State Treasury; close those funds having no transactional activity other than interest from pooled investments.

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To: Appropriations A
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representatives Read, Cockerham

HOUSE BILL NO. 1650

AN ACT TO AMEND SECTION 27-105-3, MISSISSIPPI CODE OF 1972, 1
TO DEFINE THE TERMS "POOLED INVESTMENT VEHICLE," "STATE AGENCY" 2
AND "STATE FISCAL OFFICER"; TO CREATE NEW SECTION 27-105-32, 3
MISSISSIPPI CODE OF 1972, TO REQUIRE THE STATE TREASURER TO 4
ANNUALLY REVIEW EACH PUBLIC FUND, ACCOUNT OR TRUST THAT RECEIVES 5
INTEREST ALLOCATION FROM A POOLED INVESTMENT VEHICLE TO DETERMINE 6
IF THE FUND, ACCOUNT OR TRUST THAT RECEIVES INTEREST HAD NO 7
TRANSACTIONAL ACTIVITY, OTHER THAN THE RECEIPT OF INTEREST WITHIN 8
THE PRIOR FISCAL YEAR; TO AUTHORIZE THE STATE TREASURER TO 9
PRECLUDE CERTAIN FUNDS, ACCOUNTS OR TRUSTS FROM RECEIVED INTEREST; 10
TO DIRECT CERTAIN FUNDS TO BE CLOSED OR CONSOLIDATED WITHIN THE 11
STATE TREASURY; TO AMEND SECTION 27-105-33, MISSISSIPPI CODE OF 12
1972, TO AUTHORIZE AN EXCEPTION TO THE INVESTMENT REQUIREMENTS OF 13
THIS CHAPTER UPON A DEMONSTRATION OF SUFFICIENT JUSTIFICATION; TO 14
CREATE NEW SECTION 27-105-34, MISSISSIPPI CODE OF 1972, TO REQUIRE 15
EACH STATE AGENCY TO REVIEW ITS FUNDS, ACCOUNTS AND TRUSTS WITHIN 16
AND OUTSIDE OF THE STATE TREASURY AND REPORT CERTAIN INFORMATION 17
TO THE TREASURER; TO REQUIRE THE TREASURER TO REPORT CERTAIN 18
COMPILED INFORMATION TO THE LEGISLATIVE BUDGET OFFICE AND THE 19
SENATE AND HOUSE LEGISLATIVE SERVICES OFFICE; TO AMEND SECTION 20
27-105-1, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR RELATED 21
PURPOSES. 22
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 23
SECTION 1. Section 27-105-3, Mississippi Code of 1972, is 24
amended as follows: 25
27-105-3. As used in this chapter: 26
(a) The words "bank" or "banks," whenever used in this 27
chapter, shall include trust companies. 28
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(b) The term "pooled investment vehicle" means any 29
investment fund, account or trust in which public monies from two 30
(2) or more funds, accounts or trusts are combined for the purpose 31
of collective investment and management. The term includes 32
investments required under this chapter and investments made 33
pursuant to an exception to the requirements of this chapter under 34
Section 27-105-33(4). 35
(c) The term "state agency" has the meaning as defined 36
in Section 27-103-103(3). 37
(d) The term "State Fiscal Officer" means the Executive 38
Director of the Department of Finance and Administration. 39
SECTION 2. The following shall be codified as Section 40
27-105-32, Mississippi Code of 1972: 41
27-105-32. (1) No later than August 1 of each year, the 42
State Treasurer shall review each public fund, account or trust 43
that receives interest allocation from a pooled investment vehicle 44
to determine if the fund, account or trust that receives interest 45
had no transactional activity, other than the receipt of interest 46
allocation from a pooled investment vehicle, within the prior 47
fiscal year. 48
(2) Unless the fund, account or trust identified under 49
subsection (1) of this section was created by law that authorized 50
the retention of interest earned or investment earnings, the State 51
Treasurer may preclude its allocation of interest from a pooled 52
interest vehicle. 53
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(3) Unless an amendment to law is required to do so, the 54
State Treasurer, the State Fiscal Officer and the state agency 55
associated with the fund, account or trust identified under 56
subsection (1) of this section, shall close or consolidate the 57
fund, account or trust. 58
SECTION 3. Section 27-105-33, Mississippi Code of 1972, is 59
amended as follows: 60
27-105-33. (1) It shall be the duty of the State Treasurer 61
and the * * * State Fiscal Officer on or about the tenth day of 62
each month, and in their discretion at any other time, to analyze 63
carefully the amount of cash in the General Fund of the state and 64
in all special funds credited to any special purpose designated by 65
the State Legislature or held to meet the budgets or 66
appropriations for maintenance, improvements and services of the 67
several institutions, boards, departments, commissions, agencies, 68
persons or entities of the state, and to determine in their 69
opinion when the cash in such funds is in excess of the amount 70
required to meet the current needs and demands of no more than 71
seven (7) business days on such funds and report their findings to 72
the Governor. It shall be the duty of the State Treasurer to 73
provide a cash flow model for forecasting revenues and 74
