North Carolina § 147-69 - 2. Investments authorized for special funds held by State Treasurer.

§ 147-69. 2. Investments authorized for special funds held by State Treasurer.

This section applies to funds held by the State Treasurer to the credit of each of the following: The Teachers' and State Employees' Retirement System of North Carolina. The Consolidated Judicial Retirement System of North Carolina. The State Health Plan for Teachers and State Employees. Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. The Disability Salary Continuation Income Plan of North Carolina. The North Carolina Firefighters' and Rescue Squad Workers' Pension Fund. The North Carolina Local Governmental Employees' Retirement System. The Legislative Retirement System of North Carolina. The Escheat Fund. The Legislative Retirement Fund. The State Education Assistance Authority. The State Property Fire Insurance Fund. Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. The State Public Education Property Insurance Fund. Repealed by Session Laws 2020-69, s. 9(b), effective July 1, 2020. The Liability Insurance Trust Fund. The University of North Carolina Hospitals at Chapel Hill funds, except appropriated funds, deposited with the State Treasurer pursuant to G.S. 116-37.2. Trust funds of The University of North Carolina and its constituent institutions deposited with the State Treasurer pursuant to G.S. 116-36.1. North Carolina Veterans Home Trust Fund. North Carolina National Guard Pension Fund. Retiree Health Benefit Fund. The Election Fund. The North Carolina State Lottery Fund. Funds deposited with the State Treasurer by public hospitals pursuant to G.S. 159-39(g). Funds deposited with the State Treasurer by Local Government Other Post-Employment Benefits Trusts pursuant to G.S. 159-30.1. The Local Government Law Enforcement Special Separation Allowance Fund. The North Carolina Conservation Easement Endowment Fund. The Conservation Grant Fund. The Wildlife Endowment Fund. The Ecosystem Restoration Fund. The Needs-Based Public School Capital Fund. The Riparian Buffer Restoration Fund. Any other special fund created by or pursuant to law for purposes other than meeting appropriations made pursuant to the Executive Budget Act. The Swain County Settlement Trust Fund. Institutional funds of the colleges of the North Carolina Community College System. The Disability Income Plan of North Carolina. The Lumbee Tribe of North Carolina Trust Fund. The Catawba Unit No. 1 Decommissioning Trust Fund and the Catawba Unit No. 2 Decommissioning Trust Fund established by North Carolina Municipal Power Agency Number 1, as described in G.S. 159B-18(b)(6). It shall be the duty of the State Treasurer to invest the cash of the funds enumerated in subsection (a) of this section in excess of the amount required to meet the current needs and demands on these funds. The State Treasurer may invest the funds as provided in this subsection in the manner authorized by subsection (e) of this section. If an investment was authorized by this subsection at the time the investment was made or contractually committed to be made, then that investment shall continue to be authorized by this subsection, and none of the percentage or other limitation on investments set forth in this subsection shall be construed to require the State Treasurer to subsequently dispose of the investment or fail to honor any contractual commitments as a result of changes in market values, ratings, or other investment qualifications. For purposes of computing market values on which percentage limitations on investments in this subsection are based, all investments shall be valued as of the last date of the most recent fiscal quarter. Notwithstanding anything in this section to the contrary, the State Treasurer shall categorize investment management arrangements according to the primary investment type or primary strategy utilized under the arrangement authorized under subsection (e) of this section. No investment management arrangement may be categorized in more than one of the subdivisions of this section. The State Treasurer shall select from among the following investments subject to the following limitations and requirements: Investments authorized by G.S. 147-69.1(c)(1)-(7). General obligations of other states of the United States. General obligations of cities, counties and special districts in North Carolina. Obligations of any company, other organization or legal entity incorporated or otherwise created or located within or outside the United States, including obligations that are convertible into equity securities, if, when acquired, the obligations are within one of the four highest rating categories regardless of gradations, such as ratings beginning with "AAA," "AA," "A," or either "BBB" or "Baa," of at least one nationally recognized rating service designated by the U.S. Securities and Exchange Commission. Repealed by Session Laws 2001-444, s. 2, effective October 1, 2001. Asset-backed securities (whether considered debt or equity), if, when acquired, the obligations are within one of the four highest ratings categories regardless of gradations, such as ratings beginning with "AAA," "AA," "A," or either "BBB" or "Baa," of at least one nationally recognized rating service designated by the U.S. Securities and Exchange Commission. In addition to the limitations and requirements with respect to the investments of the Retirement Systems set forth in this subsection, the State Treasurer shall select investments of the assets of the Retirement Systems such that investments made pursuant to subdivisions (b)(1) through (6) of this section shall at all times equal or exceed twenty percent (20%) of the market value of all invested assets of the Retirement Systems. Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. With respect to Retirement Systems' assets referred to in subdivision (b)(8), they may be invested, within or outside the United States, in obligations, debt securities, and asset-backed securities, whether considered debt or equity, including obligations and securities convertible into other securities, that do not meet the requirements of any of subdivisions (b)(1) through (6) of this section nor subdivision (b)(7) of this section. The amount invested under this subdivision shall not exceed seven and one-half percent (7.5%) of the market value of all invested assets of the Retirement Systems. Retirement Systems' assets referred to in subdivision (8) of this subsection may be invested in strategies managed primarily for the purpose of owning real estate or related debt financing, excluding asset-backed financing and timberlands, located within or outside the United States. The amount invested under this subdivision shall not exceed ten percent (10%) of the market value of all invested assets of the Retirement Systems. With respect to assets of the Teachers' and State Employees' Retirement System, the Consolidated Judicial Retirement System, the Firefighters' and Rescue Workers' Pension Fund, the Local Governmental Employees' Retirement System, the Legislative Retirement System, the North Carolina National Guard Pension Fund, the Registers of Deeds' Supplemental Pension Fund, and the Retiree Health Benefit Fund (hereinafter referred to collectively as the Retirement Systems), they may be invested in a strategy composed primarily of equity securities traded on a public securities exchange or market organized and regulated pursuant to the laws of the jurisdiction of the exchange or market and issued by any company incorporated or otherwise created or located within or outside the United States as long as the investments meet the conditions of this subdivision. The investments authorized for the Retirement Systems under this subdivision are subject to the following limitations: Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. The aggregate amount of the investment invested through investment companies described in sub-subdivision (e)(4)b. of this section shall not exceed eight and one-half percent (8.5%) of the market value of all invested assets of the Retirement Systems, except that the market value of group trusts and individual, common, or collective trust funds of banks and trust companies shall not be applied against this limit. Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. With respect to Retirement Systems' assets, as defined in subdivision (b)(8) of this subsection, they may be invested in (i) a strategy composed primarily of private equity, or corporate buyout transactions, within or outside the United States or (ii) an arrangement authorized under subsection (e) of this section with the primary purpose to engage in other strategies not expressly authorized by any other subdivision of this subsection. The amount invested under this subdivision shall not exceed eight and three-quarters percent (8.75%) of the market value of all invested assets of the Retirement Systems. With respect to Retirement Systems' assets, as defined in subdivision (b)(8) of this subsection, they may be invested, within or outside the United States, in obligations, debt securities, asset-backed securities, whether considered debt or equity, and other investments that are acquired by the Treasurer for the primary purpose of providing protection against risks associated with inflation, along with timberland, natural resources, commodities, infrastructure, transportation, agriculture, and other tangible and intangible real assets. The amount invested under this subdivision shall not exceed seven and one-half percent (7.5%) of the market value of all invested assets of the Retirement Systems. Recodified as part of subdivision (b)(9) by Session Laws 2000-160, s. 2. With respect to Retirement Systems' assets, as defined in subdivision (8) of this subsection, the market value of any of subdivision (6c) or (7), sub-subdivision b. of subdivision (8), or subdivision (9) or (9a) of this subsection shall not exceed ten percent (10%) of the market value of all invested assets of the Retirement Systems; and the aggregate market value of all assets invested pursuant to subdivisions (6c) and (7), sub-subdivision b. of subdivision (8), and subdivisions (9) and (9a) of this subsection shall not exceed thirty-five percent (35%) of the market value of all invested assets of the Retirement Systems. Repealed by Session Laws 2013-360, s. 6.3(c), effective July 1, 2013. It is the intent of the General Assembly that the Escheat Fund provide a perpetual and sustainable source of funding for the purposes authorized by the State Constitution. Accordingly, the following provisions apply: With respect to assets of the Escheat Fund, in addition to those investments authorized by subdivisions (1) through (6) of this subsection, up to ten percent (10%) of the assets may be invested in the investments authorized under subdivisions (6c) through (9a) of this subsection, notwithstanding the percentage limitations imposed on the Retirement Systems' investments under those subdivisions, and provided that the State Treasurer may invest the assets as provided in subsection (e) of this section. Repealed by Session Laws 2016-55, s. 1.3, effective January 31, 2017. The State Treasurer shall invest, in addition to those investments authorized by sub-subdivision a. of this subdivision, ten percent (10%) of the net assets of the Escheat Fund as authorized under G.S. 147-69.2A. The State Treasurer shall appoint an Investment Advisory Committee, which shall consist of seven