Bill Text: MN SF2255 | 2013-2014 | 88th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Metropolitan council additional investment authority authorization
Sponsorship: Partisan Bill (Democrat 2)
Status: (Passed) 2014-05-21 - Secretary of State Chapter 292 [SF2255 Detail]
Download: Minnesota-2013-SF2255-Introduced.html
Bill Title: Metropolitan council additional investment authority authorization
Sponsorship: Partisan Bill (Democrat 2)
Status: (Passed) 2014-05-21 - Secretary of State Chapter 292 [SF2255 Detail]
Download: Minnesota-2013-SF2255-Introduced.html
1.2relating to deposits and investments of public funds; granting the Metropolitan
1.3Council additional investment authority; making certain conforming technical
1.4changes;amending Minnesota Statutes 2012, sections 118A.03, subdivision 5;
1.5118A.04, subdivisions 7, 8; 118A.07; 473.543, subdivision 3.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 118A.03, subdivision 5, is amended to read:
1.8 Subd. 5. Withdrawal of excess collateral. A financial institution may withdraw
1.9excess collateral or substitute other collateral after giving written notice to the
1.10governmental government entity and receiving confirmation. The authority to return any
1.11delivered and assigned collateral rests with the government entity.
1.12 Sec. 2. Minnesota Statutes 2012, section 118A.04, subdivision 7, is amended to read:
1.13 Subd. 7. Temporary general obligation bonds. Funds may be invested in general
1.14obligation temporary bonds of the samegovernmental government entity issued under
1.15section429.091, subdivision 7 ,
469.178, subdivision 5 , or
475.61, subdivision 6 .
1.16 Sec. 3. Minnesota Statutes 2012, section 118A.04, subdivision 8, is amended to read:
1.17 Subd. 8. Debt service funds. Funds held in a debt service fund may be used to
1.18purchase any obligation, whether general or special, of an issue which is payable from the
1.19fund, at such price, which may include a premium, as shall be agreed to by the holder, or
1.20may be used to redeem any obligation of such an issue prior to maturity in accordance
1.21with its terms. The securities representing any such investment may be sold by the
1.22governmental government entity at any time, but the money so received remains part of
1.23the fund until used for the purpose for which the fund was created. Any obligation held in
2.1a debt service fund from which it is payable may be canceled at any time unless otherwise
2.2provided in a resolution or other instrument securing obligations payable from the fund.
2.3 Sec. 4. Minnesota Statutes 2012, section 118A.07, is amended to read:
2.4118A.07 ADDITIONAL INVESTMENT AUTHORITY.
2.5 Subdivision 1. Authority provided. As used in this section, "governmental entity"
2.6means a city with a population in excess of 200,000or, a county that contains a city of
2.7that size, or the Metropolitan Council. If a governmental entity meets the requirements of
2.8subdivisions 2 and 3, it may exercise additional investment authority under subdivisions 4,
2.95, and 6.
2.10 Subd. 2. Written policies and procedures. Prior to exercising any additional
2.11authority under subdivisions 4, 5, and 6, the governmental entity must have written
2.12investment policies and procedures governing the following:
2.13(1) the use of or limitation on mutual bond funds or other securities authorized or
2.14permitted investments under law;
2.15(2) specifications for and limitations on the use of derivatives;
2.16(3) the final maturity of any individual security;
2.17(4) the maximum average weighted life of the portfolio;
2.18(5) the use of and limitations on reverse repurchase agreements;
2.19(6) credit standards for financial institutions with which thegovernment
2.20 governmental entity deals; and
2.21(7) credit standards for investments made by thegovernment governmental entity.
2.22 Subd. 3. Oversight process. Prior to exercising any authority under subdivisions 4,
2.235, and 6, the governmental entity must establish an oversight process that provides for
2.24review of thegovernment governmental entity's investment strategy and the composition
2.25of the financial portfolio. This process shall include one or more of the following:
2.26(1) audit reviews;
2.27(2) internal or external investment committee reviews; and
2.28(3) internal management control.
2.29Additionally, the governing body of the governmental entity must, by resolution,
2.30authorize its treasurer to utilize the additional authorities under this section within
2.31their prescribed limits, and in conformance with the written limitations, policies, and
2.32procedures of the governmental entity.
