Connecticut Senate Bill SB00431

Connecticut 2010 Regular Session

• Introduced: 3/8/10
• Refer: 3/8/10
• Report Pass: 3/25/10
• Refer: 4/6/10
• Report Pass: 4/13/10
• Engrossed: 5/5/10
• Report Pass: 5/5/10
• Chaptered: 5/24/10
• Enrolled: 5/26/10
• Passed: 6/8/10

Caption

An Act Concerning Collateral For Securities Lending By The State Treasurer.

Impact

This legislation is significant as it modifies the statutory framework guiding the investment practices of the state treasurer, particularly in the context of managing trust funds. By allowing for a slight increase in investment in common stocks above the previous 60% limit, the bill provides the treasurer with more flexibility. However, it still enforces boundaries on how much can be invested to minimize excessive risk. This could lead to increased returns on state investments, enhancing the fiscal position of trust funds, which benefits the state in various financial capacities.

Summary

Senate Bill 431, known as an Act Concerning Collateral For Securities Lending By The State Treasurer, modifies existing regulations surrounding the investment of the state's trust funds. The bill allows the state treasurer to invest trust funds while imposing limits on the percentage of investment in common stocks. It aims to update the framework that governs trust fund investment strategies, giving the treasurer discretion to adapt to market fluctuations while ensuring a stable investment policy. The changes outlined in this bill are set to take effect on July 1, 2010.

Sentiment

The sentiment around SB 431 appears to be largely positive among the legislators who voted on it. During the voting process, the bill received overwhelming support with a vote projection of 35 in favor and none against, suggesting there is a unanimous agreement about the relevance and necessity of the modifications it proposes. Stakeholders may view it favorably, provided they believe it will lead to better management of investment risks and opportunities for the state’s financial assets.

Contention

There may be some contention regarding the degree of risk the state is willing to assume with a higher allowance for common stock investments. While proponents argue that this increased flexibility can lead to greater returns, critics may express concerns about the prudent management of state assets. The ability for the treasurer to engage in repurchase agreements and lend securities also raises questions about accountability and transparency in the investment processes. Therefore, it is essential that ongoing evaluations occur to ensure that investment strategies remain aligned with public interest.