expenditures on a bimonthly basis and providing technical 75
assistance for its operation. The Department of Finance and 76
Administration shall use the cash flow model furnished by the 77
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State Treasurer, in analyzing the amount of funds on deposit and 78
available for investment. 79
(2) The State Treasurer is hereby authorized, empowered and 80
directed to invest all such excess general and special funds of 81
the state in the following manner: 82
(a) Funds shall be allocated equally among all 83
qualified state depositories which do not have demand accounts in 84
excess of One Hundred Fifty Thousand Dollars ($150,000.00) until 85
each qualified depository willing to accept the same shall have on 86
deposit or in security repurchase agreements or in other 87
securities authorized in paragraph (d) of this subsection at 88
interest the sum of Three Hundred Thousand Dollars ($300,000.00). 89
For the purposes of this subsection, no branch bank or branch 90
office shall be counted as a separate depository. 91
(b) The balance, if any, of such excess general and 92
special funds shall be offered to qualified depositories of the 93
state on a pro rata basis as provided in Section 27-105-9. For 94
the purposes of this subsection, the pro rata share of each 95
depository shall be reduced by the amount of the average daily 96
collected earning balance of demand deposits maintained by the 97
State Treasurer pursuant to Section 27-105-9 during the preceding 98
calendar year, and such reduction shall be allocated pro rata 99
among other eligible depositories. 100
(c) Funds offered pursuant to paragraphs (a) and (b) 101
above shall be invested for periods of up to one (1) year, and 102
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shall bear interest at an interest rate no less than that 103
numerically equal to the bond equivalent yield on direct 104
obligations of the United States Treasury of comparable maturity, 105
as determined by the State Treasurer. In determining such rate, 106
the State Treasurer shall consider the Legislature's desire to 107
distribute funds equitably throughout the state to the maximum 108
extent possible. 109
(d) To the extent that the State Treasurer shall find 110
that general and special funds cannot be invested pursuant to 111
paragraphs (a), (b) and (c) of this subsection for the stated 112
maturity up to one (1) year, the Treasurer may invest such funds, 113
together with any other funds required for current operation, as 114
determined pursuant to this section, in the following: 115
(i) Time certificates of deposit or 116
interest-bearing accounts with qualified state depositories. For 117
those funds determined under prudent judgment of the State 118
Treasurer to be made available for investment in time certificates 119
of deposit, the rate of interest paid by the depositories shall be 120
determined by rules and regulations adopted and promulgated by the 121
State Treasurer which may include competitive bids. At the time 122
of investment, the interest rate on such certificates of deposit 123
under the provisions of this subparagraph shall be a rate not less 124
than the bond equivalent yield on direct obligations of the United 125
States Treasury with a similar length of maturity. 126
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(ii) Direct United States Treasury obligations, 127
the principal and interest of which are fully guaranteed by the 128
government of the United States. 129
(iii) United States government agency, United 130
States government instrumentality or United States 131
government-sponsored enterprise obligations, the principal and 132
interest of which are fully guaranteed by the government of the 133
United States, such as the Government National Mortgage 134
Association; or United States governmental agency, United States 135
government instrumentality or United States government-sponsored 136
enterprise obligations, the principal and interest of which are 137
guaranteed by any United States government agency, United States 138
government instrumentality or United States government-sponsored 139
enterprise contained in a list promulgated by the State Treasurer. 140
(iv) Direct security repurchase agreements and 141
reverse direct security repurchase agreements of any federal book 142
entry of only those securities enumerated in subparagraphs (ii) 143
and (iii) above. "Direct security repurchase agreement" means an 144
agreement under which the state buys, holds for a specified time, 145
and then sells back those securities and obligations enumerated in 146
subparagraphs (ii) and (iii) above. "Reverse direct securities 147
repurchase agreement" means an agreement under which the state 148
