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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 392-S.F.No. 2795 
                  An act relating to state government; regulating 
                  investments; modifying investment options for the 
                  medical education endowment fund and the tobacco use 
                  prevention and local public health endowment fund; 
                  amending Minnesota Statutes 1998, section 11A.24, 
                  subdivisions 5 and 6; Minnesota Statutes 1999 
                  Supplement, sections 62J.694, subdivisions 1 and 2; 
                  and 144.395, subdivisions 1 and 2; proposing coding 
                  for new law in Minnesota Statutes, chapter 136F. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 11A.24, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CORPORATE STOCKS.] The state board may invest 
        funds in stocks or convertible issues of any corporation 
        organized under the laws of the United States or the states 
        thereof, the Dominion of Canada or its provinces, or any 
        corporation listed on the New York Stock Exchange or the 
        American Stock an exchange regulated by an agency of the United 
        States or Canadian national government, if they conform to the 
        following provisions: 
           (a) The aggregate value of corporate stock investments, as 
        adjusted for realized profits and losses, shall not exceed 85 
        percent of the market or book value, whichever is less, of a 
        fund, less the aggregate value of investments according to 
        subdivision 6; 
           (b) Investments shall not exceed five percent of the total 
        outstanding shares of any one corporation, except that the state 
        board may hold up to 20 percent of the shares of a real estate 
        investment trust and up to 20 percent of the shares of a 
        closed-end mutual fund. 
           Sec. 2.  Minnesota Statutes 1998, section 11A.24, 
        subdivision 6, is amended to read: 
           Subd. 6.  [OTHER INVESTMENTS.] (a) In addition to the 
        investments authorized in subdivisions 1 to 5, and subject to 
        the provisions in paragraph (b), the state board may invest 
        funds in:  
           (1) venture capital investment businesses through 
        participation in limited partnerships, trusts, private 
        placements, limited liability corporations, limited liability 
        companies, limited liability partnerships, and corporations; 
           (2) real estate ownership interests or loans secured by 
        mortgages or deeds of trust or shares of real estate investment 
        trusts through investment in limited partnerships, bank 
        sponsored collective funds, trusts, mortgage participation 
        agreements, and insurance company commingled accounts, including 
        separate accounts; 
           (3) regional and mutual funds through bank sponsored 
        collective funds and open-end investment companies registered 
        under the Federal Investment Company Act of 1940, and closed-end 
        mutual funds listed on an exchange regulated by a governmental 
        agency; 
           (4) resource investments through limited partnerships, 
        trusts, private placements, limited liability corporations, 
        limited liability companies, limited liability partnerships, and 
        corporations; and 
           (5) international securities. 
           (b) The investments authorized in paragraph (a) must 
        conform to the following provisions:  
           (1) the aggregate value of all investments made according 
        to paragraph (a), clauses (1) to (4), may not exceed 35 percent 
        of the market value of the fund for which the state board is 
        investing; 
           (2) there must be at least four unrelated owners of the 
        investment other than the state board for investments made under 
        paragraph (a), clause (1), (2), (3), or (4); 
           (3) state board participation in an investment vehicle is 
        limited to 20 percent thereof for investments made under 
        paragraph (a), clause (1), (2), (3), or (4); and 
           (4) state board participation in a limited partnership does 
        not include a general partnership interest or other interest 
        involving general liability.  The state board may not engage in 
        any activity as a limited partner which creates general 
        liability.  
           Sec. 3.  Minnesota Statutes 1999 Supplement, section 
        62J.694, subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION.] The medical education endowment 
        fund is created in the state treasury.  The state board of 
        investment shall invest the fund under section 11A.24.  All 
        earnings of the fund must be credited to the fund.  The 
        principal of the fund must be maintained inviolate, except that 
        the principal may be used to make expenditures from the fund for 
        the purposes specified in this section when the market value of 
        the fund falls below 105 percent of the cumulative total of the 
        tobacco settlement payments received by the state and credited 
        to the tobacco settlement fund under section 16A.87, subdivision 
        2.  For purposes of this section, "principal" means an amount 
        equal to the cumulative total of the tobacco settlement payments 
        received by the state and credited to the tobacco settlement 
        fund under section 16A.87, subdivision 2. 
           Sec. 4.  Minnesota Statutes 1999 Supplement, section 
        62J.694, subdivision 2, is amended to read: 
           Subd. 2.  [EXPENDITURES.] (a) Earnings of the fund, Up to 
        five percent of the fair market value of the fund, are is 
        appropriated for medical education activities in the state of 
        Minnesota.  The appropriations are to be transferred quarterly 
        for the purposes identified in the following paragraphs.  Actual 
        appropriations are not to exceed actual earnings. 
           (b) For fiscal year 2000, 70 percent of the appropriation 
        in paragraph (a) is for transfer to the board of regents for the 
        instructional costs of health professional programs at the 
        academic health center and affiliated teaching institutions, and 
        30 percent of the appropriation is for transfer to the 
        commissioner of health to be distributed for medical education 
        under section 62J.692.  
