Read the full stored bill text
House
File
2592
-
Introduced
HOUSE
FILE
2592
BY
COMMITTEE
ON
STATE
GOVERNMENT
(SUCCESSOR
TO
HSB
633)
(COMPANION
TO
SF
2286
BY
COMMITTEE
ON
STATE
GOVERNMENT)
A
BILL
FOR
An
Act
relating
to
the
investment
of
public
funds,
and
making
1
penalties
applicable.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
12B.10,
subsection
5,
paragraph
a,
1
subparagraph
(7),
subparagraph
division
(a),
unnumbered
2
paragraph
1,
Code
2026,
is
amended
to
read
as
follows:
3
A
joint
investment
trust
organized
pursuant
to
chapter
28E
4
that
is
in
compliance
with
section
12B.10D
,
provided
that
the
5
joint
investment
trust
shall
be
one
of
the
following:
6
Sec.
2.
Section
12B.10,
subsection
7,
unnumbered
paragraph
7
1,
Code
2026,
is
amended
to
read
as
follows:
8
Notwithstanding
sections
12C.2
,
12C.4
,
and
12C.6
,
and
any
9
other
provision
of
law
relating
to
the
deposits
of
public
10
funds,
if
public
funds
are
deposited
in
a
depository,
as
11
defined
in
section
12C.1
,
any
uninsured
portion
of
the
public
12
funds
invested
through
the
depository
may
be
invested
in
13
insured
deposits
or
certificates
of
deposit
arranged
by
14
the
depository
that
are
placed
in
or
issued
by
one
or
more
15
federally
insured
banks
,
credit
unions,
or
savings
associations
16
regardless
of
location
for
the
account
of
the
public
funds
17
depositor
if
all
of
the
following
requirements
are
satisfied:
18
Sec.
3.
NEW
SECTION
.
12B.10D
Regulation
of
joint
investment
19
trusts.
20
1.
A
political
subdivision
of
the
state
may
invest
up
to
21
twenty-five
percent
of
the
aggregate
amount
of
its
public
funds
22
in
a
joint
investment
trust
authorized
under
section
12B.10,
23
subsection
5,
paragraph
“a”
,
subparagraph
(7).
The
twenty-five
24
percent
limit
must
be
calculated
based
on
the
average
of
all
of
25
the
political
subdivision’s
public
funds
over
the
previous
two
26
fiscal
years.
27
2.
A
joint
investment
trust
shall
not
directly
or
indirectly
28
pay
an
individual,
association,
or
entity
not
providing
direct
29
investment
management,
administrative,
custodial,
or
other
bona
30
fide
operational
services
to
the
trust.
31
3.
Before
depositing
or
investing
public
funds
with
a
joint
32
investment
trust
organized
under
chapter
28E,
the
governing
33
body
of
the
political
subdivision
shall
execute
a
written
34
acknowledgment
stating
all
of
the
following:
35
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2592
a.
That
the
participant
understands
and
affirms
that
funds
1
invested
in
the
joint
investment
trust
may
not
be
deposits
2
insured
by
the
federal
deposit
insurance
corporation,
national
3
credit
union
administration,
or
any
other
government
insurance
4
program
comparable
to
those
offered
by
a
local
financial
5
institution.
6
b.
That
the
participant
understands
and
affirms
that
such
7
funds
are
not
collateralized
or
guaranteed
by
the
state,
a
8
political
subdivision,
or
any
other
entity.
9
c.
That
the
participant
acknowledges
that
the
safety
of
such
10
funds
depends
on
the
investment
performance
and
management
of
11
the
joint
investment
trust
and
is
subject
to
loss
of
principal.
12
4.
A
violation
of
this
section
is
a
breach
of
fiduciary
duty
13
and
may
subject
the
trust,
the
public
entity,
and
the
public
14
entity’s
officers
and
elected
officials
to
criminal
and
civil
15
remedies,
including
administrative
remedies,
applicable
for
a
16
violation
of
section
12B.10,
including
the
penalties
provided
17
by
sections
12B.14
and
12B.15.
18
Sec.