sells and after a specified time buys back any of the securities 149
and obligations enumerated in subparagraphs (ii) and (iii) above. 150
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A qualified state depository shall be given preference for such 151
agreements when possible. 152
(v) Bonds issued, assumed or guaranteed by the 153
Country of Israel, provided that: 154
1. Investments in such instruments shall be 155
denominated in United States currency; 156
2. Such bonds must be of investment grade as 157
rated by at least one (1) nationally recognized statistical rating 158
agency; and 159
3. The amount of funds invested in such bonds 160
at any time shall not exceed Fifty Million Dollars 161
($50,000,000.00). 162
(vi) Corporate bonds and taxable municipal bonds; 163
or corporate short-term obligations of corporations or of wholly 164
owned subsidiaries of corporations, whose short-term obligations 165
are rated A-1 or better by Standard and Poor's, rated P-1 or 166
better by Moody's Investment Service, F-1 or better by Fitch 167
Ratings, Ltd., or the equivalent of these ratings if assigned by 168
another United States Securities and Exchange Commission 169
designated Nationally Recognized Statistical Rating Organization. 170
(e) For the purposes of this section, direct 171
obligations issued by the United States of America shall be deemed 172
to include securities of, or other interests in, any open-end or 173
closed-end management type investment company or investment trust 174
registered under the provisions of 15 USCS Section 80(a)-1 et 175
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seq., provided that the portfolio of such investment company or 176
investment trust is limited to direct obligations issued by the 177
United States of America, United States government agencies, 178
United States government instrumentalities or United States 179
government-sponsored enterprises, and to repurchase agreements 180
fully collateralized by direct obligations of the United States of 181
America, United States government agencies, United States 182
government instrumentalities or United States government-sponsored 183
enterprises, and the investment company or investment trust takes 184
delivery of such collateral for the repurchase agreement, either 185
directly or through an authorized custodian. The State Treasurer 186
and the * * * State Fiscal Officer shall review and approve the 187
investment companies and investment trusts in which funds invested 188
under paragraph (d) of this subsection may be invested. The total 189
dollar amount of funds invested in all open-end and closed-end 190
management type investment companies and investment trusts at any 191
one time shall not exceed twenty percent (20%) of the total dollar 192
amount of funds invested under paragraph (d) of this subsection. 193
(f) Investments authorized by subparagraphs (ii) and 194
(iii) of paragraph (d) shall mature on such date or dates as 195
determined by the State Treasurer in the exercise of prudent 196
judgment to generate a favorable return to the state and will 197
allow the monies to be available for use at such time as the 198
monies will be needed for state purposes. However, the maturity 199
of securities purchased as enumerated in subparagraphs (ii) and 200
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(iii) shall not exceed ten (10) years from date of purchase. 201
Special funds shall be considered those funds created 202
constitutionally, statutorily or administratively which are not 203
considered general funds. All funds invested for a period of 204
thirty (30) days or longer under paragraph (d) shall bear a rate 205
at least equal to the current established rate under paragraph (c) 206
of this subsection. 207
(g) Any interest-bearing deposits or certificates of 208
deposit shall not exceed at any time the amount insured by the 209
Federal Deposit Insurance Corporation in any one (1) banking 210
institution, the Federal Savings and Loan Insurance Corporation in 211
any one (1) savings and loan association, or other deposit 212
insurance corporation approved by the State Treasurer, unless the 213
uninsured portion is collateralized by the pledge of securities in 214
the manner provided by Section 27-105-5. 215
(h) Unless otherwise provided, income from investments 216
authorized by the provisions of this subsection shall be credited 217
to the State General Fund. 218
(i) Not more than Five Hundred Thousand Dollars 219
($500,000.00) of funds may be invested with foreign financial 220
institutions, and the State Treasurer may enter into price 221
contracts for the purchase or exchange of foreign currency or 222
other arrangements for currency exchange in an amount not to 223