members: the State Treasurer, who shall be chairman ex officio; two members selected from among the members of the boards of trustees of the Retirement Systems; and four members selected from the general public. All appointed members must have experience in areas relevant to the administration of a large, diversified investment program, including, but not limited to, investment management, securities law, real estate development, or absolute return strategies. The State Treasurer shall also appoint a Secretary of the Investment Advisory Committee who need not be a member of the committee. Members of the committee shall receive for their services the same per diem and allowances granted to members of the State boards and commissions generally. The committee shall have advisory powers only and membership shall not be deemed a public office within the meaning of Article VI, Section 9 of the Constitution of North Carolina or G.S. 128-1.1. The State Treasurer may invest funds deposited pursuant to subdivision (a)(17f) of this section in any of the investments authorized under subdivisions (b)(1) through (6), subdivision (b)(6c), and subdivision (b)(8) of this section, notwithstanding the percentage limitations imposed on the Retirement Systems' investments therein. The State Treasurer may require a minimum deposit, up to one hundred thousand dollars ($100,000), and may assess reasonable fees, not to exceed 15 basis points per annum, as a condition of participation pursuant to this subsection. Funds deposited pursuant to this subsection by a hospital shall remain the funds of that hospital, and interest or other investment income earned thereon shall be prorated and credited to the contributing hospital on the basis of the amounts thereof contributed, figured according to sound accounting principles. Fees assessed by the State Treasurer may be used to defray the cost of administering investments pursuant to this subsection and expenditures authorized under this section. The State Treasurer may invest funds deposited pursuant to subdivision (a)(16a) of this section in any of the investments authorized under subdivisions (1) through (6), subdivision (6c) and subdivision (b)(8) of this section, notwithstanding the percentage limitations imposed on the Retirement Systems' investments therein. The State Treasurer may require a minimum deposit, up to one hundred thousand dollars ($100,000), and may assess reasonable fees, not to exceed 15 basis points per annum, as a condition of participation pursuant to this subsection. Funds deposited pursuant to this subsection by the University of North Carolina Hospitals at Chapel Hill shall remain the funds of the University of North Carolina Hospitals at Chapel Hill, and interest or other investment income earned thereon shall be prorated and credited to the University of North Carolina Hospitals at Chapel Hill on the basis of the amounts thereof contributed, figured according to sound accounting principles. Fees assessed by the State Treasurer may be used to defray the cost of administering investments pursuant to this subsection and expenditures authorized under this section. In addition to the investments authorized under subdivisions (b)(1) through (6) of this section, the State Treasurer may invest funds deposited pursuant to subdivision (17g) of subsection (a) of this section in any of the investments authorized under subdivisions (b)(6c) and (b)(8) of this section, notwithstanding the percentage limitations imposed on the Retirement Systems' investments therein. Funds deposited pursuant to this subsection by a Local Government Other Post-Employment Benefits Trust and interest or other investment income earned from those funds shall be prorated and credited to the contributing trust on the basis of the amounts contributed, figured according to sound accounting principles. For investments under subdivisions (b)(6c) and (b)(8) of this section, the State Treasurer may require a minimum deposit of up to one hundred thousand dollars ($100,000) and may assess reasonable fees of up to 15 basis points per annum as a condition of participation pursuant to this subsection. Fees assessed by the State Treasurer may be used to defray the costs of administering the Fund and expenditures authorized under this section. In addition to the investments authorized under subdivisions (b)(1) through (6) of this section, the State Treasurer may invest funds deposited in the Local Government Law Enforcement Special Separation Allowance Fund in any of the investments authorized under subdivisions (b)(6c) and (b)(8) of this section, notwithstanding the percentage limitations imposed on the Retirement Systems' investments therein. For investments from that Fund made under subdivisions (b)(6c) and (b)(8) of this section, the State Treasurer may require a minimum deposit of up to one hundred thousand dollars ($100,000) and may assess reasonable fees of up to 15 basis points per annum as a condition of making the investment. The fee may be used to defray the costs of administering the Fund and expenditures authorized under this section. In addition to the investments authorized under subdivisions (b)(1) through (6) of this section, the State Treasurer may invest funds deposited in the Catawba Unit No. 1 Decommissioning Trust Fund and the Catawba Unit No. 2 Decommissioning Trust Fund in any of the investments authorized under subdivisions (b)(6c) and (b)(8) of this section, notwithstanding the percentage limitations imposed on the Retirement Systems' investments therein. For investments from the Funds made under subdivisions (b)(6c) and (b)(8) of this section, the State Treasurer may require a minimum deposit of up to one hundred thousand dollars ($100,000) and may assess reasonable