A. 3164--A 2
THE BOARD SHALL RECEIVE NO COMPENSATION FOR THEIR SERVICES AS BOARD
MEMBERS, BUT SHALL BE ENTITLED TO REIMBURSEMENT FOR THEIR ACTUAL AND
NECESSARY EXPENSES INCURRED IN THE PERFORMANCE OF THEIR FUNCTIONS.
VACANCIES TO THE BOARD SHALL BE FILLED WITHIN SIXTY DAYS OF THEIR OCCUR-
RENCE IN THE SAME MANNER AS ORIGINAL APPOINTMENTS.
3. THE MEMBERS OF THE BOARD SHALL BE SUBJECT TO SECTIONS SEVENTY-THREE
AND SEVENTY-FOUR OF THE PUBLIC OFFICERS LAW.
4. BOARD MEMBERS SHALL PARTICIPATE IN TRAINING, DEVELOPED AND ADMINIS-
TERED BY THE DEPARTMENT OF AUDIT AND CONTROL, IN CONSULTATION WITH THE
SUPERINTENDENT OF INSURANCE AND THE ATTORNEY GENERAL, REGARDING LEGAL,
FIDUCIARY, FINANCIAL AND ETHICAL RESPONSIBILITIES WITHIN ONE YEAR OF
APPOINTMENT TO THE BOARD.
5. A MAJORITY OF THE MEMBERS OF THE BOARD SHALL CONSTITUTE A QUORUM,
AND ALL ACTIONS OF THE BOARD SHALL REQUIRE APPROVAL OF A MAJORITY OF THE
TOTAL MEMBERS OF THE BOARD.
6. THE BOARD MAY EMPLOY AN EXECUTIVE DIRECTOR, AND TWO ADDITIONAL
EMPLOYEES AS IT MAY REQUIRE. THE BOARD SHALL ESTABLISH COMPENSATION THAT
IS REASONABLE AND CUSTOMARY FOR SUCH POSITIONS.
7. THE BOARD MAY, IN CONSULTATION WITH THE SUPERINTENDENT OF INSUR-
ANCE, PROMULGATE RULES AND REGULATIONS ON THE GOVERNANCE OF THE RETIRE-
MENT SYSTEM, AND SUCH OTHER RULES AND REGULATIONS AS IT MAY DEEM APPRO-
PRIATE.
S 3. Subdivisions b and c and the opening paragraph of subdivision g
of section 13 of the retirement and social security law, subdivision b
as amended by chapter 369 of the laws of 1964, are amended to read as
follows:
b. The [comptroller] MEMBERS OF THE EMPLOYEE RETIREMENT SYSTEM BOARD
shall be trustee of the several funds of the retirement system AND THE
COMPTROLLER SHALL BE CUSTODIAN OF SUCH FUNDS. Such funds shall be
invested by the comptroller AS AUTHORIZED BY THE EMPLOYEE RETIREMENT
SYSTEM BOARD, in securities in which he OR SHE is authorized by law to
invest the funds of the state, except that he OR SHE may invest in obli-
gations consisting of notes, bonds, debentures, or equipment trust
certificates issued under an indenture, which are the direct obligations
of, or in the case of equipment trust certificates are secured by direct
obligations of, a railroad or industrial corporation, or a corporation
engaged directly and primarily in the production, transportation,
distribution, or sale of electricity or gas, or the operation of tele-
phone or telegraph systems or waterworks, or in some combination of
them; provided the obligor corporation is one which is incorporated
under the laws of the United States, or any state thereof, or of the
District of Columbia, and said obligations shall be rated at the time of
purchase within the three highest classifications established by at
least two standard rating services. The maximum amount that the comp-
troller AS AUTHORIZED BY THE BOARD may invest in such obligations shall
not exceed thirty per centum of the assets of the New York state employ-
ees' retirement system's funds; and provided further that not more than
two and one half per centum of the assets of the New York state employ-
ees' retirement system's funds shall be invested in the obligations of
any one corporation of the highest classification and subsidiary or
subsidiaries thereof, that not more than two per centum of the assets of
the New York state employees' retirement system's funds shall be
invested in the obligations of any one corporation of the second highest
classification and subsidiary or subsidiaries thereof, that not more
than one and one half per centum of the assets of the New York state
employees' retirement system's funds shall be invested in the obli-
A. 3164--A 3
gations of any one corporation of the third highest classification and
subsidiary or subsidiaries thereof. He OR SHE shall, however, be
subject to all terms, conditions, limitations and restrictions imposed
by this article and by law upon the making of such investments. The
comptroller AS AUTHORIZED BY THE BOARD shall have full power:
1. To hold, purchase, sell, assign, transfer or dispose of any of the
securities or investments, in which any of the funds of the retirement
system shall be invested, including the proceeds of such investments and
any monies belonging to such funds, and
2. In his OR HER name as [trustee] CUSTODIAN, to foreclose mortgages
upon default or to take title to real property in such proceedings in
lieu thereof and to lease and sell real property so acquired.
c. The comptroller AS AUTHORIZED BY THE BOARD annually shall credit to
each of the funds of the retirement system regular interest on the mean
amount therein for the preceding year.
Neither the comptroller nor THE MEMBERS OF THE BOARD OR any person
employed on the work of the retirement system shall:
S 4. The retirement and social security law is amended by adding a new
article 3-C to read as follows:
ARTICLE 3-C
TRANSPARENCY, ACCOUNTABILITY AND PROHIBITIONS
IN THE STATE RETIREMENT SYSTEM
SECTION 159-A. PROHIBITION ON PLACEMENT AGENTS.
S 159-A. PROHIBITION ON PLACEMENT AGENTS. 1. DEFINITIONS. FOR THE
PURPOSES OF THIS SECTION, THE FOLLOWING DEFINITIONS SHALL APPLY:
(A) "CONFLICT OF INTEREST" SHALL MEAN A CIRCUMSTANCE UNDER WHICH AN
INDIVIDUAL OR ENTITY HAS AN INTEREST THAT HE, SHE OR IT IS AWARE MAY
IMPAIR HIS, HER OR ITS IMPARTIAL OR OBJECTIVE JUDGMENT.
(B) "CONSULTANT" SHALL MEAN ANY PERSON (OTHER THAN AN EMPLOYEE OF THE
BOARD OR THE COMPTROLLER) OR ENTITY RETAINED BY THE FUND TO PROVIDE
TECHNICAL OR PROFESSIONAL SERVICES TO THE FUND RELATING TO INVESTMENTS
BY THE FUND, INCLUDING OUTSIDE INVESTMENT COUNSEL AND LITIGATION COUN-
SEL, CUSTODIANS, ADMINISTRATORS, BROKER-DEALERS, AND PERSONS OR ENTITIES
THAT IDENTIFY INVESTMENT OBJECTIVES AND RISKS, ASSIST IN THE SELECTION
OF MONEY MANAGERS, SECURITIES, OR OTHER INVESTMENTS, OR MONITOR INVEST-
MENT PERFORMANCE.
(C) "FAMILY MEMBER" SHALL MEAN ANY PERSON RELATED BY BLOOD, MARRIAGE,
ADOPTION, OR OPERATION OF LAW WHO RESIDES IN THE SAME HOUSEHOLD, AND ANY
PERSON RELATED TO SUCH PERSON WITHIN THE THIRD DEGREE OF CONSANGUINITY
OR AFFINITY.
(D) "FUND" SHALL MEAN THE NEW YORK STATE COMMON RETIREMENT FUND.
(E) "EMPLOYEE RETIREMENT SYSTEM BOARD" OR "BOARD" SHALL MEAN THE ENTI-
TY ESTABLISHED PURSUANT TO SECTION TEN-A OF THIS CHAPTER.
(F) "INVESTMENT MANAGER" SHALL MEAN ANY PERSON (OTHER THAN AN EMPLOYEE
OF THE DEPARTMENT OF AUDIT AND CONTROL) OR ENTITY ENGAGED BY THE FUND IN
THE MANAGEMENT OF PART OR ALL OF AN INVESTMENT PORTFOLIO OF THE FUND.
"MANAGEMENT" SHALL INCLUDE, BUT IS NOT LIMITED TO, ANALYSIS OF PORTFOLIO
HOLDINGS, AND THE PURCHASE, SALE, AND LENDING THEREOF.
(G) "INVESTMENT POLICY STATEMENT" SHALL MEAN A WRITTEN DOCUMENT THAT,
CONSISTENT WITH LAW, SETS FORTH A FRAMEWORK FOR THE INVESTMENT PROGRAM
OF THE FUND.
