Section 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 water works, 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  semiannual  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,  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 five 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.
    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  twenty-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.