4.
Section
12C.17,
subsection
1,
paragraph
c,
Code
19
2026,
is
amended
to
read
as
follows:
20
c.
The
securities
shall
be
deposited
with
the
federal
21
reserve
bank,
the
federal
home
loan
bank
of
Des
Moines,
Iowa,
22
a
corporate
central
credit
union
organized
under
section
23
533.213
a
securities
broker-dealer
registered
as
a
member
of
24
the
financial
industry
regulatory
authority
,
or
a
corporate
25
credit
union
whose
activities
are
subject
to
regulation
by
the
26
national
credit
union
administration
pursuant
to
a
bailment
27
agreement
or
a
pledge
custody
agreement.
28
Sec.
5.
Section
12C.17,
subsection
4,
Code
2026,
is
amended
29
to
read
as
follows:
30
4.
Upon
written
request
from
the
appropriate
public
officer
31
but
not
less
than
monthly,
the
federal
reserve
bank,
the
32
federal
home
loan
bank
of
Des
Moines,
Iowa,
a
corporate
central
33
credit
union
organized
under
section
533.213
a
securities
34
broker-dealer
registered
as
a
member
of
the
financial
industry
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regulatory
authority
,
or
a
corporate
credit
union
whose
1
activities
are
subject
to
regulation
by
the
national
credit
2
union
administration
shall
report
a
description,
the
par
value,
3
and
the
market
value
of
any
pledged
collateral
by
a
credit
4
union.
5
EXPLANATION
6
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
7
the
explanation’s
substance
by
the
members
of
the
general
assembly.
8
This
bill
relates
to
the
investment
of
public
funds.
9
The
bill
allows
the
uninsured
portion
of
any
public
funds
10
invested
through
a
depository
to
be
invested
in
insured
11
deposits
or
certificates
of
deposit
that
are
placed
in
or
12
issued
by
a
credit
union.
13
The
bill
provides
that
a
political
subdivision
may
invest
up
14
to
25
percent
of
its
public
funds
in
a
joint
investment
trust
15
authorized
under
Code
section
12B.10(5).
A
joint
investment
16
trust
shall
not
pay
an
individual,
association,
or
entity
that
17
does
not
provide
direct
investment
management,
administrative,
18
custodial,
or
other
bona
fide
operational
services
to
the
19
trust.
Before
depositing
or
investing
public
funds
with
a
20
joint
investment
trust,
the
governing
body
of
the
political
21
subdivision
must
execute
a
written
acknowledgment
relating
to
22
the
insurance
and
safety
of
the
funds.
A
violation
of
these
23
provisions
is
a
breach
of
fiduciary
duty
and
may
subject
the
24
trust,
the
public
entity,
and
the
public
entity’s
officers
and
25
elected
officials
to
criminal
and
civil
remedies,
including
26
administrative
remedies,
and
may
result
in
a
variety
of
27
criminal
penalties
for
a
fraudulent
practice
(Code
chapter
28
714),
a
simple
misdemeanor
for
official
delinquency,
and
29
liability
for
any
fine
imposed
and
any
damages
sustained
by
a
30
person.
A
simple
misdemeanor
is
punishable
by
confinement
for
31
no
more
than
30
days
and
a
fine
of
at
least
$105
but
not
more
32
than
$855.
33
The
bill
removes
corporate
central
credit
unions
organized
34
under
Code
section
533.213
from
the
list
of
entities
with
which
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a
credit
union
receiving
public
funds
may
deposit
securities
1
and
allows
a
credit
union
which
receives
public
funds
to
2
pledge
securities
owned
by
the
credit
union
by
depositing
the
3
securities
with
a
securities
broker-dealer
registered
as
a
4
member
of
the
financial
industry
regulatory
authority
pursuant
5
to
a
bailment
agreement
or
a
pledge
custody
agreement.
Such
6
a
securities
broker-dealer
must
report
a
description,
the
par
7
value,
and
the
market
value
of
any
pledged
collateral
by
a
8
credit
union
at
least
monthly
and
upon
written
request
of
an
9
appropriate
public
officer.
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