(H) "PLACEMENT AGENT" SHALL MEAN ANY PERSON OR ENTITY THAT IS DIRECTLY
OR INDIRECTLY ENGAGED AND COMPENSATED BY AN INVESTMENT MANAGER TO
PROMOTE INVESTMENTS TO OR SOLICIT INVESTMENTS BY THE FUND, WHETHER
COMPENSATED ON A FLAT FEE, A CONTINGENT FEE, OR ANY OTHER BASIS, AND
SHALL INCLUDE A REGISTERED LOBBYIST. REGULAR EMPLOYEES OF AN INVESTMENT
A. 3164--A 4
MANAGER ARE EXCLUDED FROM THIS DEFINITION UNLESS THEY ARE EMPLOYED PRIN-
CIPALLY FOR THE PURPOSE OF SECURING OR INFLUENCING THE DECISION TO
SECURE A PARTICULAR TRANSACTION OR INVESTMENT BY THE FUND. FOR PURPOSES
OF THIS PARAGRAPH, THE TERM "EMPLOYEE" SHALL INCLUDE ANY PERSON WHO
WOULD QUALIFY AS AN EMPLOYEE UNDER THE FEDERAL INTERNAL REVENUE CODE OF
1986, AS AMENDED.
(I) "RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK STATE AND LOCAL
EMPLOYEES' RETIREMENT SYSTEM AND THE NEW YORK STATE AND LOCAL POLICE AND
FIRE RETIREMENT SYSTEM.
(J) "THIRD PARTY ADMINISTRATOR" SHALL MEAN ANY PERSON OR ENTITY THAT
CONTRACTUALLY PROVIDES ADMINISTRATIVE SERVICES TO THE RETIREMENT SYSTEM,
INCLUDING RECEIVING AND RECORDING EMPLOYER AND EMPLOYEE CONTRIBUTIONS,
MAINTAINING ELIGIBILITY ROSTERS, VERIFYING ELIGIBILITY FOR BENEFITS,
PAYING BENEFITS OR MAINTAINING ANY OTHER RETIREMENT SYSTEM RECORDS.
"ADMINISTRATIVE SERVICES" SHALL NOT INCLUDE SERVICES PROVIDED TO THE
FUND RELATING TO FUND INVESTMENTS.
2. IN ORDER TO PRESERVE THE INDEPENDENCE AND INTEGRITY OF THE FUND, TO
PRECLUDE POTENTIAL CONFLICTS OF INTEREST, AND TO ASSIST THE BOARD IN
FULFILLING ITS DUTIES AS A FIDUCIARY TO THE FUND:
(A) THE BOARD SHALL NOT ENGAGE, HIRE, INVEST WITH OR COMMIT TO AN
OUTSIDE INVESTMENT MANAGER, EITHER DIRECTLY OR INDIRECTLY, WHO IS USING
THE SERVICES OF A PLACEMENT AGENT TO ASSIST THE INVESTMENT MANAGER IN
OBTAINING INVESTMENTS BY THE FUND; AND
(B) AN INVESTMENT MANAGER MAY NOT USE THE SERVICES OF A PLACEMENT
AGENT TO ASSIST THE INVESTMENT MANAGER IN OBTAINING INVESTMENTS BY THE
FUND OR OTHERWISE DOING BUSINESS THEREWITH.
3. AN INVESTMENT MANAGER SHALL DISCLOSE AND CERTIFY ON AT LEAST A
SEMI-ANNUAL BASIS, AND MORE FREQUENTLY AS DETERMINED BY THE BOARD:
(A) THE NAME, TITLE AND DESCRIPTION OF RESPONSIBILITIES OF EACH
EMPLOYEE OF THE INVESTMENT MANAGER WHOSE PROFESSIONAL DUTIES INCLUDE
CONTACT WITH THE RETIREMENT SYSTEM, INCLUDING THE RETIREMENT SYSTEM'S
EMPLOYEES, ADVISORS, CONSULTANTS AND THIRD-PARTY ADMINISTRATORS;
(B) WHETHER AN EMPLOYEE OF THE INVESTMENT MANAGER, WHOSE PROFESSIONAL
DUTIES INCLUDE CONTACT WITH THE RETIREMENT SYSTEM, IS A CURRENT OR
FORMER RETIREMENT SYSTEM EMPLOYEE, ADVISOR, CONSULTANT, OR THIRD-PARTY
ADMINISTRATOR;
(C) WHETHER ANY EMPLOYEE OF THE INVESTMENT MANAGER, WHOSE PROFESSIONAL
DUTIES INCLUDE CONTACT WITH THE RETIREMENT SYSTEM, HAS REGISTERED AS A
LOBBYIST WITH ANY STATE OR THE FEDERAL GOVERNMENT IN THE PAST TWO YEARS;
AND
(D) THE NAMES AND ADDRESSES OF ALL THIRD PARTIES THAT THE INVESTMENT
MANAGER COMPENSATED IN CONNECTION WITH INVESTMENTS IN THE RETIREMENT
SYSTEM, INCLUDING ANY FEES, COMMISSIONS OR RETAINERS, AND THE AMOUNTS OF
SUCH COMPENSATION.
4. AN INVESTMENT MANAGER SHALL PROMPTLY DISCLOSE TO THE BOARD, IN
WRITING, ANY APPARENT, POTENTIAL OR ACTUAL CONFLICT OF INTEREST BETWEEN
THE INVESTMENT MANAGER, INCLUDING THE INVESTMENT MANAGER'S EMPLOYEES AND
ANY FAMILY MEMBERS OF THE INVESTMENT MANAGER AND ITS EMPLOYEES, AND THE
RETIREMENT SYSTEM, INCLUDING THE RETIREMENT SYSTEM'S EMPLOYEES, CONSULT-
ANTS, THIRD-PARTY ADMINISTRATORS AND ANY FAMILY MEMBERS OF THE EMPLOY-
EES, CONSULTANTS, AND THIRD-PARTY ADMINISTRATORS. THE INVESTMENT MANAG-
ER SHALL NOT PROVIDE ANY SERVICES CONCERNING ANY MATTERS AFFECTED BY
SUCH CONFLICT OF INTEREST UNLESS THE RETIREMENT SYSTEM EXPRESSLY WAIVES
SUCH PROHIBITION OR UNTIL THE CONFLICT OF INTEREST IS OTHERWISE CURED.
5. AN INVESTMENT MANAGER SHALL PUBLISH ALL DISCLOSURES AND CERTIF-
ICATIONS REQUIRED BY THIS SECTION ON THE INVESTMENT MANAGER'S WEBSITE.
A. 3164--A 5
6. THE ATTORNEY GENERAL MAY ENFORCE THE PROVISIONS OF THIS SECTION,
AND MAY SEEK AN INJUNCTION, ON NOTICE OF FIVE DAYS, ENJOINING A PERSON
OR ENTITY FROM CONTINUING TO ENGAGE IN ANY CONDUCT IN VIOLATION OF THIS
SECTION. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO LIMIT ANY RIGHT
OR REMEDY OTHERWISE AVAILABLE UNDER LAW TO ANY PERSON, OR ENTITY,
INCLUDING THE ATTORNEY GENERAL.
7. THE BOARD SHALL:
(A) FILE WITH THE SUPERINTENDENT OF INSURANCE AN ANNUAL STATEMENT AS
PRESCRIBED BY SECTION THREE HUNDRED SEVEN OF THE INSURANCE LAW, INCLUD-
ING THE RETIREMENT SYSTEM'S FINANCIAL STATEMENT, TOGETHER WITH AN OPIN-
ION OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT ON THE FINANCIAL
STATEMENT;
(B) DISCLOSE ON THE OFFICE OF STATE COMPTROLLER'S WEBSITE, ON AT LEAST
AN ANNUAL BASIS, ALL FEES PAID BY THE FUND TO INVESTMENT MANAGERS,
CONSULTANTS, AND THIRD-PARTY ADMINISTRATORS;
(C) DISCLOSE ON THE OFFICE OF STATE COMPTROLLER'S WEBSITE THE FUND'S
INVESTMENT POLICIES AND PROCEDURES; AND
(D) REQUIRE FIDUCIARY AND CONFLICT OF INTEREST REVIEWS OF THE FUND
EVERY THREE YEARS BY A QUALIFIED UNAFFILIATED PERSON.
8. FOR PURPOSES OF THIS SECTION, ANY INVESTMENT MADE BY THE FUND
PURSUANT TO SUBDIVISION SEVEN OF SECTION ONE HUNDRED SEVENTY-SEVEN OF
THIS CHAPTER SHALL BE DEEMED TO BE THE INVESTMENT OF THE FUND IN SUCH
INVESTMENT ENTITY, RATHER THAN IN THE ASSET OF SUCH INVESTMENT ENTITY.
9. ANY PERSON OR ENTITY THAT HAS A REASONABLE BASIS TO BELIEVE THAT
ANY OTHER PERSON OR ENTITY HAS VIOLATED THIS SECTION SHALL REPORT TO THE
BOARD AND THE ATTORNEY GENERAL EVIDENCE OF THE VIOLATION.
10. ANY VIOLATION OF THIS SECTION OR REGULATIONS PROMULGATED THERE-
UNDER SHALL BE A MISDEMEANOR, PUNISHABLE BY A FINE NOT TO EXCEED TWEN-
TY-FIVE THOUSAND DOLLARS OR BY IMPRISONMENT NOT TO EXCEED SIX MONTHS OR
BY BOTH SUCH FINE AND IMPRISONMENT. ANY SECOND OR SUBSEQUENT VIOLATION
SHALL BE A FELONY PUNISHABLE BY A FINE NOT TO EXCEED ONE HUNDRED THOU-
SAND DOLLARS OR BY IMPRISONMENT FOR A CLASS E FELONY OR BY BOTH SUCH
FINE AND IMPRISONMENT.
