§ 177. Eligible investments. In addition to the powers contained in
any other provision of law, including the provisions of the
administrative code of the city of New York, the trustee or trustees of
a fund shall have the power to invest the moneys thereof in: 1. Such
securities in which the trustees of a savings bank may invest the moneys
deposited therein as provided by law, subject, however, to the following
limitations:

(a) (i) Except as provided in sections one hundred seventy-eight and
three hundred six of the public housing law, no conventional mortgage
may exceed sixty per centum of the appraised value of improved and
unencumbered real property or seventy-five per centum of the appraised
value thereof if such real property is improved by a building or
buildings, the major portion of which is used, or in the case of a
building under construction is to be used, for residential, business,
manufacturing or agricultural purposes; (ii) the aggregate unpaid
principal amount of all conventional mortgages at any time held in a
fund shall not exceed thirty per centum of the assets of such fund; and
(iii) not more than five per centum of the assets of any fund shall be
invested in any one conventional mortgage;

(b) the aggregate unpaid principal amount of obligations issued or
guaranteed by the international bank for reconstruction and development
at any time held in a fund shall not exceed five per centum of the
assets of such fund;

(c) the aggregate unpaid principal amount of all obligations of the
Dominion of Canada, of any province of the Dominion of Canada, and of
any city of the Dominion of Canada at any time held in a fund shall not
exceed five per centum of the assets of such fund;

(d) the aggregate unpaid principal amount of equipment trust
certificates at any time held in a fund shall not exceed five per centum
of the assets of such fund; and

(e) not more than two and one-half per centum of the assets of any
fund shall be invested in the obligations of any one railroad or
industrial corporation, or any one corporation engaged directly and
primarily in the production, transportation, distribution, or sale of
electricity or gas, or the operations of telephone and telegraph systems
or waterworks, or in some combination thereof; and

(f) not more than thirty per centum of the assets of any fund shall be
invested in bonds of electric and gas corporations as defined in
subdivision thirteen of section two hundred thirty-five of the banking
law, notwithstanding the provisions of paragraph (h) of such
subdivision.

1-a. Obligations payable in United States funds of the United States,
any state of the United States, District of Columbia or Commonwealth of
Puerto Rico, of any department, agency or political subdivision thereof,
or of any corporation, company or other issuer of any kind or
description created or existing under the laws of the United States, any
state of the United States, District of Columbia or Commonwealth of
Puerto Rico and obligations payable in United States funds of Canada or
any province or city of Canada, provided

(a) each such obligation at the time of investment shall be rated
investment grade by two nationally recognized rating services or by one
nationally recognized rating service in the event only one such service
rates such obligation; and

(b) the aggregate investment by a fund in the obligations of any one
issuer pursuant to this subdivision (other than the obligations of the
United States, or those for which the faith of the United States is
pledged to provide payment of the interest and principal) shall not
exceed two per centum of the assets of such fund or five per centum of
the direct liabilities of such issuer.

2. Equity securities, and interest-bearing obligations payable in
United States funds which are convertible into equity securities, of any
corporation created or existing under the laws of the United States, any
state of the United States, District of Columbia and Commonwealth of
Puerto Rico, or any investment company, as defined by, and which is
registered under, an act of Congress of the United States, entitled the
"Investment Company Act of 1940", approved August twenty-second,
nineteen hundred forty, as amended, subject to the following
limitations:

(a) the maximum investment by a fund in such securities shall not
exceed (i) in any one year fifteen per centum of the assets of such
fund, or (ii) seventy per centum in the aggregate; provided, further,
however, that more than fifteen per centum of such assets, but not more
than twenty per centum thereof, may be so invested in any one year but
only to the extent that the per centum of such investments over all
prior years from the effective date of this act when added to the per
centum of such investments during that year does not exceed an average
of fifteen per centum of the assets of such fund over all prior years
and the year in which the investment is being made;

(b) not more than two per centum of the assets of any fund shall be
invested in the equity securities of any one corporation and subsidiary
or subsidiaries thereof;

(c) not more than five per centum of the total issued and outstanding
equity securities of any one corporation shall be owned by any fund; and

(d) notwithstanding any other provision of law, the equity securities
acquired hereunder must be registered on a national securities exchange,
as provided in an act of congress of the United States, entitled the
"Securities Exchange Act of 1934", approved June sixth, nineteen hundred
thirty-four, as amended, or otherwise registered pursuant to said act
and, if such equity securities are so otherwise registered, price
quotations for such equity securities are furnished through a nationwide
automated quotations system approved by the National Association of
Securities Dealers, Inc.

3. Conventional mortgages guaranteed by a state bank or trust company
having a net worth in excess of five hundred million dollars, provided,
however, that not more than ten per centum of the assets of any fund
shall be invested in any such mortgage so guaranteed.

4. Bonds and notes of any bank, trust company, savings bank or savings
and loan association organized under the laws of this state having a net
worth of at least ten million dollars, which bonds and notes shall be
validly secured at all times to the extent of one hundred and ten per
centum of the unpaid principal amount of such bonds and notes by
mortgages upon real estate insured by the federal housing administrator
or any of his successors in office and guaranteed by the United States
under the provisions of the national housing act, as amended or
supplemented, and to the extent of one hundred and thirty-three and
one-third per centum of the unpaid principal amount of such bonds and
notes by conventional mortgages, the valuation of which mortgages shall
be based upon the unpaid principal amount thereof upon the date of the
pledge, assignment or transfer thereof to such fund or its trustee or
trustees as security for such bonds and notes, such bonds or notes to be
amortized in substantially equal annual or semi-annual payments of
principal and interest over a period not in excess of twenty-five years,
provided the aggregate unpaid principal amount of bonds and notes
secured by conventional mortgages shall not exceed five per centum of
the assets of such fund.

5. The trustee or trustees shall have the power to participate or
co-invest in any whole or part interest in any conventional mortgage or
insured mortgage, or in any whole or part interest in any such mortgage,
which mortgage is held for the benefit of the holder or holders of a
whole interest or part interests therein, but no such investment shall
be made in any part interest which is junior or subordinate to any other
part interest therein nor if the aggregate amount of all investments by
the fund in whole and part interests in such mortgages when added
together will exceed the limitations set forth in the foregoing
subdivisions of this section applicable to investments in such
mortgages.

6. Real estate only if acquired or used for one or more of the
following purposes and in the following manner:

(a) The land and the building thereon in which it has its principal
office.

(b) Such as shall be requisite for its convenient accommodation in the
transaction of its business.

(c) Such as shall have been acquired in satisfaction of loans,
mortgages, liens, judgments, decrees or other debts previously owing to
such fund in the course of its business.

(d) Such as shall have been acquired in part payment of the
consideration on the sale of real property owned by it, if each such
transaction shall have effected a net reduction in the fund's investment
in real property.

(e) Such real property, other than property to be used primarily for
agricultural, horticultural, ranch, mining, recreational, amusement or
club purposes, as may be acquired, as an investment for the production
of income (including capital appreciation), or as may be acquired to be
improved or developed for such investment purpose pursuant to an
existing program therefor, subject to the following limitations: (1) the
cost of each parcel of real property so acquired under the authority of
this subdivision, including the estimated cost to the fund of the
improvement or development thereof, when added to the value of all other
real property then held by it pursuant to this subdivision, shall not
exceed ten per cent of its assets, and (2) the cost of each parcel of
real property acquired under the authority of this subdivision,
including the estimated cost to the fund of the improvement or
development thereof, shall not exceed two per cent of the fund's assets.

(f) Notwithstanding any other provision of this article, for the
purposes of this subdivision, an investment in an entity that invests or
proposes to invest, directly or indirectly through one or more other
entities, at least a majority of its assets in (1) any interest in real
property of any kind or character as an investment for the production of
income (including capital appreciation), or (2) debt instruments secured
by any interest in real estate may be considered an investment in real
estate pursuant to this subdivision and included in the assets subject
to the ten percent limitation of paragraph (e) of this subdivision.

7. The trustees of a fund shall have the power to invest the moneys
thereof in limited partnerships, joint ventures, stock of corporations
(including subsidiaries of the fund), group trusts, common trust funds,
collective investment funds, investment companies (as defined by an act
of Congress entitled the "Investment Company Act of 1940"), separate
accounts established by a domestic life insurance company in accordance
with section forty-two hundred forty of the insurance law, separate
accounts of the kinds authorized for domestic life insurance companies
in accordance with section forty-two hundred forty of the insurance law
established by life insurance companies doing business in this state,
real estate investment trusts (as defined in section 856 of the Internal
Revenue Code of 1986) or any other similar investment entity, whether
owned in whole or in part by the fund, provided that (a) such limited
partnership, joint venture, corporation (including a subsidiary of the
fund), group trust, common trust fund, investment company, separate
account, collective investment entity, real estate investment trust or
other similar investment entity has been established or organized
primarily for the purpose of investing in securities, real estate or
other investments in which the trustee or trustees of a fund are
authorized to invest pursuant to this section; and (b) each investment
by a fund pursuant to this subdivision shall be deemed to be the
investment of the fund in such investment entity (rather than in the
assets of such investment entity), except that in calculating the amount
of the fund's investment in assets for purposes of the percentage
limitations, if any set forth in this section, there shall be included
all assets held by any such investment entity in which the fund shall
have an investment as of the date of determination, but only to the
extent of the fund's indirect interest in such assets resulting from its
investment in such investment entity.

8. The trustees of a fund shall have the power to invest the moneys
thereof in foreign equity securities provided that (a) any such equity
security is registered on a national securities exchange, as provided in
an act of congress of the United States, entitled the "Securities
Exchange Act of 1934", approved June sixth, nineteen hundred
thirty-four, as amended, or otherwise registered pursuant to said act
and, if such equity security is so otherwise registered, price
quotations therefor are furnished through a nationwide automated
quotation system approved by the National Association of Securities
Dealers, Inc. or is registered on a foreign exchange organized and
regulated pursuant to the laws of the jurisdiction of such exchange and
(b) the corporation has averaged at least one billion dollars in annual
sales for the three consecutive years preceding the year in which the
investment is made or has market capitalization of at least one billion
dollars at the time the investment is made. Investments in such foreign
equities shall be included together with a fund's investments in other
equity securities for purposes of the percentage limitations set forth
in the foregoing subdivisions of this section, and not more than ten per
centum of the assets of any fund shall be invested in the aggregate in
such foreign equities.

9. Investments, which do not qualify or are not permitted under any
other subdivision of this section, notwithstanding any other provision
of law, provided

(a) the investments by a fund made pursuant to this subdivision shall
not at any time exceed thirty-five per centum of the assets of such
fund;

(b) such investments shall be for the exclusive benefit of the
participants and beneficiaries, and the trustee or trustees of a fund
shall make such investments with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in
a like capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims; and

(c) such investments shall, to the extent reasonably possible, benefit
the overall economic health of the state of New York, so long and only
if such investments satisfy paragraph (b) of this subdivision.

10. In calculating assets of a fund and percentages thereof for the
purposes of this section, a fund is authorized to use a market valuation
methodology, provided the valuation methodology is used consistently for
all such calculations and is in accordance with recognized accounting
methodology.