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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 997 By: Jett
AS INTRODUCED
An Act relating to investments; amending 62 O.S .
2021, Section 89.2, which relate s to investment of
public funds; prohibiting investment of public funds
in certain instruments of communist governments or
corporations; clarifying statutory language; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHO MA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 89.2, is
amended to read as follows:
Section 89.2. A. The State Treasurer is directed to invest the
maximum amount of funds under control of t he State Treasurer
consistent with good business practices. Except as otherwise
provided for by law, the invest ments shall earn not less than the
rate for comparable maturities on United States Treasury
obligations. Except as otherwise provided for by la w, the State
Treasurer may purchase an d invest only in:
1. Obligations of the United Sta tes Government, its age ncies
and instrumentalities, or other obligations fully insured or
unconditionally guaranteed as to the payment of principal and
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interest by the United States government or any of it s agencies and
instrumentalities;
2. Collateralized or insured certificat es of deposit and other
evidences of deposit at banks, savings banks, savings and loan
associations, and credit unions located in this state;
3. Negotiable certificates of deposit i ssued by a nationally or
state-chartered bank, a sa vings bank, a savings an d loan
association, or a state-licensed branch of a foreign bank.
Purchases of negotiable certificates of deposit shall not exceed ten
percent (10%) of the cash available for inves tment which may be
invested pursuant to this sectio n. Not more than one -half (1/2) of
the ten percent (10%) limit shall be invested in any one financial
institution specified in this paragraph;
4. Prime banker’s acceptances which are eligible for purchas e
by the Federal Reserve System and which do not ex ceed two hundred
seventy (270) days’ maturity. Purchases of prime banker ’s
acceptances shall not exceed ten percent (10%) of the cash available
for investment which m ay be invested pursuant to this sectio n. Not
more than three-fourths (3/4) of the ten pe rcent (10%) limit shall
be invested in any one commercial bank pursuant to this paragraph;
5. Prime commercial paper which shall not have a maturity that
exceeds one hundred eighty (180) days nor represen t more than ten
percent (10%) of the outstanding pa per of an issuing corpora tion.
Purchases of prime commercial paper shall not exceed seven and one -
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half percent (7 1/2%) of the cash available for investment which may
be invested pursuant to this section . No commercial paper shall be
purchased from an is suing corporation or their subsidiary that is
headquartered in a communi st country;
6. Investment grade obligations of state and local governments,
including obligations of Oklahoma state public trusts wh ich possess
the highest rating from at least one na tionally recognized rating
agency acceptable to the State Treasurer. Purchases of investment
grade obligations of state and local governments shall not exceed
ten percent (10%) of the cash available for i nvestment which may be
invested pursuant to this se ction;
7. Repurchase agreements, provided that such agreements are
included within the written investment policy required by subsection
D of this section that have underlying collateral consisting of
those items and those restrictions specified in paragra phs 1 through
6 of this subsection;
8. Money market funds and short term bond funds regulated by
the Securities and Exchange Commission and which investments consist
of those items and those restrictions specified in paragraphs 1
through 7 of this subsect ion; and
9. Bonds, notes, debentures , or other similar obligations of a
foreign government which the International Monetary Fund lists as an
industrialized country and for which the full faith and credit of
such nation has been pledged for the payment of principal and
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interest; provided, that any such security shall be rated at least
A- or better by Standard & Poor ’s Corporation or A3 or better by
Moody’s Investors Service, or an equivalent investment grad e by a
securities ratings organization accepted by the National Association
of Insurance Commissioners; and provided further, that the total
investment in such foreign securities at any one time shall not
exceed five percent (5%) of the cash available for investment which
may be invested pursuant to this s ection. In no circumstance shall
investments be made in bonds, notes, debentures , or any similar
obligations of a foreign government that:
a. is identified as a state sponsor of terrorism by the
United States Department of State, or
b. any is an authoritarian or totalitarian government the
sovereign powers of which are exercised through a
single person or group of persons who are not elected
by any form of legitimate p opular voting, or
c. is a communist government.
