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53	53	STATE OF OKLAHOMA
54	54
55	55	2nd Session of the 58th Legislature (2022)
56	56
57	57	SENATE BILL 1705 By: Jett
58	58
59	59
60	60
61	61
62	62
63	63	AS INTRODUCED
64	64
65	65	An Act relating to investments; amending 62 O.S .
66	66	2021, Section 89.2, which relates to in vestment of
67	67	public funds; prohibiting investment o f public funds
68	68	in certain instruments of communist governments or
69	69	corporations; clarifying statutory language; and
70	70	providing an effective date .
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75	75	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
76	76	SECTION 1. AMENDATORY 62 O.S. 2021, Section 89.2, is
77	77	amended to read as follows:
78	78	Section 89.2. A. The State Treasurer is directed to invest the
79	79	maximum amount of funds under control of the State Treasurer
80	80	consistent with good business practices. Except as otherwise
81	81	provided for by law, the invest ments shall earn not less than the
82	82	rate for comparable maturities on United States Treasury
83	83	obligations. Except as otherwise provided for by law, the State
84	84	Treasurer may purchase and invest only in:
85	85	1. Obligations of the United St ates Government, its age ncies
86	86	and instrumentalities, or other obligations fully insured or
87	87	unconditionally guaranteed as to the payment of principal and
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139	139	interest by the United States government or an y of its agencies and
140	140	instrumentalities;
141	141	2. Collateralized or insured certificat es of deposit and other
142	142	evidences of deposit at banks, savings banks, savings and loan
143	143	associations and credit unions located in this state;
144	144	3. Negotiable certificates of dep osit issued by a nationally or
145	145	state-chartered bank, a sa vings bank, a savings an d loan association
146	146	or a state-licensed branch of a foreign bank. Purchases of
147	147	negotiable certificates of deposit shall not exceed ten percent
148	148	(10%) of the cash available for investment which may be invested
149	149	pursuant to this section . Not more than one -half (1/2) of the ten
150	150	percent (10%) limit shall be invested in any one financial
151	151	institution specified in this paragraph;
152	152	4. Prime banker’s acceptances which are eligible for pu rchase
153	153	by the Federal Reserve System and which do not exc eed two hundred
154	154	seventy (270) days’ maturity. Purchases of prime banker ’s
155	155	acceptances shall not exceed ten percent (10%) of the cash available
156	156	for investment which may be invested pursuant to this s ection. Not
157	157	more than three-fourths (3/4) of the ten per cent (10%) limit shall
158	158	be invested in any one commercial bank pursuant to this paragraph;
159	159	5. Prime commercial paper which shall not have a maturity that
160	160	exceeds one hundred eighty (180) days nor rep resent more than ten
161	161	percent (10%) of the outstanding pap er of an issuing corpora tion.
162	162	Purchases of prime commercial paper shall not exceed seven and one -
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214	214	half percent (7 1/2%) of the cash available for investment which may
215	215	be invested pursuant to this sec tion. No commercial paper shall be
216	216	purchased from an issuing corporation or their subsidiary that is
217	217	headquartered in a communist country;
218	218	6. Investment grade obligations of state and local governments ,
219	219	including obligations of Oklahoma state public trus ts which possess
220	220	the highest rating from at least one nat ionally recognized rating
221	221	agency acceptable to the State Treasurer. Purchases of investment
222	222	grade obligations of state and local governments shall not exceed
223	223	ten percent (10%) of the cash available for investment which may be
224	224	invested pursuant to this sec tion;
225	225	7. Repurchase agreements, provided that such agreements are
226	226	included within the writte n investment policy required by subsection
227	227	D of this section that have underlying collateral consisting of
228	228	those items and those restrictions specified in paragrap hs 1 through
229	229	6 of this subsection;
230	230	8. Money market funds and short term bond funds regulated by
231	231	the Securities and Exchange Commission and which investments consist
232	232	of those items and those restrict ions specified in paragraphs 1
233	233	through 7 of this subsecti on; and
234	234	9. Bonds, notes, debentures or other similar obligations of a
235	235	foreign government whi ch the International Monetary Fund lists as an
236	236	industrialized country and for which the full faith and cre dit of
237	237	such nation has been pledged for the payment of pr incipal and
238	238
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289	289	interest; provided, that any such security shall be rated at least
290	290	A- or better by Standard & Poor’s Corporation or A3 or better by
291	291	Moody’s Investors Service, or an equivalent investment grade by a
292	292	securities ratings organization accepted by th e National Association
293	293	of Insurance Commissioners; and provided further, that the total
294	294	investment in such foreign securities at any one time shall not
295	295	exceed five percent (5%) of the cash available for investment which
296	296	may be invested pursuant to this sec tion. In no circumstance shall
297	297	investments be made in bonds, notes, debentures or any simila r
298	298	obligations of a foreign government that:
299	299	a. is identified as a state sponsor of terrorism by the
300	300	United States Department of State, or
301	301	b. any is an authoritarian or totalitarian government the
302	302	sovereign powers of which are exercised through a
303	303	single person or group of persons who are not elected
304	304	by any form of legitimate p opular voting, or
305	305	c. is a communist government.