           (c) For fiscal year 2001, 49 percent of the appropriation 
        in paragraph (a) is for transfer to the board of regents for the 
        instructional costs of health professional programs at the 
        academic health center and affiliated teaching institutions, and 
        51 percent is for transfer to the commissioner of health to be 
        distributed for medical education under section 62J.692. 
           (d) For fiscal year 2002, and each year thereafter, 42 
        percent of the appropriation in paragraph (a) may be 
        appropriated by another law for the instructional costs of 
        health professional programs at publicly funded academic health 
        centers and affiliated teaching institutions, and 58 percent is 
        for transfer to the commissioner of health to be distributed for 
        medical education under section 62J.692. 
           (e) A maximum of $150,000 of each annual appropriation to 
        the commissioner of health in paragraph (d) may be used by the 
        commissioner for administrative expenses associated with 
        implementing section 62J.692. 
           Sec. 5.  [136F.77] [EQUITY INVESTMENTS.] 
           The board may acquire an interest in a product or a private 
        business entity for the purpose of developing and providing 
        educational materials and related programs or services to 
        further the mission of the Minnesota state colleges and 
        universities and foster the economic growth of the state.  The 
        board may enter into joint venture agreements with private 
        corporations to develop educational materials and related 
        programs or services.  Any proceeds from the investments or 
        ventures are appropriated to the board.  The state is not liable 
        for any obligations or liabilities that arise from investments 
        under this section.  The board must report annually by September 
        1 to the legislature regarding its earnings from partnerships 
        and the disposition of those earnings. 
           Sec. 6.  Minnesota Statutes 1999 Supplement, section 
        144.395, subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION.] The tobacco use prevention and 
        local public health endowment fund is created in the state 
        treasury.  The state board of investment shall invest the fund 
        under section 11A.24.  All earnings of the fund must be credited 
        to the fund.  The principal of the fund must be maintained 
        inviolate, except that the principal may be used to make 
        expenditures from the fund for the purposes specified in this 
        section when the market value of the fund falls below 105 
        percent of the cumulative total of the tobacco settlement 
        payments received by the state and credited to the tobacco 
        settlement fund under section 16A.87, subdivision 2.  For 
        purposes of this section, "principal" means an amount equal to 
        the cumulative total of the tobacco settlement payments received 
        by the state and credited to the tobacco settlement fund under 
        section 16A.87, subdivision 2.  
           Sec. 7.  Minnesota Statutes 1999 Supplement, section 
        144.395, subdivision 2, is amended to read: 
           Subd. 2.  [EXPENDITURES.] (a) Earnings of the fund, Up to 
        five percent of the fair market value of the fund on the 
        preceding July 1, must be spent to reduce the human and economic 
        consequences of tobacco use among the youth of this state 
        through state and local tobacco prevention measures and efforts, 
        and for other public health initiatives. 
           (b) Notwithstanding paragraph (a), on January 1, 2000, up 
        to five percent of the fair market value of the fund is 
        appropriated to the commissioner of health to distribute as 
        grants under section 144.396, subdivisions 5 and 6, in 
        accordance with allocations in paragraph (c), clauses (1) and 
        (2).  Up to $200,000 of this appropriation is available to the 
        commissioner to conduct the statewide assessments described in 
        section 144.396, subdivision 3. 
           (c) Beginning July 1, 2000, and on July 1 of each year 
        thereafter, the money in paragraph (a) is appropriated as 
        follows, except as provided in paragraphs (d) and (e):  
           (1) 67 percent to the commissioner of health to distribute 
        as grants under section 144.396, subdivision 5, to fund 
        statewide tobacco use prevention initiatives aimed at youth; 
           (2) 16.5 percent to the commissioner of health to 
        distribute as grants under section 144.396, subdivision 6, to 
        fund local public health initiatives aimed at tobacco use 
        prevention in coordination with other local health-related 
        efforts to achieve measurable improvements in health among 
        youth; and 
           (3) 16.5 percent to the commissioner of health to 
        distribute in accordance with section 144.396, subdivision 7.  
           (d) A maximum of $150,000 of each annual appropriation to 
        the commissioner of health in paragraphs (b) and (c) may be used 
        by the commissioner for administrative expenses associated with 
        implementing this section. 
           (e) Beginning July 1, 2001, $1,100,000 of each annual 
        appropriation to the commissioner under paragraph (c), clause 
        (1), may be used to provide base level funding for the 
        commissioner's tobacco prevention and control programs and 
        activities.  This appropriation must occur before any other 
        appropriation under this subdivision. 
           Sec. 8.  [EFFECTIVE DATE.] 
           This act is effective the day following final enactment. 
           Presented to the governor April 11, 2000 
           Signed by the governor April 14, 2000, 2:10 p.m.