71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 1163
 
                         House Bill 2118
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of State Treasurer Jim Hill)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Deletes restriction on amount of certain state investment funds
that may be invested in common stock.
 
                        A BILL FOR AN ACT
Relating to investment of certain state funds; amending ORS
  293.726.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 293.726 is amended to read:
  293.726. (1) The investment funds shall be invested and the
investments of those funds managed as a prudent investor would
do, under the circumstances then prevailing and in light of the
purposes, terms, distribution requirements and laws governing
each investment fund.
  (2) The standard stated in subsection (1) of this section
requires the exercise of reasonable care, skill and caution, and
is to be applied to investments not in isolation but in the
context of each investment fund's investment portfolio and as a
part of an overall investment strategy, which should incorporate
risk and return objectives reasonably suitable to the particular
investment fund.
  (3) In making and implementing investment decisions, the Oregon
Investment Council and the investment officer have a duty to
diversify the investments of the investment funds unless, under
the circumstances, it is not prudent to do so.
  (4) In addition to the duties stated in subsection (3) of this
section, the council and the investment officer must:
  (a) Conform to the fundamental fiduciary duties of loyalty and
impartiality;
  (b) Act with prudence in deciding whether and how to delegate
authority and in the selection and supervision of agents; and
  (c) Incur only costs that are reasonable in amount and
appropriate to the investment responsibilities imposed by law.
  (5) The duties of the council and the investment officer under
this section are subject to contrary provisions of privately
created public trusts the assets of which by law are made
investment funds. Within the limitations of the standard stated
in subsection (1) of this section and subject to
 { - subsections (6) and (7) - }  { +  subsection (6) + } of this
section, there may be acquired, retained, managed and disposed of
as investments of the investment funds every kind of investment
which persons of prudence, discretion and intelligence acquire,
retain, manage and dispose of for their own account.
    { - (6) Notwithstanding subsection (1) of this section, not
more than 50 percent of the moneys contributed to the Public
Employees Retirement Fund or the Industrial Accident Fund may be
invested in common stock, and not more than 65 percent of the
moneys contributed to the other trust and endowment funds managed
by the Oregon Investment Council or the State Treasurer may be
invested in common stock. - }
    { - (7) - }  { +  (6) + } Notwithstanding subsection (1) of
this section, no moneys invested pursuant to ORS 293.701 (2)(o)
shall be invested in any securities originating outside the
United States.
    { - (8) Subject to the standards set forth in this section,
moneys held in the Deferred Compensation Fund may be invested in
the stock of any company, association or corporation, including
but not limited to shares of a mutual fund. Investment of moneys
in the Deferred Compensation Fund is not subject to the
limitation imposed by subsection (6) of this section. - }
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