2.33If the governing body of a governmental entity exercises the authority provided in
2.34this section, the treasurer of the governmental entity must annually report to the governing
2.35body on the findings of the oversight process required under this subdivision. If the
3.1governing body intends to continue to exercise the authority provided in this section for the
3.2following calendar year, it must adopt a resolution affirming that intention by December 1.
3.3 Subd. 4. Repurchase agreements. Agovernment governmental entity may enter
3.4into repurchase agreements as authorized under section118A.05 , provided that the
3.5exclusion of mortgage-backed securities defined as "high-risk mortgage-backed securities"
3.6under section118A.04, subdivision 6 , shall not apply to repurchase agreements under this
3.7authority if the margin requirement is 101 percent or more.
3.8 Subd. 5. Reverse repurchase agreements. Notwithstanding the limitations
3.9contained in section118A.05, subdivision 2 , the county governmental entity may enter
3.10into reverse repurchase agreements to:
3.11(1) meet cash flow needs; or
3.12(2) generate cash for investments, provided that the total securities owned shall be
3.13limited to an amount not to exceed 130 percent of the annual daily average of general
3.14investable monies for the fiscal year as disclosed in the most recently available audited
3.15financial report. Excluded from this limit are:
3.16(i) securities with maturities of one year or less; and
3.17(ii) securities that have been reversed to maturity.
3.18There shall be no limit on the term of a reverse repurchase agreement. Reverse
3.19repurchase agreements shall not be included in computing the net debt of the governmental
3.20entity, and may be made without an election or public sale, and the interest payable
3.21thereon shall not be subject to the limitation in section475.55 . The interest shall not be
3.22deducted or excluded from gross income of the recipient for the purpose of state income,
3.23corporate franchise, or bank excise taxes, or if so provided by federal law, for the purpose
3.24of federal income tax.
3.25 Subd. 6. Options and futures. Agovernment governmental entity may enter
3.26into futures contracts, options on futures contracts, and option agreements to buy or sell
3.27securities authorized under law as legal investments forcounties governmental entities,
3.28but only with respect to securities owned by the governmental entity, including securities
3.29that are the subject of reverse repurchase agreements under this section that expire at or
3.30before the due date of the option agreement.
3.31 Sec. 5. Minnesota Statutes 2012, section 473.543, subdivision 3, is amended to read:
3.32 Subd. 3. Where to deposit; how to invest. The moneys on hand in said funds
3.33and accounts may be deposited in the official depositories of the council or invested as
3.34hereinafter provided. The amount thereof not currently needed or required by law to be
3.35kept in cash on deposit may be invested in obligations authorized for the investment of
4.1public funds bysection
118A.04
4.2certificates of deposit issued by any official depository of the council.
4.3 Sec. 6. APPLICATION.
4.4Section 5 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
4.5Scott, and Washington.
1.3Council additional investment authority; making certain conforming technical
1.4changes;amending Minnesota Statutes 2012, sections 118A.03, subdivision 5;
1.5118A.04, subdivisions 7, 8; 118A.07; 473.543, subdivision 3.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 118A.03, subdivision 5, is amended to read:
1.8 Subd. 5. Withdrawal of excess collateral. A financial institution may withdraw
1.9excess collateral or substitute other collateral after giving written notice to the
1.10
1.11delivered and assigned collateral rests with the government entity.
1.12 Sec. 2. Minnesota Statutes 2012, section 118A.04, subdivision 7, is amended to read:
1.13 Subd. 7. Temporary general obligation bonds. Funds may be invested in general
1.14obligation temporary bonds of the same
1.15section
1.16 Sec. 3. Minnesota Statutes 2012, section 118A.04, subdivision 8, is amended to read:
1.17 Subd. 8. Debt service funds. Funds held in a debt service fund may be used to
1.18purchase any obligation, whether general or special, of an issue which is payable from the
1.19fund, at such price, which may include a premium, as shall be agreed to by the holder, or
1.20may be used to redeem any obligation of such an issue prior to maturity in accordance
1.21with its terms. The securities representing any such investment may be sold by the
1.22
1.23the fund until used for the purpose for which the fund was created. Any obligation held in
2.1a debt service fund from which it is payable may be canceled at any time unless otherwise
2.2provided in a resolution or other instrument securing obligations payable from the fund.
