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HB2140 - 572R - S Ver
Senate Engrossed
House Bill
bullion
depository; state monies; treasurer
(now:� treasurer;
investment; bullion)
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2140
AN
ACT
amending section 35-313, arizona
revised statutes; relating to
the State Treasurer
.
(TEXT OF BILL BEGINS ON NEXT PAGE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 35-313, Arizona Revised
Statutes, is amended to read:
START_STATUTE
35-313.
Investment of trust and treasury monies; loan of securities
A. The state treasurer shall invest and reinvest
trust and treasury monies in any of the following items:
1. Obligations issued or guaranteed by the United
States or any of its agencies, sponsored agencies, corporations, sponsored
corporations or instrumentalities.
2. Repurchase agreements collateralized with
securities that are authorized for investment pursuant to state law and that
are purchased from authorized counterparties that have adequate capital and
liquidity as determined by the state treasurer.
3. Bonds or other evidences of indebtedness of this
state or any of the counties or incorporated cities, towns or duly organized
school districts.
4. Commercial paper whose issuer is investment grade
for short-term obligations by any two nationally recognized statistical
rating organizations.
5. Bills of exchange or time drafts known as
banker's acceptances that are drawn on and accepted by a commercial bank.
6. Negotiable certificates of deposit issued by a
nationally or state-chartered bank or savings and loan association.
7. Bonds, debentures, notes or other evidences of
indebtedness that are denominated in United States dollars and that carry an
investment grade rating by a nationally recognized bond rating agency.
8. Securities of or any other interests in any open-end
or closed-end management type investment company or investment trust,
including exchange traded products whose underlying investments are invested in
securities allowed by state law, registered under the investment company act of
1940 (54 Stat. 789; 15 United States Code sections 80a-1 through 80a-64),
as amended. For any treasurer investment pool that seeks to maintain
a constant share price, both of the following apply:
(a) The investment company or investment trust takes
delivery of the collateral for any repurchase agreement either directly or
through an authorized custodian.
(b) The investment policy of the investment company
or investment trust includes seeking to maintain a constant share price.
9. Certificates of deferred property taxes as
provided by section 42-17309.
10. Treasurer's warrant notes issued pursuant to
section 35-185.01 or registered warrants of a county issued pursuant to
section 11-605, if the yield is equal to or greater than yields on
eligible investment instruments of comparable maturities.
11. Shares in the treasurer's local government
investment pools pursuant to section 35-326 if investment policies of the
pool seek to maintain a constant share price.
12. Shares in the treasurer's long-term local
government investment pools, the terms of which are determined by the state
board of investment, pursuant to section 35-326.01.
13. Subject to subsection D of this
section, state transportation board funding obligations delivered pursuant to
section 28-7678.
14.
13.
Deposits
placed in accordance with the procedures prescribed in section 35-323.01.
15.
14.
Institutional
common trust funds whose underlying investments are invested in securities
allowed by state law.
16.
15.
Program
funding obligations delivered by the credit enhancement eligibility board
pursuant to section 41-5857.
16. Physical gold or silver bullion
if the amount invested is valued at not more than ten percent of the total
trust or treasury monies measured at cost and the gold and silver BULLION is
held in a COMMERCIAL depository for precious metals that is located within the
United states and that meets current industry standards for secure storage,
insurance, independent audits and physical segregation from other holdings.
B. In case of default or failure to honor a county
treasurer's warrant, the state treasurer may withhold the first state shared
revenues that would otherwise be distributed to the defaulting county in the
amount necessary to honor the note, including accrued interest to and beyond
the date of default.
C. The state treasurer may contract to loan
securities owned by the trust funds and operating monies deposited in the
investment pools pursuant to section 35-316, subsection B to the
financial or dealer community through one or more of the entities listed in
section 35-317, subsection A, or authorized by the board of investment
pursuant to section 35-311, subsection E, if the borrower transfers
collateral to the state treasurer or acting agent of the state in the form of
cash or securities authorized for investment pursuant to state
law. Collateral posted in the form of cash shall be in an amount
equal to at least one hundred percent of the market value of the loaned
securities as agreed. Collateral posted in the form of securities shall
be in an amount of at least one hundred two percent of the market value of the
loaned securities as established from time to time by the board of
investment. The loaned securities shall be valued as to market value
daily, and, if necessary, the borrower shall post additional collateral, as
agreed, to ensure that the required margin is maintained. The state
treasurer may collect from the borrower all dividends, interest, premiums,
rights and other distributions to which the lender of securities would
otherwise be entitled. The state treasurer may terminate the
contract on at least five business days' notice, as agreed, and the borrower
may terminate the contract on at least two business days' notice, as agreed.
D. The state treasurer shall invest operating monies
in state transportation board funding obligations delivered pursuant to section
28-7678 pursuant to the following:
1. The state treasurer shall liquidate investments
of operating monies if necessary to invest in state transportation board
funding obligations, except that if operating monies in the state general fund
fall below an $800,000,000 average over the previous twelve consecutive months,
the state treasurer is not required to purchase state transportation board
funding obligations pursuant to this subsection.
2. Each series of state transportation board funding
obligations shall bear interest at a fixed interest rate equal to the mean bid-ask
price of the United States treasury obligation with a maturity date closest to
the maturity date of the state transportation board funding obligation as
determined by the pricing system used by the state treasurer before the date
the state treasurer receives a certificate from the state transportation board
that states the board's determination to deliver an obligation to the state
treasurer and the anticipated delivery date of the obligation. The
delivery date shall be between fifteen and sixty days after the day the state
treasurer receives the certificate.
3. The state treasurer shall notify the state
transportation board and the director of the department of transportation in
writing when the operating monies fall below $400,000,000. If
operating monies fall below $200,000,000, the state treasurer may call the
investment in the state transportation board funding obligations in $25,000,000
increments up to the amount that the operating monies are below
$200,000,000. The state treasurer shall give the state
transportation board and the director of the department of transportation at
least fifteen days' notice of the call.
END_STATUTE