B. Investments shall be made with judgme nt and care, under
circumstances then prevailing, which persons of prudence,
discretion, and intelligence exercise in the management of their own
affairs, not for spec ulation, but for investment, consi dering the
probable safety of their capital as well as the probable income to
be derived.
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C. The State Treasurer shall appoint an investment officer who
shall perform duties related to the investment of state funds in the
Office of the State Treasurer. T he investment officer shall not
perform or supervise an y accounting functions, data processing
functions, or duties related to the documentation or settlement of
investment transactions.
D. Investments of public funds by the State Treasurer shall be
made in accordance with written policies developed by the St ate
Treasurer. The written investment policies shall address:
1. Liquidity;
2. Diversification;
3. Safety of principal;
4. Yield;
5. Maturity and quality; and
6. Capability of investment manageme nt.
The State Treasurer shall place primary emphasis o n safety and
liquidity in the investment of public funds. To the extent
practicable taking into account the need to use sound investment
judgment, the written investm ent policies shall include provisio n
for utilization of a system of competitive bidding i n the investment
of state funds. The written investment policies shall be designed
to maximize yield within each class of investment instrument,
consistent with the s afety of the funds invested.
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E. The State Treasurer shall select one custodial bank to
settle transactions involving the investment of state funds under
the control of the State Treasurer. The State Treasurer shall
review the performance of the custodial bank at least once every
year. The State Treasurer shall require a written competitive bid
every five (5) years. The custodial bank shall have a minimum of
Five Hundred Million Dollars ($500,000,000.00) in assets to be
eligible for selection. Any out -of-state custodial bank shall have
a service agent in the State of Oklahoma so that servic e of summons
or legal notice may be had on such designated agent as is now or may
hereafter be provided by law. In order to be eligible for
selection, the custodial b ank shall allow electronic access t o all
transaction and portfolio reports maintained by the custodial bank
involving the investment of state funds under control of the State
Treasurer. The access shall be given to both the State Treasurer
and to the Cash Management and Investment Oversigh t Commission. The
requirement for electronic access s hall be incorporated into any
contract between the State Treasurer and the custodial bank.
Neither the State Treasurer nor the custodial bank shall permit any
of the funds under the control of the Stat e Treasurer or any of the
documents, instruments, secu rities, or other evidence of a right to
be paid money to be located in any place other than within a
jurisdiction or territory under the control or regulatory power of
the United States Government.
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F. The investment policy shall specify the general philos ophy,
policies, and procedures to be followed in the investment of state
monies by the State Treasurer. The investment policy shall include,
but not be limited to, th e following:
1. Policy objectives;
2. Performance measure objectives;
3. Authority for investment program;
4. Possible use of an investment advisory committee;
5. Reporting and documentation of investments;
6. Authorized investment instruments;
7. Diversification of investment risk;
8. Maturity limitations;
9. Selections of financial institutions;
10. Interest controls;
11. Safekeeping of investments;
12. Investment ethics; and
13. Formal adoption of policy.
G. The State Treasurer shall provid e weekly reports of all
investments made by the State Treasurer if requested by the Cash
Management and Investment Oversight Commission, and list any
commissions, fees, or payments made for services regarding such
investments. The reports required by this subsection shall be
delivered to the Commission within three (3) business days of the
end of the applicable week.
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H. Not later than July 1 of each year, the State Treasurer
shall forward a copy of the written investment policy to the
Governor, the Speake r of the House of Representatives, the President
Pro Tempore of the Senate, the Attorney General, the Bank
Commissioner, and the Director of the Office of Management and
Enterprise Services. In addition, the State Treasurer shall
maintain one copy of the investment policy in the office of the
State Treasurer for public inspection during regul ar business hours.
Copies of any modifications to the investment policy shall be
forwarded to the Governor, Speaker of the House of Representatives,
President Pro Tempore of the Senate, and each member of the Cash
Management and Investment Oversight Commi ssion.
SECTION 2. This act shall become effective November 1, 2023.
59-1-1683 QD 1/19/2023 12:13:09 PM