PRINTER'S NO. 3616
No. 2577 Session of 2000
INTRODUCED BY NICKOL AND STRITTMATTER, MAY 22, 2000
REFERRED TO COMMITTEE ON STATE GOVERNMENT, MAY 22, 2000
AN ACT
1 Amending Title 24 (Education) of the Pennsylvania Consolidated
2 Statutes, further providing for management of fund and
3 accounts relating to venture capital, private placement
4 equity and other alternative investments.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Section 8521(h) of Title 24 of the Pennsylvania
8 Consolidated Statutes is amended to read:
9 § 8521. Management of fund and accounts.
10 * * *
11 (h) Venture capital[.--Venture capital investments shall be
12 limited to not more than 2% of the book value of the total
13 assets of the fund as determined for financial statement
14 purposes as of June 30 next preceding the date of investment. An
15 investment shall be deemed a venture capital investment if it
16 results in the acquisition of equity interests or a combination
17 of debt and equity interests in a business which is expected to
18 grow substantially in the future and in which the expected
1 return on investment is to come predominantly from an increase
2 in value of the equity interests and are not interests in or
3 secured by real estate. A venture capital investment may be made
4 only if, in the judgment of the board, the investment is
5 reasonably likely to enhance the general welfare of this
6 Commonwealth and its citizens and meets the standard of prudence
7 set forth in subsection (a). In determining whether the
8 investment meets the standard of prudence, the board may
9 consider, together with the expected return on and the risk
10 characteristics of the particular investment, the actual and
11 expected future returns and the risk characteristics of the
12 total venture capital investments held by the board at the time
13 and the degree to which the proposed new investment would
14 promote further diversification within the venture capital asset
15 class], private placement and alternative investments.--The
16 board in its prudent discretion may make any venture capital
17 investment, private placement investment or other alternative
18 investment of any kind, structure or manner which meets the
19 standard of prudence set forth in subsection (a).
20 * * *
21 Section 2. This act shall take effect in 60 days.
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