Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 314 First Substitute (2015GS)

Sponsor

Rep. Cunningham, R.

Final action

Governor Signed 3/25/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• modifies provisions relating to authorized deposits or investments of public funds;
• provides for a transition of investments that were previously authorized; and
• repeals provisions relating to the State School Fund report.

Every vote on this bill

Bill text

MONEY MANAGEMENT ACT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Rich Cunningham
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill modifies provisions of the State Money Management Act.
Highlighted Provisions:
This bill:
▸ modifies provisions relating to authorized deposits or investments of public funds;
▸ provides for a transition of investments that were previously authorized; and
▸ repeals provisions relating to the State School Fund report.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
51-7-11
, as last amended by Laws of Utah 2013, Chapters 204 and 388
51-7-23
, as last amended by Laws of Utah 1989, Chapter 66
REPEALS:
51-7-9.5
, as last amended by Laws of Utah 2014, Chapter 307
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
51-7-11
 is amended to read:
51-7-11.
Authorized deposits or investments of public funds.
(1) (a) Except as provided in Subsections (1)(b) and (1)(c), a public treasurer shall
conduct investment transactions through qualified depositories, certified dealers, or directly
with issuers of the investment securities.
(b) A public treasurer may designate a certified investment adviser to make trades on
behalf of the public treasurer.
(c) A public treasurer may make a deposit in accordance with Section 
53B-7-601
 in a
foreign depository institution as defined in Section 
7-1-103
.
(2) The remaining term to maturity of the investment may not exceed the period of
availability of the funds to be invested.
(3) Except as provided in Subsection (4), all public funds shall be deposited or invested
in the following assets that meet the criteria of Section 
51-7-17
:
(a) negotiable or nonnegotiable deposits of qualified depositories;
(b) qualifying or nonqualifying repurchase agreements and reverse repurchase
agreements with qualified depositories using collateral consisting of:
(i) Government National Mortgage Association mortgage pools;
(ii) Federal Home Loan Mortgage Corporation mortgage pools;
(iii) Federal National Mortgage Corporation mortgage pools;
(iv) Small Business Administration loan pools;
(v) Federal Agriculture Mortgage Corporation pools; or
(vi) other investments authorized by this section;
(c) qualifying repurchase agreements and reverse repurchase agreements with certified
dealers, permitted depositories, or qualified depositories using collateral consisting of:
(i) Government National Mortgage Association mortgage pools;
(ii) Federal Home Loan Mortgage Corporation mortgage pools;
(iii) Federal National Mortgage Corporation mortgage pools;
(iv) Small Business Administration loan pools; or
(v) other investments authorized by this section;
(d) commercial paper that is classified as "first tier" by two nationally recognized
statistical rating organizations, which has a remaining term to maturity of:
(i) 270 days or fewer for paper issued under 15 U.S.C. Sec. 77c(a)(3); or
(ii) 365 days or fewer for paper issued under 15 U.S.C. Sec. 77d(2);
(e) bankers' acceptances that:
(i) are eligible for discount at a Federal Reserve bank; and
(ii) have a remaining term to maturity of 270 days or fewer;
(f) fixed rate negotiable deposits issued by a permitted depository that have a
remaining term to maturity of 365 days or fewer;
(g) obligations of the United States Treasury, including United States Treasury bills,
United States Treasury notes, and United States Treasury bonds[
;
] 
that, unless the funds
invested are pledged or otherwise deposited in an irrevocable trust escrow account, have a
remaining term to final maturity of:
(i) five years or less; or
(ii) if the funds are invested by an institution of higher education as defined in Section
53B-3-102
, a city of the first class, or a county of the first class, 10 years or less;
(h) obligations other than mortgage pools and other mortgage derivative products 
that:
(i) are
 issued by, or fully guaranteed as to principal and interest by, the following
agencies or instrumentalities of the United States in which a market is made by a primary
reporting government securities dealer, unless the agency or instrumentality has become private
and is no longer considered to be a government entity:
[
(i)
] 
(A)
 Federal Farm Credit banks;
[
(ii)
] 
(B)
 Federal Home Loan banks;
[
(iii)
] 
(C)
 Federal National Mortgage Association;
[
(iv)
] 
(D)
 Federal Home Loan Mortgage Corporation;
[
(v)
] 
(E)
 Federal Agriculture Mortgage Corporation; and
[
(vi)
] 
(F)
 Tennessee Valley Authority; 
and
(ii) unless the funds invested are pledged or otherwise deposited in an irrevocable trust
escrow account, have a remaining term to final maturity of:
