HCS SCS SB 270 -- DUTIES OF THE STATE TREASURER AND THE LINKED
DEPOSIT PROGRAM

This bill changes the laws regarding the duties of the State
Treasurer and the Linked Deposit Program.  In its main
provisions, the bill:

(1)  Defines the terms "market rate," "unencumbered," and "well
capitalized";

(2)  Changes the definition of "eligible agribusiness" and
"eligible beginning farmer";

(3)  Adds the definition of "eligible facility borrower" which is
a borrower qualified for a reduced rate linked deposit loan;

(4)  Specifies that any written contract between the State
Treasurer and a depositary of state funds is limited to five
years or less.  When investing state funds, due consideration
will be given to the benefits to the economy and the welfare of
the people of Missouri and to the aggregate return in earnings
and taxes on the deposits;

(5)  Allows the State Treasurer to include as acceptable
securities for state deposits mortgage securities, including
qualified individual loans secured by deeds of trust on
residential, commercial, or farm real estate.  These loans
underwritten and offered by financial institutions will conform
with standards established by the State Treasurer and the Federal
Home Loan Bank of Des Moines, Iowa.  All financial institutions
pledging securities will report monthly to the State Treasurer
ensuring that they meet collateral requirements.  Acceptable
securities also include notes, bonds, debentures from farm or
agricultural credit banks, and any investment in which the State
Treasurer may invest.  These two additions are not authorized for
political subdivisions;

(6)  Allows the State Treasurer to enter into agreements with
private entities to provide services relating to his or her
duties;

(7)  Raises from $360 million to $720 million the amount that the
State Treasurer may invest of aggregate deposits for linked
deposits to eligible farming operations, agribusinesses,
beginning farmers, and livestock operations; doubles the current
individual amounts which may be invested in linked deposits; and
removes a provision that limits the State Treasurer's ability to
commingle allocations among the types of linked deposits;

(8)  Allows the State Treasurer to determine the dollar amount of
deposits made to certain eligible agribusinesses.  Beginning
August 28, 2005, lending institutions will give consideration to
eligible borrowers who have not previously received linked
deposits; however, nothing prohibits a lending institution from
making a linked deposit loan to any entity that has previously
received a linked deposit;

(9)  Authorizes the State Treasurer to place linked deposits with
a lending institution at certain below-market rates, but not
below 1%.  A good faith effort will be made to place loans with
eligible minority- or female-owned entities.  All linked deposit
rates are determined by the State Treasurer.  The deposit
agreement will specify that the original deposit plus renewals
will not exceed five years.  The lending institution must repay
the State Treasurer any linked deposit principal received from
the borrower in the previous year.  If the linked deposit is tied
to a revolving line of credit agreement, it will be excluded from
the repayment provisions of this section;

(10)  Prohibits the State Treasurer from investing in any new
linked deposit with any new eligible facility borrower after
January 1, 2020;

(11)  Creates two new categories of eligible facility borrowers
that may participate in the linked deposit program.  The new
categories are a development facility which produces goods
derived from an agricultural commodity or product and a renewable
fuel production facility which produces an energy source derived
from a renewable domestically grown organic compound capable of
powering machinery;

(12)  Removes Section 30.247, RSMo, which requires any bank
account with an average daily balance of $10,000 or more to be
obtained through an open and competitive bid process; and

(13)  Creates the State Treasurer's General Operations Fund to be
used for the operational expenses of the office.  The State
Treasurer will determine daily the interest earned from
investments of all state funds, except those of the Department of
Transportation.  Costs incurred for the administration of these
funds will be deducted from this interest and deposited into the
operations fund.

The bill contains an emergency clause.

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm