Senate Bill No. 996
               Senate Bill No. 996

              PUBLIC ACT NO. 97-260


AN  ACT CONCERNING  INVESTMENTS  FOR  THE  STATE'S
TRUST FUND.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1. Subsection (a) of section 3-13d of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (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 fifty-five per cent of the [book]
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 book value of
each such trust  fund  in  common  stock to exceed
fifty-five per cent for more than six months after
such  fluctuation  occurs]   INVESTMENTS  IN  REAL
ESTATE   INVESTMENT  TRUSTS   (REITS)   SHALL   BE
CONSIDERED ALTERNATIVE INVESTMENTS  AND NOT COMMON
STOCK INVESTMENTS UNDER  THIS SECTION. 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.
    Sec.  2.  This  act shall take effect from its
passage.

Vetoed June 27, 1997