(A) five years or less; or
(B) if the funds are invested by an institution of higher education as defined in Section
53B-3-102
, a city of the first class, or a county of the first class, 10 years or less;
(i) fixed rate corporate obligations that:
(i) are rated "A" or higher or the equivalent of "A" or higher by two nationally
recognized statistical rating organizations;
(ii) are senior unsecured or secured obligations of the issuer, excluding covered bonds;
(iii) are publicly traded; and
(iv) have a remaining term to final maturity of 15 months or less or are subject to a
hard put at par value or better, within 365 days;
(j) tax anticipation notes and general obligation bonds of the state or a county,
incorporated city or town, school district, or other political subdivision of the state, including
bonds offered on a when-issued basis without regard to the limitations 
described
 in Subsection
(7)[
;
] 
that, unless the funds invested are pledged or otherwise deposited in an irrevocable trust
escrow account, have a remaining term to final maturity of:
(i) five years or less; or
(ii) if the funds are invested by an institution of higher education as defined in Section
53B-3-102
, a city of the first class, or a county of the first class, 10 years or less;
(k) bonds, notes, or other evidence of indebtedness of a county, incorporated city or
town, school district, or other political subdivision of the state that are payable from
assessments or from revenues or earnings specifically pledged for payment of the principal and
interest on these obligations, including bonds offered on a when-issued basis without regard to
the limitations 
described
 in Subsection (7)[
;
] 
that, unless the funds invested are pledged or
otherwise deposited in an irrevocable trust escrow account, have a remaining term to final
maturity of:
(i) five years or less; or
(ii) if the funds are invested by an institution of higher education as defined in Section
53B-3-102
, a city of the first class, or a county of the first class, 10 years or less;
(l) shares or certificates in a money market mutual fund;
(m) variable rate negotiable deposits that:
(i) are issued by a qualified depository or a permitted depository;
(ii) are repriced at least semiannually; and
(iii) have a remaining term to final maturity not to exceed three years;
(n) variable rate securities that:
(i) (A) are rated "A" or higher or the equivalent of "A" or higher by two nationally
recognized statistical rating organizations;
(B) are senior unsecured or secured obligations of the issuer, excluding covered bonds;
(C) are publicly traded;
(D) are repriced at least semiannually; and
(E) have a remaining term to final maturity not to exceed three years or are subject to a
hard put at par value or better, within 365 days;
(ii) are not mortgages, mortgage-backed securities, mortgage derivative products, or a
security making unscheduled periodic principal payments other than optional redemptions; and
(o) reciprocal deposits made in accordance with Subsection 
51-7-17
(4).
(4) The following public funds are exempt from the requirements of Subsection (3):
(a) the Employers' Reinsurance Fund created in Section 
34A-2-702
;
(b) the Uninsured Employers' Fund created in Section 
34A-2-704
;
(c) a local government other post-employment benefits trust fund under Section
51-7-12.2
; and
(d) a nonnegotiable deposit made in accordance with Section 
53B-7-601
 in a foreign
depository institution as defined in Section 
7-1-103
.
(5) If any of the deposits authorized by Subsection (3)(a) are negotiable or
nonnegotiable large time deposits issued in amounts of $100,000 or more, the interest shall be
calculated on the basis of the actual number of days divided by 360 days.
(6) A public treasurer may maintain fully insured deposits in demand accounts in a
federally insured nonqualified depository only if a qualified depository is not reasonably
convenient to the entity's geographic location.
(7) Except as provided under Subsections (3)(j) and (k), the public treasurer shall
ensure that all purchases and sales of securities are settled within:
(a) 15 days of the trade date for outstanding issues; and
(b) 30 days for new issues.
Section 2. Section 
51-7-23
 is amended to read:
51-7-23.
Transition of investments previously authorized.
(1)
 Any investment held by a public treasurer that as of [
January 1, 1989, was
previously authorized, but no longer qualifies under
] 
June 30, 2015, is not in compliance with
the provisions of
 this chapter[
, is considered an authorized investment until it matures or is
sold
] 
is subject to review by the council
.
(2) (a) No later than July 31, 2015, a public treasurer who holds an investment
described in Subsection (1) shall provide the council a written report that outlines a reasonable
plan to bring the investment into compliance.
(b) A plan described in Subsection (2)(a) is subject to annual review by the council.
Section 3. 
Repealer.
This bill repeals:
Section 
51-7-9.5
,
State School Fund report.