SB-1032, As Passed House, March 31, 2004                                    

SUBSTITUTE FOR

SENATE BILL NO. 1032

                                                                             A bill to amend 1994 PA 55, entitled                                              

"Confidential research information act,"                                    

by amending the title and sections 1 and 2 (MCL 390.1551 and                

390.1552) and by adding section 4a.                                         

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1                                 TITLE                                         

2                                                                                An act to protect from public disclosure certain information                       

3   obtained in research and related activities of public                       

4   universities and colleges; to protect from public disclosure                

5   certain investment information received by a public university or           

6   college from an investment fiduciary or portfolio company; and to           

7   prescribe certain duties of public universities and colleges.               

8       Sec. 1.  This act shall be known and may be cited as the                    

9   "confidential research and investment information act".                     

10      Sec. 2.  As used in this act:                                               

1       (a) "Commercial information" means information regarding the                

2   purchase and sale of goods and services, including, but not                 

3   limited to, information regarding marketing strategy, production            

4   data, assessments of goods and services, mineral exploration                

5   records, and compilations of data regarding commercial activity.            

6       (b) "Financial information" means information regarding                     

7   finances, including, but not limited to, assets, income,                    

8   liabilities, net worth, bank balances, financial history or                 

9   activities, or creditworthiness.                                            

10      (c) "Intellectual property" means all original data,                        

11  findings, or other products of the mind or intellect commonly               

12  associated with claims, interests, and rights that are protected            

13  under trade secret, patent, trademark, copyright, or unfair                 

14  competition law.                                                            

15  (d) "Investment" means the utilization of money or other                    

16  assets in the expectation of future returns in the form of income           

17  or capital gain.                                                            

18      (e) "Investment fiduciary" means a person who exercises any                 

19  discretionary authority or control over an investment of a public           

20  university or college or renders investment advice for a public             

21  university or college for a fee or other direct or indirect                 

22  compensation.                                                               

23      (f) "Investment information" means information that has not                 

24  been publicly disseminated or that is unavailable from other                

25  sources, the release of which might cause a portfolio company or            

26  an investment fiduciary significant competitive harm.  Investment           

27  information includes, but is not limited to, financial                      

1   performance data and projections, financial statements, list of             

2   coinvestors and their level of investment, product and market               

3   data, rent rolls, and leases.                                               

4       (g) "Portfolio company" means an entity in which an                         

5   investment fiduciary has made or considered an investment on                

6   behalf of a public university or college.

7   (h)  (d)  "Public university or college" means a university,                

8   college, or community college  described in established under

9   section  4,  5, 6, or 7 of article VIII of the state constitution           

10  of 1963.  or any institution of higher education established by             

11  the state after the effective date of this act.

12  (i) "Record" means all or part of a writing, as that term is                

13  defined in section 2 of the freedom of information act, 1976 PA             

14  442, MCL 15.232.

15  (j)  (e)  "Trade secret" means information consisting of a                  

16  valuable unpatented formula, pattern, device, or process, or                

17  other information that is used in a business and gives the                  

18  possessor of the information a competitive advantage over those             

19  who do not know or use the information, and for which sufficient            

20  measures have been taken to guard the secrecy of the information            

21  and preserve its confidentiality, and that does not encompass               

22  information that is readily ascertainable by competitors or the             

23  general public without undue difficulty or hardship.                        

24  Sec. 4a.  (1) Subject to subsection (2), a record received,                 

25  prepared, used, or retained by an investment fiduciary in                   

26  connection with an investment or potential investment of a public           

27  university or college that relates to investment information                

1   pertaining to a portfolio company in which the investment                   

2   fiduciary has invested or has considered an investment that is              

3   considered by the portfolio company and acknowledged by the                 

4   investment fiduciary as confidential, or that relates to                    

5   investment information whether prepared by or for the investment            

6   fiduciary regarding loans and assets directly owned by the                  

7   investment fiduciary and acknowledged by the investment fiduciary           

8   as confidential, is exempt from the disclosure requirements of              

9   the freedom of information act, 1976 PA 442, MCL 15.231 to                  

10  15.246, if at least annually the public university or college               

11  provides to its governing board, and makes available to the                 

12  public, a report of its investments that includes all of the                

13  following:                                                                  

14      (a) The name of each portfolio company in which the public                  

15  university or college invested during the reporting period.                 

16      (b) The aggregate amount of money invested by the public                    

17  university or college in portfolio companies during the reporting           

18  period.                                                                     

19      (c) The rate of return realized during the reporting period                 

20  on the investments of the public university or college in                   

21  portfolio companies.                                                        

22      (d) The source of any public funds invested by the public                   

23  university or college in portfolio companies during the reporting           

24  period.                                                                     

25      (2) If a record described in subsection (1) is an agreement                 

26  or instrument to which an investment fiduciary is a party, only             

27  those parts of the record that contain investment information are           

1   exempt from the disclosure requirements of the freedom of                   

2   information act, 1976 PA 442, MCL 15.231 to 15.246.