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AB 1439

Public retirement systems: development projects: labor standards.

2025-2026 Regular Session Introduced by Robert Garcia

Public pension funds may only invest in California development projects that include specified labor protections for workers.

From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 4. Noes 1.) (June 10).
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Bill Summary · AB 1439

AB 1439 — Public retirement systems: development projects: labor standards

Status: In committee — Set for first hearing; hearing canceled at the request of the author.
Introduced: February 21, 2025. Author: Garcia.

Main purpose

AB 1439 would require that public pension and retirement systems in California limit new or additional investments in in‑state development projects (or financing for those projects) to projects that include specified labor standards protections for workers. The bill also makes a technical, nonsubstantive amendment to an existing Judicial Council sale provision in the Government Code.

Key provisions

  • Adds Section 7513.77 to the Government Code.
  • Findings and purpose: declares that development projects lacking strong labor protections are not in the public interest of pension participants and beneficiaries and states the bill’s purpose to prohibit investments in such projects, consistent with fiduciary duties.
  • Prohibition on new investments: a retirement board may not make additional/new investments of public employee pension or retirement funds in California development projects, nor provide financing for such projects, unless the project includes the labor standards protections defined in the bill.
  • Definitions — “labor standards protections” require all of the following:
    • Construction and maintenance work are subject to prevailing wage and apprenticeship requirements that apply to public projects (Labor Code, Chapter 1 of Part 7, Division 2, commencing with §1720).
    • All construction/maintenance work performed only by contractors/subcontractors that have provided an enforceable commitment to use a “skilled and trained workforce” as defined in Public Contract Code §2600 et seq., for apprenticeable occupations; except where a project labor agreement (a prehire collective bargaining agreement described in federal law 29 U.S.C. §158(f)) already requires a skilled and trained workforce.
    • The developer has provided commitments intended to maintain labor peace during union organizing campaigns for workers who will be employed upon project completion.
  • Fiduciary carve‑out: a retirement board is not required to take action under this section unless it determines in good faith that the action is consistent with the board’s fiduciary responsibilities under Section 17 of Article XVI of the California Constitution.
  • Judicial Council technical change: makes nonsubstantive/technical amendments to Government Code §70397 regarding sale of specified Los Angeles courthouse properties (no substantive policy change).

Who would be affected

  • Public pension and retirement system boards (e.g., CalPERS, CalSTRS and local public retirement boards) — restricts where they may make new investments/financing in California development projects.
  • Developers of California real‑estate and infrastructure projects — to obtain new financing from public pension funds within California, projects would need to meet the prescribed labor standards.
  • Contractors and subcontractors — would be required to comply with prevailing wage, apprenticeship, and skilled workforce commitments to participate on such projects.
  • Workers, unions, and pension beneficiaries — could see stronger labor protections on projects financed by public retirement funds; pension beneficiaries could see constrained investment opportunities depending on board determinations.
  • State agencies related to the Judicial Council sale language are affected only by technical changes.

Implementation and limits

  • The restriction applies only to additional/new investments or financing by retirement boards in California development projects; it does not compel divestment of existing investments.
  • Boards retain discretion and must make a good‑faith fiduciary determination that compliance is consistent with constitutional fiduciary duties before acting.
  • Procedural status: introduced Feb 21, 2025; amended and re‑referred to Committee on Public Employees & Retirement (March 2025); set for committee hearing April 21, 2025, which was canceled at the author's request.

Potential impacts and considerations

  • May encourage developers to adopt specified labor protections to access public retirement financing in California.
  • Could narrow the investment universe for retirement boards, potentially affecting portfolio strategy; boards must balance labor policy goals against fiduciary obligations.
  • Possible legal challenges could arise over interpretation of fiduciary duties and whether the restriction conflicts with constitutional investment authority.

Compiled from official sources — confirm details with the bill’s official record.

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