2025 State Investment Modernization Act.-AB

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2025-6
HOUSE BILL 506

*H506-v-6*
AN ACT TO ENACT THE 2025 STATE INVESTMEN T MODERNIZATION ACT, AS
RECOMMENDED BY THE STATE TREASURER.

The General Assembly of North Carolina enacts:

PART I. TECHNICAL RE ORGANIZATION OF ARTI CLE 6 OF CHAPTER 147 OF
THE GENERAL STATUTES
SECTION 1.1. Article 6 of Chapter 147 of the General Statutes is amended to add
the following new Parts:
(1) Part 1, to be entitled "General" and consisting of G.S. 147-65 through
G.S. 147-69.
(2) Part 2, to be entitled "Investments and Funds" and consisting of G.S. 147-69.1
through G.S. 147-69.7.
(3) Part 3, to be entitled "Reports and Audits" and consisting of G.S. 147-69.8
through G.S. 147-69.70.
(4) Part 4, to be entitled "North Carolina Investment Authority" and consisting of
G.S. 147-70.1 through G.S. 147-73.2.
(5) Part 5, to be entitled "Department Bookkeeping and Deposits" and consisting
of G.S. 147-74 through G.S. 147-86.2.
SECTION 1.2.(a) G.S. 147-65 is recodified as G.S. 147-65.2.
SECTION 1.2.(a1) G.S. 147-66 is repealed.
SECTION 1.2.(b) G.S. 147-69.3A is recodified as G.S. 147-67.1.
SECTION 1.2.(c) G.S. 147-69.11 is recodified as G.S. 147-73.2.
SECTION 1.2.(d) G.S. 147-69.7 is recodified as G.S. 147-70.6.
SECTION 1.2.(e) G.S. 147-70 is recodified as G.S. 147-68.3.
SECTION 1.2.(f) G.S. 147-71 is recodified as G.S. 147-68.4.
SECTION 1.2.(g) G.S. 147-72 is repealed.
SECTION 1.2.(h) G.S. 147-73 is repealed.
SECTION 1.2.(i) G.S. 147-75 is recodified as G.S. 147-66.2.
SECTION 1.2.(j) G.S. 147-75.1 is recodified as G.S. 147-68.5.
SECTION 1.2.(k) G.S. 147-86.2 is recodified as G.S. 147-68.6.
SECTION 1.3. Subsection (i2) of G.S. 147-69.3 is recodified as subsection (b) of
G.S. 147-65.2, as created by Section 1.2(a) of this Part.
SECTION 1.4. This Part is effective when it becomes law.

PART II. CREATION OF THE NORTH CAROLINA INVESTMENT AUTHORITY
SECTION 2.1. Part 1 of Article 6 of Chapter 147 of the General Statutes, as created
and amended by Part I of this act, is amended by adding a new section to read:
"§ 147-65.1. Definitions.
The following definitions apply in this Article:
(1) Board of Directors. – The Board of Directors of the North Carolina Investment
Authority.

Page 2 Session Law 2025-6 House Bill 506
(2) Chief Investment Officer or CIO. – The Chief Investment Officer of the
Investment Authority.
(3) Department. – The Department of State Treasurer.
(4) Escheats Fund. – The Escheats Fund established under Article 1A of Chapter
116B of the General Statutes.
(5) Investment Authority. – The North Carolina Investment Authority,
established under Part 4 of this Article.
(6) Reserved for future codification purposes.
(7) Retirement Systems. – This term includes all of the following retirement
systems:
a. The Teachers' and State Employees ' Retirement System, established
under Article 1 of Chapter 135 of the General Statutes.
b. The Consolid ated Judicial Retirement System, established under
Article 4 of Chapter 135 of the General Statutes.
c. The North Carolina Firefighters' and Rescue Squad Workers' Pension
Fund, established under Article 86 of Chapter 58 of the General
Statutes.
d. The Local Governmental Employees' Retirement System, established
under Article 3 of Chapter 128 of the General Statutes.
e. The Legislative Retirement System of North Carolina, established
under Article 1A of Chapter 120 of the General Statutes.
f. The North Carolina National Guard Pension Fund , established under
Article 3 of Chapter 127A of the General Statutes.
g. The Registers of Deeds ' Supplemental Pension Fund , established
under Article 3 of Chapter 161 of the General Statutes.
h. The Retiree Health Benefit Fund, established under G.S. 135-7(f).
i. The North Carolina Teachers ' and State Employees ' Benefit Trust,
established under G.S. 135-7(g).
(8) Treasurer. – The State Treasurer."
SECTION 2.2. Part 4 of Article 6 of Chapter 147 of the General Statutes, as created
and amended by Part I of this act, reads as rewritten:
"Part 4. North Carolina Investment Authority.
"§ 147-70.1. Creation of Investment Authority.
(a) Creation. – The North Carolina Investment Authority is created as a body corporate
and politic having the powers and jurisdiction as provided under this Article or any other law.
The Investment Authority is a State agency for the performance of essential governmental and
public functions. The Investment Authority is located within, but independent from the control
of, the Department of State Treasurer. The Investment Authority shall have perpetual succession.
(b) Independence. – The Investment Authority, in carrying out its statutory
responsibilities, shall be independent of any fiscal control exercised by the Director of the
Budget, the Department of Administration, and the Department of State Treasurer, including for
organizational, staffing, procurement, and budgetary purposes. Except as provided under
subsection (c) of this section and unless otherwise explicitly provided by law, t he Investment
Authority is exempt from the State Budget Act , and the provisions of Chapter 143C of the
General Statutes do not apply to the Investment Authority.
(c) Fiduciary Funds. – In order for the Investment Authority to effectively operate the
investment programs under its management, all funds while under management of the Investment
Authority are Fiduciary Funds described under subdivisions (8) through (10) of G.S. 143C-1-3(a)
and shall be accounted for as specified in G.S. 147-69.3(f).
"§ 147-70.2. Powers and duties of the Investment Authority.

House Bill 506 Session Law 2025-6 Page 3
(a) In addition to the authority granted to the Investment Authority under this Article or
any other law, the Investment Authority shall have all of the powers necessary to execute the
provisions of this Part, including, at a minimum, the following powers:
(1) The right to sue and be sued.
(2) To take, demand, receive, and possess all kinds of real and personal property
necessary and proper for its purposes.
(3) To bargain, sell, grant, alienate, or dispose of all real and personal property as
it may lawfully acquire.
(b) The Investment Authority shall have the right to acquire fi delity bonds, fiduciary
insurance, directors' and officers' insurance, or errors and omissions coverage, as determined by
the Investment Authority board. This right is independent of any purchase of insurance by the
State Treasurer under G.S. 147-67.1.
(c) Pursuant to G.S. 143B-1320(b), the Investment Authority shall be exempt from the
provisions of Article 15 of Chapter 143B of the General Statutes.
"§ 147-70.3. Taxation of Investment Authority.
(a) Property owned or acquired by the Authority is exempt from all taxes imposed by the
State or any political subdivision of the State.
(b) The Investment Authority shall not be subject to State income taxes.
(c) This section shall not be construed to apply in any way to individual members of the
Board of Directors or any employee of the Investment Authority.
"§ 147-70.4. Confidentiality of Investment Authority records.
Any record or other information received or generated by the Investment Authority in order
to negotiate at arm 's length investment transactions that constitute a trade secret , as defined in
G.S. 66-152, is not public record and is exempt from the requirements of Chapter 132 of the
General Statutes until the applicable negotiation is completed and unless the record or
information substantiates a conflict with the duties of the Investment Authority under
G.S. 147-70.6(a).
"§ 147-70.5. Criminal record checks.
(a) The Investment Authority may obtain from the State and National Repositories of
Criminal Histories or from any other lawful source the criminal history of any of the following
individuals:
(1) A current or prospective permanent or temporary employee of the Investment
Authority.
(2) A contractor with the Investment Authority.
(3) An employee or agent of a contractor with the Investment Authority who is
performing or will perform work for the Investment Authority.
(4) A volunteer of the Investment Authority.
(5) Any other individual otherwise engaged by the Investment Authority who will
have access to health or financial information or data maintained by the
Investment Authority that is confidential or otherwise nonpublic.
(b) The Investment Authority may deny employment to or dismis s any individual
identified under subdivisions (1), (2), (4), and (5) of subsection (a) of this section who refuses to
consent to a criminal history record check or to the use of fingerprints or other identifying
information required by the State or Nation al Repositories of Criminal Histories. Any refusal
shall constitute just cause for the employment denial or the dismissal from employment.
(c) The Investment Authority may extend a conditional offer of employment pending the
results of a criminal history record check authorized by this section.
…
"§ 147-71.1. Board of Directors.
(a) Membership. – The Investment Authority shall be governed by a Board of Directors.
The Board of Directors shall consist of the following voting members:

