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H0456......................................................by STATE AFFAIRS
STATE TREASURER - IDLE MONEYS - INVESTMENT - Amends existing law relating
to the investment of idle moneys in the state treasury to delete language
regarding purchase of the guaranteed portion of a United States Small
Business Loan; and to provide that security held in money market portfolios
must be dollar denominated, meaning that all principal and interest
payments on the security are payable to security holders in United States
dollars.
01/18 House intro - 1st rdg - to printing
01/21 Rpt prt - to St Aff
01/24 Rpt out - rec d/p - to 2nd rdg
01/25 2nd rdg - to 3rd rdg
01/28 3rd rdg - PASSED - 70-0-0
AYES -- Aikele, Barraclough, Barrett, Bedke, Bell, Bieter, Black,
Block, Boe, Bolz, Bradford, Bruneel, Callister, Campbell, Clark,
Collins, Crow, Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge,
Field(13), Field(20), Gagner, Gould, Hadley, Hammond, Harwood,
Henbest, Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz,
Lake, Langford, Loertscher, Mader, Martinez, McKague, Meyer,
Montgomery, Mortensen, Moyle, Pearce, Pischner, Pomeroy, Raybould,
Ridinger, Roberts, Robison, Sali, Schaefer, Sellman, Shepherd,
Smith(33), Smith(23), Smylie, Stevenson, Stone, Tilman, Trail,
Wheeler, Wood, Young, Mr. Speaker
NAYS -- None
Absent and excused -- None
Floor Sponsor - Deal
Title apvd - to Senate
01/29 Senate intro - 1st rdg - to St Aff
02/04 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/07 3rd rdg - PASSED - 31-0-4
AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
Burtenshaw, Cameron, Davis, Deide, Dunklin, Frasure, Geddes, Goedde,
Hawkins, Hill, Ingram, Ipsen, Little, Lodge, Marley, Noh, Risch,
Sandy, Schroeder, Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler,
Williams
NAYS -- None
Absent and excused -- Darrington, Keough, King-Barrutia, Richardson
Floor Sponsor - Sandy
Title apvd - to House
02/08 To enrol
02/11 Rpt enrol - Sp signed
02/12 Pres signed
02/13 To Governor
02/19 Governor signed
Session Law Chapter 37
Effective: 02/19/02
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 456
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE INVESTMENT OF IDLE MONEYS IN THE STATE TREASURY; AMENDING SEC-
3 TION 67-1210, IDAHO CODE, TO DELETE LANGUAGE REGARDING PURCHASE OF THE
4 GUARANTEED PORTION OF A UNITED STATES SMALL BUSINESS LOAN AND TO PROVIDE
5 THAT SECURITY HELD IN MONEY MARKET PORTFOLIOS MUST BE DOLLAR-DENOMINATED
6 MEANING THAT ALL PRINCIPAL AND INTEREST PAYMENTS ON THE SECURITY ARE PAY-
7 ABLE TO SECURITY HOLDERS IN UNITED STATES DOLLARS; AND DECLARING AN EMER-
8 GENCY.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 67-1210, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 67-1210. INVESTMENT OF IDLE MONEYS. It shall be the duty of the state
13 treasurer to invest idle moneys in the state treasury, other than moneys in
14 public endowment funds, in any of the following:
15 (a) Bonds, treasury bills, interest-bearing notes, or other obligations
16 of the United States, or those for which the faith and credit of the United
17 States are pledged for the payment of principal and interest.
18 (b) General obligation or revenue bonds of this state, or those for which
19 the faith and credit of this state are pledged for the payment of principal
20 and interest.
21 (c) General obligation or revenue bonds of any county, city, metropolitan
22 water district, municipal utility district, school district or other taxing
23 district of this state.
24 (d) Notes, bonds, debentures, or other similar obligations issued by the
25 farm credit system or institutions forming a part thereof under the farm
26 credit act of 1971 [U.S.C., tit. 12, sections 2001-2259] and all acts of con-
27 gress amendatory thereof or supplementary thereto; in bonds or debentures of
28 the federal home loan bank board established under the federal home loan bank
29 act [U.S.C., tit. 12, sections 1421-1449]; in bonds, debentures and other
30 obligations of the federal national mortgage association established under the
31 national housing act [U.S.C., tit. 12, sections 1701-1750g) as amended, and
32 in the bonds of any federal home loan bank established under said act and in
33 other obligations issued or guaranteed by agencies or instrumentalities of the
34 government of the state of Idaho or of the United States, including the United
35 States small business administration guaranteed portion of any loan approved
36 by an Idaho banking corporation and by the state treasurer. provided, that the
37 purchase of the guaranteed portion of any United States small business admin-
38 istration loan is subject to the following conditions:
39 (i) The interest rate charged on the loan must be below the prime inter-
40 est rate and the interest on the loan must be chargeable at a variable
41 rate;
42 (ii) The interest rate of the loan is reset every three (3) years;
43 (iii) The maximum maturity period for the loan is ten (10) years.
