Nonsensical Bill Requiring Founding Team Diversity Reports Advances

In April, I reported on SB 54 (Skinner), a bill that would have required institutional Investors, securities and real estate brokers, and others to report on the diversity status of "founding teams". At the time, I criticized the bill as being "so poorly drafted as to amount to gibberish". The bill has since been amended several times and has been advancing in the legislative process. In its current iteration, the bill would require certain investment advisers to report annually to the Civil Rights Department information about the diversity of the founding members of enterprises.

The bill purports to impose reporting requirements on "covered persons" which it defines as a person who acts as an investment adviser to a venture capital company (as defined in 10 CCR § 260.204.9(a)(4)) and who meets any of the following three criteria: