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 20050S0592B1656 - 2 -
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 20050S0592B1656 - 3 -
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. 20050S0592B1656 - 4 -
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 20050S0592B1656 - 6 -
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. A31L24JLW/20050S0592B1656 - 7 -