April 14, 2016, Introduced by Senators BOOHER, HORN and ZORN and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1965 PA 314, entitled
"Public employee retirement system investment act,"
by amending section 12d (MCL 38.1132d), as amended by 2014 PA 545,
and by adding section 19c.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 12d. (1) "National rating services" means Moody's
investors
service, inc.; Investors
Service, Inc.; Standard & Poor's
ratings
group; Ratings Group; Fitch investors service inc.;
Investors
Service Inc.; Duff & Phelps credit
rating corp.; Credit
Rating Corp.; or any other nationally recognized statistical rating
organization as determined by the state treasurer.
(2) "Net earnings available for fixed charges" means net
income after deducting operating and maintenance expenses, taxes
other than federal and state income taxes, depreciation, and
depletion, but excluding extraordinary expenses appearing in the
regular financial statements of the system.
(3) "Obligations" means bonds, notes, collateral trust
certificates, convertible bonds, debentures, equipment trust
certificates, conditional sales agreements, guaranteed mortgage
certificates, pass-through certificates, participation
certificates, mortgages, trust deeds, general obligation bonds,
revenue bonds, or other similar interest bearing instruments of
debt. Obligations may be secured or unsecured and may be publicly
offered or privately placed.
(4) "Party in interest" means, as it relates to a system, any
of the following:
(a) An investment fiduciary, counsel, or employee of the
system.
(b) A person providing services to the system.
(c) The political subdivision sponsoring the system.
(d) An organization, any of whose members are covered by the
system.
(e) A spouse, ancestor, lineal descendant, or spouse of a
lineal descendant of an individual described in subdivision (a) or
(b).
(f) An entity controlled by an individual or organization
described in subdivisions (a) to (e).
(5) "Plan for adjustment" means a plan for the adjustment of
debts entered and approved by a federal bankruptcy court for a city
that has established a large sponsored system.
(6) "Portfolio company" means an entity in which the
investment fiduciary has invested or has considered investing
system assets.
(7) "Private equity" means an asset class consisting of equity
or debt securities in entities that are not publicly traded, that
may include, but are not limited to, investments in leveraged
buyouts, venture capital, growth capital, distressed or special
situations, mezzanine capital, and secondary investments in equity
or debt interests. Private equity does not include qualified
intrastate securities as that term is defined in section 19c.
Sec. 19c. (1) If the investment fiduciary of a system is the
state treasurer, the investment fiduciary may invest not more than
30% of a system's assets in qualified intrastate securities.
However, if the investment fiduciary invests in qualified
intrastate securities under this section in a calendar year, at
least 50% of those investments must be made through a Michigan
investment market.
(2) As used in this section:
(a) "Intrastate offering exemption" means that term as defined
in section 451 of the uniform securities act (2002), 2008 PA 551,
MCL 451.2451.
(b) "Michigan investment market" means that term as defined in
section 451 of the uniform securities act (2002), 2008 PA 551, MCL
451.2451.
(c) "Qualified intrastate securities" mean securities that are
issued by a business that is doing business in this state and that
are sold or offered for sale in this state under an intrastate
offering exemption.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.