PRINTER'S NO. 1505
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1253
Session of
2017
INTRODUCED BY CALTAGIRONE, NEILSON, ROZZI, McGINNIS, KINSEY AND
KORTZ, APRIL 20, 2017
REFERRED TO COMMITTEE ON STATE GOVERNMENT, APRIL 20, 2017
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).]
(1) Venture capital investments shall be limited to not
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more than 2% of the book value of the total assets of the
fund as determined for financial statement purposes as of
June 30 next preceding the date of investment.
(2) 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 that 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.
(3) 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 the Commonwealth and
its residents and meets the standard of prudence set forth in
subsection (a).
(4) 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
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other alternative investment of any kind, structure or manner
which meets the standard of prudence set forth in subsection
(a).]
(1) Venture capital investments shall be limited to not
more 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.
(2) 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 that 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.
(3) 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 the Commonwealth and
its residents and meets the standard of prudence set forth in
subsection (a).
(4) 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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