HF 357

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to state government; regulating investments 
  1.3             made by the state board of investment; authorizing 
  1.4             certain resource investments; amending Minnesota 
  1.5             Statutes 2002, section 11A.24, subdivisions 3, 5, by 
  1.6             adding a subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 11A.24, 
  1.9   subdivision 3, is amended to read: 
  1.10     Subd. 3.  [CORPORATE OBLIGATIONS.] (a) In addition to the 
  1.11  investments authorized in subdivision 6a, the state board may 
  1.12  invest funds in bonds, notes, debentures, transportation 
  1.13  equipment obligations, or any other longer term evidences of 
  1.14  indebtedness issued or guaranteed by a corporation organized 
  1.15  under the laws of the United States or any state thereof, or the 
  1.16  Dominion of Canada or any province thereof provided that: 
  1.17     (1) the principal and interest of obligations of 
  1.18  corporations incorporated or organized under the laws of the 
  1.19  Dominion of Canada or any province thereof shall be payable in 
  1.20  United States dollars; and 
  1.21     (2) obligations shall be rated among the top four quality 
  1.22  categories by a nationally recognized rating agency. 
  1.23     (b) The state board may invest in unrated corporate 
  1.24  obligations or in corporate obligations that are not rated among 
  1.25  the top four quality categories as provided in paragraph (a), 
  1.26  clause (2), provided that: 
  2.1      (1) the aggregate value of these obligations may not exceed 
  2.2   five percent of the market or book value, whichever is less, of 
  2.3   the fund for which the state board is investing; 
  2.4      (2) the state board's participation is limited to 50 
  2.5   percent of a single offering subject to this paragraph; and 
  2.6      (3) the state board's participation is limited to 25 
  2.7   percent of an issuer's obligations subject to this paragraph. 
  2.8      Sec. 2.  Minnesota Statutes 2002, section 11A.24, 
  2.9   subdivision 5, is amended to read: 
  2.10     Subd. 5.  [CORPORATE STOCKS.] In addition to the 
  2.11  investments authorized in subdivision 6a, the state board may 
  2.12  invest funds in stocks or convertible issues of any corporation 
  2.13  organized under the laws of the United States or the states 
  2.14  thereof, the Dominion of Canada or its provinces, or any 
  2.15  corporation listed on an exchange regulated by an agency of the 
  2.16  United States or Canadian national government, if they conform 
  2.17  to the following provisions: 
  2.18     (a) The aggregate value of corporate stock investments, as 
  2.19  adjusted for realized profits and losses, shall not exceed 85 
  2.20  percent of the market or book value, whichever is less, of a 
  2.21  fund, less the aggregate value of investments according to 
  2.22  subdivision 6; 
  2.23     (b) Investments shall not exceed five percent of the total 
  2.24  outstanding shares of any one corporation, except that the state 
  2.25  board may hold up to 20 percent of the shares of a real estate 
  2.26  investment trust and up to 20 percent of the shares of a 
  2.27  closed-end mutual fund. 
  2.28     Sec. 3.  Minnesota Statutes 2002, section 11A.24, is 
  2.29  amended by adding a subdivision to read: 
  2.30     Subd. 6a.  [RESOURCE INVESTMENTS.] In addition to the 
  2.31  investments in subdivisions 1 to 6, the state board of 
  2.32  investment may invest in corporate obligations and corporate 
  2.33  stock of:  (1) Minnesota-based companies that harvest or mine 
  2.34  the state's natural resources, including but not limited to its 
  2.35  forest and mineral resources; and (2) Minnesota-based companies 
  2.36  that are engaged in renewable energy production, including but 
  3.1   not limited to wind, solar, and biomass.  The investment 
  3.2   limitations in subdivisions 3 and 5 do not apply to investments 
  3.3   made pursuant to this subdivision.  Investments made under this 
  3.4   subdivision must equal at least two percent of the total funds 
  3.5   invested by the board from all sources.  
  3.6      The chief executive officer of each of the following unions 
  3.7   or the chief executive officer's designated representative shall 
  3.8   make specific investment recommendations to the board to assist 
  3.9   the board in satisfying the requirements of this subdivision: 
  3.10     (1) Minnesota state employees union AFSCME, council 6, 
  3.11  AFL-CIO; 
  3.12     (2) Minnesota association of professional employees; and 
  3.13     (3) Education Minnesota. 
  3.14     These officers shall also select two additional chief 
  3.15  executive officers to advise the board under this subdivision.  
  3.16  The selections must come from other labor unions whose members' 
  3.17  pension assets are invested by the board.