PRIOR PRINTER'S NO. 632 PRINTER'S NO. 1418
No. 592 Session of 2005
INTRODUCED BY ARMSTRONG, LEMMOND, COSTA AND MADIGAN,
APRIL 4, 2005
SENATOR EARLL, FINANCE, AS AMENDED, DECEMBER 13, 2005
AN ACT
1 Amending Titles 24 (Education) and 71 (State Government) TITLE <--
2 24 (EDUCATION) of the Pennsylvania Consolidated Statutes,
3 defining "alternative investment" AND "ALTERNATIVE INVESTMENT <--
4 VEHICLE"; and further providing for administrative duties of
5 the board.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Section 8102 of Title 24 of the Pennsylvania
9 Consolidated Statutes is amended by adding a definition <--
10 DEFINITIONS to read: <--
11 § 8102. Definitions.
12 The following words and phrases when used in this part shall
13 have, unless the context clearly indicates otherwise, the
14 meanings given to them in this section:
15 * * *
16 "Alternative investment." A private equity or venture <--
17 capital investment. AN INVESTMENT IN A PRIVATE EQUITY FUND, <--
18 PRIVATE DEBT FUND, VENTURE FUND, REAL ESTATE FUND, HEDGE FUND OR
19 ABSOLUTE RETURN FUND.
1 "ALTERNATIVE INVESTMENT VEHICLE." A LIMITED PARTNERSHIP,
2 LIMITED LIABILITY COMPANY OR ANY OTHER LEGAL VEHICLE FOR
3 AUTHORIZED INVESTMENTS UNDER SECTION 8521(I) (RELATING TO
4 MANAGEMENT OF FUND AND ACCOUNTS) THROUGH WHICH THE SYSTEM MAKES
5 AN ALTERNATIVE INVESTMENT.
6 * * *
7 Section 2. Section 8502(e) of Title 24 is amended to read:
8 § 8502. Administrative duties of board.
9 * * *
10 (e) Records.--
11 (1) The board shall keep a record of all its proceedings
12 which shall be open to inspection by the public[.], except as
13 otherwise provided in this part or by other law.
14 (2) Any record, material or data received, prepared,
15 used or retained by the board or its employees, investment
16 professionals or agents relating to an investment shall not
17 be required to be open to inspection by the public and shall
18 not constitute a public record under the act of June 21, 1957
19 (P.L.390, No.212), referred to as the Right-to-Know Law, if,
20 in the reasonable judgment of the board, the disclosure
21 would: <--
22 (i) in the case of an alternative investment,
23 involve the release of sensitive investment or financial
24 information which the fund was able to obtain only upon
25 the condition of maintaining its confidentiality;
26 (ii) cause substantial competitive harm to the
27 person from whom the record, material or data was
28 received, subject, however, to the condition that the
29 record, material or data shall be subject to public
30 inspection once its release would no longer cause
20050S0592B1418 - 2 -
1 substantial competitive harm to the person from whom the
2 record, material or data was received; or
3 (iii) have an adverse impact on the value of an
4 investment to be acquired, held or disposed of by the
5 fund, subject, however, to the condition that the record,
6 material or data shall be subject to public inspection
7 once its release would no longer have a detrimental
8 impact on the value of the investment.
