OK
Oklahoma House Bill HB2538

Oklahoma 2024 Regular Session

Oklahoma House Bill HB2538 Compare Versions

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30+April 10, 2023
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334 BILL NO. 2538 By: Lawson, Lepak, and Cantrell
435 of the House
536
637 and
738
839 Kidd of the Senate
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1545 An Act relating to public finance; amending 62 O. S.
1646 2021, Section 348.1, which relat es to authorized
1747 investments; modifying investment procedures relating
1848 to local governments; amending 62 O.S. 2021, Section
1949 348.3, which relates to written investm ent policies;
2050 modifying authorized investments; and provid ing an
2151 effective date.
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26-SUBJECT: Public finance
2756
2857 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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3058 SECTION 1. AMENDATORY 62 O.S. 2021, Section 348.1, is
3159 amended to read as follows:
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3360 Section 348.1 A. Except as otherwise provided for by law, a
3461 county treasurer, when authorized by the board of county
3562 commissioners by a written investment policy, ordinance or
3663 resolution or the treasurer of any city or town, when authorized by
3764 the appropriate governing body by a written investment policy,
3865 ordinance or resolution, shall invest monie s in the custody of the
3966 treasurer in:
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4194 1. Direct obligations of the United States Government, its
4295 agencies or instrumentalities to the payment of which the full fa ith
4396 and credit of the Government of the United States is p ledged, or
4497 investment grade obligat ions of this state; provided, that any such
4598 security shall be rated A+ or better by Standard and Poor 's
46-Corporation or A1 or better by Moody 's Investor Service or an ENR. H. B. NO. 2538 Page 2
99+Corporation or A1 or better by Moody 's Investor Service or an
47100 equivalent investment grade by a securities ratings org anization
48101 accepted by the National Association of Insurance Commissioners
49102 including investment grade obligations of state agencies;
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51103 2. Collateralized or insured certificates of deposits of
52104 savings and loan associations, banks, savings banks and credit
53105 unions located in this state when the certificates of deposit are
54106 secured by acceptable collateral as provided by law, or fully
55107 insured certificates of deposit at banks, savings banks, savings and
56108 loan associations and credit unions located out of state;
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58109 3. Savings accounts or savings certifi cates of savings and loan
59110 associations, banks, and credit unions to the extent that the
60111 accounts or certificates are fully insured by the Federal Deposit
61112 Insurance Corporation;
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63113 4. Investments as authorized by Section 348 .3 of this title
64114 which are fully collateralized in investments specified in
65115 paragraphs 1 through 3 of this section subsection, and where the
66116 collateral has been deposited with a trustee or custodian bank in an
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67144 irrevocable trust or escrow account establishe d for such purposes;
68145 or
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70146 5. County, municipal or school district direct debt obligation
71147 for which an ad valorem tax may be levied or bond and revenue
72148 anticipation notes, money judgments against such county,
73149 municipality or school district ordered by a cour t of record or
74150 bonds or bond and re venue anticipation notes issued by a public
75151 trust for which such county, municipality or school district is a
76152 beneficiary thereof. All collateral pledged to secur e public funds
77153 shall be valued at no more than market valu e. The income received
78154 from that investment may be placed in the general fund of the
79155 governmental subdivision to be used for general governmental
80156 operations, the sinking fund, the building fund, or the fund from
81157 which the investment was made; or
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83158 6. Qualified pooled investment programs, th e investments of
84159 which consist of those items specified in paragraphs 1 through 5 of
85160 this section. To be qualified, a pooled investment program for
86161 county funds or for city or town fund s or a combination thereof must
87162 be governed through an interlocal coop erative agreement formed
88163 pursuant to Sections 1001 through 1008 of Title 74 of the Oklahoma
89164 Statutes. Prior to participating in a qualified pooled investment
90165 program, the governing body of such county, city or town must
91-authorize participation through its written investment policy. ENR. H. B. NO. 2538 Page 3
166+authorize participation through its written investment policy.
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92193
93194 B. The provisions of this section shall not apply to
94195 investments made by organizations of municipalities created for the
95196 purpose of securing benefits and ser vices relating to insurance f or
96197 Oklahoma municipalities or other polit ical subdivisions.
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98198 SECTION 2. AMENDATORY 62 O.S. 2021, Section 348.3, is
99199 amended to read as follows:
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101200 Section 348.3 A. In addition to the investments authorize d by
102201 Section 348.1 of this ti tle, the governing body of a city or of a
103202 county or the governing board of a qualified pooled investment
104203 program established pursuant to paragraph 6 of subsection A of
105204 Section 348.1 of this title may adopt a written investment policy
106205 directing the investment of the funds of the city or town or county
107206 and any of its public trusts or authorities or of the qualified
108207 pooled investment program . If such a policy is adopted by the
109208 governing body, such funds shall be invested pursuant to the
110209 provisions of the policy. T he written policy shall a ddress
111210 liquidity, diversification, safety of principal, yield, maturity and
112211 quality and capability of investment management, with primary
113212 emphasis on safety and liquidity. To the extent practicab le, taking
114213 into account the need to use sound investment jud gment, the written
115214 investment policies shall include provision for utilization of a