Page 4 Session Law 2025-6 House Bill 506
(1) The State Treasurer, who shall serve as an ex officio member.
(2) One member appointed by the General Assembly upon the recommendation
of the Speaker of the House of Representatives in accordance with
G.S. 120-121.
(3) One member appointed by the General A ssembly upon the recommendation
of the President Pro Tempore of the Senate in accordance with G.S. 120-121.
(4) One member appointed by the Governor , subject to confirmation by the
General Assembly by joint resolution.
(5) One member appointed by the State Treasurer, subject to confirmation by the
General Assembly by joint resolution.
(b) Terms. – The four appointive directors of the Board of Directors shall be appointed
for staggered six‑year terms, except for the initial term. The initial term of the director appointed
by the President Pro Tempore of the Senate is one year. The initial term of the director appointed
by the Speaker of the House of Representatives is two years. The initial term of the director
appointed by the State Treasurer is three years. The initial term of the director appointed by the
Governor is four years . An appointive director whose term has expired but whose qualified
successor has not been appointed shall continue to serve on the Board of Directors until a
qualified successor is duly appointed, including by the State Treasurer after a holdover period of
six months or more as provided for under subsection (e) of this section.
(c) Qualifications to Serve. – No appointed director of the Board of Directors shall hold
any other public office in North Carolina, except that an appointed director may also have
membership on either or both of the Boards of Trustees under G.S. 128-28 and G.S. 135-6. All
appointed members of the Board of Directors shall have expert knowledge of investments and a
minimum of a 10-year track record of successful management in pension, endowment, or other
relevant investment management fields.
(d) Disqualifications to Serve. – An individual is not eligible to serve on the Board of
Directors if any of the following apply to that individual:
(1) The individual has been indicted or charged with, been convicted of, pleaded
guilty or nolo contendere to, or forfeited bail concerning a felony , or a
misdemeanor involving fraud, theft, or dishonesty under the laws of any
jurisdiction in the United States.
(2) The individual has had a judgment entered against him or her by a court of
competent jurisdiction in a civil matter involving a breach of fiduciary duties.
(3) The individual has been the subject of an adverse action by the Securities and
Exchange Commission which resulted in any sanction, payment of a fine,
injunction, or other negative finding, whether individually or as a partner,
principal member, managing director, or other position of leadership of any
entity subject to the penalty or finding.
(4) The individual, or the individual's spouse or immediate family member, is or
becomes employed by the Department of State Treasurer or by a ser vice
provider engaged to invest or assist in the oversight of assets overseen by the
Investment Authority.
(5) The individual, or the individual's spouse or immediate family member, is an
endorser, obligor, or provider of surety for , or is a borrower of, any money
loaned to or borrowed from the assets overseen by the Board of Directors.
(d1) Removal of Appointive Members. – A duly appointed member of the Board of
Directors may be removed by the applicable appointing authority for misfeasance, malfeasance,
or nonfeasance.
(e) Vacancies. – Any vacancy in a position held by an appointive member shall be filled
by a new appointment made by the applicable appointing authority for the vacant seat . If a seat
on the Board of Directors is vacant or held over for six months or more without an appointment

House Bill 506 Session Law 2025-6 Page 5
by the applicable appointing authority of an individual meeting the qualifications in this section,
then the State Treasurer may nominate a member for approval by the Board of Directors. Any
individual appointed to fill a vacancy shall serve only for the unexpired term. A vacancy
automatically occurs upon the death or resignation of a member of the Board of Directors or upon
the failure of a member of the Board of Directors to do any of the following:
(1) Attend meetings for three consecutive meetings unless excused by majority
vote of the other Board of Directors members.
(2) Cure a conflict of interest within 30 days of identification of the conflict.
(3) Agree to abide by the ethics policy adopted by the Board of Directors.
(f) Reappointment. – Any member of the Board of Directors is eligible for
reappointment, except that no appointive member of the Board of Directors may serve for more
than two consecutive, full, six-year terms without at least a one-year break in membership on the
Board of Directors.
(g) Oath. – Each appointive member of the Board of Directors shall take an oath of office
to administer the duties of office faithfully and impartially, and a record of the oath shall be filed
in the office of the Secretary of State.
(h) Officers. – The following shall apply to officers of the Board of Directors:
(1) The State Treasurer shall serve as chair of the Board of Directors.
(2) The State Treasurer shall designate a vice-chair from among the remaining
members of the Board of Directors. The term of the vice-chair extends to the
earlier of either three years or the date of expiration of the vice-chair's then
current term as a member of the Board of Directors. In the absence of the State
Treasurer or the Treasurer 's designee, the vice -chair shall preside over the
proceedings of the Board of Directors.
(3) The Board of Directors shall appoint and prescribe the duties of a secretary ,
who need not be a member of the Board of Directors . The secretary is the
custodian of all books, documents, and papers filed with the Board of
Directors and the minute book or journal of the Board of Directors. The
secretary shall keep a record of the proceedings of the Board of Directors. The
secretary has the authority to make copies of all minutes and other records and
documents of the Board of Directors.
(i) Designees. – The State Treasurer is authorized to appoint a designee. No other
member of the Board of Directors is authorized to appoint a designee.
(j) Compensation and Reimbursement . – Members of the Board of Directors shall
receive no compensation for their services. For attendance at meetings of the Board of Directors
or any committee of the Board of Directors, and for other services for the Investment Authority,
members of the Board of Directors shall receive per diem, subsistence, and travel allowances in
accordance with G.S. 138-5 or G.S. 138-6, as appropriate.
(k) Meetings and Voting . – The Board of Directors shall meet at least quarterly. A
meeting may be called by the State Treasurer or by a majority of the Board of Directors . The
State Treasurer or the Treasurer 's designee shall establish the agenda for each meeting. A
minimum of t hree members of the Board of Directors is required for quorum . The affirmative
vote of a majority of the members of the Board of Directors present at a meeting of the Board of
Directors that has been duly called and held is required for any action taken by the Investment
Authority, except that the State Treasurer's vote shall prevail in the event of a tied vote.
"§ 147-71.2. Duties of the Board of Directors.
(a) Investment-Related Powers and Duties. – The Board of Directors has all of the
following investment-related powers and duties:
(1) The Board of Directors has the authority to approve all of the following:
a. Investment policy statements to include investment objectives,
strategic asset allocation, and policy benchmarks.

Page 6 Session Law 2025-6 House Bill 506
b. Risk budgets, including related limits for key risk indicators.
c. The appointment of a master global custodian bank.
d. Annual operating budgets for investment programs.
e. Market-oriented compensation plans.
(2) The Board of Directors shall periodically review all of the following:
a. Investment performance and investment manager appointment and
termination activities.
b. Investment strategies, policies, and tactical considerations.
c. Asset liability studies.
d. Performance benchmarks and key risk indicators.
e. Audited investment financial statements and audit reports pursuant to
G.S. 147-69.9.
f. Independent evaluation of governance, operations, and investment
practices.
g. Periodic cost-effectiveness studies of the investment programs.
(3) The Board of Directors shall appoint a Chief Investment Officer of the
Investment Authority.
(4) With respect to Retirement Systems ' assets, at least biennially, the Board of
Directors shall approve an absolute risk operating range . The absolute risk
operating range shall be expressed in equity and debt allocation equivalency
terms and shall meet all of the following criteria:
a. The range is deemed appropriate in seeking to maximize long -term
returns.
b. The risk is not considered undue relative to other similarly situated
U.S. public pension funds . An assessment of compliance with t his
requirement related to undue risk shall be construed in a manner
consistent with subsections (c) and (d) of G.S. 147-70.6.
c. In setting t he range , the Board of Directors has taken into
consideration all of the factors affecting the funding of the Retirement
Systems and each of the Retirement Systems ' ability to meet its
financial obligations.
(5) The Board of Directors shall utilize the approved absolute risk operating range
under subdiv ision ( 4) of this subsection to recommend investment return
assumptions to (i) the Board of Trustees of the Local Governmental
Retirement System, (i i) the Board of Trustees of the Teachers ' and State
Employees' Retirement System, and (iii) the actuaries engaged to prepare
annual actuarial valuations.
(b) Annual Internal Budget. – The Board of Directors shall not approve an annual internal
budget for the Investment Authority that exceeds three basis points of a rolling three-year average
of total assets invested by the Investment Authority, unless the Investment Authority reasonably
determines that, because of special circumstances , including applicable investment restrictions,
it is clearly not prudent to do so. The annual internal budget includes expenditures directly
associated with services retained by the Investment Authority in accordance with subsection (c)
of this section and employee compensation and benefits. The Investment Authority's approved
annual internal budget as well as the Investment Authority 's actual spending for the prior fiscal
year shall be annually reported to the Joint Legislative Commission on Governmental Operations,
the House of Representative s Appropriations Committee, the Senate Appropriations/Base
Budget Committee, and the Fiscal Research Division.
(c) Authority to Contract for Services. – Notwithstanding Article 3 of Chapter 143 of the
General Statutes , G.S. 114-2.3, and G.S. 147-17, the Investment Authority is authorized to
independently retain t he services of appraisers, auditors, actuaries, attorneys, investment

