Bill Text: IA SSB1179 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act relating to bonding requirements for certain public entities and public fund investment requirements.
Spectrum: Committee Bill
Status: (Introduced) 2023-02-21 - Subcommittee: Rowley, Jochum, and Webster. [SSB1179 Detail]
Download: Iowa-2023-SSB1179-Introduced.html
Senate
Study
Bill
1179
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
BROWN)
A
BILL
FOR
An
Act
relating
to
bonding
requirements
for
certain
public
1
entities
and
public
fund
investment
requirements.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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1972XC
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S.F.
_____
Section
1.
Section
12.8,
subsection
1,
Code
2023,
is
amended
1
to
read
as
follows:
2
1.
The
treasurer
of
state
shall
invest
or
deposit,
subject
3
to
chapters
12F
,
12H
,
and
12J
,
and
12K
and
as
provided
by
law,
4
any
of
the
public
funds
not
currently
needed
for
operating
5
expenses
and
shall
do
so
upon
receipt
of
monthly
notice
from
6
the
director
of
the
department
of
administrative
services
of
7
the
amount
not
so
needed.
In
the
event
of
loss
on
redemption
8
or
sale
of
securities
invested
as
prescribed
by
law,
and
if
9
the
transaction
is
reported
to
the
executive
council,
neither
10
the
treasurer
nor
director
of
the
department
of
administrative
11
services
is
personally
liable
but
the
loss
shall
be
charged
12
against
the
funds
which
would
have
received
the
profits
or
13
interest
of
the
investment
and
there
is
appropriated
from
the
14
funds
the
amount
so
required.
15
Sec.
2.
NEW
SECTION
.
12.30A
Bonding
requirements.
16
1.
As
used
in
this
section,
unless
the
context
otherwise
17
requires:
18
a.
“Issuing
authority”
means
an
authority
as
defined
in
19
section
12.30,
the
state
board
of
regents,
and
the
Iowa
finance
20
authority.
21
b.
“Obligations”
means
notes,
bonds,
including
refunding
22
bonds,
and
other
evidences
of
indebtedness
of
an
issuing
23
authority.
24
2.
The
documents
or
instruments
necessary
to
effectuate
25
issuance
of
an
obligation
by
an
issuing
authority
shall
not
26
include
any
of
the
following
provisions:
27
a.
A
provision
that
would
require
or
forbid
the
state
of
28
the
issuing
authority
to
enact,
adopt,
execute,
or
implement
29
any
policy,
whether
by
law,
rule,
order,
or
other
action
30
except
with
respect
to
a
policy
directly
affecting
the
31
creditworthiness
of
the
state
or
issuing
authority.
32
b.
A
provision
obliging,
promoting,
forbidding,
or
impeding
33
any
action
by
the
issuing
authority
except
where
such
action
34
would
have
a
direct
and
material
effect
on
the
financial
risk
35
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to
a
lender
of
a
loan
to
the
issuing
authority,
or
the
return
1
to
the
lender
on
any
such
loan.
2
Sec.
3.
NEW
SECTION
.
12K.1
Definition.
3
As
used
in
this
chapter,
unless
the
context
otherwise
4
requires,
“public
fund”
means
the
treasurer
of
state,
the
state
5
board
of
regents,
the
public
safety
peace
officers’
retirement
6
system
created
in
chapter
97A,
the
Iowa
public
employees’
7
retirement
system
created
in
chapter
97B,
the
statewide
fire
8
and
police
retirement
system
created
in
chapter
411,
or
the
9
judicial
retirement
system
created
in
chapter
602.
10
Sec.
4.
NEW
SECTION
.
12K.2
Public
fund
investment
11
requirements.
12
1.
A
public
fund
shall
exercise
any
voting
rights
of
13
securities
held
in
any
separate
account,
or
in
any
collective,
14
common,
or
pooled
fund,
of
the
public
fund.
Each
public
fund
15
casting
such
a
vote
shall
file
a
written
report,
quarterly,
16
with
the
governor
and
the
treasurer
of
state
stating,
for
all
17
votes
cast
in
the
preceding
quarter,
the
substance
of
the
18
question
voted
on,
the
vote
cast,
the
date
of
the
vote,
and
19
number
of
shares
voted.
20
2.
An
investment
manager
for
a
public
fund
shall
not
21
undertake
any
transaction
on
behalf
of
such
public
fund
for
22
any
reason
other
than
to
maximize
investment
return,
unless
23
the
investment
manager
provides
written
notice
of
the
proposed
24
action,
including
the
reasons
therefor,
to
the
public
fund
and
25
has
received
written
authorization
from
the
public
fund
for
26
the
proposed
transaction.
This
subsection
does
not
apply
to
27
a
transaction
taken
in
conformity
with
the
requirements
of
28
chapters
12F,
12H,
or
12J.
29
Sec.
5.
Section
35A.13,
subsection
4,
paragraph
a,
Code
30
2023,
is
amended
to
read
as
follows:
31
a.
Notwithstanding
subsection
5
,
moneys
in
the
fund,
except
32
so
much
of
the
fund
as
may
be
necessary
to
be
kept
on
hand
33
for
the
making
of
disbursements
under
this
section
,
shall
34
be
invested
by
the
treasurer
of
state,
in
consultation
with
35
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_____
the
commission
and
the
public
retirement
systems
committee
1
established
by
section
97D.4
,
in
any
investments
authorized
for
2
the
Iowa
public
employees’
retirement
system
in
section
97B.7A
,
3
including
common
stock,
and
subject
to
the
requirements
of
4
chapters
12F
,
12H
,
and
12J
,
and
12K,
and
the
earnings
therefrom
5
shall
be
credited
to
the
fund.
The
treasurer
of
state
may
6
execute
contracts
and
agreements
with
investment
advisors,
7
consultants,
and
investment
management
and
benefit
consultant
8
firms
in
the
administration
of
investments
of
moneys
in
the
9
fund.
10
Sec.
6.
Section
97A.7,
subsection
1,
Code
2023,
is
amended
11
to
read
as
follows:
12
1.
The
board
of
trustees
shall
be
the
trustees
of
the
13
retirement
fund
created
by
this
chapter
as
provided
in
section
14
97A.8
and
shall
have
full
power
to
invest
and
reinvest
funds
15
subject
to
the
terms,
conditions,
limitations,
and
restrictions
16
imposed
by
subsection
2
and
chapters
12F
,
12H
,
and
12J
,
and
17
12K
and
subject
to
like
terms,
conditions,
limitations,
and
18
restrictions
said
trustees
shall
have
full
power
to
hold,
19
purchase,
sell,
assign,
transfer,
or
dispose
of
any
of
the
20
securities
and
investments
of
the
retirement
fund
which
have
21
been
invested,
as
well
as
of
the
proceeds
of
said
investments
22
and
any
moneys
belonging
to
the
retirement
fund.
The
board
23
of
trustees
may
authorize
the
treasurer
of
state
to
exercise
24
any
of
the
duties
of
this
section
.
When
so
authorized
the
25
treasurer
of
state
shall
report
any
transactions
to
the
board
26
of
trustees
at
its
next
monthly
meeting.
27
Sec.
7.
Section
97B.4,
subsection
5,
Code
2023,
is
amended
28
to
read
as
follows:
29
5.
Investments.
The
system,
through
the
chief
investment
30
officer,
shall
invest,
subject
to
chapters
12F
,
12H
,
and
12J
,
31
and
12K
and
in
accordance
with
the
investment
policy
and
32
goal
statement
established
by
the
board,
the
portion
of
the
33
retirement
fund
which,
in
the
judgment
of
the
system,
is
not
34
needed
for
current
payment
of
benefits
under
this
chapter
35
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subject
to
the
requirements
of
section
97B.7A
.
1
Sec.
8.
Section
262.14,
unnumbered
paragraph
1,
Code
2023,
2
is
amended
to
read
as
follows:
3
The
board
may
invest
funds
belonging
to
the
institutions,
4
subject
to
chapters
12F
,
12H
,
and
12J
,
and
12K
and
the
5
following
regulations:
6
Sec.
9.
Section
411.7,
subsection
1,
Code
2023,
is
amended
7
to
read
as
follows:
8
1.
