Req. No. 11 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 574 By: Montgomery
AS INTRODUCED
An Act relating to fiscal affairs; amendi ng 62 O.S.
2021, Section 89.2, which rela tes to investments of
public funds; authorizing the State Treasurer to
purchase and invest in debt obligations of certain
retirement systems; limiting maturity; limiting
interest paid; updating statutory language; and
providing an effective dat e.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAH OMA:
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 the 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 othe rwise provided for by law, the State
Treasurer may purchase a nd invest only in:
1. Obligations of the United States Government, its age ncies
and instrumentalities, or other obligations fully insured or
unconditionally guaranteed as to the payment of princ ipal and
Req. No. 11 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
interest by the United States government or any of i ts 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 issued by a nationally or
state-chartered bank, a savings bank, a savings an d loan
association, or a state-licensed branch of a foreign bank.
Purchases of negotiable certificates of deposit shal l not exceed ten
percent (10%) of the cash available for inve stment 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 purcha se
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 cash availabl e
for investment which may be invested pursuant to this secti on. Not
more than three-fourths (3/4) 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 ma turity that
exceeds one hundred eighty (180) days nor represe nt more than ten
percent (10%) of the outstanding paper of an issuing corpora tion.
Purchases of prime commercial paper shall not exceed seven and one -
Req. No. 11 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
half percent (7 1/2%) of the cash available for investment which may
be invested pursuant to this section ;
6. Investment grade obligations of state and local governments,
including obligations of Oklahoma state public trusts which possess
the highest rating from at least one nationally recognized r ating
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 investment which may be
invested pursuant to this section;
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 paragraphs 1 through
6 of this subsection;
8. Money market funds and short term bond fun ds 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 subsection; 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
interest; provided, that any such security shall be rated at least
A- or better by Standard & Poor’s Corporation S&P Global or A3 or
Req. No. 11 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
better by Moody’s Investors Service, or an equivalent investment
grade by a securities ratings organization accepted by the National
Association of Insurance Commis sioners; 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 section. In no
circumstance shall investment s 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 authoritarian or totalitarian gov ernment 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; and
10. Bonds, notes, debentures, or other similar obligations of
the Teachers’ Retirement System of Oklahoma, Oklahoma Pu blic
Employees Retirement System, Oklahoma Firefighters Pension and
Retirement System, Oklahoma Police Pension and Retirement System,
Oklahoma Law Enforcement Retirement Sy stem, Uniform Retirement
System for Justices and Judg es, and Retirement Plan for Full-Time
Employees of the Department of Wildlife Conservation which shall not
have a maturity that exceeds three (3) years. Interest shall be
paid on the obligations at an annual rate equal or exceeding three
(3) percentage points and not exceeding (6) percentage points
Req. No. 11 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
greater than the rate of interest paid for a fifty-two-week Treasury
Bill of the United States government as of the first working day of
the month in which the obligation is issued.
B. 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
affairs, not for speculation, but for investment, consi dering the
probable safety of their capital as well as the probable income to
be derived.
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 any accounting functions, data proces sing
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 develop ed by the State
Treasurer. The written investm ent policies shall address:
1. Liquidity;
2. Diversification;
3. Safety of principal;
4. Yield;
5. Maturity and quality; and
6. Capability of investment manageme nt.
Req. No. 11 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
The State Treasurer shall place primar y emphasis on safety and
liquidity in the inves tment of public funds. To the extent
practicable taking into account the need to use sound investment
judgment, the written investment policies shall include provisio n
for utilization of a system of competiti ve bidding in the investment
of state funds. The written investment policies shall be designed
to maximize yield within each class of investment instrument,
consistent with the safety of the funds invested.
E. The State Treasurer shall select one custodi al bank to
settle transactions involving the in vestment 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 cust odial 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 service 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 bank shall allow electronic access t o all
transaction and portfolio reports ma intained 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 Trea surer
and to the Cash Management and Investment Oversigh t Commission. The
Req. No. 11 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
requirement for electro nic access shall be incorporated into any
contract between the State Treasurer and the custodial bank.
Neither the State Treasurer nor the custodial bank sha ll permit any
of the funds under the control of the Stat e Treasurer or any of the
documents, instruments, securities, or other evidence of a righ t to
be paid money to be located in any place other than within a
jurisdiction or territory under the control o r regulatory power of
the United States Government.
F. The investment policy shall specify the ge neral philosophy,
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, the 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 investme nt instruments;
7. Diversification of investment risk;
8. Maturity limitations;
9. Selections of financial institutions;
10. Interest control s;
11. Safekeeping of investments;
12. Investment ethics; and
Req. No. 11 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
13. Formal adoption of policy.
G. The State Treasurer shall provide 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 rep orts required by this subsection shall be
delivered to the Commission within three (3) business da ys of the
end of the applicable week.
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 Speaker of the House of Representatives, the President
Pro Tempore of the Senate, t he 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 regular business hours.
Copies of any modifications to the investment policy shall be
forwarded to the Governor, Speaker of the House of Representativ es,
President Pro Tempore of the Senate, and each member of the Cash
Management and Investment Ove rsight Commission.
SECTION 2. This act shall become effective November 1, 2023.
59-1-11 QD 1/17/2023 6:14:51 PM