Bill Text: MS SB2527 | 2013 | Regular Session | Introduced
Bill Title: State Treasurer; revise the investment options for excess general and special funds.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2013-02-05 - Died In Committee [SB2527 Detail]
Download: Mississippi-2013-SB2527-Introduced.html
MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Accountability, Efficiency, Transparency; Appropriations
By: Senator(s) Fillingane
Senate Bill 2527
AN ACT TO AMEND SECTION 27-105-33, MISSISSIPPI CODE OF 1972, TO REVISE THE MANNER IN WHICH THE STATE TREASURER IS AUTHORIZED TO INVEST EXCESS GENERAL AND SPECIAL FUNDS OF THE STATE BY UPDATING THE AUTHORIZED INVESTMENTS OPTIONS TO ALLOW THE STATE TREASURER TO TAKE ADVANTAGE OF ADDITIONAL INVESTMENT OPPORTUNITIES AND TO CLARIFY LANGUAGE TO BE CONSISTENT WITH THE CURRENT INVESTMENT ENVIRONMENT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-105-33, Mississippi Code of 1972, is amended as follows:
27-105-33. It shall be the duty of the State Treasurer and the Executive Director of the Department of Finance and Administration on or about the tenth day of each month, and in their discretion at any other time, to analyze carefully the amount of cash in the General Fund of the state and in all special funds credited to any special purpose designated by the State Legislature or held to meet the budgets or appropriations for maintenance, improvements and services of the several institutions, boards, departments, commissions, agencies, persons or entities of the state, and to determine in their opinion when the cash in such funds is in excess of the amount required to meet the current needs and demands of no more than seven (7) business days on such funds and report their findings to the Governor. It shall be the duty of the State Treasurer to provide a cash flow model for forecasting revenues and expenditures on a bimonthly basis and providing technical assistance for its operation. The Department of Finance and Administration shall use the cash flow model furnished by the State Treasurer, in analyzing the amount of funds on deposit and available for investment.
The State Treasurer is hereby authorized, empowered and directed to invest all such excess general and special funds of the state in the following manner:
(a) Funds required
for current operations shall be * * * deposited in one
or more demand deposit accounts with qualified state depositories * * *.
* * *
(b) Funds not required for
current operations, but required for daily liquidity needs, shall be deposited
in one or more interest-bearing demand accounts with qualified state
depositories.
* * *
( * * *c) To the extent that the State Treasurer * * * finds that general and special
funds cannot be invested pursuant to paragraphs (a) * * * and (b) * * * of this section * * *,
the Treasurer may invest such funds, together with any other funds required for
current operation, as determined pursuant to this section, in the following:
(i) Time
certificates of deposit * * *or interest‑bearing accounts with qualified state
depositories on a pro rata basis as provided for in Section 27-105-9;
however, the maturity of the investment shall not exceed (3) years. For
those funds determined under prudent judgment of the State Treasurer to be made
available for investment in time certificates of deposit, the rate of interest
paid by the depositories shall be determined by rules and regulations adopted
and promulgated by the State Treasurer which may include competitive bids. At
the time of investment, the interest rate on such certificates of deposit under
the provisions of this subparagraph shall be a rate not less than the bond
equivalent yield on direct obligations of the United States Treasury with a
similar length of maturity.
* * *
( * * *ii)
Bonds,
bills, notes or other obligations of the United States and its subsidiary
corporations and instrumentalities or entities sanctioned or authorized by the
United States government including, but not limited to, obligations or
securities issued or guaranteed by the Federal National Mortgage Association,
the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the
Government National Mortgage Association, the Federal Farm Credit Bank, the
Federal Agricultural Mortgage Corporation, the Import-Export Bank, the Small
Business Administration, the United States Department of Housing and Urban
Development and the Private Export Funding Corporation.
( * * *iii) Direct security repurchase
agreements and reverse direct security repurchase agreements of any federal
book entry of only those securities enumerated in * * * subparagraph (ii) * * * above. "Direct security
repurchase agreement" means an agreement under which the state buys, holds
for a specified time, and then sells back those securities and obligations
enumerated in * * *
subparagraph (ii) * * *and (iii) above. "Reverse direct securities repurchase
agreement" means an agreement under which the state sells and after a
specified time buys back any of the securities and obligations enumerated in * * * subparagraph (ii) * * * above. * * * When market rates
with similar maturities are competitive, preference shall be pursuant to
contracts with qualified state depositories.