House Bill 506 Session Law 2025-6 Page 7
consultants, statisticians, custodians, information technology professionals, or other persons or
firms possessing specialized skills or knowledge necessary for the proper administration of
investment programs created pursuant to this section.
(d) Setting of Compensation Plans . – In order to promote achievement of long -term
investment objectives and to retain key public employees with investment functions, the
Investment Authority is authorized to establish, consistent with the Investment Authority 's
fiduciary duties, market-oriented compensation plans, including salaries and performance-related
bonuses, for employees possessing specialized skills or knowledge necessary for the proper
administration of investment programs . The design and administration of those compensation
plans shall be based on compensation studies conducted by a nationally recognized firm
specializing in public fund investment compensation. The compensation and othe r associated
employee benefits shall be apportioned directly from the investment program. The Investment
Authority shall report the salaries and bonuses paid to the Joint Legislative Oversight Committee
on General Government annually.
"§ 147-71.3. Liability of Board of Directors.
An individual serving on the Board of Directors shall be immune individually from civil
liability for monetary damages, except to the extent covered by insurance, for any act or failure
to act arising out of that service, except where any of the following apply:
(1) The individual was not acting within the scope of that individual 's official
duties.
(2) The individual was not acting in good faith.
(3) The individual committed gross negligence or willful or wanton misconduct
that resulted in the damages or injury.
(4) The individual derived an improper personal financial benefit, either directly
or indirectly, from the transaction.
(5) The individual incurred the liability from the operation of a motor vehicle.
…
"§ 147-72.1. Chief Investment Officer.
(a) Principal Executive Officer. – The Chief Investment Officer is the Investment
Authority's principal executive officer and is responsible to the Board of Directors.
(b) Appointment and Term. – The CIO shall be appointed by a majority vote of the Board
of Directors, and any vacancy may be so filled by the Board of Directors. An individual appointed
as the CIO shall have expert knowledge of investments and a minimum of a 15-year track record
of successful management in pension, endowment, or other relevant investment management
arenas. The term of employment and compensation of the CIO is set by the Board of Directors,
except that each term of employment shall be limited to five years or l ess. The CIO is eligible
for multiple terms of employment without interruption. The CIO may be removed from office by
the Board of Directors.
(c) Employment of Staff. – The Chief Investment Officer shall employ staff necessary to
assist the CIO and the Board of Directors in carrying out duties and responsibilities under this
Article or as prescribed in any other law. Unless otherwise provided by law, Investment Authority
employees shall serve at the pleasure of the CIO and any vacancies in these positions may be
filled by the CIO. The CIO may designate managerial, professional, and policy-making positions
as exempt from the North Carolina Human Resources Act, in accordance with G.S. 126-5(c1).
Compensation of employees is set by the CIO within the limits set by the compensation plan
approved by the Board of Directors under G.S. 147-71.2.
(d) Contract Negotiation. – The CIO may negotiate, renegotiate , and execute contracts
with third parties in the performance of the CIO's duties and responsibilities under this Article .
Any delegation of authority by the Board of Directors shall require Board of Directors approval
and shall reserve certain strategic decisions and extraordinary investment decisions to the Board

Page 8 Session Law 2025-6 House Bill 506
of Directors. Contract execution with master global custodian banks and external auditors shall
be done only after approved by the Board of Directors.
…
"§ 147-73.2. Ethics policies.
To ensure that the State Treasurer's Investment Authority investment programs operate under
a strong governance framework with rigorous internal controls and a high degree of operational
transparency and are managed with the highest ethical and professional standards and in the most
efficient and effective manner possible, the State Treasurer, after consultation with the
Investment Advisory Committee, is authorized and required to Board of Directors shall adopt
policies and procedures on the following topics:
(1) Requiring that the Department of State Treasurer's Investment Management
Division Investment Authority adopt a code of ethics.
(2) Requiring all employees of the Department Investment Authority who have
responsibility for matters related to investments to be provided with training
with respect to the discharge of their duties and responsibilities to the funds.
(3) Governing gifts to employees of the Department Investment Authority who
have responsibility for matters related to investments.
(4) Imposing limitations on external investment managers' use of pla cement
agents and other persons that appear before the Department Investment
Authority to ensure that these persons play only a proper role in investment
opportunities.
(5) As a component of the investment due diligence, negotiations, and contracting
process, requiring an independent assessment of whether circumstances exist
that create a material risk that professional judgement or actions regarding a
potential investment arrangement's recommendation, approval, or execution
have been or will be unduly influenced by a direct or indirect personal
interest."
SECTION 2.3.(a) Rules, codes of ethics, policies, and procedures adopted by the
State Treasurer in effect on June 30, 2025, that are impacted by the change in authority from the
State Treasurer or Department of State Treasurer to the Investment Authority under this Part shall
remain in effect until amended by law, amended by the Investment Authority, or repealed.
SECTION 2.3.(b) Before January 1, 2026, when the Investment Authority shall
begin to manage investments under Part III of this act, funds appropriated to the Department of
State Treasurer and funds available to the Department of State Treasurer under G.S. 147-69.3
may be used to pay any expenses of the Investment Authority.
SECTION 2.4. This Part is effective July 1, 2025.

PART III. NORTH CARO LINA INVESTMENT AUTH ORITY TO MANAGE
INVESTMENTS AND BEGI N CARRYING OUT STATU TORY DUTIES JANUARY 1,
2026
SECTION 3.1.(a) Part 2 of Article 6 of Chapter 147 of the General Statutes, as
created and amended by Part I of this act, reads as rewritten:
"Part 2. Investments and Funds
"§ 147-69.1. Investments authorized for General Fund and Highway Funds assets.
(a) The Governor and Council of State, with the advice and assistance of the State
Treasurer, shall Treasurer and the Investment Authority, may adopt such rules and regulations as
shall be necessary and appropriate to implement the provisions for the implementation of this
section.
(b) This section applies to funds held by deposited with the State Treasurer to the credit
of:of all of the following:
(1) The General Fund;Fund.

House Bill 506 Session Law 2025-6 Page 9
(2) The Highway Fund and Highway Trust Fund.
(c) It shall be is the duty of the State Treasurer Investment Authority to invest the cash
of the funds enumerated in subsection (b) of this section in excess of the amount required to meet
the current needs and demands on such those funds, selecting from among the following:
(1) Obligations of the United States or obligations fully guaranteed both as to
principal and interest by the United States.
(2) Obligations of the Federal Farm Credit Bank, the Federal Home Loan Banks,
the Federal Home Loan Mortgage Corporation, Fannie Mae, the Government
National Mortgage Association, th e International Bank for Reconstruction
and Development, the International Finance Corporation, the Inter-American
Development Bank, the Asian Development Bank, and the African
Development Bank.
(3) Repurchase Agreements with respect to one or more of the following:
a. Securities issued or guaranteed by the United States government or its
agencies.
b. Securities eligible for investment by this section executed by a bank
or trust company or by primary or other reporting dealers to the
Federal Reserve Bank of New York.
c. Securities eligible for investment by this section executed by a
registered broker-dealer that is subject to the rules and regulations of
the U.S. Securities and Exchange Commission and is a member in
good standing of the Financial Industry Regulatory Authority.
(4) Obligations of the State of North Carolina.
(5) Certificates of deposit and other deposit accounts of financial institutions
under any of the following conditions:
a. With financial institutions with a physical presence in the State for the
purpose of receiving commercial or retail deposits; provided that any
principal amount of such deposit in excess of the amount insured by
the federal government or any agency thereof, be fully secured by
surety bonds, or be fully collateralized; provided further that the rate
of return or investment yield may not be less than that available in the
market on United States government or agency obligations of
comparable maturity.
b. With financial institutions with a physical presence inside or outsi de
the State, in accordance with all of the following conditions:
1. The funds are initially deposited through a bank or savings and
loan association in the State that is an official depository and
that is selected by the State Treasurer, provided that the rate of
return or investment yield shall not be less than that available
in the market on United States government or agency
obligations of comparable maturity.
2. The selected bank or savings and loan association arranges for
the redeposit of the funds i n deposit accounts of the State in
one or more federally insured banks or savings and loan
associations wherever located, provided that no State funds
shall be deposited in a bank or savings and loan association
that at the time holds other deposits from the State.
3. The full amount of principal and any accrued interest of each
deposit account are covered by federal deposit insurance.

