SECOND REGULAR SESSION
HOUSE BILL NO. 1735
91ST GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE HARLAN.
Read 1st time January 30, 2002, and 1000 copies ordered printed.
TED WEDEL, Chief Clerk
To repeal section 30.260, RSMo, and to enact in lieu thereof three new sections relating to the local government investment pool.
Section A. Section 30.260, RSMo, is repealed and three new sections enacted in lieu thereof, to be known as sections 30.260, 30.951, and 30.952, to read as follows:
30.260. 1. The state treasurer shall prepare, maintain and adhere to a written investment policy which shall include an asset allocation plan which limits the total amount of state moneys which may be invested in any particular investment authorized by section 15, article IV of the Missouri Constitution. The state treasurer shall present a copy of such policy to the governor, commissioner of administration, state auditor and general assembly at the commencement of each regular session of the general assembly or at any time the written investment policy is amended.
2. The state treasurer shall determine by the exercise of the treasurer's best judgment the amount of state moneys that are not needed for current operating expenses of the state government and shall keep on demand deposit in banking institutions in this state selected by the treasurer and approved by the governor and state auditor the amount of state moneys which the treasurer has so determined are needed for current operating expenses of the state government and disburse the same as authorized by law.
3. Within the parameters of the state treasurer's written investment policy, the state treasurer shall place the state moneys which the treasurer has determined are not needed for current operations of the state government on time deposit drawing interest in banking institutions in this state selected by the treasurer and approved by the governor and the state auditor, or place them outright or, if applicable, by repurchase agreement in obligations described in section 15, article IV, Constitution of Missouri, as the treasurer in the exercise of the treasurer's best judgment determines to be in the best overall interest of the people of the state of Missouri, giving due consideration to:
(1) The preservation of such state moneys;
(2) The liquidity needs of the state;
(3) The comparative yield to be derived therefrom;
(4) The effect upon the economy and welfare of the people of Missouri of the removal or withholding from banking institutions in the state of all or some such state moneys and investing same in obligations authorized in section 15, article IV of the Missouri Constitution; and
(5) All other factors which to the treasurer as a prudent state treasurer seem to be relevant to the general public welfare in the light of the circumstances at the time prevailing. The state treasurer may also place state moneys which are determined not needed for current operations of the state government in linked deposits as provided in sections 30.750 to 30.767.
4. Except for state moneys deposited in linked deposits as provided in sections 30.750 to 30.767, the rate of interest payable by all banking institutions on time deposits of state moneys shall be the same as the average rate paid during the week next preceding the week in which the deposit was made for United States of America treasury securities maturing and becoming payable closest to the time of termination of the deposit, as determined by the state treasurer, adjusted to the nearest one-tenth of a percent; except that the rate shall never exceed the maximum rate of interest which by federal law or regulation a bank which is a member of the Federal Reserve System may from time to time pay on a time deposit of the same size and maturity.
5. Within the parameters of the state treasurer's written investment policy, the state treasurer may subscribe for or purchase outright, or [by] through repurchase agreement, local government investment pool or money market mutual fund, as defined by the Securities and Exchange Commission, make investments of the character described in subsection 3 of this section which the treasurer, in the exercise of the treasurer's best judgment, believes to be the best for investment of state moneys at the time and in payment therefor may withdraw moneys from any bank account, demand or time, maintained by the treasurer without having any supporting warrant of the commissioner of administration. The state treasurer may bid on subscriptions for such obligations in accordance with the treasurer's best judgment. The state treasurer shall provide for the safekeeping of all such obligations so acquired in the same manner that securities pledged to secure the repayment of state moneys deposited in banking institutions are kept by the treasurer pursuant to law. The state treasurer may hold any such obligation so acquired by the treasurer until its maturity or prior thereto may sell the same outright or by reverse repurchase agreement provided the state's security interest in the underlying security is perfected or temporarily exchange such obligation for other authorized securities of at least equal market value with no maturity more than one year beyond the maturity of any of the traded obligations, for a negotiated fee as the treasurer, in the exercise of the treasurer's best judgment, deems necessary or advisable for the best interest of the people of the state of Missouri in the light of the circumstances at the time prevailing. The state treasurer may pay all costs and expenses reasonably incurred by the treasurer in connection with the subscription, purchase, sale, collection, safekeeping or delivery of all such obligations at any time acquired by the treasurer.