exceed Five Hundred Thousand Dollars ($500,000.00) upon specific 224
direction of the Department of Economic and Community Development. 225
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The State Treasurer shall promulgate all rules and regulations for 226
applications, qualifications and any other necessary matters for 227
foreign financial institutions. 228
(3) Any liquidating agent of a depository in liquidation, 229
voluntary or involuntary, shall redeem from the state any bonds 230
and securities which have been pledged to secure state funds and 231
such redemption shall be at the par value or market value thereof, 232
whichever is greater; otherwise, the liquidating agent or receiver 233
may pay off the state in full for its deposits and retrieve the 234
pledged securities without regard to par or market value. 235
(4) (a) Upon written request of a state agency, the State 236
Treasurer may grant exceptions to the investment requirements of 237
this chapter if a state agency provides sufficient justification 238
as to why certain public monies may not bear interest under 239
Section 27-105-21 or may not be held within the public funds 240
guaranty pool provided by this chapter. Sufficient justification 241
shall include restrictions by other law or a justification 242
determined to be reasonable by the Treasurer. The State Fiscal 243
Officer shall assist the Treasurer and shall provide any necessary 244
information to make the determination under this subsection 245
(4)(a). 246
(b) To the extent allowed by other law, a state agency 247
shall seek to retain public monies excepted from the requirements 248
of the chapter in a pooled investment vehicle not regulated by 249
this chapter. If the public monies excepted from the requirements 250
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of this chapter cannot be held in a pooled investment vehicle not 251
regulated by this chapter, to the extent allowed by other law, a 252
state agency shall seek to retain public monies excepted from the 253
requirements of the chapter in an interest-bearing account. 254
(5) The State Treasurer and the * * * State Fiscal Officer 255
shall make monthly reports to the Legislative Budget Office 256
containing a full and complete statement of all funds invested by 257
virtue of the provisions of this section and the revenues derived 258
therefrom and the expenses incurred therewith, together with all 259
such other information as may seem to each of them as being 260
pertinent to inform fully the Mississippi Legislature with 261
reference thereto. 262
(6) The State Treasurer shall not deposit any funds on 263
demand deposit with any authorized depository, unless such 264
depository has contracted for interest-bearing accounts or time 265
certificates of deposit. 266
(7) Notwithstanding the foregoing, any financial institution 267
not meeting the prescribed ratio requirement set forth in Section 268
27-105-5 whose accounts are insured by the Federal Deposit 269
Insurance Corporation, or any successor to that insurance 270
corporation, may receive state funds in an amount not exceeding 271
the amount which is insured by such insurance corporations and may 272
qualify as a state depository to the extent of such insurance for 273
this purpose only. The paid-in and earned capital funds of such 274
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financial institution shall not be included in the computations 275
specified in Section 27-105-9(a) and (b). 276
SECTION 4. The following shall be codified as Section 277
27-105-34, Mississippi Code of 1972: 278
27-105-34. (1) Each state agency shall review its funds, 279
accounts or trusts held within and outside of the State Treasury 280
and shall report to the State Treasurer and the Department of 281
Finance and Administration no later than September 30, 2026, the 282
following information: 283
(a) The name of each of its funds, accounts or trusts; 284
(b) The code or number of each of its funds, accounts 285
or trusts; 286
(c) The purpose of each of its funds, accounts or 287
trusts; 288
(d) Whether the fund, account or trust was created by 289
the state agency or by law; 290
(e) If created by law, a reference to the law or 291
statute, as applicable; 292
(f) Whether the fund, account or trust retains the 293
interest earned on monies in it or provides where the interest 294
earned on such monies is transferred; 295
(g) Whether there is any restriction on transferring 296
the interest earned on the monies in the fund, account or trust to 297
the General Fund; 298
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(h) Whether the fund, account or trust can be closed or 299
consolidated with another fund, account or trust due to the fund 300
