state trust funds would ensure that California is compliant with the policy set forth by the United States Congress that the United States shall in no way be complicit in the continued denial of the Armenian Genocide by the Turkish Government and would encourage said government to acknowledge the Armenian Genocide and to reach a fair and just resolution of reparations for the survivors and their descendants.

SEC. 2.

 Section 7513.73 is added to the Government Code, to read:

7513.73.
 (a) For purposes of this section:
(1) “Government of Turkey” means the government of Turkey and its instrumentalities or political subdivisions.
(2) “Investment” means either of the following:
(A) An extension of credit made to a business.
(B) Funds or other assets given to a business in exchange for any of the following:
(i) A security interest in other assets of that business.
(ii) The beneficial ownership or control of a share or interest in that business.
(iii) A bond or other debt instrument issued by that business.
(3) “State moneys” means any of the following in possession of, or collected by, a state agency:
(A) Bonds.
(B) Money.
(C) Securities.
(4) “State trust fund” means any of the following:
(A) The Public Employees’ Retirement Fund.
(B) The Legislators’ Retirement Fund.
(C) The State Teachers’ Retirement Fund.
(D) The Judges’ Retirement Fund.
(E) The Judges’ Retirement System II Fund.
(F) The Volunteer Firefighter Fund.
(5) “State trust moneys” means funds administered by an entity described in paragraph (4).
(b) (1) Except as provided in paragraph (2), state trust moneys shall not be used to make additional or new investments or to renew existing investments in investment vehicles issued or owned by the government of Turkey.
(2) If the government of Turkey, by resolution of its legislature or head of state, adopts a policy to acknowledge the Armenian Genocide and embark on a path of affording justice to its victims, this subdivision shall not apply.
(c) Present, future, and former members of the governing board of a state 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, future, or former board members, officers, employees, or contract investment managers shall or may at any time sustain by reason of any decision to restrict, reduce, or eliminate investments pursuant to this section.
(d) Present, future, 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, future, or former regents, officers, employees, or contract investment managers shall or may at any time sustain by reason of any decision to restrict, reduce, or eliminate university investments pursuant to this chapter.
(e) This section shall not apply to any Internal Revenue Code Section 457, 401(k), or 403(b) defined contribution plan administered by the Department of Human Resources.