S 5. Section 302 of the retirement and social security law is amended
by adding a new subdivision 8-a to read as follows:
8-A. "EMPLOYEE RETIREMENT SYSTEM BOARD" OR "BOARD." THE ENTITY ESTAB-
LISHED PURSUANT TO SECTION TEN-A OF THIS CHAPTER.
S 6. Subdivision g of section 311 of the retirement and social securi-
ty law, as added by chapter 1000 of the laws of 1966, is amended to read
as follows:
g. The comptroller shall, IN CONSULTATION WITH THE EMPLOYEE RETIREMENT
SYSTEM BOARD, adopt and amend pursuant to this article only such rules
and regulations as he OR SHE determines to be for the best interest of
the retirement system and its members.
S 7. Subdivisions b and c and the opening paragraph of subdivision g
of section 313 of the retirement and social security law, as added by
chapter 1000 of the laws of 1966, are amended to read as follows:
b. The [comptroller] MEMBERS OF THE EMPLOYEE RETIREMENT SYSTEM BOARD
shall be trustee of the several funds of the policemen's and firemen's
retirement system AND THE COMPTROLLER SHALL BE CUSTODIAN OF SUCH FUNDS.
Such funds shall be invested by the comptroller AS AUTHORIZED BY THE
BOARD, in securities in which he OR SHE is authorized by law to invest
the funds of the state, except that he OR SHE may invest in obligations
consisting of notes, bonds, debentures or equipment trust certificates
issued under an indenture, which are the direct obligations of, or in
the case of equipment trust certificates are secured by direct obli-
A. 3164--A 6
gations of, a railroad or industrial corporation, or a corporation
engaged directly and primarily in the production, transportation,
distribution, or sale of electricity, or gas, or the operation of tele-
phone or telegraph systems or waterworks, or in some combination of
them; provided the obligor corporation is one which is incorporated
under the laws of the United States, or any state thereof, or of the
District of Columbia, and said obligations shall be rated at the time of
purchase within the three highest classifications established by at
least two standard rating services. The maximum amount that the comp-
troller AS AUTHORIZED BY THE BOARD may invest in such obligations shall
not exceed thirty per centum of the assets of the New York state police-
men's and firemen's retirement system's funds; and provided further that
not more than two and one-half per centum of the assets of the New York
state policemen's and firemen's retirement system's funds shall be
invested in the obligations of any one corporation of the highest clas-
sification and subsidiary or subsidiaries thereof, that not more than
two per centum of the assets of the New York state policemen's and fire-
men's retirement system's funds shall be invested in the obligations of
any one corporation of the second highest classification and subsidiary
or subsidiaries thereof, that not more than one and one-half per centum
of the assets of the New York state policemen's and firemen's retirement
system's funds shall be invested in the obligations of any one corpo-
ration of the third highest classification and subsidiary or subsid-
iaries thereof. He OR SHE shall, however, be subject to all terms,
conditions, limitations and restrictions imposed by this article and by
law upon the making of such investments. The comptroller AS AUTHORIZED
BY THE BOARD shall have full power:
1. To hold, purchase, sell, assign, transfer or dispose of any of the
securities or investments, in which any of the funds of the policemen's
and firemen's retirement system shall be invested, including the
proceeds of such investments and any monies belonging to such funds, and
2. In his OR HER name as [trustee] CUSTODIAN, to foreclose mortgages
upon default or to take title to real property in such proceedings in
lieu thereof and to lease and sell real property so acquired.
c. The comptroller AS AUTHORIZED BY THE BOARD annually shall credit to
each of the funds of the policemen's and firemen's retirement system
regular interest on the mean amount therein for the preceding year.
Neither the comptroller nor THE MEMBER OF THE BOARD OR any person
employed on the work of the policemen's and firemen's retirement system
shall:
S 8. Section 421 of the retirement and social security law, as added
by chapter 306 of the laws of 1967, is amended to read as follows:
S 421. Definitions. As used or referred to in this article, unless a
different meaning clearly appears from the context. 1. The term "employ-
ees' retirement system" shall mean the New York state [employees]
EMPLOYEES' retirement system.
2. The term "policemen's and firemen's retirement system" shall mean
the New York state [policemen's and firemen's] AND LOCAL POLICE AND FIRE
retirement system.
3. The term "each retirement [sytsem] SYSTEM" shall mean each of the
foregoing defined systems.
4. [The term "comptroller" shall mean the state comptroller.
5.] The term "actuary" shall mean the actuary of the employees'
retirement system acting jointly with the actuary of the policemen's and
firemen's retirement system.
A. 3164--A 7
5. "EMPLOYEE RETIREMENT SYSTEM BOARD" OR "BOARD" SHALL MEAN THE ENTITY
ESTABLISHED PURSUANT TO SECTION TEN-A OF THIS CHAPTER.
S 9. Section 422 of the retirement and social security law, as added
by chapter 306 of the laws of 1967, is amended to read as follows:
S 422. Establishment of a common retirement fund. 1. There is hereby
established a fund, in the custody of the comptroller, to be known as
the common retirement fund. Notwithstanding any other provision of this
chapter, all of the assets and income of the employees' retirement
system and of the policemen's and firemen's retirement system shall be
held by the comptroller as [trustee] CUSTODIAN of such fund, except as
such assets and income may be allocated or distributed to the funds of
each retirement system by the comptroller.
2. The fund shall consist initially of the total assets of the employ-
ees' retirement system as of March thirty-first, nineteen hundred
sixty-seven, as such assets are defined in subdivision a of section two
hundred ninety-three of this chapter. After the annual valuation of the
assets and liabilities of the employees' retirement system and the
determination relating to assets and liabilities required by subdivision
b of section two hundred ninety-three of this chapter, the comptroller
shall credit to each retirement system a participating interest in the
assets of such fund in the proportion and percentage that the assets of
each retirement system bear to the total assets of the common retirement
fund. [On March thirty-first, nineteen hundred sixty-eight, and at the
close of each succeeding fiscal year, the] THE comptroller shall credit
each retirement system with a participating interest in such fund in the
proportion and percentage that the interest attributable to each retire-
ment system bears to the total assets of such fund, after considering
contributions, earnings, disbursements and expenses attributable to each
system.
S 10. Section 423 of the retirement and social security law, as
amended by chapter 770 of the laws of 1970, is amended to read as
follows:
S 423. Investments. a. [On and after April first, nineteen hundred
sixty-seven, the] THE comptroller, AS AUTHORIZED BY THE BOARD shall
invest the available monies of the common retirement fund in any invest-
ments and securities authorized by law for each retirement system and
shall hold such investments in his OR HER name as [trustee] CUSTODIAN of
such fund, notwithstanding any other provision of this chapter. Partic-
ipating interests in such investments shall be credited to each retire-
ment system in the manner and at the time specified in [paragraph]
SUBDIVISION two of section four hundred twenty-two of this article.
b. To assist in the management of the monies of the common retirement
fund, the comptroller shall appoint an investment advisory committee
consisting of not less than seven members who shall serve for [his] THE
COMPTROLLER'S term of office. A vacancy occurring from any cause other
than expiration of term shall be filled by the comptroller for the
remainder of the term. Each member of the committee shall be experienced
in the field of investments and shall have served, or shall be serving,
as a senior officer or member of the board of an insurance company,
banking corporation or other financial or investment organization
authorized to do business in the state of New York. The committee shall
advise the comptroller, AS WELL AS THE EXECUTIVE DIRECTOR OF THE BOARD
on investment policies relating to the monies of the common retirement
fund and shall review, from time to time, the investment portfolio of
the fund and make such recommendations as may be deemed necessary.
A. 3164--A 8
The comptroller shall appoint a separate mortgage advisory committee,
with the advice and consent of the investment advisory committee, to
review proposed mortgage and real estate investments by the common
retirement fund. In making investments, as authorized by law, the comp-
troller shall be guided by policies established by each committee from
time to time; and, in the event the mortgage advisory committee disap-
proves a proposed mortgage or real estate investment, such shall not be
made.
No officer or employee of any state department or agency shall be
eligible for membership on either committee. Each committee shall
convene periodically on call of the comptroller, or on call of the
[chairman] CHAIR OF THE COMMITTEE. The members of each committee shall
be entitled to reimbursement for their actual and necessary expenses but
shall receive no compensation for their services.
S 11. Sections 423-a and 423-b of the retirement and social security
law, section 423-a as added by chapter 112 of the laws of 1986 and
section 423-b as added by chapter 624 of the laws of 1999, are amended
to read as follows:
S 423-a. Northern Ireland related investments. 1. Notwithstanding any
other provision of law, on and after January first, nineteen hundred
eighty-seven, any moneys or assets of the common retirement fund which
shall remain or be invested in the stocks, securities or other obli-
gations of any institution or company doing business in or with Northern
Ireland or with agencies or instrumentalities thereof, shall be invested
subject to the provisions of subdivision three of this section.