Page 10 Session Law 2025-6 House Bill 506
4. The selected bank or savings and loan association acts as
custodian for the State with respect to the deposit in the State's
account.
5. On the same date that the State funds are redeposited, the
selected bank or savings and loan association receives an
amount of federally insured deposits from customers of other
financial institutions wherever located equal to or greater than
the amount of the funds invested by the State through the
selected bank or savings and loan association pursuant to this
sub-subdivision.
…
(7) Prime quality commercial paper that, when acquired, bears the highest rating,
such as a minimum of "P1," "A1 ," or "F1," of at least one nationally
recognized rating service designated by the U.S. Securities and Exchange
Commission, and does not bear a rating below the highest by any nationally
recognized rating service which rates the particular obligation.
(8) Bills of exchange or time drafts drawn on and accepted by a commercial bank
and eligible for use as collateral by member banks in borrowing from a federal
reserve bank, provided that when bills or drafts are acquired, the accepting
bank or its holding comp any is either (i) incorporated in the State of North
Carolina or (ii) has outstanding publicly held obligations that bear the highest
rating, such as a minimum of "P1," "A1," or "F1," of at least one nationally
recognized rating service designated by the U .S. Securities and Exchange
Commission, and do not bear a rating below the highest by any nationally
recognized rating service which rates the particular obligations.
(9) Asset-backed securities (whether considered debt or equity) provided, when
acquired, the securities bear the highest rating, such as "AAA" or "Aaa," of at
least one nationally recognized rating service designated by the U.S.
Securities and Exchange Commission, and do not bear a rating below the
highest rating by any nationally recognized r ating service which rates the
particular securities.
(10) Corporate bonds and notes provided they, when acquired, bear the highest
rating, such as "AAA" or "Aaa," of at least one nationally recognized rating
service designated by the U.S. Securities and Exchange Commission, and do
not bear a rating below the highest by any nationally recognized rating service
which rates the particular obligation.
(d) Unless otherwise provided by law, the interest or income received and accruing from
all deposits or inves tments of such cash balances shall be paid into the State's General Fund,
except that all interest or income received and accruing on the monthly balance of the Highway
Fund and Highway Trust Fund shall be paid into the State Highway Fund and Highway Trust
Fund. The cash balances of the several funds may be combined for deposit or investment
purposes; and when such combined deposits or investments are made, the interest or income
received and accruing from all deposits or investments shall be prorated among the funds in
conformity with applicable law and the rules and regulations adopted by the Governor and
Council of State.
…
"§ 147-69.2. Investments authorized for special funds held by State Treasurer.
(a) This section applies to funds held by the State Treasurer to the credit of each of the
following:
(1) The Teachers' and State Employees' Retirement System of North Carolina.
(2) The Consolidated Judicial Retirement System of North Carolina.

House Bill 506 Session Law 2025-6 Page 11
(3) The State Health Plan for Teachers and State Employees.
…
(5) The Disability Salary Continuation Income Plan of North Carolina.
(6) The North Carolina Firefighters' and Rescue Squad Workers' Pension Fund.
(7) The North Carolina Local Governmental Employees' Retirement System.
(8) The Legislative Retirement System of North Carolina.
(9) The Escheat Fund.
(10) The Legislative Retirement Fund.
(11) The State Education Assistance Authority.
(12) The State Property Fire Insurance Fund.
…
(16) The Liability Insurance Trust Fund.
(16a) The University of North Carolina Hos pitals at Chapel Hill funds, except
appropriated funds, deposited with the State Treasurer pursuant to
G.S. 116-350.40.
(17) Trust funds of The University of North Carolina and its constituent institutions
deposited with the State Treasurer pursuant to G.S. 116-36.1.
(17a) North Carolina Veterans Home Trust Fund.
(17b) North Carolina National Guard Pension Fund.
(17c) Retiree Health Benefit Fund.
(17d) The Election Fund.
(17e) The North Carolina State Lottery Fund.
(17f) Funds deposited with the State Treas urer by public hospitals pursuant to
G.S. 159-39(g).
(17g) Funds deposited with the State Treasurer by Local Government Other
Post-Employment Benefits Trusts pursuant to G.S. 159-30.1.
(17h) The Local Government Law Enforcement Special Separation Allowance
Fund.
(17i) The North Carolina Conservation Easement Endowment Fund.
(17j) The Conservation Grant Fund.
(17k) The Wildlife Endowment Fund.
(17l) The Ecosystem Restoration Fund.
(17m) The Needs-Based Public School Capital Fund.
(17n) The Riparian Buffer Restoration Fund.
(18) Any other special fund created by or pursuant to law for purposes other than
meeting appropriations made pursuant to the Executive Budget Act.
(19) The Swain County Settlement Trust Fund.
(20) Institutional funds of the colleges of the North Carolina Community College
System.
(21) The Disability Income Plan of North Carolina.
…
(23) 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).
(24) Funds deposited with the State Treasurer by charter schools pursuant to
G.S. 115C-218.15(f).
(b) It shall be the duty of the State Treasurer Investment Authority 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 Investment Authority 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

Page 12 Session Law 2025-6 House Bill 506
or contractually committed to be made, then that investment shall continue to be authorized by
this subsection, and none of the percentage or other li mitation on investments set forth in this
subsection shall be construed to require the State Treasurer Investment Authority to subsequently
dispose of the investment or fail to honor any contractual commitments as a result of changes in
market values, rati ngs, 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 Investment Authority shall categorize
investment management arrangements according to the primary investment type or primary
strategy utilized under the arrangement authorized under subsect ion (e) of this section. No
investment management arrangement may be categorized in more than one of the subdivisions
of this section. The State Treasurer Investment Authority shall select from among the following
investments subject to the following any stipulated limitations and requirements:requirements:
(1) Investments authorized by G.S. 147-69.1(c)(1)-(7).
(2) General obligations of other states of the United States.
(3) General obligations of cities, counties and special districts in North Carolina.
(4) 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.
…
(6) Asset-backed securities (whether securities, whether considered debt or
equity), 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.
(6a) In addition to the limitations and requirements with respect to the investments
of the Retirement Systems set forth in under this subsection, the State
Treasurer Investment Authority shall select investments of the assets of the
Retirement Systems such that investments made pursuant to subdivisions
(b)(1) (1) through (6) of this section subsection shall at all times equal or
exceed twenty percent (20%) of the market value of all invested assets of the
Retirement Systems.
…
(6c) 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) (1) through (6) of this
section subsection nor subdivision (b)(7) (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.subsection.
(7) 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

House Bill 506 Session Law 2025-6 Page 13
under this subdivision shall not exceed ten percent (10%) of the market value
of all invested assets of the Retirement Systems.
(8) 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 Retirement Systems' assets 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:
…
a1. The aggregate amount of the investments cannot exceed sixty -five
percent (65%) of the marke t value of all invested assets of the
Retirement Systems.
b. 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.
…
(9) With respect to Retirement Systems' assets, as defined in subdivision (b)(8)
of this subsection, they assets 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.
(9a) With respect to Retirement Systems' assets, as defined in subdivision (b)(8)
of this subsection, they assets may be invested, within or outside the United
States, in obligat ions, debt securities, asset -backed securities, whether
considered debt or equity, and other investments that are acquired by the
Treasurer Investment Authority for the primary purpose of providing
protection against risks associated with inflation, along with owning real
assets or related debt financing , including, but not limited to, timberland,
natural resources, commodities, infrastructure, transportation, agriculture, and
other tangibl e 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.
…
(10a) 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

Page 14 Session Law 2025-6 House Bill 506
invested assets of the Retirement Systems; and the 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) (6c), (7), (8), (9), and (9a) of
this subsection shall not exceed thirty-five percent (35%) eighty percent
(80%) of the market value of all invested assets of the Retirement Systems.
(10b) The market value of illiquid investment s, as determined by the Board of
Directors, shall not exce ed forty percent (40%) of the market value of all
invested assets of the Retirement System.
…
(12) 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:apply to the
assets of the Escheat Fund:
a. With respect to The Investment Authority may invest the assets of the
Escheat Fund, in addition to Fund in those investments authorized by
subdivisions (1) through (6) of this subsection, up to ten percent (10%)
subsection. Up to eighty percent (80%) 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 subsection. The Investment
Authority may invest the assets as provided in subsection (e) of this
section.
…
c. The State Treasurer shall The Investment Authority may invest, in
addition to those investments authorized by sub -subdivision a. ten
percent (10%) of the net assets of the Escheat Fund as authorized under
G.S. 147-69.2A.
(b1) 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 deve lopment, 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.
(b2) The State Treasurer Investment Authority 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. section. The
State Treasurer Investment Authority 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 Investment Authority may be used to defray the cost of

House Bill 506 Session Law 2025-6 Page 15
administering investments pursuant to this subsection and expenditures authorized under this
section.
(b3) The State Treasurer Investment Authority 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. section. The
State Treasurer Investment Authority 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 c ondition 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 interes t 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 Investment
Authority may be used to defray the cost of administering investments pursuant to this subsection
and expenditures authorized under this section.
(b4) In addition to the investments authorized under subdivisions (b)(1) through (6) of this
section, the State Treasurer Investment Authority 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, notwithstandi ng the percentage limitations
imposed on the Retirement Systems' investments therein. section. 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 Investment Authority 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
Investment Authority may be used to defray the costs of administering the Fund and expenditures
authorized under this section.
(b5) In addition to the investments authorized under subdivisions (b)(1) through (6) of this
section, the State Treasurer Investment Authority 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. section. For investments
from that Fund made under subdivisions (b)(6c) and (b)(8) of this section, the State Treasurer
Investment Authority 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.
(b6) In addition to the investments authorized under subdivisions (b)(1) through (6) of this
section, the State Treasurer Investment Authority may invest funds deposited in the Catawba
Unit No. 1 Decommissioning Trust F und 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. section. For investments from the Funds made under subdivisions (b)(6c) and (b)(8) of
this section, the State Treasurer Investment Authority 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.

