ARTICLE 16  PUBLIC FINANCE

SEC. 17.  The State shall not in any manner loan its credit, nor
shall it subscribe to, or be interested in the stock of any company,
association, or corporation, except that the State and each political
subdivision, district, municipality, and public agency thereof is
hereby authorized to acquire and hold shares of the capital stock of
any mutual water company or corporation when the stock is so acquired or held for the purpose of furnishing a supply of water for public, municipal or governmental purposes; and the holding of the stock shall entitle the holder thereof to all of the rights, powers and
privileges, and shall subject the holder to the obligations and
liabilities conferred or imposed by law upon other holders of stock
in the mutual water company or corporation in which the stock is so held.

   Notwithstanding any other provisions of law or this Constitution
to the contrary, the retirement board of a public pension or
retirement system shall have plenary authority and fiduciary
responsibility for investment of moneys and administration of the
system, subject to all of the following:

   (a) The retirement board of a public pension or retirement system
shall have the sole and exclusive fiduciary responsibility over the
assets of the public pension or retirement system.  The retirement
board shall also have sole and exclusive responsibility to administer
the system in a manner that will assure prompt delivery of benefits
and related services to the participants and their beneficiaries.
The assets of a public pension or retirement system are trust funds
and shall be held for the exclusive purposes of providing benefits to
participants in the pension or retirement system and their
beneficiaries and defraying reasonable expenses of administering the
system.
   (b) The members of the retirement board of a public pension or
retirement system shall discharge their duties with respect to the
system solely in the interest of, and for the exclusive purposes of
providing benefits to, participants and their beneficiaries,
minimizing employer contributions thereto, and defraying reasonable
expenses of administering the system.  A retirement board's duty to
its participants and their beneficiaries shall take precedence over
any other duty.
   (c) The members of the retirement board of a public pension or
retirement system shall discharge their duties with respect to the
system with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like
capacity and familiar with these matters would use in the conduct of
an enterprise of a like character and with like aims.
   (d) The members of the retirement board of a public pension or
retirement system shall diversify the investments of the system so as
to minimize the risk of loss and to maximize the rate of return,
unless under the circumstances it is clearly not prudent to do so.
   (e) The retirement board of a public pension or retirement system,
consistent with the exclusive fiduciary responsibilities vested in
it, shall have the sole and exclusive power to provide for actuarial
services in order to assure the competency of the assets of the
public pension or retirement system.
   (f) With regard to the retirement board of a public pension or
retirement system which includes in its composition elected employee
members, the number, terms, and method of selection or removal of
members of the retirement board which were required by law or
otherwise in effect on July 1, 1991, shall not be changed, amended,
or modified by the Legislature unless the change, amendment, or
modification enacted by the Legislature is ratified by a majority
vote of the electors of the jurisdiction in which the participants of
the system are or were, prior to retirement, employed.
   (g) The Legislature may by statute continue to prohibit certain
investments by a retirement board where it is in the public interest
to do so, and provided that the prohibition satisfies the standards
of fiduciary care and loyalty required of a retirement board pursuant
to this section.
   (h) As used in this section, the term "retirement board" shall
mean the board of administration, board of trustees, board of
directors, or other governing body or board of a public employees'
pension or retirement system; provided, however, that the term
"retirement board" shall not be interpreted to mean or include a
governing body or board created after July 1, 1991 which does not
administer pension or retirement benefits, or the elected legislative
body of a jurisdiction which employs participants in a public
employees' pension or retirement system.