PRIOR PRINTER'S NOS. 632, 1418 PRINTER'S NO. 1656
No. 592 Session of 2005
INTRODUCED BY ARMSTRONG, LEMMOND, COSTA AND MADIGAN,
APRIL 4, 2005
SENATOR EARLL, FINANCE, RE-REPORTED AS AMENDED, MARCH 28, 2006
AN ACT
1 Amending Title 24 (Education) of the Pennsylvania Consolidated
2 Statutes, defining "alternative investment" and "alternative
3 investment vehicle"; and further providing for administrative
4 duties of the board.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Section 8102 of Title 24 of the Pennsylvania
8 Consolidated Statutes is amended by adding definitions to read:
9 § 8102. Definitions.
10 The following words and phrases when used in this part shall
11 have, unless the context clearly indicates otherwise, the
12 meanings given to them in this section:
13 * * *
14 "Alternative investment." An investment in a private equity
15 fund, private debt fund, venture fund, real estate fund, hedge
16 fund or absolute return fund.
17 "Alternative investment vehicle." A limited partnership,
18 limited liability company or any other legal vehicle for
1 authorized investments under section 8521(i) (relating to
2 management of fund and accounts) through which the system makes
3 an alternative investment.
4 * * *
5 Section 2. Section 8502(e) of Title 24 is amended to read:
6 § 8502. Administrative duties of board.
7 * * *
8 (e) Records.--
9 (1) The board shall keep a record of all its proceedings
10 which shall be open to inspection by the public[.], except as
11 otherwise provided in this part or by other law.
12 (2) Any record, material or data received, prepared,
13 used or retained by the board or its employees, investment
14 professionals or agents relating to an investment shall not
15 be required to be open to inspection by the public and shall <--
16 not constitute a public record CONSTITUTE A PUBLIC RECORD <--
17 SUBJECT TO PUBLIC INSPECTION under the act of June 21, 1957
18 (P.L.390, No.212), referred to as the Right-to-Know Law, if,
19 in the reasonable judgment of the board, the disclosure
20 would have a detrimental effect on an investment to be <--
21 acquired, held or disposed of by the fund or otherwise cause
22 a breach of the standard of care or fiduciary duty set forth
23 in this part, subject however, to the condition that such
24 information shall be subject to public inspection once its
25 release no longer has a detrimental effect on the value of an
26 investment of the fund or cause a breach of the standard of
27 care or fiduciary duty set forth in this part. WOULD: <--
28 (I) IN THE CASE OF AN ALTERNATIVE INVESTMENT OR
29 ALTERNATIVE INVESTMENT VEHICLE INVOLVE THE RELEASE OF
30 SENSITIVE INVESTMENT OR FINANCIAL INFORMATION RELATING TO
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1 THE INVESTMENT WHICH THE FUND WAS ABLE TO OBTAIN ONLY
2 UPON AGREEING TO MAINTAIN ITS CONFIDENTIALITY, SUBJECT,
3 HOWEVER, TO THE CONDITION THAT SUCH INFORMATION, TO THE
4 EXTENT NOT OTHERWISE EXEMPT, SHALL CONSTITUTE A PUBLIC
5 RECORD SUBJECT TO PUBLIC INSPECTION UNDER THE RIGHT-TO-
6 KNOW LAW, ONCE THE BOARD IS NO LONGER REQUIRED BY ITS
7 AGREEMENT TO MAINTAIN CONFIDENTIALITY;
8 (II) CAUSE SUBSTANTIAL COMPETITIVE HARM TO THE
9 PERSON FROM WHOM SENSITIVE INVESTMENT OR FINANCIAL
10 INFORMATION RELATING TO THE INVESTMENT WAS RECEIVED,
11 SUBJECT, HOWEVER, TO THE CONDITION THAT SUCH INFORMATION,
12 TO THE EXTENT NOT OTHERWISE EXEMPT, SHALL CONSTITUTE A
13 PUBLIC RECORD SUBJECT TO PUBLIC INSPECTION UNDER THE
14 RIGHT-TO-KNOW LAW, ONCE ITS RELEASE NO LONGER CAUSES
15 SUBSTANTIAL COMPETITIVE HARM TO THE PERSON FROM WHOM THE
16 INFORMATION WAS RECEIVED, WHICH IN THE CASE OF
