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        PRIOR PRINTER'S NO. 1796                      PRINTER'S NO. 2023

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 1297 Session of 2008


        INTRODUCED BY BROWNE, WOZNIAK, RAFFERTY, M. WHITE, FONTANA,
           WAUGH, TOMLINSON, C. WILLIAMS, FUMO, EARLL, BAKER,
           WONDERLING, MUSTO, COSTA, PIPPY, RHOADES, ARMSTRONG AND
           WASHINGTON, FEBRUARY 26, 2008

        SENATOR ARMSTRONG, APPROPRIATIONS, RE-REPORTED AS AMENDED,
           MAY 7, 2008

                                     AN ACT

     1  Amending the act of April 9, 1929 (P.L.343, No.176), entitled,
     2     as amended, "An act relating to the finances of the State
     3     government; providing for the settlement, assessment,
     4     collection, and lien of taxes, bonus, and all other accounts
     5     due the Commonwealth, the collection and recovery of fees and
     6     other money or property due or belonging to the Commonwealth,
     7     or any agency thereof, including escheated property and the
     8     proceeds of its sale, the custody and disbursement or other
     9     disposition of funds and securities belonging to or in the
    10     possession of the Commonwealth, and the settlement of claims
    11     against the Commonwealth, the resettlement of accounts and
    12     appeals to the courts, refunds of moneys erroneously paid to
    13     the Commonwealth, auditing the accounts of the Commonwealth
    14     and all agencies thereof, of all public officers collecting
    15     moneys payable to the Commonwealth, or any agency thereof,
    16     and all receipts of appropriations from the Commonwealth,
    17     authorizing the Commonwealth to issue tax anticipation notes
    18     to defray current expenses, implementing the provisions of
    19     section 7(a) of Article VIII of the Constitution of
    20     Pennsylvania authorizing and restricting the incurring of
    21     certain debt and imposing penalties; affecting every
    22     department, board, commission, and officer of the State
    23     government, every political subdivision of the State, and
    24     certain officers of such subdivisions, every person,
    25     association, and corporation required to pay, assess, or
    26     collect taxes, or to make returns or reports under the laws
    27     imposing taxes for State purposes, or to pay license fees or
    28     other moneys to the Commonwealth, or any agency thereof,
    29     every State depository and every debtor or creditor of the
    30     Commonwealth," further providing for the expiration of
    31     provisions relating to prudent investments; PROVIDING FOR      <--


     1     AUDIT OF SECURITIES DEPOSITED WITH STATE TREASURER; AND
     2     MAKING A RELATED REPEAL.

     3     The General Assembly of the Commonwealth of Pennsylvania
     4  hereby enacts as follows:
     5     Section 1.  Section 301.1(i) of the act of April 9, 1929
     6  (P.L.343, No.176), known as The Fiscal Code, amended November 9,
     7  2006 (P.L.1335, No.138), is amended to read:
     8     Section 301.1.  Investment of Moneys.--* * *
     9     (i)  (1)  Notwithstanding subsections (a) through (h), the
    10  Treasury Department shall have the exclusive management and full
    11  power to invest and reinvest the moneys of any fund as shall be
    12  accumulated beyond the ordinary needs of the various funds and
    13  which are not authorized by law to be invested by any board,
    14  commission or State officer, subject, however, to the exercise
    15  of that degree of judgment and care under the circumstances then
    16  prevailing which persons of prudence, discretion and
    17  intelligence who are familiar with such matters exercise in the
    18  management of their own affairs not in regard to speculation but
    19  in regard to the permanent disposition of the funds, considering
    20  the probable income to be derived therefrom as well as the
    21  probable safety of their capital. The Treasury Department shall
    22  have the power to hold, purchase, sell, assign, transfer and
    23  dispose of any securities, including equity securities and
    24  mutual funds consisting in whole or in part of equity
    25  securities, and investments in any such fund as well as the
    26  proceeds of such investments and of the money belonging to any
    27  such fund. The Treasury Department shall, through the Governor,
    28  submit to the General Assembly annually, at the same time the
    29  Treasury Department submits its budget covering administrative
    30  expenses, a report identifying the nature and amount of all