fees of up to 15 basis points per annum as a condition of making the investment. The fee may be used to defray the costs of administering the Fund and expenditures authorized under this section. In addition to the investments authorized under subdivisions (b)(1) through (6) of this section, the State Treasurer may invest funds deposited in the Swain County Settlement Trust Fund in any of the investments authorized under subdivision (b)(8) of this section, notwithstanding the percentage limitations imposed on the Retirement Systems' investments therein. For investments from that Fund made under subdivision (b)(8) of this section, the State Treasurer may require a minimum deposit of up to one hundred thousand dollars ($100,000) and may assess reasonable fees of up to 15 basis points per annum as a condition of making the investment. The fee may be used to defray the costs of administering the Fund and expenditures authorized under this section. Repealed by Session Laws 1995, c. 501, s. 2. The State Treasurer may invest funds deposited pursuant to subdivisions (17i), (17j), (17k), (17l), and (17n) of subsection (a) of this section in any of the investments authorized under subdivisions (1) through (6) and subdivision (8) of subsection (b) of this section. The State Treasurer may require a minimum deposit, up to one hundred thousand dollars ($100,000), and may assess a reasonable fee, not to exceed 15 basis points, as a condition of participation pursuant to this subsection. Fees assessed by the State Treasurer may be used to defray the costs of administering the funds and expenditures authorized under this section. Funds deposited pursuant to this subsection shall remain the funds of the North Carolina Conservation Easement Endowment Fund, the Conservation Grant Fund, the Ecosystem Restoration Fund, the Riparian Buffer Restoration Fund, or the Wildlife Endowment Fund, as applicable, and interest or other investment income earned thereon shall be prorated and credited to the North Carolina Conservation Easement Endowment Fund, the Conservation Grant Fund, the Ecosystem Restoration Fund, the Riparian Buffer Restoration Fund, or the Wildlife Endowment Fund on the basis of the amounts contributed to the respective Funds, figured according to sound accounting principles. Investments made pursuant to this section may be made as internally managed investments by the State Treasurer or may be made through third-party investment management arrangements, under the following conditions: Internally managed portfolios shall be subject to industry standard portfolio guidelines developed with periodic consultation by the Investment Advisory Committee. In assessing whether to invest directly or to utilize indirect third-party investment management arrangements, the State Treasurer shall consider all material factors he or she considers relevant to the decision consistent with the Treasurer's fiduciary duties under G.S. 147-69.7, including financial, operational, and investment expertise and resources, alignment of interests and investor protections, transparency and repeatability of investment process, risk controls, and cost-effectiveness. For any third-party investment management arrangements, the investment manager must have total assets under management of at least one hundred million dollars ($100,000,000) at the inception of the investment management arrangement with the State Treasurer. Third-party investment management arrangements may be with persons and legal entities located within or outside the United States, including through any of the following: Contractual arrangements in which the investment manager has delegated discretion and authority to invest assets. Investment companies as defined under United States generally accepted accounting principles as promulgated by the Financial Accounting Standards Board, including without limitation entities registered under the Investment Company Act of 1940; individual, common, or collective trust funds of banks and trust companies; limited partnerships; limited liability companies or other limited liability investment vehicles; and insurance contracts that provide for participation in individual or pooled separate accounts of insurance companies. Investment companies shall provide annual audited financial statements to the State Treasurer, unless the State Treasurer waives the requirement after conducting a cost-benefit analysis. In connection with any investment otherwise authorized under this section, the State Treasurer may enter into an indemnification agreement provided that, under any agreement, the liability of the State Treasurer will be limited to the amount of the State Treasurer's contractual investment. a1. The aggregate amount of the investments cannot exceed sixty-five percent (65%) of the market value of all invested assets of the Retirement Systems. Any limited liability investment vehicles organized by the State Treasurer shall be deemed investment companies for the purposes of this subsection. History (1979, c. 467, s. 2; 1983, c. 702, ss. 1-9; 1987, c. 446, s. 1; c. 751, s. 5; 1987 (Reg. Sess., 1988), c. 1070; 1989, c. 770, s. 54; 1989 (Reg. Sess., 1990), c. 813, s. 11; c. 848, s. 5; 1991, c. 542, s. 16; c. 636, s. 3; c. 749, s. 8; 1993 (Reg. Sess., 1994), c. 777, s. 4(i); 1995, c. 346, s. 2; c. 501, s. 2; 1997-456, s. 27; 1999-237, s. 27.16; 1999-251, s. 2; 2000-160, s. 2; 2001-444, ss. 2, 3; 2003-12, s. 2; 2004-124, s. 30.22(b); 2005-144, s. 7; 2005-201, s. 2; 2005-252, s. 1; 2005-276, s. 28.17; 2005-344, s. 10; 2005-417, s. 2; 2007-323, s. 27.7; 2007-384, ss. 2, 3, 7, 8; 2008-13, s. 2; 2008-107, ss. 12.9(b), (c), 12.13; 2009-98, s. 1; 2009-283, s. 2; 2009-451, s. 25.2(a); 2010-175, ss. 3, 4; 2011-145, ss. 6.10(a), 8.20(c); 