9 WOULD HAVE A DETRIMENTAL EFFECT ON AN INVESTMENT TO BE <--
10 ACQUIRED, HELD OR DISPOSED OF BY THE FUND OR OTHERWISE CAUSE
11 A BREACH OF THE STANDARD OF CARE OR FIDUCIARY DUTY SET FORTH
12 IN THIS PART, SUBJECT HOWEVER, TO THE CONDITION THAT SUCH
13 INFORMATION SHALL BE SUBJECT TO PUBLIC INSPECTION ONCE ITS
14 RELEASE NO LONGER HAS A DETRIMENTAL EFFECT ON THE VALUE OF AN
15 INVESTMENT OF THE FUND OR CAUSE A BREACH OF THE STANDARD OF
16 CARE OR FIDUCIARY DUTY SET FORTH IN THIS PART.
17 (3) NOTWITHSTANDING THE PROVISIONS OF THIS SUBSECTION,
18 THE FOLLOWING INFORMATION REGARDING AN ALTERNATIVE INVESTMENT
19 SHALL BE SUBJECT TO PUBLIC INSPECTION:
20 (I) THE NAME, ADDRESS AND VINTAGE YEAR OF THE
21 ALTERNATIVE INVESTMENT VEHICLE.
22 (II) THE IDENTITY OF THE MANAGER OF THE ALTERNATIVE
23 INVESTMENT VEHICLE.
24 (III) THE DOLLAR AMOUNT OF THE COMMITMENT MADE BY
25 THE SYSTEM TO THE ALTERNATIVE INVESTMENT VEHICLE.
26 (IV) THE DOLLAR AMOUNT OF CASH CONTRIBUTIONS MADE BY
27 THE SYSTEM TO THE ALTERNATIVE INVESTMENT VEHICLE SINCE
28 INCEPTION.
29 (V) THE DOLLAR AMOUNT OF CASH DISTRIBUTIONS RECEIVED
30 BY THE SYSTEM FROM THE ALTERNATIVE INVESTMENT VEHICLE
20050S0592B1418 - 3 -
1 SINCE INCEPTION.
2 (VI) THE NET INTERNAL RATE OF RETURN OF THE
3 ALTERNATIVE INVESTMENT VEHICLE SINCE INCEPTION, PROVIDED
4 THAT THE SYSTEM SHALL NOT BE REQUIRED TO DISCLOSE THE NET
5 INTERNAL RATE OF RETURN UNDER CIRCUMSTANCES IN WHICH,
6 BECAUSE OF THE LIMITED NUMBER OF PORTFOLIO ASSETS
7 REMAINING IN THE ALTERNATIVE INVESTMENT VEHICLE, THE
8 DISCLOSURE COULD REVEAL THE VALUES OF SPECIFICALLY
9 IDENTIFIABLE REMAINING PORTFOLIO ASSETS TO THE DETRIMENT
10 OF THE ALTERNATIVE INVESTMENT.
11 (VII) THE AGGREGATE VALUE OF THE REMAINING PORTFOLIO
12 ASSETS ATTRIBUTABLE TO THE SYSTEM'S INVESTMENT IN THE
13 ALTERNATIVE INVESTMENT VEHICLE, PROVIDED THAT THE SYSTEM
14 SHALL NOT BE REQUIRED TO DISCLOSE THE VALUE UNDER
15 CIRCUMSTANCES IN WHICH, BECAUSE OF THE LIMITED NUMBER OF
16 PORTFOLIO ASSETS REMAINING IN THE ALTERNATIVE INVESTMENT
17 VEHICLE, THE DISCLOSURE COULD REVEAL THE VALUES OF
18 SPECIFICALLY IDENTIFIABLE REMAINING PORTFOLIO ASSETS TO
19 THE DETRIMENT OF THE ALTERNATIVE INVESTMENT.
20 (VIII) THE DOLLAR AMOUNT OF TOTAL MANAGEMENT FEES
21 AND COSTS PAID TO THE ALTERNATIVE INVESTMENT VEHICLE BY
22 THE SYSTEM ON AN ANNUAL FISCAL YEAR-END BASIS.
23 (4) THIS SUBSECTION SHALL APPLY TO ALL RECORDS, MATERIAL
24 OR DATA DESCRIBED IN IT, WITHOUT REGARD TO WHETHER THE
25 RECORD, MATERIAL OR DATA WERE CREATED, GENERATED OR STORED
26 BEFORE THE EFFECTIVE DATE OF THIS PARAGRAPH, WITHOUT REGARD
27 TO WHETHER THE RECORD, MATERIAL OR DATA WERE PREVIOUSLY
28 RELEASED OR MADE PUBLIC AND WITHOUT REGARD TO WHETHER A
29 REQUEST FOR THE RECORD, MATERIAL OR DATA WAS MADE OR IS
30 PENDING FINAL RESPONSE UNDER THE RIGHT-TO-KNOW LAW.
20050S0592B1418 - 4 -
1 (5) NOTHING IN THIS SUBSECTION SHALL BE CONSTRUED OR
2 DEEMED:
3 (I) TO IMPLY THAT THE RELEASE OR MAKING PUBLIC OF A
4 RECORD, MATERIAL OR DATA DESCRIBED IN IT AS NOT BEING A
5 PUBLIC RECORD IS A VIOLATION OF THE BOARD'S FIDUCIARY
6 DUTIES.
7 (II) TO LIMIT THE AUTHORITY OF THE AUDITOR GENERAL
8 TO OBTAIN COPIES OF ANY RECORDS, MATERIALS OR DATA
9 DESCRIBED IN THIS SUBSECTION IN CONNECTION WITH AN AUDIT
10 THAT THE AUDITOR GENERAL IS OTHERWISE AUTHORIZED BY LAW
11 TO CONDUCT OR TO EXPAND THE AUTHORITY OF THE AUDITOR
12 GENERAL TO CONDUCT AN AUDIT.
13 * * *
14 Section 3. Section 5102 of Title 71 is amended by adding a <--
15 definition to read:
16 § 5102. Definitions.
17 The following words and phrases when used in this part shall
18 have, unless the context clearly indicates otherwise, the
19 meanings given to them in this section:
20 * * *
21 "Alternative investment." A private equity or venture
22 capital investment.
23 * * *
24 Section 4. Section 5902(e) of Title 71 is amended to read:
25 § 5902. Administrative duties of the board.
26 * * *
27 (e) Records.--
28 (1) The board shall keep a record of all its proceedings
29 which shall be open to inspection by the public[.], except as
30 otherwise provided in this part or by other law.
