Bill Text: NY S03267 | 2021-2022 | General Assembly | Introduced


Bill Title: Relates to the use of MWBE investments for and aspirational goal of at least twenty percent of each New York state fund, to the greatest extent feasible within the bounds of financial and fiduciary prudence.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2022-01-05 - REFERRED TO CIVIL SERVICE AND PENSIONS [S03267 Detail]

Download: New_York-2021-S03267-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          3267

                               2021-2022 Regular Sessions

                    IN SENATE

                                    January 28, 2021
                                       ___________

        Introduced  by  Sens.  COMRIE, PARKER -- read twice and ordered printed,
          and when printed to be committed to the Committee on Civil Service and
          Pensions

        AN ACT to amend the  retirement  and  social  security  law,  the  state
          finance  law, the education law, and the workers' compensation law, in
          relation to the use of MWBE investments for New York state funds

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. The retirement and social security law is amended by adding
     2  a new section 177-b to read as follows:
     3    §  177-b.  Use of MWBE asset management and financial institutions. 1.
     4  In addition to the powers contained  in  any  other  provision  of  law,
     5  including  the  provisions of the administrative code of the city of New
     6  York, it shall be the goal of public officials  with  investment  making
     7  discretion  and  duties, including, but not limited to elected officials
     8  such as the state comptroller and the comptroller of  the  city  of  New
     9  York,  appointed officials, the trustee or trustees of a fund, and state
    10  authority officials that, to the greatest  extent  feasible  within  the
    11  bounds of financial and fiduciary prudence, such public officials, trus-
    12  tee or trustees shall aspire to utilize MWBE asset managers, MWBE finan-
    13  cial  institutions, and MWBE financial or professional service firms for
    14  the investment of no less than twenty percent of the total dollar amount
    15  of such fund under management, which shall include, but not  be  limited
    16  to, the following:
    17    (a) investing assets of such fund with MWBE asset managers;
    18    (b)  subject to best execution: (i) conducting trades of public equity
    19  securities with MWBE financial institutions; and (ii) conducting  trades
    20  of fixed-income securities through MWBE institutions;
    21    (c)  allocating investments of assets of such fund either through: (i)
    22  direct investments in the equities and debt securities of MWBEs; or (ii)
    23  indirectly through special programs involving MWBE asset managers; or

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07592-01-1

        S. 3267                             2

     1    (d) awarding contracts for accounting,  banking,  financial  advisory,
     2  insurance,  legal,  research, valuation, and other financial and profes-
     3  sional services to MWBE financial institutions and  other  MWBE  profes-
     4  sional service firms.
     5    2.  The trustee or trustees of a fund shall be authorized to establish
     6  additional aspirational goals to the goals directed by  subdivision  one
     7  of this section.
     8    3.  Within  sixty  days  of  the end of each fiscal year following the
     9  effective date of this section, the trustee or trustees of a fund  shall
    10  report  to the governor, legislature, and chief diversity officer of the
    11  state of New York on the participation  of  MWBE  asset  managers,  MWBE
    12  financial  institutions,  and  MWBE  professional  service  providers in
    13  investment and brokerage transactions with or as providers  of  services
    14  for  such  fund, including a comparative analysis of such activity rela-
    15  tive to such activity with all asset managers,  financial  institutions,
    16  and  professional  service providers for the relevant period, and on the
    17  progress and success of the efforts undertaken  during  such  period  to
    18  achieve  the aspirational goals under subdivision one of this section to
    19  the greatest extent feasible within the bounds of financial and  fiduci-
    20  ary  prudence.  Each  report  shall  be  simultaneously published on the
    21  website of such fund for not less than sixty days following its  release
    22  to the governor and the other recipients named in this subdivision.
    23    § 2. The retirement and social security law is amended by adding a new
    24  section 177-e to read as follows:
    25    §  177-e.  Required disclosures from consultants; MWBEs and businesses
    26  owned by persons with disabilities. 1. As used in this section, the term
    27  "disability" shall have the same  meaning  as  defined  by  section  two
    28  hundred ten of the economic development law.
    29    2.  No  later  than  January  first, two thousand twenty-two, and each
    30  January first thereafter, each consultant retained  by  the  trustee  or
    31  trustees  of  a  fund  shall disclose to the trustee or trustees of such
    32  fund the total number of searches for investment services made  by  such
    33  consultant in the previous calendar year including all such searches:
    34    (a)  that  included  (i)  MWBE asset   managers,   (ii) MWBE financial
    35  institutions, (iii) MWBE financial  or  professional  service firms,  or
    36  (iv)  any  business enterprise at least fifty-one percent owned by indi-
    37  viduals with disabilities;
    38    (b) in which the consultant recommended for selection (i)  MWBE  asset
    39  managers,    (ii) MWBE financial  institutions, (iii) MWBE financial  or
    40  professional  service firms, or (iv) any business  enterprise  at  least
    41  fifty-one percent owned by individuals with disabilities; and
    42    (c)  that resulted in the selection of (i) MWBE asset  managers,  (ii)
    43  MWBE financial  institutions, (iii) MWBE financial    or    professional
    44  service  firms,  or  (iv)  any  business  enterprise  at least fifty-one
    45  percent owned by individuals  with  disabilities,  including  the  total
    46  dollar amounts invested pursuant to such selection.
    47    3.    Beginning  January  first, two thousand twenty-two, no contract,
    48  oral or written, for consulting services shall be awarded by the trustee
    49  or trustees of a fund without first requiring the consultant to make the
    50  disclosures required under subdivision two of this section.
    51    4. Such disclosure shall be considered by the trustee or trustees of a
    52  fund, within the bounds of financial and fiduciary  prudence,  prior  to
    53  the awarding of an oral or written contract for consulting services.
    54    § 3. The retirement and social security law is amended by adding a new
    55  section 177-f to read as follows:

        S. 3267                             3

     1    §  177-f.  Required  disclosures  from  consultants;  compensation and
     2  economic opportunity received.  1. For the purposes of this section, the
     3  following terms shall have the following meanings:
     4    (a)  "compensation" means any money, thing of value, or economic bene-
     5  fit conferred on, or received by, a consultant in  return  for  services
     6  rendered, or to be rendered.
     7    (b)  "economic opportunity" means any purchase, sale, lease, contract,
     8  option, or  other  transaction  or  arrangement  involving  property  or
     9  services wherein a consultant may gain an economic benefit.
    10    2.  No  later  than  January  first, two thousand twenty-two, and each
    11  January first succeeding such date, a consultant retained by the trustee
    12  or trustees of a fund shall disclose to the trustee or trustees of  such
    13  fund  all  compensation  and  economic opportunity received in the prior
    14  twenty-four months from investment advisors retained by such trustee  or
    15  trustees.
    16    3.  Beginning  January  first,  two  thousand twenty-two, a consultant
    17  shall disclose to the trustee or trustees of a fund any compensation  or
    18  economic  opportunity  received  in the prior twenty-four months from an
    19  investment advisor that is recommended for selection by such consultant.
    20  A consultant shall make this disclosure prior to the trustee or trustees
    21  of a fund selecting an investment advisor for appointment.
    22    4. Beginning January first, two thousand twenty-two, no contract, oral
    23  or written, for consulting services shall be awarded  by  a  trustee  or
    24  trustees  of  a  fund without first requiring the consultant to make the
    25  disclosures required by subdivision three of this section.
    26    § 4. Section 8 of the state finance law is amended by adding  two  new
    27  subdivisions 21 and 22 to read as follows:
    28    21.  a. When procuring or authorizing the procurement of any goods and
    29  services, whether through  a  request  for  proposal  or  otherwise,  be
    30  authorized  to  incorporate preferences in the scoring process for busi-
    31  nesses that:
    32    (1) are a minority  business  enterprise  or  a  woman-owned  business
    33  enterprise,  as such terms are defined by section two hundred ten of the
    34  economic development law;
    35    (2) are at least fifty-one percent owned by a veteran or veterans or a
    36  person or persons with a  disability,  as  such  terms  are  defined  by
    37  section two hundred ten of the economic development law; or
    38    (3) have a record of support for increasing diversity and inclusion in
    39  board  membership,  management,  employment,  philanthropy, and supplier
    40  diversity, including investment professionals and investment sourcing.
    41    b. Beginning with the fiscal year  two  thousand  twenty-two,  and  at
    42  least annually thereafter, report on his or her utilization of the busi-
    43  nesses  described in paragraph a of this subdivision.  Such report shall
    44  be published on the official website of the comptroller.
    45    22. Review a financial institution's  federal  Community  Reinvestment
    46  Act  rating,  record,  and  current level of financial commitment to the
    47  community when determining the eligibility of such financial institution
    48  to participate in a banking contract,  investment  contract,  investment
    49  activity, or other financial program under the control or supervision of
    50  the comptroller.
    51    § 5. Subdivision 1 of section 423-c of the retirement and social secu-
    52  rity  law,  as  added  by chapter 171 of the laws of 2010, is amended to
    53  read as follows:
    54    1. Within the discretion of the state comptroller  and  in  accordance
    55  with and subject to his or her fiduciary duties and obligations as trus-
    56  tee of the common retirement fund and to the members, retirees and bene-