2011-211, s. 1; 2011-340, s. 4(a), (b); 2012-130, s. 10; 2012-142, s. 6.4; 2012-178, s. 6; 2013-284, s. 1(d); 2013-360, s. 6.3(c); 2013-398, s. 1; 2015-164, s. 3(a); 2015-241, ss. 6.3(a), 14.2; 2016-55, s. 1.3; 2017-57, s. 13A.2(b), (c); 2017-102, s. 28.1(a); 2017-125, s. 6; 2018-5, ss. 5.3(e), 13.5; 2019-162, s. 5; 2019-176, s. 3(e); 2020-69, s. 9(a), (b); 2020-78, s. 7.3(a), (b); 2021-73, ss. 1(b), 2(a).) Cross References. - As to investment of idle cash by community colleges and technical institutes, see G.S. 115D-58.6. Editor's Note. - Subsection (a), as amended by Session Laws 1999-251, s. 2, has been set forth above with subdivision designation changes pursuant to direction from the Revisor of Statutes. The preamble to Session Laws 2003-12, which amended this section, reads as follows: "Whereas, in 2002, Congress enacted the Help America Vote Act of 2002 (HAVA), Public Law 107-252, entitled an act to establish a program to provide funds to states to replace punch card voting systems, to establish the Election Assistance Commission to assist in the administration of federal elections and to otherwise provide assistance with the administration of certain federal election laws and programs, to establish minimum election administration standards for states and units of local government with responsibility for the administration of federal elections, and for other purposes; and has appropriated over thirty-one million dollars ($31,000,000) to the State of North Carolina for the current fiscal year; and "Whereas, Section 254(b) of HAVA requires each state receiving funds to establish a fund to receive and disburse these funds; Now, therefore, "The General Assembly of North Carolina enacts:" Session Laws 2003-12, s. 1, provides: "There is established a special fund to be known as the Election Fund. All funds received for implementation of the Help America Vote Act of 2002, Public Law 107-252, shall be deposited in that fund. The State Board of Elections shall use funds in the Election Fund only to implement HAVA." Session Laws 2004-124, s. 30.22.(a) and (c) provide: "(a) From funds borrowed from the Escheat Fund pursuant to G.S. 63A-4(a)(22) and G.S. 147-69.2(b)(11), the North Carolina Global TransPark Authority shall make a payment of two million five hundred thousand dollars ($2,500,000) to the Escheat Fund as soon as feasible after the effective date of this section and shall not expend or obligate any other funds that were borrowed from the Escheat Fund except after consultation with the Joint Legislative Commission on Governmental Operations on its intent to expend or obligate the funds. "(c) All interest on funds borrowed from the Escheat Fund pursuant to G.S. 63A-4(a)(22) and G.S. 147-69.2(b)(11) and on account with the State Treasurer for the benefit of the North Carolina Global TransPark Authority may only be used to repay the loan." Session Laws 2004-124, s. 1.2, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2004'." Session Laws 2004-124, s. 33.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2004-2005 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2004-2005 fiscal year." Session Laws 2004-124, s. 33.5, is a severability clause. Session Laws 2004-138, s. 1.1, provides: "Except after consultation with the Joint Legislative Commission on Governmental Operations on its intent to expend or obligate funds, the North Carolina Global TransPark Authority shall not expend or obligate any funds that were borrowed from the Escheat Fund pursuant to G.S. 63A-4(a)(22) and G.S. 147-69.2(b)(11), or any interest earned on those funds." The preamble to Session Laws 2005-252, which amended this section, reads as follows: "Whereas, the State Constitution mandates that proceeds of the Escheat Fund shall be utilized to aid needy and worthy North Carolina students enrolled in public institutions of higher education; and "Whereas, continued tuition increases are intensifying the demand on the Escheat Fund to provide North Carolina students with loans and tuition assistance to offset tuition hikes; and "Whereas, adoption of a proactive investment policy for the Escheat Fund will enable the State to realize a greater benefit from existing capital, thereby enhancing the Escheat Fund's constitutionally provided purpose; and "Whereas, the assets of the Escheat Fund have grown to nearly $600,000,000, necessitating the establishment of a modern investment allocation strategy for these funds; and "Whereas, such a policy will enable the State Treasurer to invest in those types of investments considered prudent for the Escheat Fund; Now, therefore," Session Laws 2005-344, s. 14, provides: "Nothing in this act [which established the North Carolina State Lottery] shall be construed to obligate the General Assembly to appropriate funds to implement this act." Subdivision (a)(17f) was enacted as subdivision (a)(17e) by Session Laws 2005-417, s. 2, and redesignated as subdivision (a)(17f) at the direction of the Revisor of Statutes. Session Laws 2010-31, s. 28.3(a), provides: "The Board of Directors of the Global TransPark Authority shall report on or before December 31, 2010, to the House Appropriations Subcommittee on Transportation and the Senate Committee on Appropriations on Department of Transportation on the Authority's strategic, business, and financial plans. The report shall include the Authority's proposed schedule to achieve financial self-sufficiency and proposed schedule to repay to the Escheat Fund the investment authorized under G.S. 147-69.2(b)(11) and any accumulated interest, both of which totaled thirty-seven million seven hundred ninety-eight thousand eight hundred ninety-eight dollars and fifty cents ($37,798,898.50) as of March 31, 2010." Session Laws 2010-31, s. 28.3(b), as