6. As used in this chapter, except as more particularly specified in section 30.270, obligations of the United States shall include securities of the United States Treasury, and United States agencies or instrumentalities as described in section 15, article IV, Constitution of Missouri. The word "temporarily" as used in this section shall mean no more than six months.
30.951. 1. The state treasurer is hereby authorized to establish a "Local Government Investment Pool", consisting of the aggregate of all funds from local officials handling public funds that are placed in the custody of the state treasurer pursuant to this section and sections 30.260, 30.270, and 30.952 for investment and reinvestment as provided for in this section.
2. As used in this section, the following terms mean:
(1) "Governing body", the board, body, or persons in which the powers of a municipality or political subdivision are vested;
(2) "Municipality", municipal corporations, political corporations, and other public corporations and agencies authorized to exercise governmental functions;
(3) "Political subdivision", counties, townships, cities, towns, villages, schools, county libraries, city libraries, city-county libraries, road, drainage, sewer, levee, and fire districts, soil and water conservation districts, watershed subdistricts, county hospitals, any board of control of an art museum, and any other public subdivision or public corporation having power to tax.
3. Notwithstanding any other provision of law to the contrary, the governing body, or any person designated by such governing body, of any municipality or political subdivision of this state having authority to receive, hold, and expend public moneys or funds may invest and reinvest in accordance with this section any moneys, including without limitation proceeds of bonds, notes, or other indebtedness which are not immediately required for the purposes for which the moneys were collected or received.
4. The state treasurer may administer the local government investment pool on behalf of the participating local officials. The treasurer may promulgate such rules as the treasurer deems necessary for the efficient administration of the pool, including specification of minimum investment amounts and minimum investment periods. Such rules may provide for the administration of expenses of the pool to be paid from its earnings and for the interest earnings in excess of such expenses to be credited or paid to the participants in the pool in a manner which equitably reflects the differing amounts of their respective investments and the differing periods of time for which such amounts were in the pool. The state treasurer may contract with financial institutions and other service providers in furtherance of the purposes of this section and section 30.952.
5. No rule or portion of a rule promulgated under the authority of this section shall become effective unless it has been promulgated pursuant to chapter 536, RSMo.
6. The local government investment pool may invest funds, directly or through repurchase agreements or money market mutual funds, as defined and regulated in Rule 2a-7 of the Securities and Exchange Commission, solely in the obligations authorized in article IV, section 15 of the Missouri Constitution.
7. The state treasurer shall ensure all funds in the local government investment pool are invested with the same degree of judgment and care, under circumstances then prevailing, used in the investment of state funds.
8. A separate account for each participant in the fund shall be kept to record individual transactions and totals of all investments belonging to each participant. A monthly report showing the changes in investments made during the preceding month shall be furnished to each participant in the local government investment pool.
9. The principal and accrued income, and any part thereof, of each and every account maintained for a participant in the pool shall be subject to payment at any time from the pool upon request, subject to applicable regulations and guidelines. Accumulated income shall be remitted or credited to each participant at least quarterly.
10. The state treasurer may appoint an advisory board to assist in the marketing and administration of the local government investment pool. At least seventy-five percent of the advisory board shall be comprised of representatives of participants in the investment pool.
11. There is hereby created in the state treasury the "Local Government Investment Pool Revolving Fund" which shall consist of revenues collected pursuant to this section. The fund shall be administered by the state treasurer. Upon appropriation, money received by the fund shall be used solely for the administration of this section.
12. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, any moneys remaining in the fund at the end of the biennium shall not revert to the credit of the general revenue fund. The state treasurer shall invest moneys in the fund in the same manner as other funds are invested. Any interest and moneys earned on such investments shall be credited to the fund.
30.952. Notwithstanding any other provision of law to the contrary, any municipality or political subdivision of this
state, as defined in section 30.951, may place public funds, directly or through money market mutual funds, as
defined by the Securities and Exchange Commission, in the investments authorized by article IV, section 15 of the
Missouri Constitution so long as the municipality or political subdivision has adopted a written investment policy
pursuant to section 30.950.