        S. 3267                             4

     1  ficiaries  of  such fund and such other investment limitations as may be
     2  prescribed by this chapter, the comptroller is authorized  to  establish
     3  an  MWBE asset management and financial institution strategy [including]
     4  consistent  with and in addition to his or her obligations under section
     5  one hundred seventy-seven-b of this chapter, which shall include reason-
     6  able goals for utilization of MWBE asset managers, MWBE financial insti-
     7  tutions and MWBE financial and professional service firms, which strate-
     8  gy shall include, but shall not be limited to, the following objectives:
     9    (a) investing assets of the common retirement  fund  with  MWBE  asset
    10  managers;
    11    (b)  subject to best execution: (i) conducting trades of public equity
    12  securities with MWBE financial institutions; and (ii) conducting  trades
    13  of fixed-income securities through MWBE financial institutions;
    14    (c)  allocating  investments  of  assets of the common retirement fund
    15  either through: (i) direct investments in the equities and debt  securi-
    16  ties  of  MWBEs;  or  (ii) indirectly through special programs involving
    17  MWBE asset managers; and
    18    (d) awarding contracts for accounting,  banking,  financial  advisory,
    19  insurance,  legal,  research,  valuation and other financial and profes-
    20  sional services to MWBE financial institutions and  other  MWBE  profes-
    21  sional service firms.
    22    §  6. Subdivision 1 of section 508-a of the education law, as added by
    23  chapter 171 of the laws of 2010, is amended to read as follows:
    24    1. Within the discretion of the retirement  board  and  in  accordance
    25  with  and subject to its fiduciary duties and obligations as trustees of
    26  the [teachers] teachers' retirement system and to the members,  retirees
    27  and  beneficiaries  of such system and such other investment limitations
    28  as may be prescribed by this chapter, the retirement board is authorized
    29  to establish [on] an MWBE asset  management  and  financial  institution
    30  strategy  pursuant to section four hundred twenty-three-c of the retire-
    31  ment and social security law [including] consistent with and in addition
    32  to his or her obligations under section one hundred  seventy-seven-b  of
    33  the  retirement  and social security law, which shall include reasonable
    34  goals for utilization of MWBE  asset  managers,  MWBE  financial  insti-
    35  tutions  and  MWBE  financial  and  professional services firms, as such
    36  terms are defined in section one hundred seventy-six of  the  retirement
    37  and  social  security law which strategy shall include, but shall not be
    38  limited to, the following objectives:
    39    a. investing assets of the teachers' retirement system with MWBE asset
    40  managers;
    41    b. subject to best execution, (1) conducting trades of  public  equity
    42  securities with MWBE financial institutions and (2) conducting trades of
    43  fixed-income securities through MWBE financial institutions;
    44    c.  allocating  investments  of  assets  of  the [teacher's] teachers'
    45  retirement system either through (1) direct investments in the  equities
    46  and  debt securities of MWBEs or (2) indirectly through special programs
    47  involving MWBE asset managers; and
    48    d. awarding contracts for  accounting,  banking,  financial  advisory,
    49  insurance,  legal,  research,  valuation and other financial and profes-
    50  sional services to MWBE financial institutions and  other  MWBE  profes-
    51  sional services firms.
    52    As  used in this section, the terms "MWBE asset manager", "MWBE finan-
    53  cial  institutions",  "MWBE",  "[fidiuciary-controlled]  fiduciary-cont-
    54  rolled entities", and "best execution" shall have the meanings specified
    55  in section one hundred seventy-six of the retirement and social security
    56  law,  and  shall be certified in a manner consistent with the provisions