amended by Session Laws 2010-123, s. 8.1, provides: "The Program Evaluation Division of the General Assembly shall conduct a comprehensive program and financial review of the North Carolina Global TransPark Authority. The program review shall examine the Authority's operations and evaluate the effectiveness of the Authority in meeting its mission and goals. The financial review shall study the cost-effectiveness of all State funds appropriated to the Authority to date, examine potential efficiency savings, study the long-term operating needs of the Authority, examine the Authority's current business practices, and make recommendations for it to become financially self-sustaining and to fully repay the Escheat Fund. The Division shall prepare a report of the findings and recommendations of the study and submit it to the Joint Legislative Program Evaluation Oversight Committee no later than May 1, 2011. Sessions Laws 2011-340, s. 4(a), effective July 1, 2011, repealed Session Laws 2011-145, s. 6.10, which in subsection (a) amended G.S. 147-69.2, effective July 1, 2011. The repealed amendment to this section by Session Laws 2011-145, s. 6.10(a) was identical to the amendment made to this section by Session Laws 2011-340, s. 4(b). Session Laws 2013-360, s. 6.3(a), provides: "The Office of State Budget and Management shall transfer funds from the Reserve for Global TransPark Loan Repayment to the Escheat Fund as payment-in-full for the outstanding loan from the Escheat Fund to the Global TransPark Authority originally authorized under G.S. 63A-4(a)(22) and G.S. 147-69.2(b)(11)." Session Laws 2013-360, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2013.'" Session Laws 2013-360, s. 38.2, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2013-2015 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2013-2015 fiscal biennium." Session Laws 2013-360, s. 38.5, is a severability clause. Session Laws 2014-100, s. 25.1(a)-(d), provides: "(a) In addition to all other audits and reports required by law, the State Treasurer shall prepare and issue, for the 2014-2015 fiscal year, a set of financial statements regarding the investment programs for the Retirement Systems enumerated in G.S. 147-69.2(b)(8). These financial statements shall be audited by a commercial independent third-party audit firm selected and engaged by the State Auditor based upon selection criteria developed by the State Auditor in consultation with the State Treasurer. The audit firm's report and the financial statements shall be provided to the State Controller and the General Assembly no later than January 1, 2016. "(b) Supplementary information accompanying the financial statements required by subsection (a) of this section shall include a discussion of the Retirement Systems' risk and returns compared to benchmarks, total management fees and incentives paid, and comparisons to peer cost benchmarks. "(c) The State Treasurer shall transfer to the State Auditor, from the assets of the Retirement Systems, the funds necessary to conduct the third-party audit required under this section. "(d) The State Treasurer shall engage a commercial independent expert firm pursuant to G.S. 147-69.3(g) to evaluate the governance, operations, and investment practices of the State Treasurer in order to develop recommendations for improvement. The firm shall evaluate any potential cost-savings and performance impact generated by additional internal management of investments. The report of the expert firm shall be provided to the General Assembly when complete." Session Laws 2014-100, s. 1.1, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2014.'" Session Laws 2014-100, s. 38.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2014-2015 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2014-2015 fiscal year." Session Laws 2014-100, s. 38.7, is a severability clause. Session Laws 2018-5, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2018.'" Subdivision (a)(17m) was enacted as subdivision (a)(17 l ) by Session Laws 2018-5, s. 5.3(e). It was renumbered as subdivision (a)(17m) at the direction of the Revisor of Statutes. Session Laws 2018-5, s. 39.7, is a severability clause. This section was amended by Session Laws 2019-176, s. 3(e), effective July 1, 2020, but was not set out in the coded bill drafting format provided by G.S. 120-20.1. The language in the act read "amended by adding a new subdivision." The subdivision was set out as subdivision (15a) at the direction of the Revisor of Statutes. Session Laws 2020-69, s. 9(a), (b), rewrote the introductory language of Session Laws 2019-176, s. 3(e) to read: "G.S. 147-69.2(a)(15) reads as rewritten:" and repealed subdivision (a)(15a), effective July 1, 2020. Subdivision (a)(15) now appears as rewritten by Session Laws 2019-176, s. 3(e), as amended by Session Laws 2020-69, s. 9(a). Session Laws 2020-78, s. 22.1, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2019-2021 fiscal biennium, the textual provisions of this act apply only to the 2019-2021 fiscal biennium." Session Laws 2020-78, s. 22.3, is a severability clause. Effect of Amendments. - Session Laws 2004-124, s. 30.22(b), effective July 1, 2004, substituted "July 1, 2005" for "September 1, 2004" in the first sentence of subdivision (b)(11). Session Laws 2005-144, s. 7, effective June 30, 2005, substituted "July 31, 2005" for "July 1, 2005" at the end of the first sentence in subdivision (b)(11). Session Laws 2005-201, s. 2, effective July 19, 2005, substituted "August" for "July" at the end of the first sentence in subdivision (b)(11). Session Laws 2005-252, s. 1, effective August 5, 2005, added subdivision (b)(12). Session Laws 2005-276, s. 28.17, effective July 1, 2005, in subdivision (b)(11), in the first