THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BROWNE, PILEGGI, SCARNATI AND CORMAN, JUNE 28, 2010

REFERRED TO FINANCE, JUNE 28, 2010  

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," in the Treasury Department, further providing

for investment.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 301.1(i) of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code, amended July 4,

2008 (P.L.629, No.53), is amended to read:

Section 301.1.  Investment of Moneys.--* * *

(i)  (1)  Notwithstanding subsections (a) through (h), the

Treasury Department shall have the exclusive management and full

power to invest and reinvest the moneys of any fund as shall be

accumulated beyond the ordinary needs of the various funds and

which are not authorized by law to be invested by any board,

commission or State officer, subject, however, to the prudent

investor standard.

(1.1)  When investing, reinvesting, purchasing, acquiring,

exchanging, selling or managing public funds, the Treasury

Department shall act as a fiduciary with care, skill, prudence

and diligence under the circumstances then prevailing,

specifically including, but not limited to, the general economic

conditions and the anticipated needs of the funds, that a

prudent person acting in a like capacity and with familiarity

with those matters would use in the conduct of funds of a like

character and with like objectives. The following shall apply:

(i)  The primary objective of the Treasury Department shall

be to safeguard the principal of the funds. The secondary

objective shall be to meet the liquidity needs of the funds. The

third objective shall be to achieve a return on the funds.

(ii)  The prudent investor standard embraces the duty of

loyalty whereby actions must be in accordance with the sole

purpose doctrine to accomplish the prudent investor objectives

and not in pursuit of other objectives except as otherwise

provided by statute.

(iii)  The prudent investor standard embraces the duty to

monitor the ongoing circumstances of investments for ongoing

appropriateness of investments to meet the prudent investor

objectives.

(iv)  The Treasury Department shall have the power and

authority to invest in securities subject to the then prevailing

standards that institutional investors employ in the context of

investment decisions made with consideration of fiduciary

standards.

(v)  The Treasury Department shall maintain and publish a

list of prohibited investments within its investment policy.

(2)  The authority to invest or reinvest the moneys of any

fund pursuant to this subsection shall expire December 31,

[2010] 2014. The Treasury Department may maintain investments

pursuant to this subsection which are in existence on the

expiration date in this paragraph for not more than two years

following such expiration date.

Section 2.  This act shall take effect immediately.