20050S0592B1418 - 5 -
1 (2) Any record, material or data received, prepared,
2 used or retained by the board or its employees, investment
3 professionals or agents relating to an investment shall not
4 be required to be open to inspection by the public and shall
5 not constitute a public record under the act of June 21, 1957
6 (P.L.390, No.212), referred to as the Right-to-Know Law, if,
7 in the reasonable judgment of the board, the disclosure
8 would:
9 (i) in the case of an alternative investment,
10 involve the release of sensitive investment or financial
11 information which the fund was able to obtain only upon
12 the condition of maintaining its confidentiality;
13 (ii) cause substantial competitive harm to the
14 person from whom the record, material or data was
15 received, subject, however, to the condition that the
16 record, material or data shall be subject to public
17 inspection once its release would no longer cause
18 substantial competitive harm to the person from whom the
19 record, material or data was received; or
20 (iii) have an adverse impact on the value of an
21 investment to be acquired, held or disposed of by the
22 fund, subject, however, to the condition that the record,
23 material or data shall be subject to public inspection
24 once its release would no longer have a detrimental
25 impact on the value of the investment.
26 * * *
27 Section 5. Nothing in the amendment of 24 Pa.C.S. §§ 8102
28 and 8502(e) shall be construed:
29 (1) To imply that, but for the exclusions provided in 24
30 Pa.C.S. § 8502(e), any of the types of record, material or
20050S0592B1418 - 6 -
1 data described in 24 Pa.C.S. § 8502(e) are required to be
2 open to inspection by the public or constitute a public
3 record, or that any record not excluded under 24 Pa.C.S. §
4 8502(e) is a public record under the act of June 21, 1957
5 (P.L.390, No.212), referred to as the Right-to-Know Law.
6 (2) To limit the authority of the Auditor General to
7 obtain copies of any record, material or data described in 24
8 Pa.C.S. § 8502(e) in connection with a lawfully conducted
9 audit.
10 (3) To imply that the release or making public of any
11 record, material or data described in 24 Pa.C.S. § 8502(e) as
12 not constituting a public record is a violation of the Public
13 School Employees' Retirement Board's fiduciary duties.
14 Section 6. Nothing in the amendment of 71 Pa.C.S. §§ 5102
15 and 5902(e) shall be construed:
16 (1) To imply that, but for the exclusions provided in 71
17 Pa.C.S. § 5902(e), any of the types of record, material or
18 data described in 71 Pa.C.S. § 5902(e) are required to be
19 open to inspection by the public or constitute a public
20 record, or that any record not excluded in 71 Pa.C.S. §
21 5902(e) is a public record under the act of June 21, 1957
22 (P.L.390, No.212), referred to as the Right-to-Know Law.
23 (2) To limit the authority of the Auditor General to
24 obtain copies of any record, material or data described in 71
25 Pa.C.S. § 5902(e) in connection with a lawfully conducted
26 audit.
27 (3) To imply that the release or making public of any
28 record, material or data described in 71 Pa.C.S. § 5902(e) as
29 not constituting a public record is a violation of the State
30 Employees' Retirement Board's fiduciary duties.
20050S0592B1418 - 7 -
1 Section 7. The amendment of 24 Pa.C.S. §§ 8102 and 8502(e)
2 shall apply to any record, material or data described in 24
3 Pa.C.S. § 8502(e) regardless of whether:
4 (1) the record, material or data was created, generated
5 or stored;
6 (2) the record, material or data was released or made
7 public; or
8 (3) a request for the record, material or data was
9 received by or is pending final response from the Public
10 School Employees' Retirement System under the act of June 21,
11 1957 (P.L.390, No.212), referred to as the Right-to-Know Law;
12 prior to the effective date of this act.
13 Section 8. The amendment of 71 Pa.C.S. §§ 5102 and 5902(e)
14 shall apply to any record, material or data described in 71
15 Pa.C.S. § 5902(e) regardless of whether:
16 (1) the record, material or data was created, generated
17 or stored;
18 (2) the record, material or data was released or made
19 public; or
20 (3) a request for the record, material or data was
21 received by or is pending final response from the State
22 Employees' Retirement System under the act of June 21, 1957
23 (P.L.390, No.212), referred to as the Right-to-Know Law;
24 prior to the effective date of this act.
25 Section 9. In the event that the Public School Employees'
26 Retirement System has collected a fee or other monetary charge
27 from a requester for the preparation, duplication, production,
28 redaction or other expenses associated with the inspection or
29 provision of a record, material or data that, as a result of
30 this act, will not be made available for inspection by and will
20050S0592B1418 - 8 -
1 not be provided to the requester, the Public School Employees'
2 Retirement System shall return the fee or other monetary charge
3 to the requester.
4 Section 10. In the event that the State Employees'
5 Retirement System has collected a fee or other monetary charge
6 from a requester for the preparation, duplication, production,
7 redaction or other expenses associated with the inspection or
8 provision of a record, material or data that, as a result of
9 this act, will not be made available for inspection by and will
10 not be provided to the requester, the State Employees'
11 Retirement System shall return the fee or other monetary charge
12 to the requester.
13 Section 11 3. This act shall take effect immediately. <--
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