sentence, substituted "October 1, 2007" for "August 31, 2005" and added the second paragraph. Session Laws 2005-344, s. 10, effective August 31, 2005, made minor stylistic changes and added subdivision (a)(17e). Session Laws 2005-417, s. 2, effective October 1, 2005, added "each of the following" to the end of the introductory language of subsection (a); added subdivisions (a)(16a) and (a)(17f); in the first paragraph of subdivision (b)(8), deleted "and" preceding " the North Carolina National" and inserted "and assets invested pursuant to subdivision (b2) of this section" and in the second paragraph, inserted "for the Retirement Systems" preceding "under this subdivision"; added subsections (b2) and (b3); and made minor punctuation changes. Session Laws 2007-323, s. 27.7, effective July 1, 2007, substituted "2009" for "2007" at the end of the first sentence of subdivision (b)(11). Session Laws 2007-384, ss. 2, 3, 7 and 8, effective August 19, 2007, added subdivisions (a)(17g) and (17h); and added subsections (b4) and (b5). Session Laws 2008-13, s. 2, effective June 25, 2008, added subdivision (a)(19). Session Laws 2008-107, ss. 12.9(b), (c), and 12.13, effective July 1, 2008, added subdivisions (a)(17i) and (a)(17j) and subsection (d). Session Laws 2009-98, s. 1, effective June 11, 2009, substituted "The State Health Plan for Teachers and State Employees" for "The Teachers' and State Employees' Hospital and Medical Insurance Plan" in subdivision (a)(3); and rewrote subsections (b) and (b1) through (b5). Session Laws 2009-283, s. 2, effective July 10, 2009, in subsection (b1), in the first sentence, substituted "subsections (b)(7), (b)(8), and (b)(9)" for "subsections (b)(8) and (b)(9)" near the beginning, "seven members" for "five members" near the middle, and "four members" for "two members" near the end; and rewrote the second sentence. Session Laws 2009-451, s. 25.2(a), effective July 1, 2009, substituted "October 1, 2011" for "October 1, 2009" in the first sentence of subdivision (b)(11). Session Laws 2010-175, ss. 3 and 4, effective July 1, 2010, rewrote subdivision (a)(17g), which formerly read: "The Local Government Other Post-Employment Benefits Fund"; and in subsection (b4), in the first sentence, substituted "deposited pursuant to subdivision (17g) of subsection (a) of this section" for "deposited in the Local Government Other Post-Employment Benefits Fund," added the second sentence, in the third sentence, deleted "from that Fund made" following "For investments," and substituted "as a condition of participation pursuant to this subsection" for "as a condition of making the investment," and in the last sentence, substituted "Fees assessed by the State Treasurer" for "The fee." Session Laws 2011-145, s. 8.20(c), effective July 1, 2011, added subdivision (a)(20). Session Laws 2011-211, s. 1, effective June 23, 2011, in the introductory paragraph of subsection (b), deleted "selecting from among the following" from the end of the first sentence, and added the last two sentences; in subdivision (b)(1), deleted "Any of the" from the beginning; made a minor stylistic change in subdivision (b)(6c); in subdivision (b)(8), added the second paragraph and rewrote the third paragraph; and in subdivision (b)(9), in the first sentence, inserted "(i)," deleted "public or" preceding "private equity," and added "or (ii) to engage in other strategies not expressly authorized by any other subdivision of this subsection," and in the last sentence, substituted "seven and one-half percent (7.5%)" for "five percent (5%)." Session Laws 2011-340, s. 4(b), effective July 1, 2011, substituted "October 1, 2012" for "October 1, 2011" in the first paragraph of subdivision (b)(11). Session Laws 2012-130, s. 10, effective July 1, 2012, substituted "Benefit Fund" for "Premium Reserve Account" in subdivision (a)(17c). Session Laws 2012-142, s. 6.4, effective July 1, 2012, substituted "October 1, 2014" for "October 1, 2012" in the first sentence of subdivision (b)(11). Session Laws 2012-178, s. 6, effective July 1, 2012, inserted "and the Retiree Health Benefit" in the first paragraph of subdivision (b)(8). Session Laws 2013-284, s. 1(d), effective July 1, 2013, substituted "Firefighters"' for "Firemen's" in subdivisions (a)(6) and (b)(8). Session Laws 2013-360, s. 6.3(c), effective July 1, 2013, repealed subdivision (b)(11). Session Laws 2013-398, s. 1, effective August 23, 2013, in subsection (b), added "that investment shall continue to be authorized by this subsection, and," and added the last sentence; in subdivision (b)(6c), deleted "and other" following "obligations," and substituted "and asset-backed securities, whether considered debt or equity, including obligations and" for "including debt" and "seven and one-half percent (7.5%)" for "five percent (5%)"; in subdivision (b)(7), added "and (vii) contractual arrangements in which the investment manager has discretion and authority to invest assets specified in such arrangements in investments authorized by this subsection" and "excluding asset-backed financing," and made a minor stylistic change; in sub-subdivision (b)(8)b., substituted "eight" for "six" and "(8.5%)" for "(6.5%)"; substituted "eight and three-quarters percent (8.75%)" for "seven and one-half percent (7.5%)" in subdivision (b)(9); in subdivision (b)(9a), substituted "investments" for "assets" and "seven and one-half percent (7.5%)" for "five percent (5%)," and added "by the Treasurer"; and added subdivision (b)(10a). Session Laws 2015-164, s. 3(a), effective October 1, 2015, rewrote subdivision (b)(6b). Session Laws 2015-241, ss. 6.3(a) and 14.2, effective July 1, 2015, rewrote subdivision (b)(12); and in subsection (d), substituted "subdivisions (a)(17i) or (a)(17j)" for "subdivision (a)(17i)" in the first sentence, and, in the third sentence, substituted the first occurrence of "Fund or the Conservation Grant Fund, as applicable" for "Fund", substituted the second occurrence of "Fund or the Conservation Grant Fund" for "Fund", and substituted "contributed to the respective Funds" for "thereof contributed". Session Laws 2016-55, s. 1.3, effective January 31, 2017, in subsection (a), deleted subdivisions (a)(4), (a)(13), and (a)(14); in subdivisions (a)(1), (a)(2), and (a)(8), substituted "System of North Carolina" for "System"; in subdivision (a)(5), substituted "Income Plan of North Carolina" for "Plan"; in subdivision (a)(6), inserted "North Carolina" and "Squad"; and in subdivision (a)(7), inserted "North Carolina"; in subsection (b), substituted "subsection in the manner authorized by subsection (e) of this section" for "subsection"; and added the final sentence; in subdivision (b)(4), substituted "if, when acquired" for "if," and "are within one of the four highest rating categories regardless of gradations, such as ratings beginning with 'AAA,' 'AA' 'A,' or either 'BBB' or 'Baa,' of at least one nationally recognized rating service designated by the U.S. Securities and Exchange Commission" for "bear one of the four highest ratings of at least one nationally recognized rating service when acquired"; in subdivision (b)(6), substituted "equity), if, when acquired, the obligations are within one of the four highest ratings categories regardless of gradations, such as ratings beginning with 'AAA,' 'AA,' 'A,' or either 'BBB' or 'Baa,' of at least one" for "equity) provided they bear ratings by," and "service designated by the U.S. Securities and Exchange Commission" for "services as provided in G.S. 147-69.2(b)(4)"; deleted subdivisions (b)(6b), and (b)(12)b.; and rewrote subdivisions (b)(6c), (b)(7), (b)(8), (b)(9), (b)(9a), (b)(10a); in subsection (b1); substituted "The" for "With respect to investments authorized by subdivisions (b)(7), (b)(8), and (b)(9) of this section, the," and "All appointed" for "The four public"; in subsections (b2) and (b3), substituted "subsection and expenditures authorized under this section" for "subsection"; in subsections (b4) and (b5), inserted "reasonable"; and substituted "Fund and expenditures authorized under this section" for "Fund"; in subsection (d), inserted "Fees assessed by the State Treasurer may be used to defray the costs of administering the funds and expenditures authorized under this section"; and added subsection (e). Session Laws 2017-57, ss. 13A.2(b) and 13A.2(c), effective July 1, 2017, added subdivision (a)(17k); and in subsection (d), substituted "subdivisions (17i), (17j), and (17k) of subsection (a)" for "subdivisions (a)(17i) or (a)(17j)", in the last sentence, added "or the Wildlife Endowment Fund," in two places, and made stylistic changes. Session Laws 2017-102, s. 28.1(a), effective July 12, 2017, in the introductory paragraph of subsection (b), substituted "these funds" for "such funds" at the end of the first sentence, and added "The State Treasurer shall select from among the following investments subject to the following limitations and requirements" at the end; and made stylistic changes in subdivisions (b)(8) and (12). Session Laws 2017-125, s. 6, effective July 20, 2017, added subdivision (a)(21). Session Laws 2018-5, s. 5.3(e), effective July 1, 2018, added subdivision (a)(17 l ). For redesignation of subdivision, see editor's note. Session Laws 2018-5, s. 13.5, effective July 1, 2018, added subdivision (a)(17 l ). Session Laws 2019-162, s. 5, effective July 25, 2019, added subdivision (a)(22). Session Laws 2019-176, s. 3(e), as amended by Session Laws 2020-69, s. 9(a), effective July 1, 2020, substituted "State Public Education Property Insurance Fund" for "Public School Insurance Fund" in subdivision (a)(15). See editor's note. Session Laws 2020-69, s. 9(b), effective July 1, 2020, deleted subdivision (a)(15a), which read: "The State Public Education Property Insurance Fund." Session Laws 2020-78, s. 7.3(a), (b), effective July 1, 2020, added subsection (a)(17n); and in subsection (d), substituted "subdivisions (17i), (17j), (17k), (17 l ), and (17n)" for "subdivisions (17i), (17j), and (17k)" in the first sentence, and added "the Ecosystem Restoration Fund, the Riparian Buffer Restoration Fund" twice in the last sentence. Session Laws 2021-73, ss. 1(b), 2(a), effective July 2, 2021, added subdivision (a)(23), and subsections (b6), and (b7). Legal Periodicals. - For note, "North Carolina's South African Divestment Statute," see 67 N.C.L. Rev. 949 (1989). Opinions of Attorney General Investments made through the North Carolina Equity Investment Fund Pooled Trust and managed by State Street Bank and Trust Company are not subject to the conditions set forth in subdivisions (8)a.-g. of this section. See opinion of Attorney General to Ralph Campbell, Jr., State Auditor, 2002 N.C.A.G. 31 (12/12/02). Investments in Limited Partnerships or Limited Liability Companies. - Authority of the State Treasurer under subdivision (b)(9) of this section to invest in limited partnerships or limited liability companies does not specify or limit the types of investment vehicles in which the limited partnerships or limited liability companies may invest; therefore, investments in derivatives are not prohibited. See opinion of Attorney General to Ralph Campbell, Jr., State Auditor, 2002 N.C.A.G. 31 (12/12/02). Economic Development - As long as an investment by the State Treasurer is authorized by this section and G.S.147-69.3, it is not disqualified by the fact that it might indirectly facilitate economic development. See opinion of Attorney General to Ralph Campbell, Jr., State Auditor, 2002 N.C.A.G. 31 (12/12/02).