2. On or before the first day of January of each year, the comptroller
AS AUTHORIZED BY THE BOARD shall determine the existence of affirmative
action taken by institutions or companies doing business in Northern
Ireland to eliminate ethnic or religious discrimination based on actions
taken for:
(a) Increasing the representation of individuals from underrepresented
religious groups in the workforce including managerial, supervisory,
administrative, clerical and technical jobs.
(b) Providing adequate security for the protection of minority employ-
ees both at the workplace and while travelling to and from work.
(c) The banning of provocative religious or political emblems from the
workplace.
(d) Publicly advertising all job openings and making special recruit-
ment efforts to attract applicants from underrepresented religious
groups.
(e) Providing that layoff, recall, and termination procedures should
not in practice favor particular religious groupings.
(f) The abolition of job reservations, apprenticeship restrictions,
and differential employment criteria, which discriminate on the basis of
religion or ethnic origin.
(g) The development of training programs that will prepare substantial
numbers of current minority employees for skilled jobs, including the
expansion of existing programs and the creation of new programs to
train, upgrade, and improve the skills of minority employees.
(h) The establishment of procedures to assess, identify, and actively
recruit minority employees with potential for further advancement.
(i) The appointment of senior management staff members to oversee
affirmative action efforts and the setting up of timetables to carry out
affirmative action principles.
3. Consistent with sound investment policy, the comptroller AS AUTHOR-
IZED BY THE BOARD shall invest the assets of the common retirement fund
A. 3164--A 9
in such a manner that the investments in institutions doing business in
or with Northern Ireland shall reflect the advances made by such insti-
tutions in eliminating discrimination as established pursuant to subdi-
vision two of this section.
S 423-b. New York state venture capital program. The comptroller AS
AUTHORIZED BY THE BOARD is hereby authorized to establish within the
common retirement fund a New York state venture capital program for the
purpose of investing in qualified businesses as defined in paragraph
[six] SEVEN of subdivision (a) of section eleven of the tax law. The
comptroller [is authorized to] AS AUTHORIZED BY THE BOARD MAY invest up
to two hundred fifty million dollars of assets of the common retirement
fund to carry out the purposes of this section. The comptroller AS
AUTHORIZED BY THE BOARD may make investments pursuant to this section in
partnerships, corporations, trusts or limited liability companies organ-
ized on a for-profit basis that enter into agreements to invest the
moneys of the New York state venture capital program in qualified busi-
nesses. The comptroller AS AUTHORIZED BY THE BOARD shall make such
investments consistent with the provisions of paragraph (b) of subdivi-
sion nine of section one hundred seventy-seven of this chapter. The
comptroller may establish procedures necessary to insure that invest-
ments of moneys of the New York state venture capital program are, for
each investment in a qualified business, equitably matched by invest-
ments made by other sources. The comptroller shall, to the maximum
extent practicable, insure that the geographic distribution of invest-
ments in the program is in proportion to the state population.
S 12. Section 425 of the retirement and social security law, as added
by chapter 306 of the laws of 1967, is amended to read as follows:
S 425. Separability of retirement systems. No provision of this arti-
cle shall be construed as an impairment of the separability of or of the
corporate powers and privileges of the employees' retirement system or
the policemen's and firemen's retirement system. The comptroller AS
AUTHORIZED BY THE BOARD shall establish or continue separate funds and
accounts for each retirement system, consistent with the common retire-
ment fund herein provided for, as may be required to carry out the sepa-
rate purposes and privileges of each retirement system.
S 13. The retirement and social security law is amended by adding a
new article 26 to read as follows:
ARTICLE 26
INVESTMENT FIRMS
SECTION 1330. LEGISLATIVE INTENT.
1331. DEFINITIONS.
1332. BAN ON INVESTMENT FIRM BUSINESS.
1333. PROHIBITION ON SOLICITING AND COORDINATING CONTRIBUTIONS.
1334. CIRCUMVENTION OF RULE.
1335. REQUIRED DISCLOSURE TO COMMISSION ON PUBLIC INTEGRITY.
1336. VOLUNTARY DISCLOSURE TO COMMISSION ON PUBLIC INTEGRITY.
1337. PROHIBITION OF CERTAIN EMPLOYMENT.
1338. PROHIBITION OF CERTAIN FINANCIAL RELATIONSHIPS.
1339. INTERNAL PROCEDURES.
1340. PROHIBITION OF CERTAIN CONTACTS.
1341. GIFTS.
1342. MANDATORY REPORTING.
1343. ATTORNEY GENERAL ACTION.
1344. CRIMINAL SANCTIONS.
S 1330. LEGISLATIVE INTENT. THE PURPOSE AND INTENT OF THIS ARTICLE IS
TO ENSURE THAT THE HIGH STANDARDS AND INTEGRITY OF INVESTMENT FIRMS ARE
A. 3164--A 10
MAINTAINED TO PREVENT FRAUDULENT AND MANIPULATIVE ACTS AND PRACTICES, TO
PROMOTE JUST AND EQUITABLE PRINCIPLES, TO PERFECT A FREE AND OPEN MARKET
AND TO PROTECT THE COMMON RETIREMENT FUND AND THE PUBLIC INTEREST BY:
1. PROHIBITING INVESTMENT FIRMS FROM ENGAGING IN BUSINESS WITH THE
COMMON RETIREMENT FUND IF CERTAIN POLITICAL CONTRIBUTIONS HAVE BEEN MADE
TO OFFICIALS THAT OVERSEE THE FUND; AND
2. REQUIRING INVESTMENT FIRMS TO DISCLOSE CERTAIN POLITICAL CONTRIB-
UTIONS, AS WELL AS OTHER INFORMATION, TO ALLOW PUBLIC SCRUTINY OF POLI-
TICAL CONTRIBUTIONS BY THOSE IN THE BUSINESS.
S 1331. DEFINITIONS. AS USED IN THIS ARTICLE:
1. "COMMON RETIREMENT FUND" SHALL MEAN ALL OF THE ASSETS AND INCOME OF
THE EMPLOYEES' RETIREMENT SYSTEM AND OF THE POLICE AND FIRE RETIREMENT
SYSTEM.
2. "ISSUER" SHALL MEAN THE COMPTROLLER OR HIS OR HER DESIGNEE IN
RELATION TO THE ISSUANCE OF FUNDS FOR INVESTMENT FROM THE COMMON RETIRE-
MENT FUND.
3. "INVESTMENT FIRM" SHALL MEAN ANY PERSON OR ENTITY THAT ACCEPTS AN
INVESTMENT FROM OR PROVIDES INVESTMENT MANAGEMENT SERVICES TO THE
RETIREMENT SYSTEM IN CONNECTION WITH THE MANAGEMENT OR INVESTMENT OF A
RETIREMENT SYSTEM'S TRUST FUND OR ASSETS. INVESTMENT FIRM INCLUDES ANY
SUBSIDIARY OR AFFILIATE OVER WHICH THE INVESTMENT FIRM EXERCISES EXCLU-
SIVE CONTROL.
4. "OFFICIAL" SHALL MEAN ANY PERSON, INCLUDING THE PERSON'S ELECTION
COMMITTEE, WHO WAS, AT THE TIME OF A CONTRIBUTION, AN INCUMBENT, CANDI-
DATE OR SUCCESSFUL CANDIDATE FOR AN ELECTIVE OFFICE OF A GOVERNMENT
ENTITY, IF THE OFFICE IS DIRECTLY RESPONSIBLE FOR, OR CAN DIRECTLY
INFLUENCE THE OUTCOME OF, THE RETIREMENT SYSTEM'S INVESTMENT WITH OR
ENGAGEMENT OF THE INVESTMENT FIRM.
S 1332. BAN ON INVESTMENT FIRM BUSINESS. NO INVESTMENT FIRM SHALL
ENGAGE IN BUSINESS WITH THE COMMON RETIREMENT FUND WITHIN TWO YEARS
AFTER ANY CONTRIBUTION TO AN OFFICIAL OF THE COMMON RETIREMENT FUND MADE
BY:
1. THE INVESTMENT FIRM;
2. ANY FINANCE PROFESSIONAL ASSOCIATED WITH SUCH INVESTMENT FIRM; OR
3. ANY POLITICAL ACTION COMMITTEE CONTROLLED BY THE INVESTMENT FIRM;
PROVIDED, HOWEVER, THAT THIS SECTION SHALL NOT PROHIBIT THE INVESTMENT
FIRM FROM ENGAGING IN BUSINESS WITH THE COMMON RETIREMENT FUND IF THE
ONLY CONTRIBUTIONS MADE BY THE FOREGOING PERSONS AND ENTITIES TO OFFI-
CIALS OF SUCH ISSUER WITHIN THE PREVIOUS TWO YEARS WERE MADE BY PERSONS
TO OFFICIALS OF SUCH ISSUER FOR WHOM THE PERSONS WERE ENTITLED TO VOTE
AND WHICH CONTRIBUTIONS, IN TOTAL, WERE NOT IN EXCESS OF THREE HUNDRED
DOLLARS BY ANY INVESTMENT FIRM TO EACH OFFICIAL, PER ELECTION.
