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SENATE BILL 1690
By Briggs
HOUSE BILL 1794
By Crawford
HB1794
011032
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AN ACT to amend Tennessee Code Annotated, Title 9 and
Title 49, relative to investment pools for school
districts.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 9-1-107(b), is amended by deleting
the subsection and substituting instead:
(b) Counties, municipalities, districts, and other public or quasi-public entities are
authorized to deposit or invest funds in the local government investment pool or other
investment pools provided for under chapter 4, part 7 of this title. The governing body of
such local government may delegate revocable investment authority to the financial
officer charged with custody of the funds of the local government, who shall thereafter
assume full responsibility for transactions with the local government investment pool or
other investment pools provided for under chapter 4, part 7 of this title.
SECTION 2. Tennessee Code Annotated, Section 9-4-701, is amended by deleting the
section and substituting instead:
The purpose of this part is to enable local governments in this state to participate
in pooled investment funds for the investment of idle public funds as provided in this
part. For purposes of this part, the local governments that can participate in the fund are
those entities listed in § 9-1-107(b). The general assembly finds and declares that the
public interest is satisfied through a pooled investment fund for idle public funds, thereby
reducing the need for imposing additional taxes. Each local government participating in
a pooled investment fund provided for in this part is deemed a participant.
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SECTION 3. Tennessee Code Annotated, Section 9-4-702, is amended by designating
the existing language as subsection (a) and adding the following as a new subsection (b):
(b)
(1) Notwithstanding another law to the contrary, in lieu of or in addition to
the local government investment pool described in subsection (a), school
districts, as defined in § 49-1-103, may establish by written agreement one (1) or
more pools for the investment of school district funds.
(2) In establishing and managing one (1) or more such pools, the
establishing school districts, or a board of directors or other agent or agents
designated by the establishing school districts by written agreement, may
exercise the powers conferred on the state treasurer and the state funding board
with regard to the local government investment pool as provided in this part;
provided, that the funds invested in any pool established pursuant to this
subsection (b) must be in the custody of the establishing school districts, or a
board of directors for the pool designated by the establishing school districts by
written agreement or the agents thereof, for the investment, reinvestment, and
administration of the fund.
(3) A written agreement establishing a pool under this subsection (b)
must include a written investment policy authorizing how pool assets may be
invested. Unless otherwise provided in a written policy adopted by the
establishing school districts or board of directors designated by the establishing
school districts, and approved by the state funding board, an investment policy
must be consistent with the investment guidelines provided in § 9-4-602.
(4) Written agreements creating an investment pool under this
subsection (b), and any investment policies adopted by establishing school
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districts or board of directors designated by the establishing school districts, must
be filed with the comptroller of the treasury.
(5) Any pool created by establishing school districts under this section is
subject to audit and review by the comptroller of the treasury.
SECTION 4. Tennessee Code Annotated, Section 9-4-705, is amended by adding the
following as a new subsection:
(e) Written agreements creating investment pools pursuant to SECTION 3 must
include procedures for the submission of applications for participation by school districts,
other than the establishing school districts, desiring to participate in the pool that are
consistent with subsections (a) and (b); provided, that applications for participation are
not necessary for the establishing school districts who are signatories to the written
agreement required by SECTION 3. Written agreements creating pools pursuant to
SECTION 3 must include provisions consistent with subsections (c) and (d) regarding
electronic transfer of funds and electronic filing of reports and documents, as well as
regarding requests for the return of principal investments or investment income or both.
SECTION 5. Tennessee Code Annotated, Section 9-4-706, is amended by adding the
following as a new subsection:
(d) This section applies to pools created pursuant to SECTION 3; provided, that
the references to the state treasurer are deemed to reference establishing school
districts, a board of directors for the pool designated by written agreement by the
establishing school districts, or the agents thereof.
SECTION 6. This act takes effect upon becoming a law, the public welfare requiring it.