Bill Text: NY S08524 | 2019-2020 | 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 2-0)

Status: (Introduced - Dead) 2020-06-08 - REFERRED TO RULES [S08524 Detail]

Download: New_York-2019-S08524-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          8524

                    IN SENATE

                                      June 8, 2020
                                       ___________

        Introduced  by  Sen.  COMRIE -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        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
    24    (d) awarding contracts for accounting,  banking,  financial  advisory,
    25  insurance,  legal,  research, valuation, and other financial and profes-
    26  sional services to MWBE financial institutions and  other  MWBE  profes-
    27  sional service firms.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14527-03-0

        S. 8524                             2

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

        S. 8524                             3

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

        S. 8524                             4

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

        S. 8524                             5

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

        S. 8524                             6

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