Sec. 3-13d. Trust funds: Investment, restrictions, sale of call options. Consideration of political implications of particular investments in relation to U.S. foreign policy and national interests. Co
Sec. 3-13d. Trust funds: Investment, restrictions, sale of call options. Consideration of political implications of particular investments in relation to U.S. foreign
policy and national interests. Connecticut mortgage pass-through certificates. Certain contracts with life insurance companies. (a) Notwithstanding any other provision
in the general statutes or elsewhere to the contrary, the Treasurer shall invest as much
of the state's trust funds as are not required for current disbursements in accordance
with the provisions of section 45a-203 or the provisions of this part. Notwithstanding
the provisions of this section or any other provision in the general statutes or elsewhere
to the contrary, the Treasurer shall not invest more than sixty per cent of the market
value of each such trust fund in common stock, except in the event of a stock market
fluctuation that causes the common stock percentage to increase and the Treasurer deems
it in the best interest of such trust fund to maintain a higher percentage of equities,
provided the Treasurer shall not allow the market value of each such trust fund in common stock to exceed sixty-five per cent for more than six months after such fluctuation
occurs. On and after January 1, 2001, or on and after the first adoption of an investment
policy statement under section 3-13b, whichever is later, all trust fund investments shall
be made in accordance with the investment policy statement adopted under section 3-13b. In order to increase the income for each such combined investment fund established
pursuant to section 3-31b, the Treasurer may enter into repurchase agreements or lend
securities from each such fund, provided that at the time of the execution of the repurchase agreement or the loan at least one hundred per cent of the market value of the
security sold or lent shall be received as consideration in the form of cash or securities
guaranteed by the United States government or any agency of the United States government in the case of a repurchase agreement or secured by cash or such securities in the
case of a loan. At all times during the term of each such repurchase agreement or the
term of each such loan the consideration received or the collateral shall be equal to not
less than ninety-five per cent of the full market value of the security and said consideration received or said collateral shall not be more than one hundred thousand dollars
less than the full market value of the security. The Treasurer may sell call options which
would give the holders of such options the right to purchase securities held by the Treasurer at the date the call is sold for investment purposes, under such terms and conditions
as the Treasurer may determine. Among the factors to be considered by the Treasurer
with respect to all securities may be the social, economic and environmental implications
of investments of trust funds in particular securities or types of securities. In the investment of the state's trust funds the Treasurer shall consider the implications of any particular investment in relation to the foreign policy and national interests of the United States.
(b) Notwithstanding any other provision in the general statutes or elsewhere to the
contrary, the Treasurer may invest as much of the state's trust funds as are not required
for current disbursements in Connecticut mortgage pass-through certificates. As used
in this section, "Connecticut mortgage pass-through certificate" means (1) a certificate
evidencing ownership of an undivided interest in a pool of mortgage loans, each of
which is secured by a first mortgage on real property located in this state improved
by one-to-four-family residential dwellings or units, where such mortgage loans are
assigned to a trust company or bank having the powers of a trust company within or
without the state, as trustee for the benefit of the holders of such certificates, or (2) any
Federal Home Loan Mortgage Corporation pass-through certificate or Federal National
Mortgage Association securities backed by mortgage loans, each of which is secured
by a first mortgage on real property located in this state improved by one-to-four-family
residential dwellings or units; provided such mortgage loans are originated by any bank,
trust company, national banking association, savings bank, federal mutual savings bank,
savings and loan association, federal savings and loan association, credit union, or federal credit union authorized to do business in this state or by any lender authorized to
do business in this state and approved by the federal Secretary of Housing and Urban
Development for participation in any mortgage insurance program under the National
Housing Act. In exercising his discretion to invest the state's trust funds in Connecticut
mortgage pass-through certificates and in considering the yield on such investments,
the Treasurer shall give preference to pools of mortgage loans which contain loans to
persons who at the time of mortgage application are contributors to state pension and
retirement funds included among the trust funds defined in section 3-13c or who have
been past contributors to such funds and who continue to maintain a financial interest
therein, and may consider furtherance of the public policy of increasing the amount of
reasonably priced mortgage loans available to state residents. Nothing in this section
shall prevent the Treasurer from investing state trust funds in mortgage pass-through
certificates other than Connecticut mortgage pass-through certificates.