Page 16 Session Law 2025-6 House Bill 506
(b7) In addition to the investments authorized under subdivisions (b)(1) through (6) of this
section, the State Treasurer Investment Authority 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. section. For investments from that Fund made under subdivision (b)(8) of
this section, the State Treasurer Investment Authority 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.
(b8) In addition to the investments authorized under subdivisions (b)(1) through (6) of this
section, the State Treasurer Investment Authority may invest funds deposited pursuant to
subdivision (24) 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. For investments from that Fund made
under subdivisions (b)(6c) and (b)(8) of this section, the State Treasurer Investment Authority
may require a minimum deposit of up to fifty thousand dollars ($50,000) 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 investments and expenditures authorized
under this section.
…
(d) The State Treasurer Investment Authority may invest f unds deposited pursuant to
subdivisions (17i), (17j), (17k), (17 l), 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 Investment Authority 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 Investment Authority 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 Caro lina 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.
(e) Investments made pursuant to this section may be made as internally managed
investments by the State Treasurer Investment Authority or may be made through third -party
investment management arrangements, under the following conditions:
(1) Internally managed portfolios shall be subject to industry standard portfolio
guidelines developed with periodic consultation by the Investment Advisory
Committee.guidelines.
(2) In assessing whether to invest directly or to utilize indi rect third -party
investment management arrangements, the State Treasurer Investment
Authority shall consider all relevant material factors he or she considers
relevant to the decision consistent with the Treasurer's Investment Authority's
fiduciary duties under G.S. 147-69.7, G.S. 147-70.6, 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.
(3) For any third -party investment management arrangements, the investment
manager must have total assets under management of at least one hundred

House Bill 506 Session Law 2025-6 Page 17
million dollars ($100,000,000) at the inception of the investment management
arrangement with the State Treasurer.
(4) 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:
a. Contractual arrangements in which the investment manager ha s
delegated discretion and authority to invest assets.
b. 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.
Any limited liability investment vehicles organized by the State Treasurer
Investment Authority shall be deemed investment companies for the purposes
of this subsection.subdivision.
(5) Investment companies shall provide annual audited financial statements to the
State Treasurer, Investment Authority, unless the State Treasurer Investment
Authority waives the requirement after conducting a cost-benefit analysis.
(6) In connection with any investment otherwise authorized under this section,
the State Treasurer Investment Authority may enter into an indemnification
agreement provided that, under any agreement, the liability of the State
Treasurer Investment Authority will be limited to the amount of the State
Treasurer's Investment Authority's contractual investment.
"§ 147-69.2A. Investments; special funds held by the State Treasurer.
(a) Firm to Administer Special Fund. – Following a public procurement process, a
designee of the Governor, a designee of the State Treasurer, a designee of the Speaker of the
House of Representatives, and a designee of the President Pro Tempore of the Senate shall jointly
and unanimously Venture Capital Multiplier Fund. – The Investment Authority may select a
third-party professional investment management firm, subject to the rules and regulations of the
U.S. Securities and Exchange Commission, to administer a special fund created to invest assets
described in G.S. 147-69.2(b)(12)c. of the Escheats Fund and select investment opportunities
appropriate for receiving allocations from the Venture Capital Multiplier Fund on the basis of
potential return on investment and the risks attendant thereto. The State Treasurer Investment
Authority shall assign professional and clerical staff to assist in the oversight of the Venture
Capital Multiplier Fund. All costs for the third -party investment management firm and the
professional and clerical staff shall be borne by the Venture Capital Multiplier Fund pursuant to
G.S. 147-69.3(f). The State Treasurer Investment Authority shall discharge his or her its duties
with respect to the Venture Capital Multiplier Fund as a fiduciary consistent with
G.S. 147-69.7.G.S. 147-70.6.
(b) Organization and Reporting. – All documents of the Governor or the State Treasurer
concerning the Fund are public records governed by Chapter 132 of the General Statutes and any
applicable provisions of the General Statutes protecting confidential information.
The State Treasurer and the Governor shall jointly The Investment Authority shall develop
and adopt an investment policy statement for the Venture Capital Multiplier Fund.
The State Treasurer and Governor shall jointly adopt a common policy to prevent conflicts
of interests such that (i) the designees of the State Treasurer and Governor who selected the
third-party investment management firm, (ii) the staff of the State Treasurer overseeing the Fund,

Page 18 Session Law 2025-6 House Bill 506
and (iii) the third-party investment management firm's employees selecting or overseeing Fund
investments do not provide services for compensation (as an employee, consultant, or otherwise),
within two years after the end of their service to the Fund, to any entity in which an investment
from the Fund was made.
(b1) Conflict of Interest Policy. – The Investment Authority shall adopt a policy to prevent
conflicts of interest. This policy shall include a provision prohibiting all of the following
individuals from providing services for compensation to any entity in which an investment from
the Venture Capital Multiplier Fund was made within two years after the end of that individual's
service to the Fund:
(1) The designee of the State Treasurer and Governor who selected the third-party
investment management firm prior to the creation of the Investment Authority.
(2) The designee of the Investment Authority who selected the third -party
investment management firm.
(3) The staff of the Department of State Treasurer or of the Investment Authority
overseeing the Fund.
(4) The third -party investment management firm 's employees selecting or
overseeing Fund investments.
(c) Types of Investments. – Assets of the Venture Capital Multiplier Fund may be
invested in those types of investments authorized for the North Carolina Retirement Systems by
G.S. 147-69.2(b), notwithstanding the percentage limitations imposed on the Retirement
Systems' investments under those subdivisions.G.S. 147-69.2(b).
(d) Report on Escheat Fund Financial Status. – The State Treasurer Treasurer, in
coordination with the Investment Authority, shall engage a third-party professional consultant to
conduct an assessment and projection of the financial status of the Escheat Fund. A third-party
professional consultant may be engaged to conduct the required assessment. The associated costs
for the services may be directly charged to the Escheat Fund. The No later than December 31 of
each year, the State Treasurer shall communicate the assessment of the consultant in an annual
report to the Governor, the Speaker of the House of Representatives, the President Pro Tempore
of the Senate, and the chairs of the respective appropriations and appropriate substantive
committees of each chamber. The annual report shall evaluate include all of the following:
(1) An evaluation of claims by owners upon the Escheat Fund, current and
projected investment returns, and projected contributions to the Escheat Fund,
current and projected legislative appropriations, and au thorized expenses. In
the report, the State Treasurer shall assess
(2) An assessment of the State Treasurer, with the assistance of the Investment
Authority of the status of utilizing the Escheat Fund as an endowment fund
and shall recommend a recommendation of an annual amount available for the
funding of scholarships, loans, and grants from the Fund. The annual report
shall be presented no later than December 31 of each year.
"§ 147 -69.3. Administration of State Treasurer's Investment Autho rity's investment
programs.
(a) The State Treasurer shall deposit with the Investment Authori ty assets of the funds
under G.S. 147-69.1 and the special funds under G.S. 147-69.2. The Investment Authority shall
establish, maintain, administer, manage, and operate within the Department of State Treasurer
one or more investment programs for the deposit and to the credit of the State Treasurer of the
investment of assets pursuant to the provisions of G.S. 147-69.1 and G.S. 147-69.2. Different of
the funds under G.S. 147-69.1 and the special funds under G.S. 147-69.2. Funds of each of the
Retirement Systems and other funds held by the State Treasurer Investment Authority may be
invested collectively or separately in the State Treasurer's Investment Authority 's discretion
consistent with the fiduciary duties stated in G.S. 147-69.7.under G.S. 147-70.6.

House Bill 506 Session Law 2025-6 Page 19
(b) Any official, board, commission, other public authority, local gover nment, school
administrative unit, charter school, local ABC board, or community college of the State having
custody of any funds not required by law to be deposited with and invested by the State Treasurer
or the Investment Authority may deposit all or any portion of those funds with the State Treasurer
Investment Authority for investment in one of the investment programs established pursuant to
authorized under this section, subject to any provisions of law with respect to eligible
investments, provided that any investments. Any occupational licensing board as defined in
G.S. 93B-1 may participate in one of the investment programs established pursuant to authorized
under this section regardless of whether or not the funds were requir ed by law to be deposited
with and invested by the State Treasurer. Treasurer or the Investment Authority. In the absence
of specific statutory provisions to the contrary, any of those funds described in this subsection
may be invested by the Investment Authority in accordance with the provisions of G.S. 147-69.2
and 147-69.3. Upon request from any depositor eligible under this subsection, the State Treasurer
may authorize moneys invested pursuant to this subsection to be withdrawn by warrant on the
State Treasurer.
(c) The State Treasurer's Investment Authority 's investment programs shall be so
managed that that, in the judgment of the State Treasurer Investment Authority, funds may be
readily converted into cash when needed.
(d) Except as provided by G.S. 147-69.1(d), the total return earned on investments shall
accrue pro rata to the fund whose assets are invested according to the formula prescribed by the
State Treasurer with the approval of the Governor and Council of State.invested.
(e) The State T reasurer Investment Authority has full powers as a fiduciary to hold,
purchase, sell, assign, transfer, lend and dispose of any of the securities or investments in which
any of the investment programs created pursuant to this section have been invested, an d may
reinvest the proceeds from the sale of those securities or investments and any other investable
assets of the program.
(f) The cost of administration, management, and operation of investment programs
established pursuant to this section shall be apportioned and paid equitably among the programs
in a manner prescribed by the State Treasurer. Investment Authority, including through
administrative fees if approved by the Board of Directors. To the extent not otherwise chargeable
directly to the income or assets of a specific investment program or pooled investment vehicle,
the cost of administration, management, and operation of investment programs established
pursuant to this section shall be paid from the income and assets of the investment programs.
Any apportionment and payment under this section shall be accounted for in a manner determined
by the State Treasurer.Investment Authority.
(g) The State Treasurer is authorized to retain the services of independent appraisers,
auditors, actuaries, attorneys, investment counseling firms, statisticians, custodians, or other
persons or firms possessing specialized skills or knowledge necessary for the proper
administration of investment programs created pursuant to this section.
(g1) Notwithstanding G.S. 114-8.3, the Investment Authority's designated attorneys shall
review all proposed investment contracts and all proposed contracts for investment -related
services entered into pursuant to the Investment Authority 's authority under this Article. All of
the following apply to the required review:
(1) This review shall include confirmation that a proposed contract meets all of
the following criteria:
a. The proposed contract is in proper legal form.
b. The proposed contract is legally enforceable to the extent governed by
North Carolina law.
c. The proposed contract accomplishes the intended purposes of the
contract.

Page 20 Session Law 2025-6 House Bill 506
(2) The Investment Authority 's designated attorneys shall establish procedures
regarding the review.
(3) The required review does not constitute approval or disapproval of the policy
merit, or lack thereof, of the proposed contract.
(4) A designated attorney under this subsection includes any attorney employed
or retained by the Investment Authority to review contracts as required by this
subsection.
(5) For purposes of this subsection, "investment contract" means investments to
be acquired, held, or sold, directly or indirectly, by or for the Investment
Authority or an investment entity created by the Investment Authority, either
on its own behalf or on behalf of another beneficial owner.
…
(i1) The State Treasurer shall report the incentive bonus paid to the Chief Investment
Officer to the Joint Legislative Commission on Governmental Operations by October 1 of each
year.
…
(i3) The Treasurer Investment Authority may invest in the countries of Sudan and South
Sudan to the extent not prohibited by the United States Government, or to the extent that such
investment is part of an index or index replication strategy, a commingle d fund, limited
partnership, or similar investment vehicle, or a derivative instrument.
(j) Subject to the provisions of G.S. 147-69.1(d), the State Treasurer shall Investment
Authority may adopt any rules necessary to carry out the provisions of this section.
…
"§ 147-69.4A. Support and assistance; Supplemental Retirement Board of Trustees.
(a) The Supplemental Retirement Board of Trustees, as established under G.S. 135-96,
may request the Investment Authority to provide monitoring, evaluation, reporting, and other
support or assistance for the investments of the Supplemental Retirement Income Plan of North
Carolina and the North Carolina Public Employee Deferred Compensation Plan.
(b) Upon the consent of the Investment Authority to provide requested support or
assistance under this section, the Investment Authority's responsibilities shall be documented in
a Statement of Investment Policy approved by the Supplemental Retirement Board of Trustees.
(c) In providing any support or assistance under this section, the Investment Authority
shall discharge its duties as a fiduciary to the participants in the Supplemental Retirement Income
Plan of North Carolina and the North Carolina Public Employee Deferred Compensation Plan.
"§ 147-69.5. Local Government Law Enforcement Special Separation Allowance Fund.
The Local Government Law Enforcement Special Separation Allowance Fund is established
as a fund in the Office of the State Treasurer under the management of the Treasurer. Investment
Authority. The Fund consists of contributions made by entities authorized to make contributions
to the Fund and interest and other investment income earned by the Fund. Contributions to the
Fund are irrevocable. Assets of the Fund may be used only to provide law enforcement special
separation allowance benefits to individuals who are former employees of a unit of local
government that contributes to the Fund and are entitled to law enforcement special separation
allowance payable by the un it. The assets of the Fund are not subject to the claims of creditors
of an entity that contributes to the Fund.
"§ 147-69.6. Swain County Settlement Trust Fund.
(a) The Swain County Settlement Trust Fund is established as a special fund in the Office
of the State Treasurer under the management of the Treasurer. The Treasurer Investment
Authority. The Investment Authority may invest the assets of the Fund in any of the investments
authorized under subdivisions (b)(1) through (6) and subdivision (b)(8) of G .S. 147-69.2. The
Fund shall consist of the proceeds of any payments made by the United States in settlement of
the 1943 agreement between Swain County and the United States Department of Interior, such

House Bill 506 Session Law 2025-6 Page 21
other contributions as Swain County or other entities may choose to make to the Fund, and the
interest and other investment income earned by the Fund. For the purposes of this section, the
initial balance of the Fund shall be defined as fifty-two million dollars ($52,000,000).
…."
SECTION 3.1.(b) Part 3 of Article 6 of Chapter 147 of the General Statutes, as
created and amended by Part I of this act, reads as rewritten:
"Part 3. Reports and Audits.
"§ 147-69.8. Annual report on new investment authority.
Whenever the General Assembly broadens the investment authority of the State Treasurer
Investment Authority as to the General Fund, the Teachers' and State Employees' Retirement
System, the Consolidated Judicial Retirement System, the Firefighters' and Res cue Squad
Workers' Pension Fund, the Local Governmental Employees' Retirement System, the Legislative
Retirement System, the North Carolina National Guard Pension Fund, or any idle funds, the State
Treasurer Investment Authority shall annually report in de tail to the General Assembly the
investments made under such new authority, including the returns on those investments, earnings,
changes to value, and gains and losses in disposition of such investments. The report shall be
made no later than the first six months of each calendar year, covering performance in the prior
fiscal year. As to each type of new investment authority, the report shall be made for at least four
years. To the extent the information required by this section is also required in the reports under
G.S. 147-69.12, the State Treasurer Investment Authority may combine reports or make
cross-reference to those reports.
"§ 147-69.9. Third-party audit of State Treasurer's investments.
(a) In addition to all other audits and reports required by the law, the State Treasurer
Treasurer, with the active assistance of the Investment Authority, shall prepare and issue, at the
end of each fiscal year beginning with the 2015 -2016 fiscal year, year, a set of consolidated
stand-alone financial statements regarding investments authorized in G.S. 147-69.1 and
G.S. 147-69.2. These financial statements shall be audited by a commercial independent
third-party audit firm selected and engaged by the State Treasurer. Treasurer, in consultation with
the Investment Authority. The audit firm's report and the financial statement shall be provided to
the Joint Legislative Commission on Governmental Operations, the House of Representative
Appropriations Committee, the Senate Appropriations/Base Budget Committee, and the Fiscal
Research Division within six months after the closing of the reporting period.
(b) The management discussion and analysis section of the report accompanying the
financial statements shall be prepared by the Investment Authority and shall include a discussion
of the investment programs' risk and returns compared to benchmarks, total management fees
and incentives paid, and comparison to peer cost benchmarks.
"§ 147 -69.10. Investment policies and performance reviews of Retirement Systems
investment programs.
(a) On at least a biennial basis, the State Treasurer Chief Investment Officer shall present
an investment policy statement to the Investment Advisory Committee Board of Directors for the
Committee's consultation. approval. The investment policy statement must include descriptions
of investment objectives and strategy, roles and responsibilities, permissible asset classes, asset
allocation targets and ranges, risk management and compliance guidelines, and evaluation
criteria necessary to measure investment performance.
(b) At least once every four years, the State Treasurer Investment Authority shall engage
a commercial independent expert firm, pursuant to G.S. 147-69.3(g), G.S. 147-71.2(c), to
evaluate the governance, operations, and investment practices of the State Treasurer Investment
Authority in order to develop recommendations for improvement. The State Treasurer must
consult with the Investment Advisory Committee to develop the scope of the evaluation. The
report of the independent expert fi rm shall be provided to the Joint Legislative Commission on
Governmental Operations, the House of Representatives Appropriations Committee, the Senate