17 INFORMATION REGARDING AN INVESTMENT, SHALL BE NO LATER
18 THAN THE LIQUIDATION OF THE ENTITY IN WHICH THE
19 INVESTMENT WAS MADE; OR
20 (III) HAVE A SUBSTANTIAL DETRIMENTAL IMPACT ON THE
21 VALUE OF AN INVESTMENT TO BE ACQUIRED, HELD OR DISPOSED
22 OF BY THE FUND, OR WOULD CAUSE A BREACH OF THE STANDARD
23 OF CARE OR FIDUCIARY DUTY SET FORTH IN THIS PART,
24 SUBJECT, HOWEVER, TO THE CONDITION THAT SENSITIVE
25 INVESTMENT OR FINANCIAL INFORMATION RELATING TO THE
26 INVESTMENT, TO THE EXTENT NOT OTHERWISE EXEMPT, SHALL
27 CONSTITUTE A PUBLIC RECORD SUBJECT TO PUBLIC INSPECTION
28 UNDER THE RIGHT-TO-KNOW LAW, ONCE ITS RELEASE NO LONGER
29 HAS A SUBSTANTIAL DETRIMENTAL IMPACT ON THE VALUE OF AN
30 INVESTMENT OF THE FUND AND ITS RELEASE WOULD NOT CAUSE A
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1 BREACH OF THE STANDARD OF CARE OR FIDUCIARY DUTY SET
2 FORTH IN THIS PART, WHICH, IN THE CASE OF INFORMATION
3 REGARDING AN INVESTMENT, SHALL BE NO LATER THAN THE
4 LIQUIDATION OF THE ENTITY IN WHICH THE INVESTMENT WAS
5 MADE.
6 (3) Notwithstanding the provisions of this subsection,
7 the following information regarding an alternative investment
8 shall be subject to public inspection UNDER THE RIGHT-TO-KNOW <--
9 LAW:
10 (i) The name, address and vintage year of the
11 alternative investment vehicle.
12 (ii) The identity of the manager of the alternative
13 investment vehicle.
14 (iii) The dollar amount of the commitment made by
15 the system to the alternative investment vehicle.
16 (iv) The dollar amount of cash contributions made by
17 the system to the alternative investment vehicle since
18 inception.
19 (v) The dollar amount of cash distributions received
20 by the system from the alternative investment vehicle
21 since inception.
22 (vi) The net internal rate of return of the
23 alternative investment vehicle since inception, provided
24 that the system shall not be required to disclose the net
25 internal rate of return under circumstances in which,
26 because of the limited number of portfolio assets
27 remaining in the alternative investment vehicle, the
28 disclosure could reveal the values of specifically
29 identifiable remaining portfolio assets to the detriment
30 of the alternative investment.
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1 (vii) The aggregate value of the remaining portfolio
2 assets attributable to the system's investment in the
3 alternative investment vehicle, provided that the system
4 shall not be required to disclose the value under
5 circumstances in which, because of the limited number of
6 portfolio assets remaining in the alternative investment
7 vehicle, the disclosure could reveal the values of
8 specifically identifiable remaining portfolio assets to
9 the detriment of the alternative investment.
10 (viii) The dollar amount of total management fees
11 and costs paid to the alternative investment vehicle by
12 the system on an annual fiscal year-end basis.
13 (4) This subsection shall apply to all records, material <--
14 or data described in it, without regard to whether the
15 record, material or data were created, generated or stored
16 before the effective date of this paragraph, without regard
17 to whether the record, material or data were previously
18 released or made public and without regard to whether a
19 request for the record, material or data was made or is
20 pending final response under the Right-to-Know Law.
21 (5) Nothing in this subsection shall be construed or
22 deemed:
23 (i) To imply that the release or making public of a
24 record, material or data described in it as not being a
25 public record is a violation of the board's fiduciary
26 duties.