S 1333. PROHIBITION ON SOLICITING AND COORDINATING CONTRIBUTIONS. NO
INVESTMENT FIRM SHALL SOLICIT ANY PERSON, INCLUDING BUT NOT LIMITED TO,
ANY AFFILIATED ENTITY OF THE INVESTMENT FIRM OR POLITICAL ACTION COMMIT-
TEE, TO:
1. MAKE OR COORDINATE ANY CONTRIBUTION, TO AN OFFICIAL OF THE COMMON
RETIREMENT FUND WITH WHICH THE INVESTMENT FIRM IS ENGAGING OR IS SEEKING
TO ENGAGE IN BUSINESS WITH; OR
2. MAKE OR COORDINATE ANY PAYMENT TO A POLITICAL PARTY OF A STATE OR
LOCALITY WHERE THE INVESTMENT FIRM IS ENGAGING OR IS SEEKING TO ENGAGE
IN BUSINESS WITH THE COMMON RETIREMENT FUND.
S 1334. CIRCUMVENTION OF RULE. NO INVESTMENT FIRM, OR ANY PROFESSIONAL
THAT CONDUCTS BUSINESS WITH THE COMMON RETIREMENT FUND SHALL, DIRECTLY
OR INDIRECTLY, THROUGH OR BY ANY OTHER PERSON, RELATIVE OR MEANS, DO ANY
A. 3164--A 11
ACT THAT SHALL RESULT IN A VIOLATION OF SECTION THIRTEEN HUNDRED THIR-
TY-TWO OR THIRTEEN HUNDRED THIRTY-THREE OF THIS ARTICLE.
S 1335. REQUIRED DISCLOSURE TO COMMISSION ON PUBLIC INTEGRITY. 1.
EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION TWO OF THIS SECTION, EACH
INVESTMENT FIRM SHALL, BY JANUARY THIRTY-FIRST, APRIL THIRTIETH, JULY
THIRTY-FIRST AND OCTOBER THIRTY-FIRST OF EACH YEAR, REPORT TO THE
COMMISSION ON PUBLIC INTEGRITY, IN A FORMAT REQUIRED BY THE COMMISSION,
THE FOLLOWING INFORMATION:
(A) FOR CONTRIBUTIONS TO OFFICIALS OF THE COMMON RETIREMENT FUND
(OTHER THAN A CONTRIBUTION MADE BY AN INVESTMENT FIRM TO AN OFFICIAL OF
AN ISSUER FOR WHOM SUCH INVESTMENT FIRM IS ENTITLED TO VOTE IF ALL
CONTRIBUTIONS BY SUCH INVESTMENT FIRM TO SUCH OFFICIAL, IN TOTAL, DO NOT
EXCEED THREE HUNDRED DOLLARS PER ELECTION) AND PAYMENTS TO POLITICAL
PARTIES OF A STATE OR POLITICAL SUBDIVISION (OTHER THAN A PAYMENT MADE
BY AN INVESTMENT FIRM TO A POLITICAL PARTY OF A STATE OR A POLITICAL
SUBDIVISION IN WHICH SUCH INVESTMENT FIRM IS ENTITLED TO VOTE IF ALL
PAYMENTS BY SUCH INVESTMENT FIRM TO SUCH POLITICAL PARTY, IN TOTAL, DO
NOT EXCEED THREE HUNDRED DOLLARS PER YEAR) MADE BY THE PERSONS AND ENTI-
TIES DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH:
(I) THE NAME AND TITLE (INCLUDING ANY CITY, COUNTY, STATE OR POLITICAL
SUBDIVISION) OF EACH OFFICIAL AND POLITICAL PARTY RECEIVING CONTRIB-
UTIONS OR PAYMENTS DURING SUCH CALENDAR QUARTER;
(II) THE CONTRIBUTION OR PAYMENT AMOUNT MADE AND THE CONTRIBUTOR CATE-
GORY OF EACH OF THE FOLLOWING PERSONS AND ENTITIES MAKING SUCH CONTRIB-
UTIONS OR PAYMENTS DURING SUCH CALENDAR QUARTER:
(A) ANY INVESTMENT FIRM OR FINANCE PROFESSIONAL ASSOCIATED WITH SUCH
INVESTMENT FIRM; AND
(B) EACH POLITICAL ACTION COMMITTEE CONTROLLED BY THE INVESTMENT FIRM
OR ANY FINANCE PROFESSIONAL ASSOCIATED WITH SUCH INVESTMENT FIRM;
(B) A LIST OF STATE OFFICIALS WITH WHICH THE INVESTMENT FIRM HAS
ENGAGED IN BUSINESS DURING SUCH CALENDAR QUARTER, ALONG WITH THE TYPE OF
BUSINESS;
(C) WHETHER ANY CONTRIBUTION LISTED IN THIS SUBDIVISION IS THE SUBJECT
OF AN AUTOMATIC EXEMPTION, AND THE DATE OF SUCH AUTOMATIC EXEMPTION; AND
(D) SUCH OTHER INFORMATION REQUIRED BY THE COMMISSION ON PUBLIC INTEG-
RITY.
2. NO INVESTMENT FIRM SHALL BE REQUIRED TO MAKE A DISCLOSURE PURSUANT
TO THIS SECTION TO THE COMMISSION ON PUBLIC INTEGRITY FOR ANY CALENDAR
QUARTER IN WHICH:
(A) SUCH INVESTMENT FIRM HAS NO INFORMATION TO DISCLOSE FOR SUCH
CALENDAR QUARTER; OR
(B) SUCH INVESTMENT FIRM HAS NOT ENGAGED IN BUSINESS WITH THE COMMON
RETIREMENT FUND, BUT ONLY IF SUCH INVESTMENT FIRM DID NOT ENGAGE IN
BUSINESS WITH THE COMMON RETIREMENT FUND DURING THE SEVEN CONSECUTIVE
CALENDAR QUARTERS IMMEDIATELY PRECEDING SUCH CALENDAR QUARTER.
3. THE COMMISSION ON PUBLIC INTEGRITY SHALL MAKE PUBLIC A COPY OF THE
DISCLOSURES RECEIVED FROM ANY INVESTMENT FIRM.
4. IF AN INVESTMENT FIRM ENGAGES IN BUSINESS DURING ANY CALENDAR QUAR-
TER AFTER NOT HAVING REPORTED THE INFORMATION DESCRIBED IN PARAGRAPH (A)
OF SUBDIVISION ONE OF THIS SECTION FOR ONE OR MORE CONTRIBUTIONS OR
PAYMENTS MADE DURING THE TWO-YEAR PERIOD PRECEDING SUCH CALENDAR QUARTER
SOLELY AS A RESULT OF PARAGRAPH (B) OF SUBDIVISION TWO OF THIS SECTION,
THEN SUCH INVESTMENT FIRM SHALL INCLUDE IN THE INFORMATION FOR SUCH
CALENDAR QUARTER ALL SUCH INFORMATION (INCLUDING YEAR AND CALENDAR QUAR-
TER OF SUCH CONTRIBUTIONS OR PAYMENTS) NOT SO REPORTED DURING SUCH TWO-
YEAR PERIOD.
A. 3164--A 12
5. AN INVESTMENT FIRM THAT SUBMITS INFORMATION TO THE COMMISSION ON
PUBLIC INTEGRITY SHALL:
(A) SEND TWO COPIES OF SUCH DISCLOSURE TO THE COMMISSION ON PUBLIC
INTEGRITY BY CERTIFIED OR REGISTERED MAIL, OR SOME OTHER EQUALLY PROMPT
MEANS THAT PROVIDES A RECORD OF SENDING; OR
(B) SUBMIT AN ELECTRONIC VERSION OF SUCH DISCLOSURE TO THE COMMISSION
ON PUBLIC INTEGRITY IN SUCH FORMAT AND MANNER SPECIFIED IN REGULATIONS
PROMULGATED BY THE COMMISSION ON PUBLIC INTEGRITY.
S 1336. VOLUNTARY DISCLOSURE TO COMMISSION ON PUBLIC INTEGRITY. THE
COMMISSION ON PUBLIC INTEGRITY SHALL ACCEPT ADDITIONAL DISCLOSURES
RELATED TO CONTRIBUTIONS MADE TO OFFICIALS OF ISSUERS AND PAYMENTS TO
POLITICAL PARTIES AND POLITICAL SUBDIVISIONS VOLUNTARILY SUBMITTED BY AN
INVESTMENT FIRM PROVIDED THAT SUCH DISCLOSURES ARE SUBMITTED IN ACCORD-
ANCE WITH SECTION THIRTEEN HUNDRED THIRTY-FIVE OF THIS ARTICLE.
