Senate Bill No. 536
               Senate Bill No. 536

               PUBLIC ACT NO. 98-86


AN   ACT   CLASSIFYING  REITS  AS  AN  ALTERNATIVE
INVESTMENT IN  THE  STATE'S  TRUST  FUNDS  WITHOUT
AFFECTING   THE   EQUITY   CAP  AND  CHANGING  THE
VALUATION ON EQUITIES FROM BOOK TO MARKET.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    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general statutes is repealed and the following  is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] MARKET
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.

Approved May 22, 1998