Current Status Bill Number:
1178Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 19960227Primary Sponsor: MartinAll Sponsors: Martin, Wilson and GieseDrafted Document Number: res9933.lamCompanion Bill Number: 4517Residing Body: SenateCurrent Committee: Finance Committee 06 SFSubject: Investment Safeguards Act
Body Date Action Description Com Leg Involved ______ ________ _______________________________________ _______ ____________ Senate 19960227 Introduced, read first time, 06 SF referred to CommitteeView additional legislative information at the LPITS web site.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 11-5-270 SO AS TO AUTHORIZE THE INVESTMENT OF THE FUNDS OF THE VARIOUS STATE RETIREMENT SYSTEMS IN EQUITY SECURITIES OF CORPORATIONS WITHIN THE UNITED STATES, TO ESTABLISH THE EQUITY INVESTMENT ADVISORY COUNCIL AND PROVIDE FOR ITS MEMBERSHIP AND DUTIES, INCLUDING RECOMMENDATIONS WITH RESPECT TO AN ANNUAL EQUITY INVESTMENT PLAN PREPARED BY THE STATE TREASURER SUBJECT TO THE REVIEW AND APPROVAL OF THE STATE BUDGET AND CONTROL BOARD, TO ESTABLISH REQUIREMENTS FOR THE ANNUAL PLAN, PROVIDE REPORTING REQUIREMENTS, AND AUTHORIZE THE RETAINING OF PERSONS OR FIRMS TO MANAGE AND ASSIST WITH THESE INVESTMENTS; TO AMEND SECTIONS 9-1-1310 AND 9-11-240, RELATING TO INVESTING OF FUNDS OF THE SOUTH CAROLINA RETIREMENT SYSTEM AND THE POLICE OFFICERS RETIREMENT SYSTEM, SO AS TO ALLOW THE INVESTMENTS AUTHORIZED BY THIS ACT, AND TO MAKE THIS ACT EFFECTIVE ON THE RATIFICATION DATE OF A CONSTITUTIONAL AMENDMENT AUTHORIZING ITS TERMS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 5, Title 11 of the 1976 Code is amended by adding:
"Section 11-5-270. (A) This section may be cited as the `Investment Safeguards Act'.
(B) The State Treasurer may invest and reinvest the funds of the South Carolina Retirement System, Retirement System for Judges and Solicitors, Retirement System for Members of the General Assembly, and Police Officers Retirement System in equity securities of any corporation within the United States that is registered on a national securities exchange as provided in Federal Securities Exchange Act or quoted through the National Association of Securities Dealers Automatic Quotations System. Investment and reinvestment of these funds by the State Treasurer in equity securities and the annual equity investment plan must be consistent with the provisions of this section.
(C) There is created the Equity Investment Advisory Council consisting of seven members as follows:
(1) the State Treasurer, ex officio, who shall serve as chairman;
(2) two members appointed by the Governor;
(3) two members appointed by the Senate Finance Committee by committee resolution; and
(4) two members appointed by the Committee on Ways and Means of the House of Representatives by committee resolution.
In addition to the members provided in items (1) through (4), the State Treasurer may appoint consulting members who shall serve in the same manner as those members appointed pursuant to items (2) through (4) of this subsection except that they may not vote on any matter before the council. All members appointed to the council must have knowledge of equity investing. Appointed members shall serve for terms of two years and until their successors are appointed and qualify and vacancies must be filled in the manner of the original appointment for the unexpired term. Members shall serve without compensation but may receive the mileage, subsistence, and per diem authorized by law for members of state boards, commissions, and committees. Staff support for the council must be provided by the Office of the State Treasurer. The expenses of the council must be paid from earnings from the investment of funds of the various state retirement systems. The council shall meet no later than May thirty-first to make investment recommendations as provided for by this section for the next fiscal year and at other times the chairman considers appropriate. The council shall review and make recommendations on the proposed annual equity investment plan for the retirement systems prepared by the Office of the State Treasurer.
(D) Before June thirtieth of each year, the State Treasurer shall present the annual equity investment plan for the succeeding fiscal year, together with the recommendations of the council on the plan, to the State Budget and Control Board for review and approval. The plan is considered approved unless the board by a majority vote of its membership disapproves the plan. During any fiscal year, the Treasurer may not invest more than forty percent of the market value of the assets of a retirement system in equity securities nor increase the proportion of the market value of the assets of a retirement system invested in equity securities by more than ten percent of the market value of that system. The plan must establish parameters for the allocation of available assets and monies for a retirement system among industry and market segments and may include other similar general prudent risk guidelines, but must not address specific transactions or details of transactions. Amendments to the plan may be made by the State Treasurer after review and recommendation by the council and review and approval by the board in the same manner as the plan is approved. The State Treasurer may prescribe policies for the implementation of this section.
(E) The State Treasurer shall provide a quarterly report of equity investing to each member of the board and council and to other appropriate officials.
(F) The State Treasurer may hire or retain qualified persons or firms to manage and assist with investing in equity securities whose compensation must be paid from earnings from the investment of funds of the various state retirement systems.
(G) Nothing in this section affects the authority or discretion of the State Treasurer in investing in fixed income securities or in cash management activities for any retirement system or state funds, or in establishing, managing, or closing a bank account, investment account, or similar account or activity for any retirement system or state fund."
SECTION 2. Section 9-1-1310 of the 1976 Code is amended to read:
"Section 9-1-1310. The board shall be is the trustee of the funds of the system, and the State Treasurer, on behalf of the board, may invest and reinvest such these funds, subject to all the terms, conditions, limitations, and restrictions imposed by Article 7 of Chapter 9 of Title 11, upon the investment of sinking funds of the State, Sections 11-5-270 and 11-9-660 and, subject to like similar terms, conditions, limitations, and restrictions, may hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which any of the funds created herein in this chapter shall have been are invested, as well as and the proceeds of such the investments and any moneys monies belonging to such these funds."
SECTION 3. Section 9-11-240(1) of the 1976 Code is amended to read:
"(1) The board shall be is the trustee of the system, may invest and reinvest such these funds, may hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which any of the funds created herein in this chapter shall have been are invested, as well as the proceeds of such these investments and any moneys monies belonging to such the fund all in the manner as funds of the South Carolina Retirement System are invested and reinvested."
SECTION 4. This act takes effect on the ratification date of a constitutional amendment authorizing its terms.