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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 2538 By: Lepak
AS INTRODUCED
An Act relating to public finance; amending 62 O.S.
2021, Section 348.1, which relates to authorized
investments; modifying investment procedures relating
to local governments; ame nding 62 O.S. 2021, Section
348.3, which relates to written investment policies;
modifying authorized investments; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 348.1, is
amended to read as follows :
Section 348.1 A. Except as otherwise provided for by law, a
county treasurer, when authorized by the board of county
commissioners by a written inve stment policy, ordinance or
resolution or the treasurer of a ny city or town, when authorized by
the appropriate governing body by a written investment policy,
ordinance or resolution, shall invest monies in the custody of the
treasurer in:
1. Direct obligations of the United States Government, its
agencies or instrumentalities to the payment of which the full faith
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and credit of the Government of the United States is pledged, or
investment grade obligations of this state; provided, that any such
security shall be rated A+ or better by Standard and Poor 's
Corporation or A1 or better by Moody 's Investor Service or an
equivalent investment grade by a securities ratings organization
accepted by the National Association of Insurance Commissioners
including investment grade obligations of state agencies;
2. Collateralized or insured certificates of deposits of
savings and loan associations, banks, savings banks and credit
unions located in this state when the certificates of deposit are
secured by acceptable coll ateral as provided by law, or fully
insured certificates of deposit at banks, savings banks, savings and
loan associations and credit unions located out of state;
3. Savings accounts or savings certificates of savings and loan
associations, banks, and cre dit unions to the extent that the
accounts or certificates a re fully insured by the Federal Deposit
Insurance Corporation;
4. Investments as authorized by Section 348.3 of this title
which are fully collateralized in investments specified in
paragraphs 1 through 3 of this section subsection, and where the
collateral has been deposited with a trustee or custodian bank in an
irrevocable trust or escrow account established for such purposes;
or
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5. County, municipal or school district direct debt obligation
for which an ad valorem tax may be levied or bond and revenue
anticipation notes, money judgments against such county,
municipality or school district ordered by a court of record or
bonds or bond and revenue anticipation notes issued by a public
trust for which such county, municipality or school district is a
beneficiary thereof. All collateral pledged to secure public funds
shall be valued at no more than market value. The income received
from that investment may be placed in the general fund of the
governmental subdivision to be used for general governmental
operations, the sinking fund, the building fund, or the fund from
which the investment was made ; or
6. Local government investment p ools which investments consis t
of those items and those restricti ons specified in paragraphs 1
through 5 of this subsection.
B. The provisions of this section shall not apply to
investments made by organizations of municipalities created for the
purpose of securing benefits and services relating to insurance for
Oklahoma municipalities or other political subdivisions.
SECTION 2. AMENDATORY 62 O.S. 2021, Section 348.3, is
amended to read as follows:
Section 348.3 A. In addition to the investments authorized by
Section 348.1 of this title, the governing body of a city or of a
county may adopt a written investment policy directi ng the
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investment of the funds of the city or county and any of its public
trusts or authorities. If such a policy is adopted by the governing
body, such funds shall be i nvested pursuant to the provisions of the
policy. The written policy shall address l iquidity,
diversification, safety of principal, yield, maturity and quality
and capability of investment management, with primary emphasis on
safety and liquidity. To the extent practicable, taking into
account the need to use sound investment judgment, t he written
investment policies shall include provision for utilization of a
system of competitive bidding in the investment of municipal funds.
The system shall be design ed to maximize yield within each class of
investment instrument consistent with the s afety of the funds
invested.
B. The written investment policy may authorize the city
treasurer or county treasurer to purchase and invest in any or all
of the following:
1. Obligations of the United States government, its agencies
and instrumentalities, or investment grade obligations of this
state; provided, that any such security shall be rated A+ or better
by Standard and Poor 's Corporation or A1 or better by Moody 's
Investor Service or an equivalent investment grade by a securities
ratings organization accepted by the National Association of
Insurance Commissioners including investment grade obligations of
state agencies;
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2. Collateralized or insured certificates of d eposit and other
evidences of deposit at banks, savings banks, savings and loan
associations and credit unions located in this state, or fully
insured certificates of deposit at banks, savings banks, savings and
loan associations and credit unions located out of state;
3. Negotiable certificates of deposit issued by a nationally or
state-chartered bank, a savings bank, a savings and loan association
or a state-licensed branch of a foreign bank. Purchases of
negotiable certificates of deposit shall not exc eed ten percent
(10%) of the surplus funds of the city or county which may be
invested pursuant to this section. 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 purchase
by the Federal Reserve S ystem and which do not exceed two hundred
seventy (270) days' maturity. Purchases of prime banker 's
acceptances shall not exceed ten percent (10%) of the surplus funds
of the city or county which may be invested pursuant to this
section. Not more than on e-half (1/2) of the ten percent (10%)
limit shall be invested in any one commercial bank pursuant to this
paragraph;
5. Prime commercial paper which shall not have a matu rity that
exceeds one hundred eighty (180) days nor represent more than ten
percent (10%) of the outstanding paper of an issuing corporation.
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Purchases of prime commercial paper shall not exceed seven and one -
half percent (7 1/2%) of the surplus funds of t he city or county
which may be invested pursuant to this section;
6. Repurchase agreements that have underlying collateral
consisting of those items specified in paragraphs 1 through 5 of
this subsection; and
7. Money market funds regulated by the Securi ties and Exchange
Commission and which investments consist of those items and those
restrictions specified in paragraphs 1 through 6 of this subsection ;
and
8. Local government investment pool s which investments consist
of those items and those restrictio ns specified in paragraphs 1
through 6 of this subsection .
C. Investments shall be made with judgment and care, under
circumstances then prevailing, which persons of prudence, discretion
and intelligence exercise in the management of their own af fairs,
not for speculation, but for investment, considering the probable
safety of their capital as well as the probable income to be
derived.
SECTION 3. This act shall become effective November 1, 2023.
59-1-5933 MJ 01/01/23