GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2011
SESSION LAW 2011-211
HOUSE BILL 318
AN ACT to modify the state treasurer INVESTMENT statute.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 147-69.2(b) reads as rewritten:
"(b) It shall be the duty
of the State Treasurer to invest the cash of the funds enumerated in subsection
(a) of this section in excess of the amount required to meet the current needs
and demands on such funds, selecting from among the following:funds.
The State Treasurer may invest the funds as provided in this subsection. If an
investment was authorized by this subsection at the time the investment was
made or contractually committed to be made, then none of the percentage or
other limitation on investments set forth in this subsection shall be construed
to require the State Treasurer to subsequently dispose of the investment or
fail to honor any contractual commitments as a result of changes in market
values, ratings, or other investment qualifications.
(1) Any of the
investments Investments authorized by G.S. 147-69.1(c)(1)-(7).
(2) General obligations of other states of the United States.
(3) General obligations of cities, counties and special districts in North Carolina.
(4) Obligations of any company, other organization or legal entity incorporated or otherwise created or located within or outside the United States, including obligations that are convertible into equity securities, if the obligations bear one of the four highest ratings of at least one nationally recognized rating service when acquired.
(5) Repealed by Session Laws 2001-444, s. 2, effective October 1, 2001.
(6) Asset-backed securities (whether considered debt or equity) provided they bear ratings by nationally recognized rating services as provided in G.S. 147-69.2(b)(4).
(6a) In addition to the limitations and requirements with respect to the investments of the Retirement Systems set forth in this subsection, the State Treasurer shall select investments of the assets of the Retirement Systems such that investments made pursuant to subdivisions (b)(1) through (6) of this section shall at all times equal or exceed twenty percent (20%) of the market value of all invested assets of the Retirement Systems.
(6b) Investments pursuant to subdivisions (b)(1) through (6) of this section may be made directly by the State Treasurer or through contractual arrangements in which the investment manager has full and complete discretion and authority to invest assets specified in such arrangements in investments authorized by subdivisions (b)(1) through (6) of this section, provided for each indirect investment, the investment manager has assets under management of at least one hundred million dollars ($100,000,000).
(6c) With respect to Retirement
Systems' assets referred to in subdivision (b)(8), they may be invested in
obligations and other debt securities, including debt securities convertible
into other securities, that do not meet the requirements of any of subdivisions
(b)(1) through (6) of this section nor subdivision (b)(7) of this section,
provided such investments are made through investment companies registered
under the Investment Company Act of 1940, individual, commoncommon,
or collective trust funds of banks and trust companies, group trusts and
limited partnerships, limited liability companies or other limited liability
investment vehicles that invest primarily in investments authorized by this
subdivision and through contractual arrangements in which the investment
manager has full and complete discretion and authority to invest assets
specified in such arrangements in investments authorized by this subdivision,
provided the investment manager for each investment pursuant to this subdivision
has assets under management of at least one hundred million dollars
($100,000,000) and provided that the investments authorized under this
subdivision shall not exceed five percent (5%) of the market value of all
invested assets of the Retirement Systems.
(7) With respect to Retirement Systems' assets referred to in subdivision (8) of this subsection, (i) insurance contracts that provide for participation in individual or pooled separate accounts of insurance companies, (ii) group trusts, (iii) individual, common, or collective trust funds of banks and trust companies, (iv) real estate investment trusts, (v) investment companies registered under the Investment Company Act of 1940, and (vi) limited partnerships, limited liability companies, or other limited liability investment vehicles; provided the investment manager has assets under management of at least one hundred million dollars ($100,000,000); provided such investment assets are managed primarily for the purpose of investing in or owning real estate or related debt financing located within or outside the United States; and provided that the investments authorized by this subdivision shall not exceed ten percent (10%) of the market value of all invested assets of the Retirement Systems.
(8) With respect to assets of the Teachers' and State Employees' Retirement System, the Consolidated Judicial Retirement System, the Firemen's and Rescue Workers' Pension Fund, the Local Governmental Employees' Retirement System, the Legislative Retirement System, the North Carolina National Guard Pension Fund (hereinafter referred to collectively as the Retirement Systems), and assets invested pursuant to subdivision (b2) of this section, they may be invested in equity securities traded on a public securities exchange or market organized and regulated pursuant to the laws of the jurisdiction of such exchange or market and issued by any company incorporated or otherwise created or located within or outside the United States; provided the investments meet the conditions of this subdivision. The
The investments authorized
for the Retirement Systems under this subdivision cannot exceed sixty-five
percent (65%) of the market value of all invested assets of the Retirement
Systems.
The assets authorized under this subdivision may be invested directly by the State Treasurer in any equity securities authorized by this subdivision for the primary purpose of approximating the movements of a nationally recognized and published market benchmark index. No more than one and one-half percent (1.5%) of the market value of the Retirement Systems' assets that may be invested directly under this subdivision can be invested in the stock of a single corporation, and the total number of shares in that single corporation cannot exceed eight percent (8%) of the issued and outstanding stock of that corporation.
So long as each investment manager
has assets under management of at least one hundred million dollars
($100,000,000), the assets authorized under this subdivision can may
also be invested through any of the following:
(i)a. investmentInvestment
companies registered under the Investment Company Act of 1940;(ii)
individual, common, or collective trust funds of banks and trust companies,(iii)
companies; and group trusts, and trusts that invest primarily
in investments authorized by this subdivision.
b. Limited partnerships, limited liability companies, or other limited liability investment vehicles that are not publicly traded and invest primarily in investments authorized by this subdivision. Investments under this sub-subdivision shall not exceed six and one-half percent (6.5%) of the market value of all invested assets of the Retirement Systems.
(iv)c. contractualContractual
arrangements in which investment managers have full and complete discretion
and authority to invest assets specified in such contractual arrangements.arrangements
in investments authorized by this subdivision.
The assets authorized under this
subdivision can also be invested directly by the State Treasurer in any equity
securities represented in the S&P 500 Index or that have been publicly
announced to be included in the S&P 500 Index. No more than one and one-half
percent (11/2%) of the market value of the Retirement Systems' assets that may
be invested directly under this subdivision can be invested in the stock of a
single corporation, and the total number of shares in that single corporation
cannot exceed eight percent (8%) of the issued and outstanding stock of that
corporation.
(9) With respect to
Retirement Systems' assets, as defined in subdivision (b)(8) of this
subsection, they may be invested in interests in limited partnerships, limited
liability companies, or other limited liability investment vehicles that are
not publicly traded if the primary purpose of the limited partnership, limited
liability company, or other limited liability investment vehicle is (i)
to invest in public or private equity, or corporate buyout transactions,
within or outside the United States.States or (ii) to engage in other
strategies not expressly authorized by any other subdivision of this
subsection. The amount invested under this subdivision shall not exceed five
percent (5%) seven and one-half percent (7.5%) of the market value
of all invested assets of the Retirement Systems.
(9a) With respect to Retirement Systems' assets, as defined in subdivision (b)(8) of this subsection, they may be invested in inflation-linked bonds, timberlands, commodities, and other assets that are acquired for the primary purpose of providing protection against risks associated with inflation, provided such investments are made through investment companies registered under the Investment Company Act of 1940, individual, common or collective trust funds of banks and trust companies, group trusts and limited partnerships, limited liability companies or other limited liability investment vehicles that invest primarily in investments authorized by this subdivision and through contractual arrangements in which the investment manager has full and complete discretion and authority to invest assets specified in such arrangements in investments authorized by this subdivision, provided the investment manager for each investment pursuant to this subdivision has assets under management of at least one hundred million dollars ($100,000,000) and provided that the investments authorized under this subdivision shall not exceed five percent (5%) of the market value of all invested assets of the Retirement Systems. Notwithstanding anything in this subsection to the contrary, the investments authorized by this subdivision shall not be included in any subdivision other than this subdivision for purposes of the percentage investment limitations therein or otherwise.
(10) Recodified as part of subdivision (b)(9) by Session Laws 2000-160, s. 2.
(11) With respect to assets of the Escheat Fund, obligations of the North Carolina Global TransPark Authority authorized by G.S. 63A-4(a)(22), not to exceed twenty-five million dollars ($25,000,000), that have a final maturity not later than October 1, 2011. The obligations shall bear interest at the rate set by the State Treasurer. No commitment to purchase obligations may be made pursuant to this subdivision after September 1, 1993, and no obligations may be purchased after September 1, 1994. In the event of a loss to the Escheat Fund by reason of an investment made pursuant to this subdivision, it is the intention of the General Assembly to hold the Escheat Fund harmless from the loss by appropriating to the Escheat Fund funds equivalent to the loss.
If any part of the property owned by the North Carolina Global TransPark Authority now or in the future is divested, proceeds of the divestment shall be used to fulfill any unmet obligations on an investment made pursuant to this subdivision.
(12) With respect to assets of the Escheat Fund, in addition to those investments authorized by subdivisions (1) through (6) of this subsection, up to twenty percent (20%) of such assets may be invested in the investments authorized under subdivisions (7) through (9) of this subsection, notwithstanding the percentage limitations imposed on the Retirement Systems' investments under those subdivisions."
SECTION 2. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 15th day of June, 2011.
s/ Walter H. Dalton
President of the Senate
s/ Thom Tillis
Speaker of the House of Representatives
s/ Beverly E. Perdue
Governor
Approved 12:06 p.m. this 23rd day of June, 2011