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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2538 By: Lawson and Lepak
COMMITTEE SUBSTITUTE
An Act relating to public finance; amending 62 O. S.
2021, Section 348.1, which relat es to authorized
investments; modifying investment procedures relating
to local governments; amending 62 O.S. 2021, Section
348.3, which relates to written investm ent policies;
modifying authorized investments; and provid ing 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 investment policy, ordinance or
resolution or the treasurer of any city or town, when authorized by
the appropriate governing body by a written investment policy,
ordinance or resolution, shall invest monie s in the custody of the
treasurer in:
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1. Direct obligations of the United States Government, its
agencies or instrumentalities to the payment of which the full fa ith
and credit of the Government of the United States is p ledged, or
investment grade obligat ions 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 org anization
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 collateral 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 certifi cates of savings and loan
associations, banks, and credit unions to the extent that the
accounts or certificates are 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
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irrevocable trust or escrow account establishe d for such purposes;
or
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 cour t of record or
bonds or bond and re venue anticipation notes issued by a public
trust for which such county, municipality or school district is a
beneficiary thereof. All collateral pledged to secur e public funds
shall be valued at no more than market valu e. 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. Qualified pooled investment programs, th e investments of
which consist of those items specified in paragraphs 1 through 5 of
this section. To be qualified, a pooled investment program for
county funds or for city or town fund s or a combination thereof must
be governed through an interlocal coop erative agreement formed
pursuant to Sections 1001 through 1008 of Title 74 of the Oklahoma
Statutes. Prior to participating in a qualified pooled investment
program, the governing body of such county, city or town must
authorize participation through its written investment policy.
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B. The provisions of this section shall not apply to
investments made by organizations of municipalities created for the
purpose of securing benefits and ser vices relating to insurance f or
Oklahoma municipalities or other polit ical 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 authorize d by
Section 348.1 of this ti tle, the governing body of a city or of a
county or the governing board of a qualified pooled investment
program established pursuant to paragraph 6 of subsection A of
Section 348.1 of this title may adopt a written investment policy
directing the investment of the funds of the city or town or county
and any of its public trusts or authorities or of the qualified
pooled investment program . If such a policy is adopted by the
governing body, such funds shall be invested pursuant to the
provisions of the policy. T he written policy shall a ddress
liquidity, diversification, safety of principal, yield, maturity and
quality and capability of investment management, with primary
emphasis on safety and liquidity. To the extent practicab le, taking
into account the need to use sound investment jud gment, the written
investment policies shall include provision for utilization of a
system of competitive bidding in the investment of municipal funds.
The system shall be designed to maximize yi eld within each class of
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investment instrument consistent wi th the safety of the funds
invested.
B. The written investment policy may authorize the city
treasurer or county treasurer or of the qualified pooled investment
program 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;
2. Collateralized or insured certificates of deposit 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 exceed te n percent
(10%) of the surplus funds of the city or county which may be
invested pursuant to this section , however the restrictions in this
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paragraph shall not apply to purchases of negotiable certificates of
deposit by qualified pooled investment programs established under
paragraph 6 of subsection A of Section 341.1 of this title. 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 System 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 ma y be invested pursuant to this
section, however the restrictions in this paragraph shall not apply
to purchases of prime banker’s acceptances by qualified investment
programs established under paragraph 6 of subsection A of Section
341.1 of this title. Not more than one-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 maturity that
exceeds one hundred eighty (18 0) days nor represent more than ten
percent (10%) of the outstanding paper of an issuing corporation.
Purchases of prime commercial paper shall not exceed seven and one -
half percent (7 1/2%) of the surplus funds of the city or county
which may be invested pursuant to this section, however the
restrictions in this paragraph shall not apply to purchases of prime
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commercial paper by qualified pooled investment programs established
under paragraph 6 of subsection A of Section 341.1 of this title;
6. Repurchase agreements that have underlying co llateral
consisting of those items specified in paragraphs 1 through 5 of
this subsection; and
7. Money market funds regulated by the Securities and Exchange
Commission and which investments consist of those items and th ose
restrictions specified in parag raphs 1 through 6 of this subsectio n.
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 o wn affairs,
not for speculation, bu t for investment, considering t he probable
safety of their capital as well as the probable income to be
derived.
SECTION 3. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON RULES, dated 03/02/2023 - DO PASS,
As Amended and Coauthored.