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ENGROSSED HOUSE
BILL NO. 3625 By: Lay of the House
and
Rader of the Senate
An Act relating to schools; amending 70 O.S. 2021,
Section 5-115, which relates to investment of funds;
modifying provisions related to authorized
investments; providing an effective date; and
declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 O.S. 2021, Section 5-115, is
amended to read as follows:
Section 5-115. A. Unless the context clearly shows otherwise,
the term "treasurer", as used in this section, includes a county
treasurer acting as the treasurer of a school district pursuant to
the provisions of Section 5-114 of this title. The treasurer so
appointed shall execute, before entering upon the duties of the
office of the treasurer, a surety bond in an amount which it is
estimated by the board of education the treasurer will have on hand
at any one time during the current year, and the amount of
securities held as investments shall not be considered. The board
of education is empowered to require the treasurer to increase or
decrease the bond of the treasurer as the amount of funds on hand
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may require. Provided, the bond of a school district shall not, in
any event, be required to be in an amount greater than that of the
county treasurer of the county. The premium on the bond shall be
paid by the board of education out of district funds. Provided,
however, the treasurer of such district shall require the depository
wherein school district funds are deposited to insure or guarantee
the deposit by proper securities, which shall be of the same class
of securities as are required to insure deposits of county
treasurers of the various counties, and the securities shall be
pledged, taken and kept in the manner provided by Sections 517.1
through 517.7 of Title 62 of the Oklahoma Statutes.
B. In all districts which are permitted by law to select a
local treasurer, the county treasurer shall act as treasurer thereof
until such time as a local treasurer shall be appointed and has
executed the surety bond required by this section. In no instance
in which the county treasurer is the treasurer of any school
district shall any additional bond be required, but the official
bond of the county treasurer shall stand for any and all funds and
securities coming into the hands of the county treasurer.
C. The local treasurer of a district, when required by the
board of education, shall prepare and submit in writing a report of
the condition of the finances of the district and shall produce at
any meeting of the board or to any committee appointed for the
purpose of examining the accounts of the treasurer all books and
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papers pertaining to the office of the treasurer. Upon failure to
make reports as provided for herein or as may otherwise be required
by law, the board may at any regular or special meeting thereof
summarily suspend the treasurer, and while so suspended the
treasurer shall perform no act pertaining to the office of the
treasurer. Such suspension shall continue until ended by order of
the board or by judgment of a court of competent jurisdiction.
D. The local treasurer of a school district shall keep a
separate cash ledger for each fund in the custody of the treasurer.
The local treasurer shall enter each collection and disbursement in
the cash ledger of the applicable fund by recording the date and
classification of each transaction and such other information as may
be deemed desirable. Additional ledgers shall also be maintained to
record the investments made from each fund. Such investment ledgers
shall disclose the date, description and principal amount paid for
each investment purchased and the date and principal amount received
for each investment liquidated.
E. Upon suspension by the board, the treasurer shall
immediately turn over to the board of education or to the acting
treasurer if one has been appointed by the board, all books and
papers and other property pertaining to the office of the treasurer.
F. Except as otherwise provided by law, no treasurer of any
district shall pay out school district funds in the care of the
treasurer except upon warrants signed by the proper school district
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officials authorized by the law to sign such warrants, provided,
this restriction shall not apply to sinking funds or to the
investment of school district funds. Authorized sinking fund
payments and payment for investments or receipt of liquidated
investments may be made by check, wire transfer or other instrument
or method through the Federal Reserve System.
G. The board of education shall, each month, set aside funds to
an operating account and to an investment account. Investments by
the treasurer shall be made in accordance with a written policy
adopted by the board of education. The written investment policy
shall address liquidity, diversification, safety of principal,
yield, maturity, quality of the instrument, and capability of
investment management. Acting within the investment policy, the
treasurer shall place primary emphasis on safety and liquidity in
the investment of funds. Taking into account the need to use sound
investment judgment, school districts shall, to the extent
practicable, use competitive bids when they purchase direct
obligations of the United States Government or other obligations of
the United States Government, its agencies or instrumentalities.