(iv) Corporate short-term obligations of corporations or of wholly owned subsidiaries of corporations, whose short-term obligations are rated A-2 or better by Standard and Poor's, rated P-2 or better by Moody's Investment Service, F-2 or better by Fitch Ratings, Ltd. or corporate bonds rated A or better, as rated by Standard and Poor's, Moody's Investment Service, Fitch Ratings, Ltd. or the equivalent of these ratings if assigned by another United States Securities and Exchange Commission designated Nationally Recognized Statistical Rating Organization; provided that the maturity of such investment does not exceed five (5) years.
( * * *d) For the purposes of this section,
direct obligations issued by the United States of America shall be deemed to
include securities of, or other interests in, any open-end or closed-end
management type investment company or investment trust registered under the
provisions of * * * the Investment Company Act of 1940,
provided that the portfolio of such investment company or investment trust is
limited to direct obligations issued by the United States of America, United
States government agencies, United States government instrumentalities or
United States government sponsored enterprises, and to repurchase agreements
fully collateralized by direct obligations of the United States of America,
United States government agencies, United States government instrumentalities
or United States government sponsored enterprises, and the investment company
or investment trust takes delivery of such collateral for the repurchase
agreement, either directly or through an authorized custodian. * * *. The total dollar
amount of funds invested in all open-end and closed-end management type
investment companies and investment trusts at any one time shall not exceed
twenty percent (20%) of the total dollar amount of funds invested under
paragraph ( * * *c)
of this section.
( * * *e) Investments authorized by * * *
subparagraph
(ii) * * *
of paragraph ( * * *c)
shall mature on such date or dates as determined by the State Treasurer in the
exercise of prudent judgment to generate a favorable return to the state and
will allow the monies to be available for use at such time as the monies will
be needed for state purposes. However, the maturity of securities purchased as
enumerated in * * * subparagraph (ii) * * * shall not exceed ten (10) years from
date of purchase for United States Treasury and Agency securities and shall
not exceed thirty (30) years from the date of purchase and six-year average
life for mortgage-backed pass-through and collateralized mortgage obligation
securities. Special funds shall be considered those funds created
constitutionally, statutorily or administratively which are not considered
general funds. All funds invested for a period of thirty (30) days or longer
under paragraph ( * * *c)
shall bear a rate at least equal to the * * * prevailing market rates of comparable securities of
similar maturity.
( * * *f) Any interest-bearing deposits or
certificates of deposit shall not exceed at any time the amount insured by the
Federal Deposit Insurance Corporation in any one (1) banking institution, the
Federal Savings and Loan Insurance Corporation in any one (1) savings and loan
association, or other deposit insurance corporation approved by the State Treasurer,
unless the uninsured portion is collateralized by the pledge of securities in
the manner provided by Section 27-105-5.
( * * *g) Unless otherwise provided, income
from investments authorized by the provisions of this subsection shall be
credited to the State General Fund.
( * * *h) Not more than Five Hundred Thousand
Dollars ($500,000.00) of funds may be invested with foreign financial
institutions, and the State Treasurer may enter into price contracts for the
purchase or exchange of foreign currency or other arrangements for currency
exchange in an amount not to exceed Five Hundred Thousand Dollars ($500,000.00)
upon specific direction of the * * *
Mississippi Development Authority. The State Treasurer shall promulgate
all rules and regulations for applications, qualifications and any other
necessary matters for foreign financial institutions.
Any liquidating agent of a depository in liquidation, voluntary or involuntary, shall redeem from the state any bonds and securities which have been pledged to secure state funds and such redemption shall be at the par value or market value thereof, whichever is greater; otherwise, the liquidating agent or receiver may pay off the state in full for its deposits and retrieve the pledged securities without regard to par or market value.
The State Treasurer and the Executive Director of the Department of Finance and Administration shall make monthly reports to the Legislative Budget Office containing a full and complete statement of all funds invested by virtue of the provisions of this section and the revenues derived therefrom and the expenses incurred therewith, together with all such other information as may seem to each of them as being pertinent to inform fully the Mississippi Legislature with reference thereto.
The State Treasurer shall not deposit any funds on demand deposit with any authorized depository, unless such depository has contracted for interest-bearing accounts or time certificates of deposit.
Notwithstanding the foregoing, any financial institution not meeting the prescribed ratio requirement set forth in Section 27-105-5 whose accounts are insured by the Federal Deposit Insurance Corporation, or any successor to that insurance corporation, may receive state funds in an amount not exceeding the amount which is insured by such insurance corporations and may qualify as a state depository to the extent of such insurance for this purpose only. The paid-in and earned capital funds of such financial institution shall not be included in the computations specified in Section 27-105-9(a) and (b).
SECTION 2. This act shall take effect and be in force from and after July 1, 2013.