2.3 Sec. 4. Minnesota Statutes 2012, section 118A.07, is amended to read:
2.4118A.07 ADDITIONAL INVESTMENT AUTHORITY.
2.5 Subdivision 1. Authority provided. As used in this section, "governmental entity"
2.6means a city with a population in excess of 200,000
2.7that size, or the Metropolitan Council. If a governmental entity meets the requirements of
2.8subdivisions 2 and 3, it may exercise additional investment authority under subdivisions 4,
2.95, and 6.
2.10 Subd. 2. Written policies and procedures. Prior to exercising any additional
2.11authority under subdivisions 4, 5, and 6, the governmental entity must have written
2.12investment policies and procedures governing the following:
2.13(1) the use of or limitation on mutual bond funds or other securities authorized or
2.14permitted investments under law;
2.15(2) specifications for and limitations on the use of derivatives;
2.16(3) the final maturity of any individual security;
2.17(4) the maximum average weighted life of the portfolio;
2.18(5) the use of and limitations on reverse repurchase agreements;
2.19(6) credit standards for financial institutions with which the
2.20 governmental entity deals; and
2.21(7) credit standards for investments made by the
2.22 Subd. 3. Oversight process. Prior to exercising any authority under subdivisions 4,
2.235, and 6, the governmental entity must establish an oversight process that provides for
2.24review of the
2.25of the financial portfolio. This process shall include one or more of the following:
2.26(1) audit reviews;
2.27(2) internal or external investment committee reviews; and
2.28(3) internal management control.
2.29Additionally, the governing body of the governmental entity must, by resolution,
2.30authorize its treasurer to utilize the additional authorities under this section within
2.31their prescribed limits, and in conformance with the written limitations, policies, and
2.32procedures of the governmental entity.
2.33If the governing body of a governmental entity exercises the authority provided in
2.34this section, the treasurer of the governmental entity must annually report to the governing
2.35body on the findings of the oversight process required under this subdivision. If the
3.1governing body intends to continue to exercise the authority provided in this section for the
3.2following calendar year, it must adopt a resolution affirming that intention by December 1.
3.3 Subd. 4. Repurchase agreements. A
3.4into repurchase agreements as authorized under section
3.5exclusion of mortgage-backed securities defined as "high-risk mortgage-backed securities"
3.6under section
3.7authority if the margin requirement is 101 percent or more.
3.8 Subd. 5. Reverse repurchase agreements. Notwithstanding the limitations
3.9contained in section
3.10into reverse repurchase agreements to:
3.11(1) meet cash flow needs; or
3.12(2) generate cash for investments, provided that the total securities owned shall be
3.13limited to an amount not to exceed 130 percent of the annual daily average of general
3.14investable monies for the fiscal year as disclosed in the most recently available audited
3.15financial report. Excluded from this limit are:
3.16(i) securities with maturities of one year or less; and
3.17(ii) securities that have been reversed to maturity.
3.18There shall be no limit on the term of a reverse repurchase agreement. Reverse
3.19repurchase agreements shall not be included in computing the net debt of the governmental
3.20entity, and may be made without an election or public sale, and the interest payable
3.21thereon shall not be subject to the limitation in section
3.22deducted or excluded from gross income of the recipient for the purpose of state income,
3.23corporate franchise, or bank excise taxes, or if so provided by federal law, for the purpose
3.24of federal income tax.
3.25 Subd. 6. Options and futures. A
3.26into futures contracts, options on futures contracts, and option agreements to buy or sell
3.27securities authorized under law as legal investments for
3.28but only with respect to securities owned by the governmental entity, including securities
3.29that are the subject of reverse repurchase agreements under this section that expire at or
3.30before the due date of the option agreement.
3.31 Sec. 5. Minnesota Statutes 2012, section 473.543, subdivision 3, is amended to read:
3.32 Subd. 3. Where to deposit; how to invest. The moneys on hand in said funds
3.33and accounts may be deposited in the official depositories of the council or invested as
3.34hereinafter provided. The amount thereof not currently needed or required by law to be
3.35kept in cash on deposit may be invested in obligations authorized for the investment of
4.1public funds by
4.2certificates of deposit issued by any official depository of the council.
4.3 Sec. 6. APPLICATION.
4.4Section 5 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
4.5Scott, and Washington.