Such system shall be designed to maximize yield within each class of
investment instrument, consistent with the safety of the funds
invested. The board of education must review the investment
performance of the treasurer on a regular basis and no less than
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each month. The treasurer of every school district shall invest the
full amount of the investment account in:
1. Direct obligations of the United States Government to
federal government the payment of which the full faith and credit of
the Government of the United States federal government is pledged;
provided, a treasurer of a school district who has completed the
program pursuant to the provisions of subsection H of this section
may invest funds in the investment account in other obligations of
the United States Government federal government, its agencies or
instrumentalities, federal agencies or federal-government-sponsored
enterprise obligations, participations, or other instruments,
including those issued by or fully guaranteed as to principal and
interest by federal agencies or federal-government-sponsored
enterprises;
2. Obligations, to the payment of which the full faith and
credit of this state is pledged, or investment grade obligations of
state agencies, authorities, or instrumentalities rated A+ or better
by Standard and Poor's Corporation and Fitch Ratings or A1 or better
by Moody's Investors Service or equivalent by another securities
rating organization;
3. Certificates Collateralized or insured certificates of
deposits of banks or credit unions located within the state and
located outside of the state when such certificates of deposits are
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secured by acceptable collateral as in the deposit of other public
monies;
4. Negotiable certificates of deposit issued by a nationally or
state-chartered bank, a savings bank, a savings and loan
association, or a state-licensed branch of a foreign bank;
5. Savings accounts or savings certificates of savings and loan
associations banks or credit unions where the funds are either
secured or acceptable collateral or savings and loan associations
to the extent that such accounts or certificates are fully insured
by the Federal Savings and Loan Deposit Insurance Corporation.
Provided, that the income received from the investments may be
placed in the general fund of the governmental subdivision to be
used for general governmental operations or the National Credit
Union Administration;
5. Repurchase agreements that have underlying collateral
consisting of those items specified in paragraphs 1 and 2 of this
subsection including obligations of the United States, its agencies
and instrumentalities, and where the collateral has been deposited
with a trustee or custodian bank in an irrevocable trust or escrow
account established for such purposes;
6. County Direct debt obligations of county, municipal or
school district districts or their authorities direct debt
obligations for which an ad valorem tax may be levied or paid by
bond and revenue anticipation notes, and of money judgments against
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such a county, municipality or school district ordered paid by a
court of record or bonds or bond and revenue anticipation notes
issued by a public trust for of which such the county, municipality
or school district is a beneficiary thereof. All collateral pledged
to secure public funds shall be valued at no more than market value.
The income received from an investment may be placed in the general
fund of the governmental subdivision to be used for general
governmental operations, the sinking fund, the building fund, or the
fund from which the investment was made;
7. Money market mutual funds regulated by the Securities and
Exchange Commission and which investments consist of obligations of
the United States, its agencies and instrumentalities, and
investments in those items and those restrictions specified in
paragraphs 1 through 6 of this subsection Prime banker's acceptances
which are eligible for purchase by the Federal Reserve System and
which do not exceed two hundred seventy (270) days' maturity;
provided, purchase of prime banker's acceptances shall not exceed
ten percent (10%) of the surplus funds of the school district which
may be invested according to this section; provided further, the
restrictions of this paragraph shall not apply to purchases of prime
banker's acceptances by qualified pool investment programs
established under paragraph 12 of this subsection;
8. Prime commercial paper with a rating of A-1,P-1/F-1 which
shall not have a maturity that exceeds two hundred seventy (270)
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days nor represent more than ten percent (10%) of the outstanding
paper of an issuing corporation. Purchases of prime commercial
paper shall not exceed seven and one-half percent (7 1/2%) of the
surplus funds of the school district which may be invested pursuant
to this section, however, the restrictions in this paragraph shall
not apply to purchases of prime commercial paper by qualified pooled
investment programs established under paragraph 12 of this
subsection;
9. Repurchase agreements that have an underlying collateral
consisting of those items specified in paragraphs 1 through 8 of
this subsection;
8. 10. Warrants, bonds or judgments of the school district;
11. Money market funds regulated by the United States
Securities and Exchange Commission and which investments consist of
those items and those restrictions specified in paragraphs 1 through
9 of this subsection;
9. 12. Qualified pooled investment programs, the investments of
which consist of those items specified in paragraphs 1 through 8 10
of this subsection, as well as obligations of the United States
agencies and instrumentalities, regardless of the size of the
district's budget. To be qualified, a pooled investment program for
school funds must be governed through an interlocal cooperative
agreement formed pursuant to Section 5-117b of this title, and the
program must competitively select its investment advisors and other
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professionals. Any pooled investment program used must be approved
by the board of education; or
10. 13. Investment programs administered by the State
Treasurer.
H. The board of education is hereby empowered to require the
treasurer to satisfactorily complete an investment education program
approved by the State Board of Education and the State Board of
Career and Technology Education. Such program shall be designed to
allow treasurers to make informed decisions regarding the safety,
return, liquidity, costs and benefits of various investment options
allowed under this section.
I. The income received on an investment may be placed in the
fund from which the investment was made, the general fund, the
building fund, or the sinking fund.
SECTION 2. This act shall become effective July 1, 2026.
SECTION 3. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
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Passed the House of Representatives the 11th day of March, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2026.
Presiding Officer of the Senate