HB 1964 — An Act amending Titles 24 (Education) and 71 (State Government) of the Pennsylvania Consolidated Statutes, in administration and miscellaneous provisions, further providing for administrative duties of the Public School Employees' Retirement Board; and, in administration, funds, accounts and general provisions, further providing for administrative duties of the State Employees' Retirement Board.

PRIOR PRINTER'S NO.

2706 PRINTER'STHE NO.GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

2765 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

MILLER, RYAN, GREINER, GROVE, SCHEMEL, TOBASH, HICKERNELL, OWLETT, IRVIN, BERNSTINE, DUSH, KAUFFMAN, MOUL, FEE, MILLARD, GILLEN, KEEFER, COX, ZIMMERMAN, MENTZER, NELSON, GLEIM, LAWRENCE, ROAE, DIAMOND, BENNINGHOFF, RADER, WENTLING, COOK, GREGORY, SCHMITT, WHEELAND, EMRICK, KLUNK, ECKER, METCALFE, FRITZ, SOLOMON, SCHLEGEL CULVER, O'NEAL, SAYLOR, HERSHEY, ROTHMAN, FREEMAN, RAPP, STAATS, LEWIS, DAY, REESE, JAMES, GABLER, JONES, CALTAGIRONE,CALTAGIRONE MACKENZIE, DOWLING, KAUFER AND WARNER,MACKENZIE, OCTOBER 18, 2019 ASREFERRED REPORTEDTO FROM COMMITTEE ON STATE GOVERNMENT, HOUSE OF REPRESENTATIVES, AS AMENDED, OCTOBER 22,18, 2019 AN ACT Amending Titles 24 (Education) and 71 (State Government) of the Pennsylvania Consolidated Statutes, in administration and miscellaneous provisions, further providing for administrative duties of the Public School Employees' general provisions, further providing for administratives and duties of the State Employees' Retirement Board.Board;

and, in administration, funds, accounts and duties of the State Employees' Retirement Board.strative The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

20190HB1964PN276520190HB1964PN2706 - 2 - [(i) The sensitive investment or financial information excluded from access under paragraph (2)(i), to the extent not otherwise excluded from access, shall constitute a public record subject to public access under the Right-to-Know Law once the board is no longer required by its agreement to maintain confidentiality.] (ii) The sensitive investment or financial information excluded from access under paragraph (2)(ii), to the extent not otherwise excluded from access, shall constitute a public record subject to public access under the Right-to-Know Law once:

20190HB1964PN276520190HB1964PN2706 - 3 - (4) [Except for the provisions of paragraph (3), nothing in this subsection shall be construed to designate any record, material or data received, prepared, used or retained by the board or its employees, investment professionals or agents relating to an investment as a public record subject to public access under the Right-to-Know Law.] The board shall be prohibited from entering into any investment management contract or agreement that contains any term or provision that is contrary to this section.

(5) Notwithstanding the provisions of this subsection, the following information regarding an alternative investment vehicle shall [bebe subject to public access]access CONSTITUTE A <-- PUBLIC RECORD under the Right-to-KnowRight-to- Know Law:

(vi) The gross and net internal rate of return of the alternative investment vehicle since inception, provided that the system or plan shall not be required to disclose the gross or net internal rate of return under circumstances in which, because of the limited number of 20190HB1964PN276520190HB1964PN2706 - 4 - portfolio assets remaining in the alternative investment vehicle, the disclosure could reveal the values of specifically identifiable remaining portfolio assets to the detriment of the alternative investment.

(1) In addition to the requirements set forth in this 20190HB1964PN276520190HB1964PN2706 - 5 - section, the board shall prepare and have published on its publicly accessible Internet website, and electronically submit copies to all members of the General Assembly, the following information within six months after the end of the system's fiscal year:

(iv) All travel or other expenses incurred by staff 20190HB1964PN276520190HB1964PN2706 - 6 - and paid for by an external investment manager, fund or consultant.

20190HB1964PN276520190HB1964PN2706 - 7 - Section 2.

Section 5902(e)(1), (2), (3), (4) and (5) AND (4) <-- of Title 71 are amended, subsection (e) is amended by adding a paragraph and the section is amended by adding a subsection to read:

[(i) in the case of an alternative investment or alternative investment vehicle, involve the release of sensitive investment or financial information relating to the alternative investment or alternative investment 20190HB1964PN276520190HB1964PN2706 - 8 - vehicle which the fund or trust was able to obtain only upon agreeing to maintain its confidentiality;] (ii) cause substantial competitive harm to the person from whom sensitive investment or financial information relating to the investment was received;

(iii) The sensitive investment or financial information excluded from access under paragraph (2) 20190HB1964PN276520190HB1964PN2706 - 9 - (iii), to the extent not otherwise excluded from access, shall constitute a public record subject to public access under the Right-to-Know Law once:

20190HB1964PN276520190HB1964PN2706 - 10 - (iv) The dollar amount of cash contributions made by the system or plan to the alternative investment vehicle since inception.

20190HB1964PN276520190HB1964PN2706 - 11 - (ix) Unredacted marketing materials, including, without limitation, proposed fee terms, prospectuses, staff and consultant investment memorandum, subscription agreements, investment management agreements, contracts, side letters and annual investor reports of the alternative investment vehicle.

(5) Any record, material or data received, prepared, <-- used or retained by the board or its employees, or agents relating to the contributions, account value or benefits payable to or on account of a participant shall [not] constitute a public record subject to public access under the Right-to-Know Law [if] unless, in the reasonable judgment of the board, the access would disclose any of the following:

20190HB1964PN276520190HB1964PN2706 - 12 - (1) In addition to the requirements set forth in this section, the board shall prepare and have published on its publicly accessible Internet website, and electronically submit copies to all members of the General Assembly, the following information within six months after the end of the system's calendar year:

20190HB1964PN276520190HB1964PN2706 - 13 - (iv) All travel or other expenses incurred by staff and paid for by an external investment manager, fund or consultant.

"Institutional Limited Partners Association Fee Transparency Initiative." An initiative created by the Institutional Limited Partners Association to establish guidelines for reporting fees, expenses and compliance 20190HB1964PN276520190HB1964PN2706 - 14 - disclosures regarding investments.

§ 8502(e)(1) shall apply to board meetings that occur and video, written records and materials created MORE THAN 120 DAYS after the effective date <-- of this section.

§ 8502(e)(4) shall apply to contracts and agreements entered into,into RENEWED, AMENDED OR <-- EXTENDED after the effective date of this section.

§ 5902(e)(1) shall apply to board meetings that occur and video, written records and materials created MORE THAN 120 DAYS after the effective date <-- of this section.

§ 5902(e)(4) shall apply to contracts and agreements entered into,into RENEWED, AMENDED OR <-- EXTENDED after the effective date of this section.

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