June 22, 2010, Introduced by Rep. Bettie Scott and referred to the Committee on Banking and Financial Services.
A bill to amend 1965 PA 314, entitled
"Public employee retirement system investment act,"
by amending sections 20d and 20g (MCL 38.1140d and 38.1140g),
section 20d as amended by 2008 PA 425 and section 20g as added by
1982 PA 55.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 20d. (1) An investment fiduciary of a system having
assets of less than $250,000,000.00 may invest not more than 5% of
the system's assets in investments not otherwise qualified under
this act, except as qualified in section 19a, whether the
investments are similar or dissimilar to those specified in this
act.
(2) An investment fiduciary of a system having assets of
$250,000,000.00 or more may invest not more than 10% of the
system's assets in investments described in subsection (1).
(3) An investment fiduciary of a system having assets of
$1,000,000,000.00 or more or who is the state treasurer may invest
not
more than 15% 20% of the system's assets in investments
described in subsection (1).
(4)
An investment fiduciary of a system who is the state
treasurer
may invest not more than 20% of the system's assets in
investments
described in subsection (1).
(4) (5)
If an investment described in
subsection (1) is
subsequently determined to be permitted under another section of
this act, then the investment shall no longer be included under
this section.
(5) (6)
This section shall not be used to
exceed a percentage
of total assets limitation for an investment provided in any other
section of this act.
(6) If an investment fiduciary of a pension system that is
associated with a municipality with a population greater than
700,000 investments in municipal bonds up to the limitations
allowed under this section, all of the following apply:
(a) Except as provided in subdivision (b), the investment
fiduciary shall apply those standards of care that a prudent
investor would apply in selecting and administering the investment.
This standard shall be applied consistently and reviewed
periodically.
(b) The municipal bonds selected for investment may be
selected at a rate discounted from the usual market rate for
equivalent bonds if the municipality agrees to use the difference
between the discount rate and municipal bonds market rate for
police, fire, and other core city services.
Sec.
20g. Notwithstanding Except
for municipal bonds that are
issued by a city with a population over 700,000 under section 4s of
the home rule city act, 1909 PA 279, MCL 117.4s, notwithstanding
any other provision of this act, investment in securities wholly or
partially exempt from income or other taxes levied by the United
States shall be made only at taxable-equivalent yields or returns
available in the marketplace on otherwise comparable securities at
the time the investment decision is made.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 6274(request no.
06865'10) of the 95th Legislature is enacted into law.