Page 22 Session Law 2025-6 House Bill 506
Appropriations/Base Budget Committee, and the Fiscal Research Division within 30 days of
receipt.
"§ 147 -69.12. Reporting on the State Treasurer's Investment Authority 's investment
programs.
(a) No later than the tenth day of February, May, August, and November of each year,
the State Treasurer shall report on all investments for which the State Treasurer is in any way
responsible, including investments made from the Escheat Fund and return on investment as
provided in G.S. 147-69.2A. This report shall be made for the Escheat Fund in lieu of the report
required by G.S. 147-69.8. The State Treasurer's quarte rly report shall include each of the
following:
(1) A specific listing of all direct and indirect placement fees, asset fees,
performance fees, and any other money management fees incurred by the
State in the management of the Retirement Systems defined in
G.S. 147-69.2(b)(8). In the event that the market value of any of subdivision
(6c) or (7), sub-subdivision b. of subdivision (8), or subdivision (9) or (9a) of
G.S. 147-69.2 increases during a fiscal year by an amount greater than three
percent (3%) of th e market value of all invested assets of the Retirement
Systems as of the prior fiscal year end, then the quarterly report provided shall
describe how that increase complies with the duties described in
G.S. 147-69.7 and the consequent expected impact on t he risk profile of the
Retirement Systems' assets.
(2) A specific listing of all investments made with certified green managers and
companies and funds that support sustainable practices, including the names
of the companies, managers, and funds, the amoun t invested, and the State's
return on investment.
(3) For bank balances:
a. The State's total bank balance with the State Treasurer, including the
amount of cash on hand and money on deposit.
b. For each bank or other qualified depository utilized by the S tate
Treasurer to hold cash balances, (i) the name of each depository and
(ii) current quarter-end cash balances.
(4) For the State Treasurer's cash management programs:
a. Total assets.
b. Duration of investments.
c. Rate of return, including a comparison to an appropriate benchmark,
if available.
(5) For the Retirement Systems, as defined in G.S. 147-69.2(b)(8), reported
separately for each asset class authorized by G.S. 147-69.2(b):
a. Total assets.
b. Rate of return, including a comparison to an appropr iate benchmark,
if available.
c. Percentage of the total assets that are invested in the asset class and the
limitation, if any, on the percentage under G.S. 147-69.2(b).
(6) For each investment program created under G.S. 147-69.3:
a. The financial condition of each investment program.
b. A full and complete statement of all moneys invested by virtue of the
provisions of G.S. 147-69.1 and G.S. 147-69.2.
c. The nature and character of the investments.
d. The revenues derived from the investments, net of fees and expenses.
e. The costs of administering, managing, and operating the investment
programs, including the recapture of any investment commissions.

House Bill 506 Session Law 2025-6 Page 23
f. The location on the State Treasurer's Web site where the public may
find a statement of the investment policies for the revenues invested.
g. Any other information that may be helpful in understanding the State
Treasurer's investment policies, investment practices, and investment
results.
h. Any other information requested by the House of Representatives and
Senate Finance Committees.
i. The location on the State Treasurer's Web site where the public may
find a list of new commitments to external investment managers.
j. The location on the State Treasurer's Web site where the public may
find informati on on the use of placement agents by investment
managers.
(7) For all other investments with or on behalf of the State or any of its agencies
or institutions:
a. The particular agency or institution, fund, rate of return, and duration
of the investment.
b. The amount of deposit on all noninterest bearing accounts.
(a1) On a monthly basis, the Investment Authority shall report on the performance of all
investments for which the Investment Authority is in any way responsible. The monthly report
shall include all of the following information:
(1) The beginning and ending market value of each investment program and
deposits or withdrawals.
(2) The rate of return, net of all fees , and expenses for various time periods,
including comparisons to an appropriate benchmark, if available. For the
Retirement Systems' investment program, asset class level information shall
also be provided.
(3) The asset allocation of each investment progr am and compliance with any
statutory limitations or limitations set by the Board of Directors.
(4) All of the following information for each investment program:
a. The location on the Investment Authority 's website where the public
may find a statement of the investment policies.
b. The location on the Department 's or Investment Authority 's website
where the public may find a list of new commitments to external
investment managers and on the use of placement agents by
investment managers.
c. Any other information that may be helpful in understanding the
Investment Authority's investment policies, investment practices, and
investment results.
(b) No later than the date set by G.S. 147-69.9 for the submission of consolidated
stand-alone financial statements, the State Treasurer Investment Authority shall report annually
on the fees and performance of all externally and internally managed investments for the
Retirement Systems defined in G.S. 147-69.2(b)(8). Systems. Externally managed investments
shall be reported on the basis of each investment vehicle or investment manager, as applicable.
Internally managed investments shall be reported on a portfolio -by-portfolio basis. The State
Treasurer's Investment Authority's annual report shall include all of the following, as applicable,
reported separately for each investment:
(1) The name, commitment amount, statutory classification, and inception year.
(2) Either a statement that the investment is managed internally by the staff of the
State Treasurer Investment Authority or the names of the external investment
manager and the investment vehicle for that investment.
(3) Value The value of the investment.

Page 24 Session Law 2025-6 House Bill 506
(4) Dollar The dollar amount of the management fees and incentive fees.
(5) For investment-grade fixed income or public equity investments, public
market investment manager accounts, the periodic net annualized
time-weighted rate of return for that fiscal year and since inception, reported
net of fees.
(6) For all investments other than investment-grade fixed income or public equity
investments, public market investment manager accounts, all of the following:
a. The net annualized internal rate of return and investment multiple
since inception, reported net of fees.
b. The total cash contribution s or other investments made by the State
Treasurer.made.
c. The total distribution received by the State Treasurer with respect to
that investment since inception, reported net of fees.
(7) For any fund of funds investment vehicles, the aggregate management fees
and incentive fees for the underlying investment managers or investment
vehicles used by the external investment manager.
(8) If any placement agent fees relating to the investment were directly or
indirectly borne by the State Treasurer Investment Authority or Retirement
Systems, a list of the amount and type of those fees.
(c) The Treasurer shall report to the Governor annually the exact balance in the treasury
to the credit of the State, with a summary of the receipts and payments of the treasury during the
preceding fiscal year, and so far as practicable an account of the same down to the termination
of the current calendar year.
(d) The reports required by this section shall be delivered to the Joint Legislative
Commission on Governmenta l Operations, chairs of the House of Representatives and Senate
Appropriations Committees, chairs of the House of Representative and Senate Finance
Committees, Fiscal Research Division, Governor, Council of State, and State Auditor. The
reports shall also be made available for public review, including by posting on the State
Treasurer's Web site.
A copy of a report on any State Treasurer investment program shall be sent to review by the
official, institution, board, commission, or other agency investing in that program.the programs,
including by posting on the Investment Authority's website."
SECTION 3.1.(c) G.S. 147-70.6, as created and amended by Part I of this act, and
as further amended by Section 2.2 of this act, reads as rewritten:
"§ 147-70.6. Discharge of duties to funds.
(a) The State Treasurer Investment Authority, including the Board of Directors, shall
discharge his or her all duties with respect to each fund or investment program held by the
Investment Authority to the credit of the State Treasurer, including each of the funds, funds
enumerated in G.S. 147-69.2 as follows:G.S. 147-69.1 and G.S. 147-69.2, in all of the following
manners:
(1) Solely in the interest of the intended beneficiaries of the fund, if any.
(2) For the exclusive purpose of carrying out the purpose of the fund, including
providing benefits to participants and beneficiaries, and paying reasonable
expenses of administering the fund.
(3) With the care, skill, and caution that a prudent investor would use after
considering the purposes, distribution requirements, and other circumstances
then prevailing.
(4) Impartially, taking into account any differing interests of participants and
beneficiaries.
(5) Incurring only costs that are appropriate and reasonable.

