S1297B2232A08156       AJM:JSL 06/27/08    #90             A08156
                       AMENDMENTS TO SENATE BILL NO. 1297
                                    Sponsor:  REPRESENTATIVE MAHER
                                           Printer's No. 2232

     1       Amend Sec. 1 (Sec. 301.1), page 2, line 18, by inserting a
     2    bracket before "exercise"
     3       Amend Sec. 1 (Sec. 301.1), page 3, line 3, by inserting a
     4    bracket after "section." and inserting immediately thereafter
     5    prudent investor standard.
     6       (1.1)  When  investing, reinvesting, purchasing, acquiring,
     7    exchanging, selling or managing public funds, the Treasury
     8    Department shall act as a fiduciary with care, skill, prudence
     9    and diligence under the circumstances then prevailing,
    10    specifically including, but not limited to, the general economic
    11    conditions and the anticipated needs of the funds, that a
    12    prudent person acting in a like capacity and with familiarity
    13    with those matters would use in the conduct of funds of a like
    14    character and with like objectives. The following shall apply:
    15       (i)  The primary objective of the Treasury Department shall
    16    be to safeguard the principal of the funds. The secondary
    17    objective shall be to meet the liquidity needs of the funds. The
    18    third objective shall be to achieve a return on the funds.
    19       (ii)  The prudent investor standard embraces the duty of
    20    loyalty whereby actions must be in accordance with the sole
    21    purpose doctrine to accomplish the prudent investor objectives
    22    and not in pursuit of other objectives except as otherwise
    23    provided by statute.
    24       (iii)  The prudent investor standard embraces the duty to
    25    monitor the ongoing circumstances of investments for ongoing
    26    appropriateness of investments to meet the prudent investor
    27    objectives.
    28       (iv)  The Treasury Department shall have the power and
    29    authority to invest in securities subject to the then prevailing
    30    standards that institutional investors employ in the context of
    31    investment decisions made with consideration of fiduciary
    32    standards.
    33       (v)  The Treasury Department shall maintain and publish a
    34    list of prohibited investments within its investment policy.

    35       Amend Sec. 2 (Sec. 301.4), page 4, lines 21 through 27, by
    36    striking out "A PERSON THAT" in line 21 and all of lines 22
    37    through 27 and inserting

     1    (a)  A person who provides financial services to the Treasury
     2    Department shall not benefit directly or indirectly from the
     3    investment actions of the Treasury Department except as provided
     4    in the contract for the provision of those services. No person
     5    providing financial services shall knowingly do indirectly that
     6    which is directly prohibited by this section.
     7       (b)  A violation of this section constitutes a misdemeanor of
     8    the third degree.
     9       (c)  For the purposes of this section, "financial services"
    10    shall include, but not be limited to, the providing of
    11    investment advice and management of investments.

















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