S 1337. PROHIBITION OF CERTAIN EMPLOYMENT. NO INVESTMENT FIRM SHALL
EMPLOY OR COMPENSATE IN ANY MANNER A BOARD MEMBER, OFFICIAL, RETIREMENT
FUND OFFICIAL, EMPLOYEE OR FIDUCIARY OF THE COMMON RETIREMENT FUND FOR
TWO YEARS AFTER THE TERMINATION OF SUCH PERSON'S RELATIONSHIP WITH THE
COMMON RETIREMENT FUND UNLESS SUCH PERSON SHALL NOT HAVE CONTACT WITH,
OR PROVIDE SERVICES TO, THE COMMON RETIREMENT FUND.
S 1338. PROHIBITION OF CERTAIN FINANCIAL RELATIONSHIPS. NO INVESTMENT
FIRM OR RELATED PARTY SHALL HAVE A DIRECT OR INDIRECT FINANCIAL, COMMER-
CIAL OR BUSINESS RELATIONSHIP WITH AN OFFICIAL OR ISSUER OF PENSION
FUNDS, UNLESS THE BOARD CONSENTS AFTER FULL DISCLOSURE BY THE INVESTMENT
FIRM OR RELATED PARTY.
S 1339. INTERNAL PROCEDURES. AN INVESTMENT FIRM SHALL ADOPT INTERNAL
PROCEDURES TO MONITOR AND ENSURE ITS COMPLIANCE WITH THIS ARTICLE, AND
SHALL PROVIDE TO THE BOARD AND THE ATTORNEY GENERAL A COPY OF THESE
PROCEDURES, INCLUDING ANY UPDATES THERETO.
S 1340. PROHIBITION OF CERTAIN CONTACTS. UPON THE COMMON RETIREMENT
FUND'S RELEASE OF ANY REQUEST FOR PROPOSAL, INVITATION FOR BID, OR
COMPARABLE PROCUREMENT VEHICLE FOR ANY INVESTMENT SERVICES, THERE SHALL
BE NO COMMUNICATION BETWEEN ANY BOARD MEMBER, OFFICIAL, RETIREMENT FUND
OFFICIAL, EMPLOYEE OR FIDUCIARY OF THE COMMON RETIREMENT FUND CONCERNING
THE PROCUREMENT PROCESS UNTIL THE PROCESS IS COMPLETE, PROVIDED, HOWEV-
ER, THAT A REQUEST FOR TECHNICAL CLARIFICATION REGARDING THE PROCUREMENT
PROCESS ITSELF SHALL BE PERMISSIBLE, AND AN INVESTMENT FIRM SHALL DIRECT
SUCH REQUEST TO THE PERSON DESIGNATED BY THE COMMON RETIREMENT FUND.
NOTHING HEREIN SHALL PROHIBIT AN INVESTMENT FIRM FROM COMPLYING WITH A
REQUEST FOR INFORMATION FROM THE COMMON RETIREMENT FUND DURING THE
PROCUREMENT PROCESS.
S 1341. GIFTS. AN INVESTMENT FIRM SHALL NOT GIVE OR OFFER TO GIVE ANY
GIFT TO ANY BOARD MEMBER, OFFICIAL, RETIREMENT FUND OFFICIAL, EMPLOYEE
OR FIDUCIARY OF THE COMMON RETIREMENT FUND OTHER THAN AN ARTICLE OF
MERCHANDISE NOT EXCEEDING FIFTEEN DOLLARS IN VALUE, WHICH SHALL HAVE
CONSPICUOUSLY STAMPED OR PRINTED THEREON THE ADVERTISEMENT OF THE
INVESTMENT FIRM. FOR THE PURPOSE OF THIS SECTION, A GIFT SHALL INCLUDE,
BUT IS NOT LIMITED TO, MONEY, LOANS, LODGING, MEALS, REFRESHMENTS,
VACATIONS, PRIZES, DISCOUNTS, AND ENTERTAINMENT.
S 1342. MANDATORY REPORTING. ANY PERSON OR ENTITY THAT HAS A REASON-
ABLE BASIS TO BELIEVE THAT ANY OTHER PERSON OR ENTITY HAS VIOLATED THIS
ARTICLE SHALL REPORT TO THE BOARD AND THE ATTORNEY GENERAL EVIDENCE OF
THE VIOLATION.
S 1343. ATTORNEY GENERAL ACTION. THE ATTORNEY GENERAL MAY ENFORCE THE
PROVISIONS OF THIS ARTICLE AND MAY SEEK AN INJUNCTION, ON NOTICE OF FIVE
DAYS, ENJOINING A PERSON OR ENTITY FROM CONTINUING TO ENGAGE IN ANY
A. 3164--A 13
CONDUCT IN VIOLATION OF THIS ARTICLE. NOTHING IN THIS ARTICLE SHALL BE
CONSTRUED TO LIMIT ANY RIGHT OR REMEDY OTHERWISE AVAILABLE UNDER LAW TO
ANY PERSON OR ENTITY, INCLUDING THE ATTORNEY GENERAL.
S 1344. CRIMINAL SANCTIONS. ANY VIOLATION OF THIS ARTICLE OR REGU-
LATIONS PROMULGATED THEREUNDER SHALL BE A MISDEMEANOR, PUNISHABLE BY A
FINE NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS OR BY IMPRISONMENT NOT
TO EXCEED SIX MONTHS OR BY BOTH SUCH FINE AND IMPRISONMENT. ANY SECOND
OR SUBSEQUENT VIOLATION SHALL BE A FELONY PUNISHABLE BY A FINE NOT TO
EXCEED ONE HUNDRED THOUSAND DOLLARS OR BY IMPRISONMENT FOR A CLASS E
FELONY OR BY BOTH SUCH FINE AND IMPRISONMENT.
S 14. The opening paragraph and the second undesignated paragraph of
section 98 of the state finance law are amended to read as follows:
The comptroller, AS AUTHORIZED BY THE EMPLOYEE RETIREMENT SYSTEM BOARD
OF TRUSTEES ESTABLISHED PURSUANT TO SECTION TEN-A OF THE RETIREMENT AND
SOCIAL SECURITY LAW, shall invest and keep invested all moneys belonging
to any and all funds which the comptroller OR SUCH BOARD now is or here-
after shall be authorized to invest, in any of the following securities:
The comptroller, AS AUTHORIZED BY THE EMPLOYEE RETIREMENT SYSTEM
BOARD, whenever he, SHE OR IT deems it for the best interest of any of
such funds, may dispose of any of the securities therein or investments
therefor, in making other investments authorized by law, and he, SHE OR
IT may exchange any such securities for those held in any other of such
funds, and the comptroller OR SUCH BOARD may take such action as may be
necessary to obtain the benefits of the insurance provided for in the
national housing act, and may draw his, HER OR ITS warrant upon the
treasurer for the amount required for such investments and exchanges.
S 15. The public officers law is amended by adding a new section 73-c
to read as follows:
S 73-C. DESIGNATING COMMISSION FOR THE EMPLOYEE RETIREMENT SYSTEM
BOARD. 1. DEFINITIONS. FOR THE PURPOSE OF THIS CHAPTER, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
A. "DESIGNATING COMMISSION" MEANS THE DESIGNATING COMMISSION FOR THE
EMPLOYEE RETIREMENT SYSTEM BOARD.
B. "DESIGNATING MEMBERS" MEANS THE MEMBERS OF THE DESIGNATING COMMIS-
SION FOR THE EMPLOYEE RETIREMENT SYSTEM BOARD.
C. "COMMISSIONER" MEANS A MEMBER OF THE STATE GOVERNMENT ETHICS
COMMISSION.
D. "CANDIDATE" MEANS ANY INDIVIDUAL UNDER CONSIDERATION BY THE DESIG-
NATING COMMISSION FOR THE POSITION OF TRUSTEE OF THE EMPLOYEE RETIREMENT
SYSTEM BOARD.
E. "APPOINTING OFFICER" MEANS THE STATE ELECTED OFFICIAL RESPONSIBLE
FOR APPOINTING THE DESIGNATING MEMBERS.
2. ORGANIZATION OF THE DESIGNATING COMMISSION. A. A DESIGNATING
COMMISSION FOR THE EMPLOYEE RETIREMENT SYSTEM BOARD IS HEREBY ESTAB-
LISHED. THE DESIGNATING COMMISSION SHALL CONSIST OF TEN MEMBERS OF WHOM
FOUR SHALL BE APPOINTED BY THE GOVERNOR, AND ONE EACH BY THE ATTORNEY
GENERAL, THE STATE COMPTROLLER, THE SPEAKER OF THE ASSEMBLY, THE TEMPO-
RARY PRESIDENT OF THE SENATE, THE MINORITY LEADER OF THE SENATE, AND THE
MINORITY LEADER OF THE ASSEMBLY. OF THE FOUR MEMBERS APPOINTED BY THE
GOVERNOR, NO MORE THAN TWO SHALL BE ENROLLED IN THE SAME POLITICAL
PARTY. NO MEMBER OF THE DESIGNATING COMMISSION SHALL BE A MEMBER OF THE
LEGISLATURE, AN EMPLOYEE OF STATE GOVERNMENT, HOLD ANY OFFICE IN ANY
POLITICAL PARTY OR BE A REGISTERED LOBBYIST IN THIS STATE OR IN ANY
OTHER STATE. NO MEMBER OF THE DESIGNATING COMMISSION SHALL BE A PARTNER,
OF COUNSEL OR OTHERWISE EMPLOYED BY A LOBBYING FIRM OR ANY ENTITY
RECEIVING A STATE CONTRACT THAT SHARES IN ANY PART OF THE PROFIT DERIVED
A. 3164--A 14
FROM LOBBYING. TO THE EXTENT POSSIBLE, THE MEMBERS OF THE DESIGNATING
COMMISSION SHALL BE INDIVIDUALS WITH KNOWLEDGE OR EXPERIENCE IN THE
FIELD OF SECURITIES INVESTMENTS, PENSION ADMINISTRATION, PENSION LAW OR
GOVERNMENTAL FINANCE.
