July 12, 2017, Introduced by Rep. Albert and referred to the Committee on Financial Liability Reform.
A bill to amend 1965 PA 314, entitled
"Public employee retirement system investment act,"
by amending section 19 (MCL 38.1139), as amended by 2012 PA 347.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 19. (1) An investment fiduciary may invest up to 10% of a
system's assets in publicly or privately issued real estate
investment trusts or in real or personal property otherwise
qualified
pursuant to under section 15, 16, or 20c.
(2) In addition to investments authorized under subsection
(1), an investment fiduciary of a system having assets of more than
$100,000,000.00 may do any of the following:
(a) Invest in, buy, sell, hold, improve, lease, or acquire by
foreclosure or an agreement in lieu of foreclosure, real or
personal property or an interest in real or personal property.
(b) Develop, maintain, operate, or lease the real or personal
property referred to in subdivision (a).
(c)
Form Subject to subsection
(5), form or invest in 1 or
more limited partnerships, corporations, limited liability
companies, trusts, or other organizational entities for which
liability of an investor cannot exceed the amount of the investment
under the laws of the United States or of any state, district, or
territory of the United States or foreign country. The limited
partnership, corporation, limited liability company, trust, or
other organizational entity may invest in, buy, sell, hold,
develop, improve, lease, or operate real or personal property, or
originate a mortgage or invest in an annuity separate account that
invests in real or personal property to hold title to, improve,
lease, manage, develop, maintain, or operate real or personal
property whether currently held or acquired after December 27,
1996.
An entity formed under this subdivision has the right to may
exercise all powers granted to the entity by the laws of the
jurisdiction of formation, including, but not limited to, the power
to
borrow money in order to provide additional capital to benefit
and increase the overall return on the investment held by the
entity.
(d)
Invest in investments otherwise qualified pursuant to
under subsection (1).
(3) Except as otherwise provided in this section, the
aggregate
investments made under subsection (2) shall must not
exceed 10% of the assets of the system. The purchase price of an
investment
made under this section shall must
not exceed the
appraised value of the real or personal property.
(4) If the investment fiduciary of a system is the state
treasurer, investments described in subsection (1) or (2) may
exceed 10% of the assets of the system.
(5) If the investment fiduciary of a system is the state
treasurer, both of the following apply:
(a) Except as otherwise provided in subdivision (b), the
investment fiduciary shall not form or invest in a limited
partnership unless the partnership agreement or an ancillary
document to the partnership agreement, such as a side letter,
provides that if the general partner of the limited partnership is
removed for fraud, gross negligence, willful misconduct, or any
material breach of the partnership agreement, the carried interest
attributed to the system's investment in the limited partnership
must be forfeited to the system.
(b) If a partnership agreement or an ancillary document to the
partnership agreement does not include a forfeiture provision
described in subdivision (a), the investment fiduciary may form or
invest in the partnership if the investment fiduciary determines
that the risk of the general partner being removed for a reason
described in subdivision (a) is sufficiently mitigated. For
purposes of this subdivision only, the investment fiduciary does
not include the state treasurer's investment personnel.
(6) (5)
An investment qualified under this
section in which
the underlying asset is an interest in real or personal property
constitutes
is an investment under this section for the purpose of
meeting
the asset limitations contained included
in this act. This
subsection applies even though the investment may be qualified
elsewhere in this act. Notwithstanding this subsection, an
investment fiduciary may designate a real estate investment trust
which
that satisfies the requirements of section 14(2) as an
investment qualified under this section or as an investment in
stock under section 14.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.