House Bill 506 Session Law 2025-6 Page 25
(6) In acc ordance with a good -faith interpretation of the provisions of
G.S. 147-69.2 and any other applicable law governing the fund.
(b) In investing and managing assets of the any fund or investment program pursuant to
subsection (a) of this section, the State Treasurer:Investment Authority shall do all of the
following:
(1) Shall consider Consider all of the following circumstances:
a. General economic conditions.
b. The possible effect of inflation or deflation.
c. The role that each investment or course of ac tion plays within the
overall portfolio of the fund.
d. The expected total return from income and the appreciation of capital.
e. Needs for liquidity, regularity of income, and preservation or
appreciation of capital.
f. With respect to the Retirement Systems defined in G.S. 147-69.2(b)(8)
and any other pension plans, the adequacy of funding for the
Retirement Systems or other pension plan based on reasonable
actuarial factors.
g. The purpose of the fund, if established.
(2) Shall diversify Diversify the investments of the fund fund, unless the State
Treasurer Investment Authority reasonably determines that, because of
special circumstances, including applicable investment restrictions, it is
clearly prudent not to do so.
(3) Shall make Make a reasonable effort to verify facts relevant to the investment
and management of assets of the funds.
(4) Shall invest only in those investments authorized by law consistent with the
provisions of Article 6 of Chapter 146 of the General Statutes.
(5) Shall, in In the evaluation of an investment, or in the evaluation or exercise of
any right appurtenant to an investment, consider only pecuniary
factors:factors as follows:
a. For the purposes of this section, a pecuniary factor is a factor that has
a material effect on the financial risk or financial return of an
investment based on appropriate investment horizons consistent with
the purpose of the fund, if established.
b. Environmental or social considerations are pecuniary factors only if
they present economic risks or opportunities that qualified investment
professionals would treat as material economic considerations under
generally accepted investment theories. The weight given to those
factors shall solely reflect a prudent assessment of their impact on risk
and return.
(6) May,
(b1) In investing and managing assets of any fund or investment program pursuant to
subsection (a) of this section, the Investment Authority may, in the evaluation or exercise of any
right appurtenant to an investment, reasonably conclude that not exercising such a that right is in
the best interest of the fund's beneficiaries.
(c) Compliance by the State Treasurer Investment Authority with this section must be
determined in light of the facts and circumstances existing at the time of the Treasurer's
Investment Authority's decision or action and not by hindsight.
(d) The State Treasurer's Investment Authority's investment and management decisions
must be evaluated not in isolation but in the context of the portfolio of the fund as a whole a nd
as part of an overall investment strategy having risk and return objectives reasonably suited to
the fund.

Page 26 Session Law 2025-6 House Bill 506
(e) Notwithstanding any of the foregoing, the State Treasurer other provision of this
section to the contrary, the Investment Authority shall have no duty to assist or advise any
official, board, commission, local government, other public authority, school administrative unit,
local ABC board, community college of the State, or other person, trust, agency, institution, or
entity in connection with any of the following decisions and directions with respect to any funds
to be deposited with the State Treasurer and invested by the State Treasurer: Investment
Authority.
(1) The voluntary decision to deposit or withdraw funds in accordance with
applicable law in one or more of the State Treasurer's Investment Authority's
investment programs.
(2) The voluntary direction as to the allocation of deposited funds in accordance
with applicable law among the State Treasurer's Investment Authority 's
investment programs.
(3) Any other decision or direction by which the depositor exercises control over
assets deposited or to be deposited with the State Treasurer or the Investment
Authority in accordance with applicable law."
SECTION 3.1.(d) G.S. 147-71.2(a), as enacted by Section 2.2 of this act, is amended
by adding a new subdivision to read:
"(6) The Board of Directors has the following liquidity monitoring duties:
a. Upon the quarterly receipt of liquidity monitoring requirements from
the Chief Investment Officer, the Board of Directors shall ensure that
a portion of the Retirement Systems ' invested assets are at all times
available to be converted in an orderly fashion to cash proceed s
sufficient to meet projected net benefit payments and highly probable
contractual obligations.
b. The Board of Directors shall annually certify the allocation of illiquid
investment.
c. If the Board of Directors determines that liquidity is insufficient, then
the Board of Directors may direct the CIO to pause new contractual
commitments to illiquid investment s or implement other mitigation
activities."
SECTION 3.1.(e) G.S. 147-72.1, as enacted by Section 2.2 of this act, is amended
by adding a new subsection to read:
"(e) Management of Retirement Systems Investments. – The Chief Investment Officer
shall manage the Retirement Systems investments to remain within the approved absolute risk
operating range set by the Board of Directors in accordance with G.S. 147-71.2(a)(4)."
SECTION 3.2. Rules adopted by the State Treasurer in effect as of December 31,
2025, and that are impacted by the change in authority under this Part shall remain in effect until
amended by the Investment Authority, amended by law, or repealed.
SECTION 3.3. This Part is effective January 1, 2026.

PART IV. TECHNICAL AND CONFORMING CHANGES
SECTION 4.1.(a) G.S. 147-65.2, as created by Section 1.2(a) of this act, reads as
rewritten:
"§ 147-65.2. Salary of State Treasurer.Treasurer and certain Department employees.
(a) State Treasurer. – The salary of the State Treasurer shall be as established in the
Current Operations Appropriations Act. In addition to the salary set by the General Assembly in
the Current Operations Appropriations Act, longevity pay shall be paid on t he same basis as is
provided to employees of the State who are subject to the North Carolina Human Resources Act.
(b) In order to promote achievement of long term investment objectives and to retain key
public employees with investment functions, the Certain Departmental Employees. – The State

House Bill 506 Session Law 2025-6 Page 27
Treasurer is authorized to establish, consistent with the duties of the State Treasurer's fiduciary
duties, Treasurer as prescribed by law, market-oriented compensation plans, including salaries
and performance -related bonuses, for employees possessing specialized skills or knowledge
necessary for the proper administration of investment programs, who shall be programs. In
accordance with G.S. 126-5(c12), these employees are exempt from the classification and
compensation rules established by the Office of State Human Resources. The design and
administration of those compensation plans shall be based on compensation studies conducted
by a nationally recognized firm specializing in public fund investment compensatio n. The
compensation and other associated employee benefits shall be apportioned directly from the
investment program. and paid equitably among the funds and programs utilizing the services of
these employees in a manner prescribed by the State Treasurer. The Treasurer shall report the
salaries and bonuses paid to the Joint Legislative Oversight Committee on General Government
annually."
SECTION 4.1.(b) G.S. 126-5 reads as rewritten:
"§ 126-5. Employees subject to Chapter; exemptions.
…
(c1) Except as to Articles 6 and 7 of this Chapter, this Chapter does not apply to any of the
following:
…
(23) The Executive Administrator of the State Health Plan for Teachers and State
Employees.
(24) Employees of the State Health Plan for Teachers and State Employees as
designated by law or by the Executive Administrator of the Plan.
…
(40) The Chief Investment Officer of the North Carolina Investment Authority
established under Part 4 of Article 6 of Chapter 147 of the General Statutes.
(41) Employees of the North Carolina Investment Authority established under Part
4 of Article 6 of Chapter 147 of the General Statutes who possess specialized
skills or knowledge necessary for the proper administration of investment
programs and who are employed in a position designated b y the Chief
Investment Officer as exempt in accordance with G.S. 147-72.1.
…
(c12) Except as to G.S. 126-13, 126-14, 126-14.1, and Articles 6, 7, 14, 15, and 16 of this
Chapter, this Chapter does not apply to employees of the Department of State Treasurer
possessing specialized skills or knowledge necessary for the proper administration of investment
programs and compensated pursuant to G.S. 147-69.3(i2).G.S. 147-65.2(b).
…."
SECTION 4.1.(c) This section is effective July 1, 2025, and applies to employees
hired on or after that date.
SECTION 4.2.(a) G.S. 128-29(c) reads as rewritten:
"(c) Custodian of Funds. – The State Treasurer shall be the custodian of the several funds
and shall deposit these funds with the Investment Authority to invest their these assets in
accordance with the provisions of G.S. 147-69.2 and 147-69.3. Article 6 of Chapter 147 of the
General Statutes. All payments from said funds shall be made by him the State Treasurer only
upon vouchers signed by two persons designated by the Board of Trustees. The secretary of the
Board of Trustees shall furnish said Board a surety bond in a company authorized to do business
in North Carolina in such amount as shall be required by the Board, the premium to be paid from
the expense fund."
SECTION 4.2.(b) G.S. 135-7(c) reads as rewritten:
"(c) Custodian of Funds; Disbursements; Bond of Director. – The State Treasurer shall be
the custodian of the several funds and shall deposit these funds with the Investment Authority to

Page 28 Session Law 2025-6 House Bill 506
invest their these assets in accordance with the provisions of G.S. 147-69.2 and 147-69.3.Article
6 of Chapter 147 of the General Statutes."
SECTION 4.2.(c) This section is effective January 1, 2026.
SECTION 4.3.(a) G.S. 143C-1-3 is amended by adding a new subsection to read:
"(e) Notwithstanding subsections (a) and (b) of this section, funds under the management
of the North Carolina Investment Authority are exempt from this Chapter and shall be accounted
for as provided in Article 6 of Chapter 147 of the General Statutes."
SECTION 4.3.(b) This section is effective July 1, 2025.

PART V. EFFECTIVE DATE
SECTION 5.1. Except as otherwise provided, this act is effective when it becomes
law.
In the General Assembly read three times and ratified this the 4th day of June, 2025.

s/ Rachel Hunt
President of the Senate

s/ Destin Hall
Speaker of the House of Representatives

s/ Josh Stein
Governor

Approved 8:15 a.m. this 13th day of June, 2025