B. THE MEMBERS FIRST APPOINTED BY THE GOVERNOR SHALL HAVE RESPECTIVELY
ONE, TWO, THREE AND FOUR-YEAR TERMS AS HE SHALL DESIGNATE. THE MEMBER
FIRST APPOINTED BY THE ATTORNEY GENERAL SHALL HAVE A TWO-YEAR TERM. THE
MEMBER FIRST APPOINTED BY THE STATE COMPTROLLER SHALL HAVE A TWO-YEAR
TERM. THE MEMBER FIRST APPOINTED BY THE TEMPORARY PRESIDENT OF THE
SENATE SHALL HAVE A ONE-YEAR TERM. THE MEMBER FIRST APPOINTED BY THE
MINORITY LEADER OF THE SENATE SHALL HAVE A TWO-YEAR TERM. THE MEMBER
FIRST APPOINTED BY THE SPEAKER OF THE ASSEMBLY SHALL HAVE A FOUR-YEAR
TERM. THE MEMBER FIRST APPOINTED BY THE MINORITY LEADER OF THE ASSEMBLY
SHALL HAVE A THREE-YEAR TERM. EACH SUBSEQUENT APPOINTMENT SHALL BE FOR
A TERM OF FOUR YEARS.
C. A VACANCY SHALL BE DEEMED TO OCCUR IMMEDIATELY UPON THE APPOINTMENT
OR ELECTION OF ANY MEMBER TO AN OFFICE THAT WOULD DISQUALIFY HIM OR HER
FOR APPOINTMENT TO, OR MEMBERSHIP ON, THE DESIGNATING COMMISSION. A
VACANCY OCCURRING FOR ANY REASON OTHER THAN BY EXPIRATION OF TERM SHALL
BE FILLED BY THE APPOINTING OFFICER FOR THE REMAINDER OF THE UNEXPIRED
TERM. NO MEMBER OF THE DESIGNATING COMMISSION SHALL HOLD OFFICE FOR
MORE THAN NINETY DAYS AFTER THE EXPIRATION OF HIS OR HER TERM. IF THE
APPOINTING OFFICER FAILS TO APPOINT A PERSON TO A VACANT OFFICE, BY A
MAJORITY VOTE WITHOUT VACANCY, THE DESIGNATING COMMISSION SHALL SELECT A
PERSON TO FILL THE VACANT OFFICE.
D. THE MEMBERS SHALL DESIGNATE ONE OF THEIR NUMBER TO SERVE AS CHAIR-
MAN FOR A PERIOD OF TWO YEARS OR UNTIL HIS OR HER TERM OF OFFICE
EXPIRES, WHICHEVER PERIOD IS SHORTER.
E. NO MEMBER OF THE DESIGNATING COMMISSION SHALL RECEIVE COMPENSATION,
BUT MAY RECEIVE HIS OR HER ACTUAL AND NECESSARY EXPENSES INCURRED IN THE
DISCHARGE OF HIS OR HER DUTIES.
F. EIGHT MEMBERS OF THE DESIGNATING COMMISSION SHALL CONSTITUTE A
QUORUM.
3. FUNCTIONS OF THE DESIGNATING COMMISSION. A. THE DESIGNATING COMMIS-
SION SHALL CONSIDER AND EVALUATE THE QUALIFICATIONS OF CANDIDATES FOR
APPOINTMENT AS A MEMBER OF THE EMPLOYEE RETIREMENT SYSTEM BOARD AND, AS
A VACANCY OCCURS IN ANY SUCH OFFICE, SHALL APPOINT PERSONS WHO BY THEIR
CHARACTER, TEMPERAMENT, PROFESSIONAL APTITUDE AND EXPERIENCE ARE WELL
QUALIFIED TO HOLD SUCH OFFICE. THE DESIGNATING COMMISSION SHALL SELECT
ONE SUCH PERSON TO SERVE AS CHAIR OF THE BOARD.
B. AN APPOINTMENT AS MEMBER OF THE EMPLOYEE RETIREMENT SYSTEM BOARD BY
THE DESIGNATING COMMISSION SHALL REQUIRE THE CONCURRENCE OF SEVEN
MEMBERS OF THE DESIGNATING COMMISSION. THE APPOINTMENT SHALL BE TRANS-
MITTED TO THE GOVERNOR, THE ATTORNEY GENERAL, THE STATE COMPTROLLER, THE
TEMPORARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, THE
MINORITY LEADER OF THE SENATE AND THE MINORITY LEADER OF THE ASSEMBLY IN
A SINGLE WRITTEN REPORT, WHICH SHALL BE RELEASED TO THE PUBLIC BY THE
DESIGNATING COMMISSION AT THE TIME IT IS SUBMITTED. THE REPORT SHALL BE
IN WRITING, SIGNED ONLY BY THE CHAIRMAN, AND SHALL INCLUDE THE DESIGNAT-
ING COMMISSION'S FINDINGS RELATING TO THE CHARACTER, TEMPERAMENT,
PROFESSIONAL APTITUDE, EXPERIENCE, QUALIFICATIONS AND FITNESS FOR OFFICE
OF EACH CANDIDATE WHO IS APPOINTED COMMISSIONER.
C. NO PERSON SHALL BE APPOINTED MEMBER OF THE BOARD BY THE DESIGNATING
COMMISSION WHO HAS NOT CONSENTED TO BE A CANDIDATE, WHO HAS NOT BEEN
PERSONALLY INTERVIEWED BY A QUORUM OF THE MEMBERSHIP OF THE DESIGNATING
COMMISSION, AND WHO HAS NOT FILED A FINANCIAL STATEMENT WITH THE DESIG-
A. 3164--A 15
NATING COMMISSION, ON A FORM TO BE PRESCRIBED BY THE DESIGNATING COMMIS-
SION. THE FINANCIAL STATEMENT SHALL CONSIST OF A SWORN STATEMENT OF THE
PERSON'S ASSETS, LIABILITIES AND SOURCES OF INCOME, AND ANY OTHER RELE-
VANT FINANCIAL INFORMATION WHICH THE DESIGNATING COMMISSION MAY REQUIRE.
THE DESIGNATING COMMISSION SHALL TRANSMIT THE FINANCIAL STATEMENT FILED
BY EACH PERSON WHO IS APPOINTED TO THE GOVERNOR, THE ATTORNEY GENERAL,
THE STATE COMPTROLLER, THE TEMPORARY PRESIDENT OF THE SENATE, THE SPEAK-
ER OF THE ASSEMBLY, THE MINORITY LEADER OF THE SENATE AND THE MINORITY
LEADER OF THE ASSEMBLY. THE DESIGNATING COMMISSION SHALL MAKE AVAILABLE
TO THE PUBLIC THE FINANCIAL STATEMENT FILED BY THE PERSON WHO IS
APPOINTED TO FILL A VACANCY. THE FINANCIAL STATEMENTS FILED BY ALL OTHER
PERSONS NOT APPOINTED BY THE DESIGNATING COMMISSION SHALL BE CONFIDEN-
TIAL.
4. ADDITIONAL FUNCTIONS OF THE DESIGNATING COMMISSION. THE DESIGNATING
COMMISSION SHALL HAVE THE FOLLOWING FUNCTIONS, POWERS AND DUTIES:
A. ESTABLISH DETAILED COMMUNICATION PROCEDURES TO ASSURE THAT PERSONS
WHO MAY BE QUALIFIED FOR APPOINTMENT TO THE BOARD, OTHER THAN THOSE WHO
HAVE REQUESTED CONSIDERATION OR WHO HAVE BEEN RECOMMENDED FOR CONSIDER-
ATION BY OTHERS, ARE ENCOURAGED TO AGREE TO BE CONSIDERED BY THE DESIG-
NATING COMMISSION. THE TOTAL NUMBER OF REQUESTS FOR CONSIDERATION SHALL
BE DOCUMENTED FOR THE PUBLIC RECORD.
B. CONDUCT INVESTIGATIONS, ADMINISTER OATHS OR AFFIRMATIONS, INTERVIEW
WITNESSES AND COMPEL THEIR ATTENDANCE, EXAMINE THEM UNDER OATH OR AFFIR-
MATION AND REQUIRE THE PRODUCTION OF ANY BOOKS, RECORDS, DOCUMENTS OR
OTHER EVIDENCE THAT IT MAY DEEM RELEVANT OR MATERIAL TO ITS EVALUATION
OF CANDIDATES FOR TRUSTEE.