not having transactional activity other than the deposit of any 301
earned interest; 302
(i) If it is determined that the fund can be closed or 303
consolidated, a statement as to whether the action must be 304
effectuated by legislation; 305
(j) A statement as to whether the fund, account or 306
trust is held in an interest-bearing account regulated by this 307
chapter; 308
(k) If the fund is not being held in an 309
interest-bearing account regulated by this chapter, a statement 310
that an exception has been received from the Treasurer under 311
Section 27-105-33(4); 312
(l) A statement as to whether the fund is held within 313
the public funds guaranty pool under this chapter; 314
(m) If the fund is not being held within the public 315
funds guaranty pool under this chapter, a statement that an 316
exception has been received from the Treasurer under Section 317
27-105-33(4); and 318
(n) Whether an agency has a fund created by law without 319
an associated fund created in the State Treasury. 320
(2) The Treasurer shall review the information submitted by 321
the agencies for accuracy and compile the information submitted in 322
subsection (1) of this section in a report to the Legislative 323
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Budget Office to be delivered by December 15, 2026. The report 324
shall also include a recommendation on which funds should be 325
closed or combined, a listing of idle funds receiving interest 326
allocation from pooled interest investments, and recommended 327
changes to the general laws of Mississippi related to the 328
information provided by the agencies. The Department of Finance 329
and Administration shall assist the Treasurer with any information 330
necessary to complete the report. 331
(3) Beginning with calendar year 2028 and each calendar year 332
following a statewide election as provided in Section 23-15-193 333
thereafter: 334
(a) All state agencies shall provide the information 335
required by subsection (1) of this section to the department and 336
the Treasurer no later than September 30; and 337
(b) The Treasurer shall complete the required reporting 338
in subsection (2) of this section and provide it in a report to 339
the Legislative Budget Office and the Senate and House Legislative 340
Services Offices by December 15. 341
(4) In addition to the four-year report, the state agencies 342
shall file interim reports with the Treasurer including the 343
information required by subsection (1) of this section for any new 344
funds created by state agencies by September 30 of each year when 345
a four-year report is not required. The Treasurer shall compile 346
the interim reports under this subsection and provide it in a 347
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report to the Legislative Budget Office by December 15 of each 348
year when a four-year report is not required. 349
(5) The State Fiscal Officer may disapprove of payments from 350
the State Treasury if a state agency does not timely provide the 351
information required by this section. 352
SECTION 5. Section 27-105-1, Mississippi Code of 1972, is 353
amended as follows: 354
27-105-1. Wherever the term "State Depository Commission" 355
appears in any law, the same shall mean the State Treasurer. All 356
funds deposited or invested by and through the State Treasurer 357
shall be deposited in the manner prescribed in Section 27-105-33. 358
All such deposits shall be subject to payment when demanded by the 359
State Treasurer, except time deposits as provided by Section 360
27-105-33. Such time deposits shall be subject to payment as 361
specified by the contract or certificate of deposit. All deposits 362
made by the State Treasurer shall also be subject to such 363
regulations as are imposed by law and by rules promulgated by the 364
State Treasurer for such deposits. The State Treasurer, a state 365
institution or a state agency may compensate depositories for the 366
expense in maintaining deposit accounts and in handling items 367
related thereto, subject to approval by the State Treasurer 368
and * * * State Fiscal Officer. 369
The Commissioner of Banking and Consumer Finance shall serve 370
to advise the State Treasurer as to the condition and safety as a 371
state depository of any financial institution, especially as to 372
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ST: State Treasury; close those funds having no
transactional activity other than interest from
pooled investments.
any impairment of capital or surplus. Such information or 373
recommendation shall be considered confidential information and 374
shall not be disclosed. 375
SECTION 6. This act shall take effect and be in force from 376
and after its passage. 377