PRINTER'S NO. 3567
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2174
Session of
2015
INTRODUCED BY CALTAGIRONE, McGINNIS, DRISCOLL, READSHAW AND
SAVAGE, JUNE 20, 2016
REFERRED TO COMMITTEE ON STATE GOVERNMENT, JUNE 20, 2016
AN ACT
Amending Titles 24 (Education) and 71 (State Government) of the
Pennsylvania Consolidated Statutes, in administration and
miscellaneous provisions relating to retirement for school
employees, further providing for management of fund and
accounts; and, in administration, funds, accounts and general
provisions relating to retirement for State employees and
officers, further providing for management of fund and
accounts.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 8521(h) of Title 24 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 8521. Management of fund and accounts.
* * *
(h) Venture capital, private placement and alternative
investments.--[The board in its prudent discretion may make any
venture capital investment, private placement investment or
other alternative investment of any kind, structure or manner
which meets the standard of prudence set forth in subsection
(a).] Venture capital investments shall be limited to not more
than 2% of the book value of the total assets of the fund as
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determined for financial statement purposes as of June 30 next
preceding the date of investment. An investment shall be deemed
a venture capital investment if it results in the acquisition of
equity interests or a combination of debt and equity interests
in a business which is expected to grow substantially in the
future and in which the expected return on investment is to come
predominantly from an increase in value of the equity interests
and are not interests in or secured by real estate. A venture
capital investment may be made only if, in the judgment of the
board, the investment is reasonably likely to enhance the
general welfare of this Commonwealth and its citizens and meets
the standard of prudence set forth in subsection (a). In
determining whether the investment meets the standard of
prudence, the board may consider, together with the expected
return on and the risk characteristics of the particular
investment, the actual and expected future returns and the risk
characteristics of the total venture capital investments held by
the board at the time and the degree to which the proposed new
investment would promote further diversification within the
venture capital asset class.
* * *
Section 2. Section 5931(h) of Title 71 is amended to read:
§ 5931. Management of fund and accounts.
* * *
(h) Venture capital, private placement and alternative
investments.--[The board in its prudent discretion may make any
venture capital investment, private placement investment or
other alternative investment of any kind, structure or manner
which meets the standard of prudence set forth in subsection
(a).] Venture capital investments shall be limited to not more
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than 2% of the book value of the total assets of the fund as
determined for financial statement purposes as of December 31
next preceding the date of investment. An investment shall be
deemed a venture capital investment if it results in the
acquisition of equity interests or a combination of debt and
equity interests in a business which is expected to grow
substantially in the future and in which the expected return on
investment is to come predominantly from an increase in value of
the equity interests and are not interests in or secured by real
estate. A venture capital investment may be made only if, in the
judgment of the board, the investment is reasonably likely to
enhance the general welfare of this Commonwealth and its
citizens and meets the standard of prudence set forth in
subsection (a). In determining whether the investment meets the
standard of prudence, the board may consider, together with the
expected return on and the risk characteristics of the
particular investment, the actual and expected future returns
and the risk characteristics of the total venture capital
investments held by the board at the time and the degree to
which the proposed new investment would promote further
diversification within the venture capital asset class.
* * *
Section 3. This act shall take effect in 60 days.
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