SF0119 • 2021

Investment of state permanent funds.

AN ACT relating to public funds; adopting a risk profile standard for the investment of funds of the state which may be invested in equities, including stocks; repealing specified maximum amounts of state permanent funds which may be invested in equities including stocks; and providing for an effective date.

Budget

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Appropriations
Last action: 2021-04-01
Official status: enrolled
Effective date: 7/1/2021

Plain English Breakdown

The official source material does not provide details about the frequency of reviews or who will create benchmarks for measuring portfolio risks.

Investment Rules for State Funds

This law changes how state permanent funds can be invested, adopting a risk profile standard and allowing up to 70% of these funds to be put into equities like stocks.

What This Bill Does

Changes the rules for investing state permanent funds in equities such as stocks based on a new risk profile standard.
Replaces old maximum percentage limits with a risk profile that compares investments to a reference portfolio consisting of 70% global equities and 30% domestic fixed income.
Removes specific old laws about the maximum percentages of state permanent funds that could be invested in stocks.

Who It Names or Affects

The state treasurer
Permanent state funds

Terms To Know

Risk profile: A set of rules limiting how risky investments can be compared to a reference portfolio consisting of 70% global equities and 30% domestic fixed income.

Limits and Unknowns

The law does not specify who will create or update the specific benchmarks for measuring portfolio risks.
It is unclear how often the State Loan and Investment Board will review and adjust these investment rules.

Bill History

2021-04-01 LSO
Assigned Chapter Number 58
2021-04-01 Governor
Governor Signed SEA No. 0018
2021-03-30 House
H Speaker Signed SEA No. 0018
2021-03-29 Senate
S President Signed SEA No. 0018
2021-03-29 LSO
Assigned Number SEA No. 0018
2021-03-29 House
H 3rd Reading:Passed 56-4-0-0-0
2021-03-26 House
H 2nd Reading:Passed
2021-03-25 House
H COW:Passed
2021-03-19 House
H Placed on General File
2021-03-19 House
H02 - Appropriations:Recommend Do Pass 7-0-0-0-0
2021-03-12 House
H Introduced and Referred to H02 - Appropriations
2021-03-10 House
H Received for Introduction
2021-03-10 Senate
S 3rd Reading:Passed 30-0-0-0-0
2021-03-09 Senate
S 2nd Reading:Passed
2021-03-08 Senate
S COW:Passed
2021-03-04 Senate
S Placed on General File
2021-03-04 Senate
S02 - Appropriations:Recommend Do Pass 5-0-0-0-0
2021-03-02 Senate
S Introduced and Referred to S02 - Appropriations
2021-03-01 Senate
S Received for Introduction
2021-02-27 LSO
Bill Number Assigned

Official Summary Text

Bill Summary - 21LSO-0541
Bill No.:

SF0119

Effective:

7/1/2021 12:00:00 AM

LSO No.:

21LSO-0541

Enrolled Act No.:

SEA No. 0018

Chapter No.:

Prime Sponsor:

Joint Appropriations Committee

Catch Title:

Investment of state permanent funds.

Subject:

Adoption of a risk profile for investment of state permanent funds.

Summary/Major Elements:

The state is authorized to invest permanent funds in equities, including stocks.

Current law specifies a maximum percentage of certain permanent funds that may be invested in equities. This act replaces a specific percentage with a risk profile standard for the investment of those funds.

The risk profile may not materially exceed the risk profile of a reference portfolio that consists of seventy percent (70%) global equities and thirty percent (30%) domestic fixed income investments.

Any provision of law that restricts the investment of a specific fund or account to a greater degree than the risk profile provisions controls.

Investments made in accordance with the risk profile and other required statutory provisions and policies adopted by the State Loan and Investment Board are deemed to satisfy laws which require funds to be invested in a manner to obtain the highest net return consistent with preservation of principal or the corpus of a fund.

Comments:

Amends a major program – amends the standard under which state permanent funds are to be invested.

The above summary is not an official publication of the Wyoming Legislature and is not an official statement of legislative intent.

While the Legislative Service Office endeavored to provide accurate information in this summary, it should not be relied upon as a comprehensive abstract of the bill.

Current Bill Text

Read the full stored bill text

21LSO-0541

ORIGINAL Senate

File No
.
SF0119

ENROLLED ACT NO. 18,

SENATE

SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 General Session

AN ACT relating to public funds; adopting a risk profile standard for the investment of funds of the state which may be invested in equities, including stocks; repealing specified maximum amounts of state permanent funds which may be invested in equities including stocks; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 9
‑
4
‑
715(b) and 9
‑
4
‑
716(d)(i)(C) and by creating new subsections (e) and (f) are amended to read:

9
‑
4
‑
715.

Permissible investments.

(b)

The state treasurer, or his designee, which shall be registered under the Investment Advisor's Act of 1940 as amended if required to be registered by the terms of that act as amended, may invest
up to seventy percent (70%) of
the permanent funds in equities, including stocks of corporations
pursuant to
in accordance with
subsections
(c) and (d)
(a) through (e)
of this section
and W.S. 9
‑
4
‑
716
. The state treasurer shall report at least annually to the select committee on capital financing and investments, the joint appropriations committee and the investment funds committee on the analysis conducted pursuant to paragraph (d)(ii) of this section and W.S. 9
‑
4
‑
716(b)(ix)
and (e)
.

9
‑
4
‑
716.

State investment policy; investment consultant.

(d)

The board:

(i)

Shall procure the services of a qualified entity to evaluate:

(C)

At least annually or when market conditions warrant a change or reallocation of investments, the risks of investing state funds using the metrics specified in the investment policy statements pursuant to paragraph (b)(ix) of this section
and the risk profile under subsection (e) of this section
.

(e)

In investing monies of a fund or account which may be invested in stock of a corporation or other equities, the overall risk profile of the investments, excluding any specific public purpose investment authorized or directed by the legislature,

shall not materially exceed the risk profile of a reference portfolio that consists of seventy percent (70%) global equities and thirty percent (30%) domestic fixed income investments.
The state treasurer after consultation with the investment funds committee shall submit to the board the committee's recommendations of specific benchmarks for the measurement of the portfolio risk characteristics. The specific benchmarks shall be determined by the board.

Any provision of law which restricts the investment of a specific fund or account to a greater degree than the provisions of this subsection shall control over this subsection.

(f)

Investments made in accordance with this section and W.S. 9
‑
4
‑
715 and policies adopted pursuant to this section shall be deemed to satisfy provisions of law which require funds to be invested in a manner to obtain the highest net return consistent with preservation of principal or the corpus of a fund.

Section 2
.

This act is effective July 1, 2021
.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the Senate.

Chief Clerk

1