        S. 3267                             5

     1  of subdivision three of  section  four  hundred  twenty-three-c  of  the
     2  retirement and social security law.
     3    §  7.  Paragraph  c of subdivision 2 of section 5 of the state finance
     4  law, as added by chapter 171 of the laws of 2010, is amended to read  as
     5  follows:
     6    c.  Within  the  discretion  of the deferred compensation board and in
     7  accordance with and subject to its fiduciary duty and obligations to the
     8  deferred compensation plan for state employees and to  the  members  and
     9  beneficiaries  of such plan and such other investment limitations as may
    10  be prescribed by  this  chapter,  the  deferred  compensation  board  is
    11  authorized  to establish an MWBE asset management and financial institu-
    12  tion strategy [including] consistent with and in addition to his or  her
    13  obligations  under section one hundred seventy-seven-b of the retirement
    14  and social security law, which shall include reasonable goals for utili-
    15  zation of MWBE asset managers,  MWBE  financial  institutions  and  MWBE
    16  professional service firms, which shall include, but shall not be limit-
    17  ed to, the following objectives:
    18    (i) conducting procurement procedures in a manner that will assure the
    19  inclusion  of  MWBE asset managers in any request for proposal or search
    20  process for asset management services undertaken in accordance with  the
    21  rules and regulations and of the board;
    22    (ii)  subject to best execution policies, developing a strategy to (1)
    23  conduct trades of public equity securities with  MWBE  financial  insti-
    24  tutions  and  (2) conduct trades of fixed-income securities through MWBE
    25  financial institutions;
    26    (iii) conducting procurement procedures in a manner that  will  assure
    27  the inclusion of MWBE financial institutions and other MWBE professional
    28  service  firms  in  procurements  for  services that include accounting,
    29  banking, financial advisory, insurance, legal, research,  valuation  and
    30  other financial and professional services that are undertaken in accord-
    31  ance with the rules and regulations of the board;
    32    (iv)  cooperating  with  other fiduciary controlled entities and state
    33  agencies and offices to identify MWBE  asset  managers,  MWBE  financial
    34  institutions and MWBE professional service firms.
    35    As  used in this section, the terms "MWBE asset manager", "MWBE finan-
    36  cial institutions", "MWBE", "fiduciary-controlled  entities"  and  "best
    37  execution"  shall  have  the  meanings  specified in section one hundred
    38  seventy-six of the retirement and social security law.
    39    § 8. Subdivision 1 of section 87-i of the workers'  compensation  law,
    40  as  added  by  chapter  171  of  the laws of 2010, is amended to read as
    41  follows:
    42    1. Within the discretion of the commissioners of the  state  insurance
    43  fund  and  in  accordance  with  and subject to their fiduciary duty and
    44  obligations as trustees of the state insurance fund and to the benefici-
    45  aries of such fund and such  other  investment  limitations  as  may  be
    46  prescribed  by  this chapter, the commissioners are authorized to estab-
    47  lish  an  MWBE  asset  management  and  financial  institution  strategy
    48  [including]  consistent  with and in addition to their obligations under
    49  section one hundred seventy-seven-b of the retirement and social securi-
    50  ty law, which shall include reasonable goals  for  utilization  of  MWBE
    51  asset  managers,  MWBE  financial  institutions  and  MWBE financial and
    52  professional service firms, which strategy shall include, but shall  not
    53  be limited to, the following objectives:
    54    (a)  investing  assets  of  the  state  insurance fund with MWBE asset
    55  managers;

        S. 3267                             6

     1    (b) subject to best execution, (1) conducting trades of public  equity
     2  securities  with  MWBE financial institutions; and (2) conducting trades
     3  of fixed-income securities through MWBE financial institutions;
     4    (c)  allocating  investments  of  assets  of  the state insurance fund
     5  either through (1) direct investments in the equities and  debt  securi-
     6  ties of MWBEs; or (2) indirectly through special programs involving MWBE
     7  asset managers; and
     8    (d)  awarding  contracts  for accounting, banking, financial advisory,
     9  insurance, legal, research, valuation and other  financial  and  profes-
    10  sional  services  to  MWBE financial institutions and other MWBE profes-
    11  sional service firms.
    12    As used in this section, the terms "MWBE asset manager", "MWBE  finan-
    13  cial  institutions",  "MWBE",  "fiduciary-controlled entities" and "best
    14  execution" shall have the meanings  specified  in  section  one  hundred
    15  seventy-six  of  the  retirement  and  social  security law and shall be
    16  certified in a manner consistent  with  the  provisions  of  subdivision
    17  three  of  section  four  hundred  twenty-three-c  of the retirement and
    18  social security law.
    19    § 9. This act shall take effect on the first of January next  succeed-
    20  ing the date on which it shall have become a law.
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