|
An Act TO REDUCE THE STRESS ON LOCAL PROPERTY TAXES THROUGH ENHANCED PENSION FUND INVESTMENT |
Be it enacted by the Senate and House
of Representatives in General Court assembled, and by the authority of the
same, as follows:
SECTION 1. Section 22 of chapter 32 of the General Laws, as appearing in the 2004 Official Edition, is hereby amended by inserting after line 14 the following 2 paragraphs:-
Notwithstanding any general or special law to the contrary, the commission shall order each system that in any year has a funded ratio of less than 65 per cent, and has a rate of return during the previous 10 years that is at least 2 percentage points less than the PRIT rate of return over the same period, all as determined by the commission, to transfer all of its assets to the PRIT Fund for investment. The public employee retirement administration commission shall make its initial determination under this section using data as of January 1, 2007. The system shall transfer these assets in accordance with a schedule, procedure and other conditions or requirements determined by the executive director of the PRIM board.
A system ordered by the commission to transfer its assets under this section may appeal for an exemption to a review board which shall consist of the executive director of the PRIM board or the director’s designee, the secretary of administration and finance or the secretary’s designee, and a member selected by the state treasurer from a list of 3 names submitted by the Massachusetts Association of Contributory Retirement Systems. The system shall file written notice of its appeal to the review board with the secretary of administration and finance not later than 30 days after receiving the commission’s order. The review board may establish rules for its own procedure, which need not comply with chapter 30A. The review board may grant an exemption from the transfer requirement of this section if the rate of return for that system has exceeded the PRIT Fund rate of return for the previous 2 years or if the rate of return was affected by other extenuating circumstances. The review board may also consider the system’s management costs, its risk return ratio and any other factors it considers appropriate. The grant of an exemption shall require the concurrence of at least 2 of the 3 members or their designees. A system may seek judicial review of the review board’s decision denying an exemption under section 14 of chapter 30A.
SECTION 2. The public employee retirement administration shall file a report with the Joint Committee on Public Service every five years detailing the average rate of return since 1985 and funding level of each retirement system.
SECTION 3. There shall be a special commission to consist of the lieutenant governor who shall serve as chairman; the assistant secretary of economic development who shall serve as vice-chairman; the president of the Massachusetts Technology Development Corporation; the executive director of the public employee retirement administration commission; the house and senate chairs of the joint committee on public service; the house and senate chairs of the joint committee on economic development and emerging technologies; the house and senate ranking minority members of the joint committee on public service; and 15 members to be appointed by the governor 1 of whom shall be a representative of a regional retirement board which has an established record of targeted economic development investments; 1 of whom shall be a representative of a local retirement board that has not invested in the PRIT fund; 1 of whom shall be a professional with 10 years experience in the management of an early stage high growth business; 1 of whom shall be a professional with 10 years experience in affordable housing; 1 of whom shall be a professional with 10 years experience in urban economic development, 1 of whom shall be a professional with 10 years experience in rural economic development; 1 of whom shall be a professional with 10 years experience in economic development or consulting or development finance; 1 of whom shall be a professional with 10 years experience in food, agriculture, aquaculture or the fish industry; 1 of whom shall be a founder or executive of a successful medical devise company; 1 of whom shall be a professional with 10 years experience in the financing of infrastructure; 1 of whom shall be a professor from a Massachusetts public university or college; 1 of whom shall be a professor from a private university or college; 1of whom shall be a member of the Massachusetts Public Pension Forum and 2 of whom shall be professionals with 10 years experience in the management of venture capital investment and early stage high growth business. All members shall serve without compensation but shall be reimbursed for out-of-pocket expenses for service on the commission. The commission shall be appointed within 90 days of the effective date of this act.
The commission shall study the nature of private capital market gaps in the supply of financing to small businesses, urban centers, rural communities, affordable housing and emerging industries in the Commonwealth. The commission shall evaluate and propose the manner in which public pension funds can contribute to addressing such capital gaps. The commission shall issue a final report to the governor and the general court on or before October 7, 2008.
The commission shall assess all public retirement boards not fully invested in the PRIT fund and may spend a sum not to exceed $250,000 for the study. Public retirement boards cited shall be assessed for this expense proportionately based on the amount of assets. PERAC shall be the legal entity to collect this charge on behalf of the Commonwealth.