306	306	B. Investments shall be made with judgment and care, under
307	307	circumstances then prevailing, which persons of prudence, discretion
308	308	and intelligence exercise in the management of their own affairs,
309	309	not for speculation, but for investment, consi dering the probable
310	310	safety of their capital as well as the probable income to be
311	311	derived.
312	312
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363	363	C. The State Treasurer shall appoint an investment officer who
364	364	shall perform duties related to the investment of state funds in the
365	365	Office of the State Treasurer. T he investment officer shall not
366	366	perform or supervise any ac counting functions, data processing
367	367	functions or duties related to the documentation or settlement o f
368	368	investment transactions.
369	369	D. Investments of public funds by the State Treasurer shall be
370	370	made in accordance with written policies developed by the State
371	371	Treasurer. The written investment policies shall address:
372	372	1. Liquidity;
373	373	2. Diversification;
374	374	3. Safety of principal;
375	375	4. Yield;
376	376	5. Maturity and quality; and
377	377	6. Capability of investment manageme nt.
378	378	The State Treasurer shall place primary emphasis on saf ety and
379	379	liquidity in the investment of public funds. To the extent
380	380	practicable taking into account the need to use sound investment
381	381	judgment, the written investment policies shall include provisio n
382	382	for utilization of a system of competitive bidding in the investment
383	383	of state funds. The written investment policies shall be designed
384	384	to maximize yield wit hin each class of investment instrument,
385	385	consistent with the safety of the funds invested.
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437	437	E. The State Treasurer shall select one custodial bank to
438	438	settle transactions involving the investment of state funds under
439	439	the control of the State Treasurer. The State Treasurer shall
440	440	review the performance of the custodial bank at least once every
441	441	year. The State Treasurer shall require a written competitive bid
442	442	every five (5) years. The custodial bank shall have a minimum of
443	443	Five Hundred Million Dollars ($500, 000,000.00) in assets to be
444	444	eligible for selection. Any out -of-state custodial bank shall have
445	445	a service agent in the State of Oklahoma so that service of summons
446	446	or legal notice may be had on such designated agent as is now or may
447	447	hereafter be provided b y law. In order to be eligible for
448	448	selection, the custodial bank shall allow electronic access t o all
449	449	transaction and portfolio reports maintained by the c ustodial bank
450	450	involving the investment of state funds under control of the State
451	451	Treasurer. The access shall be given to both the State Treasurer
452	452	and to the Cash Management and Investment Oversigh t Commission. The
453	453	requirement for electronic access shall be incorporated into any
454	454	contract between the State Treasurer and the custodial bank.
455	455	Neither the State Treasurer nor the custodial bank shall permit any
456	456	of the funds under the control of the Stat e Treasurer or any of the
457	457	documents, instruments, securitie s or other evidence of a right to
458	458	be paid money to be located in any place other than within a
459	459	jurisdiction or territory under the control or regulatory power of
460	460	the United States Government.
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512	512	F. The investment policy shall specify the general philosophy,
513	513	policies and procedures to be followed in the investment of state
514	514	monies by the State Treasurer. Th e investment policy shall include,
515	515	but not be limited to, the following:
516	516	1. Policy objectives;
517	517	2. Performance measure objectives;
518	518	3. Authority for invest ment program;
519	519	4. Possible use of an investment advisory committee;
520	520	5. Reporting and documentation of investments;
521	521	6. Authorized investment instruments;
522	522	7. Diversification of investment risk;
523	523	8. Maturity limitations;
524	524	9. Selections of financial institu tions;
525	525	10. Interest controls;
526	526	11. Safekeeping of investments;
527	527	12. Investment ethics; and
528	528	13. Formal adoption of policy.
529	529	G. The State Treasurer shall provide weekly reports of all
530	530	investments made by the State Treasurer if requested by the Cash
531	531	Management and Investment Oversight Commission, and list any
532	532	commissions, fees or payments made for service s regarding such
533	533	investments. The reports required by this subsection shall be
534	534	delivered to the Commission within three (3) business days of the
535	535	end of the applicable week.
536	536
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587	587	H. Not later than July 1 of each year, the State Treasurer
588	588	shall forward a copy o f the written investment policy to the
589	589	Governor, the Speaker of the House of Representatives, the President
590	590	Pro Tempore of the Senate, the Attorney General, the Bank
591	591	Commissioner, and the Director of the Office of Management and
592	592	Enterprise Services. In addition, the State Treasurer shall
593	593	maintain one copy of the investment policy in the office of the
594	594	State Treasurer for public inspection during regular busin ess hours.
595	595	Copies of any modifications to the investment policy shall be
596	596	forwarded to the Governor, Speaker of the House of Representatives,
597	597	President Pro Tempore of the Senate, and each member of the Cash
598	598	Management and Investment Oversight Commission.
599	599	SECTION 2. This act shall become effective November 1, 2022.
600	600
601	601	58-2-3448 QD 1/20/2022 5:46:38 PM

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB1705 Compare Versions