(c) Except in the event of an express repeal of this subsection, no pool of mortgage
loans, the ownership of which is evidenced by Connecticut mortgage pass-through certificates, shall be subject to any tax imposed by the state if all of the outstanding Connecticut mortgage pass-through certificates respecting such pool were at any time owned by
or on behalf of any one or more of the state's trust funds.
(d) Notwithstanding any other provision in the general statutes or elsewhere to the
contrary, the Treasurer may enter into contracts with any life insurance company authorized to do business in Connecticut under which any amounts held in the state's trust
funds may be used to purchase pension funding contracts and contracts providing for
participation in separate accounts or under which funds become a part of the general
account of any such life insurance company.
(e) Notwithstanding any provision of the general statutes, neither the Treasurer, the
Deputy Treasurer nor any acting Treasurer shall make a private equity or real estate
investment without the approval of the Investment Advisory Council, for the balance
of the Treasurer's term of office, on or after any of the following events: (1) The defeat
of the Treasurer (A) in a ballot for the party nomination for Treasurer at a convention
where said Treasurer was a candidate for nomination, (B) in a primary for nomination
for said office where said Treasurer was a candidate for nomination, or (C) upon the
completion of a recanvass of the returns from such primary under section 9-445 or 9-446, whichever is later, (2) the defeat of the Treasurer (A) in the election for said office
or (B) upon the completion of a recanvass of the returns from such election under section
9-311, 9-311a or 9-311b, or (3) the resignation of the Treasurer.
(P.A. 73-594, S. 7, 12; P.A. 74-49, S. 1, 2; P.A. 80-431, S. 2, 4; P.A. 81-343, S. 2, 7; P.A. 86-29, S. 1, 3; P.A. 92-69,
S. 4, 5; P.A. 95-120, S. 1, 2; June 18 Sp. Sess. P.A. 97-4, S. 8, 11; June 18 Sp. Sess. P.A. 97-11, S. 63, 65; P.A. 98-86;
P.A. 00-43, S. 2, 4, 19; P.A. 02-34, S. 1.)
History: P.A. 74-49 provided that market value of loans from investment funds could be guaranteed by U.S. government
or its agencies; P.A. 80-431 required treasurer to consider foreign policy and national interest in making investments of
state trust funds; P.A. 81-343 added Subsecs. (b) to (d) re mortgage pass-through certificates and contracts with life
insurance companies to purchase pension funding contracts; P.A. 86-29 amended Subsec. (a) to provide specifically that
the treasurer may enter into repurchase agreements for purposes of investing the trust funds of the state; P.A. 92-69 amended
Subsec. (b) to include certain Federal Home Loan Mortgage Corporation pass-through certificates and Federal National
Mortgage Association securities backed by mortgage loans in the definition of "Connecticut mortgage pass-through certificate"; P.A. 95-120 amended Subsec. (a) to permit Treasurer to invest no more than 55%, instead of %50 of a trust fund in
common stock, except under specified conditions, for a six-month period of time, effective July 1, 1995; (Revisor's note:
Section 8 of June 18 Sp. Sess. P.A. 97-4 is void and was therefore not codified because it attempts to amend section 1 of
vetoed public act 97-260 by restoring language which was deleted in the vetoed act and leaving in place new language
added in the vetoed act, effective June 30, 1997. June 18 Sp. Sess. 97-11 changed the effective date of June 18 Sp. Sess.
P.A. 97-4 but without affecting section 8 of the act); P.A. 98-86 amended Subsec. (a) to replace book value with market
value and add REITS as alternative investments; P.A. 00-43 amended Subsec. (a) to increase the limit on investment in
common stock and to provide that all investments be made in accordance with the investment policy statement adopted
under Sec. 3-13b, effective January 1, 2001, and added Subsec. (e) re restrictions on investment of trust funds in private
equity or real estate during "lame duck" phase of Treasurer's term, effective May 3, 2000; P.A. 02-34 amended Subsec.
(a) to delete provision which designated real estate investment trusts as alternative investments and not common stock
investments, effective May 6, 2002.
See Sec. 3-13g re investment policies re corporations doing business in Iran.
See Sec. 3-13h re disinvestment of state funds in certain corporations doing business in Northern Ireland.
See Sec. 3-13i re contracts for services related to investment of trust funds.