The
board
of
trustees
is
the
trustee
of
the
fire
9
and
police
retirement
fund
created
in
section
411.8
and
10
shall
annually
establish
an
investment
policy
to
govern
the
11
investment
and
reinvestment
of
the
moneys
in
the
fund,
subject
12
to
the
terms,
conditions,
limitations,
and
restrictions
13
imposed
by
subsection
2
and
chapters
12F
,
12H
,
and
12J
,
and
14
12K
.
Subject
to
like
terms,
conditions,
limitations,
and
15
restrictions
the
system
has
full
power
to
hold,
purchase,
sell,
16
assign,
transfer,
or
dispose
of
any
of
the
securities
and
17
investments
in
which
the
fund
has
been
invested,
as
well
as
of
18
the
proceeds
of
the
investments
and
any
moneys
belonging
to
the
19
fund.
20
Sec.
10.
Section
602.9111,
subsection
1,
Code
2023,
is
21
amended
to
read
as
follows:
22
1.
So
much
of
the
judicial
retirement
fund
as
may
not
be
23
necessary
to
be
kept
on
hand
for
the
making
of
disbursements
24
under
this
article
shall
be
invested
by
the
treasurer
of
25
state
in
any
investments
authorized
for
the
Iowa
public
26
employees’
retirement
system
in
section
97B.7A
and
subject
to
27
the
requirements
of
chapters
12F
,
12H
,
and
12J
,
and
12K,
and
28
the
earnings
therefrom
shall
be
credited
to
the
fund.
The
29
treasurer
of
state
may
execute
contracts
and
agreements
with
30
investment
advisors,
consultants,
and
investment
management
and
31
benefit
consultant
firms
in
the
administration
of
the
judicial
32
retirement
fund.
33
EXPLANATION
34
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
35
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the
explanation’s
substance
by
the
members
of
the
general
assembly.
1
This
bill
concerns
bonding
requirements
for
certain
public
2
entities
and
public
fund
investment
requirements.
3
New
Code
section
12.30A
requires
an
authority,
as
defined
in
4
Code
section
12.30,
the
state
board
of
regents,
and
the
Iowa
5
finance
authority,
to
not
include
in
any
document
or
instrument
6
necessary
to
effectuate
issuance
of
a
debt
obligation
by
7
the
issuer
any
provision
requiring
any
action
by
the
state
8
or
issuing
entity
except
an
action
directly
affecting
the
9
creditworthiness
of
the
state
or
authority
or
an
action
that
10
would
have
a
direct
and
material
effect
on
the
financial
risk
11
or
return
to
a
lender.
12
The
bill
also
creates
new
Code
chapter
12K,
which
imposes
13
certain
investment
restrictions
on
public
funds,
defined
as
14
the
treasurer
of
state,
the
state
board
of
regents,
the
Iowa
15
public
employees’
retirement
system
(IPERS),
the
public
safety
16
peace
officers’
retirement
system,
the
statewide
fire
and
17
police
retirement
system,
and
the
judicial
retirement
system.
18
The
bill
requires
public
funds
to
exercise
any
voting
rights
19
of
securities
held
by
the
public
fund
and
to
file
a
written
20
report,
quarterly,
with
the
governor
and
the
treasurer
of
21
state
concerning
each
vote
taken,
to
include
the
substance
of
22
the
question
voted
on,
the
vote
cast,
the
date
of
the
vote,
23
and
number
of
shares
voted.
The
bill
also
provides
that
an
24
investment
manager
for
a
public
fund
shall
not
undertake
any
25
transaction
on
behalf
of
such
public
fund
for
any
reason
other
26
than
to
maximize
investment
return,
unless
the
investment
27
manager
provides
written
notice
of
the
proposed
transaction
and
28
receives
written
authorization
from
the
public
fund
for
the
29
proposed
transaction.
The
bill
provides
that
this
restriction
30
does
not
apply
to
transactions
taken
in
conformity
with
the
31
divestment
and
other
requirements
of
Code
chapter
12F,
12H,
or
32
12J.
The
bill
makes
conforming
changes
to
Code
sections
12.8,
33
35A.13,
97A.7,
97B.4,
262.14,
411.7,
and
602.9111.
34
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