C. REQUIRE FROM ANY COURT, DEPARTMENT, DIVISION, BOARD, BUREAU,
COMMISSION, OR OTHER AGENCY OF THE STATE OR POLITICAL SUBDIVISION THERE-
OF OR ANY PUBLIC AUTHORITY SUCH ASSISTANCE, INFORMATION AND DATA, AS
WILL ENABLE IT PROPERLY TO EVALUATE THE QUALIFICATIONS OF CANDIDATES,
SUBJECT TO ANY ABSOLUTE JUDICIAL OR EXECUTIVE PRIVILEGE, WHERE ONE
EXISTS.
NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE DESIGNATING COMMIS-
SION, WITH THE CONSENT OF THE APPLICANT, SHALL BE ENTITLED TO REQUIRE
FROM ANY FORMAL DELIBERATIVE BODY ANY FORMAL WRITTEN COMPLAINT AGAINST A
CANDIDATE, IN WHICH THE APPLICANT'S MISCONDUCT WAS ESTABLISHED, ANY
PENDING COMPLAINT AGAINST A CANDIDATE, AND THE RECORD TO DATE OF ANY
PENDING PROCEEDING PURSUANT TO A FORMAL WRITTEN COMPLAINT AGAINST SUCH
CANDIDATE. THE DELIBERATIVE BODY THAT HAS JURISDICTION OVER SUCH
COMPLAINT SHALL HAVE FIFTEEN DAYS WITHIN WHICH TO RESPOND TO A REQUEST
MADE PURSUANT TO THIS SUBDIVISION.
D. REQUIRE THE APPEARANCE OF ANY CANDIDATE BEFORE IT AND INTERVIEW ANY
PERSON CONCERNING THE QUALIFICATIONS OF ANY CANDIDATE.
E. ESTABLISH PROCEDURES TO COMMUNICATE WITH THE GOVERNOR, THE ATTORNEY
GENERAL, THE STATE COMPTROLLER, THE TEMPORARY PRESIDENT OF THE SENATE,
THE SPEAKER OF THE ASSEMBLY, THE MINORITY LEADER OF THE SENATE AND THE
MINORITY LEADER OF THE ASSEMBLY CONCERNING THE QUALIFICATIONS OF ANY
PERSON WHO IT HAS APPOINTED AS TRUSTEE.
F. APPOINT, AND AT PLEASURE REMOVE, A COUNSEL AND SUCH OTHER STAFF AS
IT MAY REQUIRE FROM TIME TO TIME, AND PRESCRIBE THEIR POWERS AND DUTIES.
THE DESIGNATING COMMISSION SHALL FIX THE COMPENSATION OF ITS STAFF AND
PROVIDE FOR REIMBURSEMENT OF THEIR EXPENSES WITHIN THE AMOUNTS APPROPRI-
ATED BY LAW.
G. DO ALL OTHER THINGS NECESSARY AND CONVENIENT TO CARRY OUT ITS FUNC-
TIONS PURSUANT TO THIS ARTICLE.
A. 3164--A 16
5. RULES OF THE DESIGNATING COMMISSION. A. THE DESIGNATING COMMISSION
SHALL ADOPT, AND MAY AMEND, WRITTEN RULES OF PROCEDURE NOT INCONSISTENT
WITH LAW.
B. RULES OF THE DESIGNATING COMMISSION SHALL BE FILED WITH THE SECRE-
TARY OF STATE AND SHALL BE PUBLISHED IN THE OFFICIAL COMPILATION OF
CODES, RULES AND REGULATIONS OF THE STATE. UPON REQUEST OF ANY PERSON,
THE SECRETARY OF STATE SHALL FURNISH A COPY OF THE DESIGNATING COMMIS-
SION'S RULES WITHOUT CHARGE.
C. RULES OF THE DESIGNATING COMMISSION MAY PRESCRIBE FORMS AND QUES-
TIONNAIRES TO BE COMPLETED AND, IF REQUIRED BY THE DESIGNATING COMMIS-
SION, VERIFIED BY CANDIDATES.
D. RULES OF THE DESIGNATING COMMISSION SHALL PROVIDE THAT UPON THE
COMPLETION BY THE DESIGNATING COMMISSION OF ITS CONSIDERATION AND EVALU-
ATION OF THE QUALIFICATIONS OF A CANDIDATE, THERE SHALL BE NO RECONSID-
ERATION OF SUCH CANDIDATE FOR THE VACANCY FOR WHICH HE WAS CONSIDERED,
EXCEPT WITH THE CONCURRENCE OF EIGHT MEMBERS OF THE DESIGNATING COMMIS-
SION.
6. CONFIDENTIALITY OF PROCEEDINGS AND RECORDS. A. ALL COMMUNICATIONS
TO THE DESIGNATING COMMISSION, AND ITS PROCEEDINGS, AND ALL APPLICA-
TIONS, CORRESPONDENCE, INTERVIEWS, TRANSCRIPTS, REPORTS AND ALL OTHER
PAPERS, FILES AND RECORDS OF THE DESIGNATING COMMISSION SHALL BE CONFI-
DENTIAL AND PRIVILEGED AND, EXCEPT FOR THE PURPOSES OF ARTICLE TWO
HUNDRED TEN OF THE PENAL LAW, SHALL NOT BE MADE AVAILABLE TO ANY PERSON
EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE.
B. NEITHER THE MEMBERS OF THE BOARD, MEMBERS OF THE DESIGNATING
COMMISSION NOR ITS STAFF SHALL PUBLICLY DIVULGE THE NAMES OF, OR ANY
INFORMATION CONCERNING, ANY CANDIDATE EXCEPT AS OTHERWISE PROVIDED IN
THIS ARTICLE. ANY VIOLATION OF THIS SUBDIVISION SHALL BE A CLASS A
MISDEMEANOR.
7. PROCEDURES WHEN VACANCIES OCCUR. A. WHENEVER A VACANCY WILL OCCUR
FOR THE POSITION OF MEMBER OF THE EMPLOYEE RETIREMENT SYSTEM BOARD BY
EXPIRATION OF A TERM, THE MEMBER OF THE BOARD SHALL NOTIFY THE DESIGNAT-
ING COMMISSION OF THE ANTICIPATED VACANCY NO LATER THAN SEVEN MONTHS
PRECEDING THE VACANCY. THE DESIGNATING COMMISSION SHALL MAKE ITS
APPOINTMENT TO THE BOARD ON OR BEFORE THE DATE OF EXPIRATION, TO TAKE
EFFECT ON THE DAY FOLLOWING SUCH EXPIRATION.
B. WHENEVER A VACANCY OCCURS OTHER THAN BY EXPIRATION OF TERM, THE
COMMISSIONERS OF STATE GOVERNMENT ETHICS SHALL IMMEDIATELY NOTIFY THE
DESIGNATING COMMISSION OF SUCH VACANCY. THE DESIGNATING COMMISSION SHALL
MAKE ITS APPOINTMENT NO LATER THAN ONE HUNDRED TWENTY DAYS AFTER RECEIPT
OF SUCH NOTICE.
S 16. This act shall take effect on the ninetieth day after it shall
have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would create an Employee Retirement System Board to serve as
the trustee of the Common Retirement Fund (CRF), and would designate the
Comptroller as the custodian of the CRF. Members of the Board would be
nominated by a designating commission, which would be authorized to
appoint and compensate staff as it may require. The Board would be
authorized to make rules and regulations on the governance of the
retirement system, as well as any other rules and regulations it deems
appropriate, and shall direct the investment of CRF. The Board would be
authorized to employ an executive director and two additional employees
as it may require. This bill would also establish prohibitions on place-
ment agents, and enact standards of integrity for investment firms deal-
ing with the CRF.
A. 3164--A 17
If this bill is enacted, we estimate that there would be additional
annual costs to compensate staff of the designating commission and the
Board, and to reimburse the members of the designating commission and
the Board for their actual and necessary expenses. These costs would be
shared by the State of New York and the participating employers of the
New York State and Local Employees' Retirement System and the New York
State and Local Police and Fire Retirement System.
Summary of relevant resources:
Data: March 31, 2011 Actuarial Year End File with distributions of
membership and other statistics displayed in the 2011 Report of the
Actuary and 2011 Comprehensive Annual Financial Report.
Assumptions and Methods: 2010 and 2011 Annual Report to the Comp-
troller on Actuarial Assumptions, Codes Rules and Regulations of the
State of New York: Audit and Control.
Market Assets and GASB Disclosures: March 31, 2011 New York State and
Local Retirement System Financial Statements and Supplementary Informa-
tion.
Valuations of Benefit Liabilities and Actuarial Assets: summarized in
the 2011 Actuarial Valuations report.
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This estimate, dated March 16, 2012, and intended for use only during
the 2012 Legislative Session, is Fiscal Note No. 2012-115, prepared by
the Actuary for the New York State and Local Employees' Retirement
System and the New York State and Local Police and Fire Retirement
System.