27 (ii) To limit the authority of the Auditor General
28 to obtain copies of any records, materials or data
29 described in this subsection in connection with an audit
30 that the Auditor General is otherwise authorized by law
20050S0592B1656 - 5 -
1 to conduct or to expand the authority of the Auditor
2 General to conduct an audit.
3 * * *
4 Section 3. This act shall take effect immediately. <--
5 SECTION 3. NOTHING IN THIS ACT SHALL BE CONSTRUED OR DEEMED <--
6 TO IMPLY THAT:
7 (1) BUT FOR THE EXCLUSIONS PROVIDED IN 24 PA.C.S. §
8 8502(E)(2), ANY OF THE TYPES OF RECORDS, MATERIALS OR DATA
9 DESCRIBED IN THAT PARAGRAPH ARE REQUIRED TO BE OPEN TO
10 INSPECTION BY THE PUBLIC OR CONSTITUTE A PUBLIC RECORD UNDER
11 THE ACT OF JUNE 21, 1957 (P.L.390, NO.212), REFERRED TO AS
12 THE RIGHT-TO-KNOW LAW; OR
13 (2) ANY RECORD NOT EXCLUDED IN 24 PA.C.S § 8502(E)(2) IS
14 A PUBLIC RECORD UNDER THE RIGHT-TO-KNOW LAW.
15 SECTION 4. NOTHING IN THIS ACT SHALL BE CONSTRUED OR DEEMED
16 TO AFFECT THE AUTHORITY OF THE AUDITOR GENERAL TO OBTAIN COPIES
17 OF ANY RECORD, MATERIAL OR DATA DESCRIBED IN 24 PA.C.S. §
18 8502(E)(2) IN CONNECTION WITH A LAWFULLY CONDUCTED AUDIT.
19 SECTION 5. NOTHING IN THIS ACT SHALL BE CONSTRUED OR DEEMED
20 TO IMPLY THAT THE RELEASE OR MAKING PUBLIC OF ANY RECORD,
21 MATERIAL OR DATA DESCRIBED IN 24 PA.C.S. § 8502(E)(2) AS NOT
22 BEING A PUBLIC RECORD IS A VIOLATION OF THE PUBLIC SCHOOL
23 EMPLOYEES' RETIREMENT BOARD'S FIDUCIARY DUTIES.
24 SECTION 6. THIS ACT SHALL APPLY TO ANY RECORD, MATERIAL OR
25 DATA DESCRIBED IN 24 PA.C.S. § 8502(E)(2), WITHOUT REGARD TO
26 WHETHER THE RECORD, MATERIAL OR DATA WAS CREATED, GENERATED OR
27 STORED BEFORE THE EFFECTIVE DATE OF THIS SECTION, WITHOUT REGARD
28 TO WHETHER THE RECORD, MATERIAL OR DATA WAS PREVIOUSLY RELEASED
29 OR MADE PUBLIC AND WITHOUT REGARD TO WHETHER A REQUEST FOR THE
30 RECORD, MATERIAL OR DATA WAS MADE OR IS PENDING FINAL RESPONSE
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1 UNDER THE ACT OF JUNE 21, 1957 (P.L.390, NO.212), REFERRED TO AS
2 THE RIGHT-TO-KNOW LAW.
3 SECTION 7. IN THE EVENT THAT THE PUBLIC SCHOOL EMPLOYEES'
4 RETIREMENT SYSTEM HAS COLLECTED A FEE OR OTHER MONETARY CHARGE
5 FOR THE PREPARATION, DUPLICATION, PRODUCTION, REDACTION OR OTHER
6 EXPENSES ASSOCIATED WITH THE INSPECTION OR PROVISION OF A
7 RECORD, MATERIAL OR DATA THAT AS A RESULT OF THE AMENDMENT OF 24
8 PA.C.S. § 8502(E) WILL NOT BE MADE AVAILABLE FOR INSPECTION BY
9 AND WILL NOT BE PROVIDED TO THE REQUESTER WHO MADE THE PAYMENT,
10 THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM SHALL RETURN THE
11 FEE OR MONEY TO THE REQUESTER.
12 SECTION 8. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
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