116215 system of competitive bidding in the investment of municipal funds.
117216 The system shall be designed to maximize yi eld within each class of
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118244 investment instrument consistent wi th the safety of the funds
119245 invested.
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121246 B. The written investment policy may authorize the city
122247 treasurer or county treasurer or of the qualified pooled investment
123248 program to purchase and invest in any or all of the following:
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125249 1. Obligations of the United States government, its agencies
126250 and instrumentalities, or investment grade obligations of this
127251 state; provided, that any such security shall be rated A+ or better
128252 by Standard and Poor 's Corporation or A1 or better by Moody's
129253 Investor Service or an equivalent investment grade by a securities
130254 ratings organization accepted by the National Association of
131255 Insurance Commissioners including investment grade obligations of
132256 state agencies;
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134257 2. Collateralized or insured certificates of deposit and other
135258 evidences of deposit at banks, savings banks, savings and loan
136-associations and credit unions located in this state, or fully ENR. H. B. NO. 2538 Page 4
259+associations and credit unions located in this state, or fully
137260 insured certificates of deposit at banks, savings banks, savings and
138261 loan associations and credit unions located out of state;
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140262 3. Negotiable certificates of deposit issued by a nationally or
141263 state-chartered bank, a savings bank, a savings and loan association
142264 or a state-licensed branch of a foreign bank. Purchases of
143265 negotiable certificates of deposit shall not exceed te n percent
144266 (10%) of the surplus funds of the city or county which may be
145267 invested pursuant to this section, however the restrictions in this
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146295 paragraph shall not apply to purchases of negotiable certificates of
147296 deposit by qualified pooled investment programs established under
148-paragraph 6 of subsection A of Section 348.1 of this title. Not
297+paragraph 6 of subsection A of Section 341.1 of this title. Not
149298 more than one-half (1/2) of the ten percent (10%) limit shall be
150299 invested in any one financial institution specified in this
151300 paragraph;
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153301 4. Prime banker's acceptances which are eligible for purchase
154302 by the Federal Reserve System and which do not exceed two hundred
155303 seventy (270) days' maturity. Purchases of prime banker 's
156304 acceptances shall not exceed ten percent (10%) of the surplus funds
157305 of the city or county which ma y be invested pursuant to this
158306 section, however the restrictions in this paragraph shall not apply
159307 to purchases of prime banker’s acceptances by qualified investment
160308 programs established under paragraph 6 of subsection A of Section
161-348.1 of this title. Not more than one-half (1/2) of the ten
309+341.1 of this title. Not more than one-half (1/2) of the ten
162310 percent (10%) limit shall be invested in any one commercial bank
163311 pursuant to this paragraph ;
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165312 5. Prime commercial paper which shall not have a maturity that
166313 exceeds one hundred eighty (18 0) days nor represent more than ten
167314 percent (10%) of the outstanding paper of an issuing corporation.
168315 Purchases of prime commercial paper shall not exceed seven and one -
169316 half percent (7 1/2%) of the surplus funds of the city or county
170317 which may be invested pursuant to this section, however the
171318 restrictions in this paragraph shall not apply to purchases of prime
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172346 commercial paper by qualified pooled investment programs established
173-under paragraph 6 of subsection A of Section 34 8.1 of this title;
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347+under paragraph 6 of subsection A of Section 341.1 of this title;
175348 6. Repurchase agreements that have underlying co llateral
176349 consisting of those items specified in paragraphs 1 through 5 of
177350 this subsection; and
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179351 7. Money market funds regulated by the Securities and Exchange
180352 Commission and which investments consist of those items and th ose
181-restrictions specified in parag raphs 1 through 6 of this subsectio n. ENR. H. B. NO. 2538 Page 5
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353+restrictions specified in parag raphs 1 through 6 of this subsectio n.
183354 C. Investments shall be made with judgment and care, under
184355 circumstances then prevailing, which persons of prudence, discretion
185356 and intelligence exercise in the management of their o wn affairs,
186357 not for speculation, bu t for investment, considering t he probable
187358 safety of their capital as well as the probable income to be
188359 derived.
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190360 SECTION 3. This act shall become effective November 1, 2023.
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193- ENR. H. B. NO. 2538 Page 6
194-Passed the House of Representatives the 14th day of March, 2023.
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199- Presiding Officer of the House
200- of Representatives
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203-Passed the Senate the 19th day of April, 2023.
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208- Presiding Officer of the Senate
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212-OFFICE OF THE GOVERNOR
213-Received by the Office of the Governor this ____________________
214-day of ___________________, 20_______, at _______ o'clock _______ M.
215-By: _________________________________
216-Approved by the Governor of the State of Oklahoma this _____ ____
217-day of ___________________, 20_______, at _______ o'clock _______ M.
218-
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220- _________________________________
221- Governor of the State of Oklahoma
222-
223-OFFICE OF THE SECRETARY OF STATE
224-Received by the Office of the Secretary of State this __________
225-day of ___________________, 20_______, at _______ o'clock _______ M.
226-By: _________________________________
361+COMMITTEE REPORT BY: COMMITTEE ON FINANCE
362+Apr 10, 2023 - DO PASS