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     1  existing investments made pursuant to this section.
     2     (2)  The authority to invest or reinvest the moneys of any
     3  fund pursuant to this subsection shall expire [December 31,
     4  2008] December 31, 2010. The Treasury Department may maintain
     5  investments pursuant to this subsection which are in existence
     6  on the expiration date in this paragraph for not more than two
     7  years following such expiration date.
     8     SECTION 2.  THE ACT IS AMENDED BY ADDING A SECTION TO READ:    <--
     9     SECTION 409.  AUDIT OF SECURITIES DEPOSITED WITH STATE
    10  TREASURER.--(A)  THE AUDITOR GENERAL, THROUGH SUCH AGENTS AS HE
    11  MAY SELECT, SHALL PERFORM AN ANNUAL AUDIT OF THE BONDS, STOCKS,
    12  MORTGAGES, OR OTHER SECURITIES, WHICH ARE DEPOSITED WITH THE
    13  STATE TREASURER IN WHATEVER CAPACITY, AND SHALL AUDIT THE BOOKS
    14  IN WHICH A RECORD IS KEPT OF SUCH BONDS, STOCKS, MORTGAGES, OR
    15  OTHER SECURITIES; AND, FOR THIS PURPOSE, THE AUDITOR GENERAL MAY
    16  EMPLOY SUCH CONSULTANTS, EXPERTS, ACCOUNTANTS, OR INVESTIGATORS
    17  AS HE MAY DEEM ADVISABLE. THE AUDIT MAY BE CONDUCTED
    18  INDEPENDENTLY OR AS PART OF ANY OTHER ANNUAL AUDIT OR AUDITS
    19  CONDUCTED BY THE AUDITOR GENERAL.
    20     (B)  THE STATE TREASURER SHALL, WHENEVER DEMAND IS MADE UPON
    21  HIM BY THE AUDITOR GENERAL, SUBMIT FOR THE AUDIT OF THE AUDITOR
    22  GENERAL, OR HIS AGENTS, ALL RECORDS IN HIS POSSESSION RELATING
    23  TO SUCH BONDS, STOCKS, MORTGAGES, OR OTHER SECURITIES, INCLUDING
    24  SUCH RECORDS IN THE POSSESSION OF ANY CUSTODIAN OR SUBCUSTODIAN
    25  ENGAGED BY HIM REGARDING SUCH SECURITIES, AND HIS FAILURE SO TO
    26  DO SHALL DISQUALIFY HIM FROM HOLDING THE OFFICE OF STATE
    27  TREASURER.
    28     SECTION 3.  REPEALS ARE AS FOLLOWS:
    29         (1)  THE GENERAL ASSEMBLY DECLARES THAT THE REPEAL UNDER
    30     PARAGRAPH (2) IS NECESSARY TO EFFECTUATE THE ADDITION OF
    20080S1297B2023                  - 3 -     

     1     SECTION 409 OF THE ACT.
     2         (2)  THE ACT OF MAY 21, 1923 (P.L.288, NO.184), ENTITLED
     3     "AN ACT TO BETTER SECURE ALL BONDS, STOCKS, MORTGAGES, OR
     4     OTHER SECURITIES DEPOSITED WITH THE STATE TREASURER, BY
     5     PROVIDING FOR THEIR INSPECTION, EXAMINATION, AND
     6     VERIFICATION, AND THE VERIFICATION OF THE BOOKS, CONTAINING A
     7     RECORD OF SUCH BONDS, STOCKS, MORTGAGES, OR OTHER SECURITIES,
     8     BY THE AUDITOR GENERAL OR HIS AGENTS," IS REPEALED.
     9     Section 2 4.  This act shall take effect immediately.          <--














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