2
1 (e) Bonds, notes or other similar obligations issued by public corpora-
2 tions of the state of Idaho including, but not limited to, the Idaho state
3 building authority, the Idaho housing authority and the Idaho water resource
4 board, but such investment shall not extend beyond seven (7) days.
5 (f) Repurchase agreements covered by any legal investment for the state
6 of Idaho.
7 (g) Tax anticipation notes and registered warrants of the state of Idaho.
8 (h) Tax anticipation bonds or notes and income and revenue anticipation
9 bonds or notes of taxing districts of the state of Idaho.
10 (i) Time deposit accounts and savings accounts in state depositories
11 including, but not limited to, accounts on which interest or dividends are
12 paid and upon which negotiable orders of withdrawal may be drawn, and similar
13 transaction accounts.
14 (j) Time deposit accounts and savings accounts of state or federal sav-
15 ings and loan associations located within the geographical boundaries of the
16 state in amounts not to exceed the insurance provided by the federal savings
17 and loan insurance corporation including, but not limited to, accounts on
18 which interest or dividends are paid and upon which negotiable orders of with-
19 drawal may be drawn, and similar transaction accounts.
20 (k) Revenue bonds of institutions of higher education of the state of
21 Idaho.
22 (l) Share, savings and deposit accounts of state and federal credit
23 unions located within the geographical boundaries of the state in amounts not
24 to exceed the insurance provided by the national credit union share insurance
25 fund and/or any other authorized deposit guaranty corporation, including, but
26 not limited to, accounts on which interest or dividends are paid and upon
27 which negotiable orders of withdrawal may be drawn, and similar transaction
28 accounts.
29 (m) Money market funds whose portfolios consist of any allowed investment
30 as specified in this section. The securities held in money market portfolios
31 must be dollar-denominated, meaning that all principal and interest payments
32 on such a security are payable to security holders in United States dollars.
33 The term "idle moneys" means the balance of cash and other evidences of
34 indebtedness which are accepted by banks as cash in the ordinary course of
35 business, in demand deposit accounts, after taking into consideration all
36 deposits and withdrawals, on a daily basis.
37 The interest received on all such investments, unless otherwise specifi-
38 cally required by law, shall be paid into the general account of the state of
39 Idaho. Provided, unless otherwise specifically provided by statute, any inter-
40 est earned on funds received by the state pursuant to a federal law, regula-
41 tion, or federal-state agreement which governs disposition of interest earned
42 upon such funds shall be accounted for separately to give effect to the fed-
43 eral law, regulation, or federal-state agreement.
44 If the interest is to be credited to a separate account, the state trea-
45 surer shall charge the account an investment administration fee. The amount
46 of the fee shall be determined annually by the state treasurer and submitted
47 to the board of examiners for approval as stipulated in section 67-3524, Idaho
48 Code. The fee shall be expressed as an annual percentage of the average daily
49 balance of the account, including separate investments, if any, of that
50 account. The fee shall be charged monthly in an amount approximately one-
51 twelfth (1/12) of the fee which would be payable on an annual basis. The
52 amount of the investment administration fee shall constitute an appropriation
53 from the account for which the investment administration services are ren-
54 dered.
55 The state treasurer shall charge an investment administration fee to each
3
1 such state fund or account, including the general account, which receives
2 investment income from investments administered by the office of state trea-
3 surer. The investment administration fee shall be determined annually by the
4 state treasurer and submitted to the board of examiners for approval, as stip-
5 ulated in section 67-3524, Idaho Code. The fee shall be expressed as an
6 annual percentage of the average daily balance of the fund or account, includ-
7 ing separate investments, if any, of that fund or account. The fee shall be
8 charged monthly in an amount approximately one-twelfth (1/12) of the fee which
9 would be payable on an annual basis. The amount of the investment administra-
10 tion fee shall constitute an appropriation from the fund or account for which
11 the investment administration services are rendered.
12 The term "to invest" means to use the idle moneys in the state treasury to
13 buy, sell, including selling before maturity at either a gain or a loss,
14 retain, or exchange any of the investments described in this section, consid-
15 ering the probable safety of the capital, the probable income to be derived,
16 and the liquidity of the assets.
17 SECTION 2. An emergency existing therefor, which emergency is hereby
18 declared to exist, this act shall be in full force and effect on and after its
19 passage and approval.
STATEMENT OF PURPOSE
RS 11590
The purpose of this legislation is to amend the Idaho Code 67-
1210 in order to clarify language and delete unnecessary language.
The proposed changes will:
1. Eliminate the restrictions placed on the small business
administration loans. Removal of these restrictions will give the
Investment Division of the State Treasurer’s Office the ability to
change their investment procedures to accurately reflect the open
market fluctuations. The current restrictions unnecessarily limit
the investment of those monies.
2. Clarify the description of money market portfolios. There
will be no additional cost to the state. However, the reduction in
restrictions will allow the Investment Division greater flexibility
in its investments in this area, thus increasing the opportunity for
additional investment income for the state.
FISCAL IMPACT
None
Contact
Name: Ron Crane, State Treasurer
Phone: 334-3200
Liza Carberry, Investment Manager
STATEMENT OF PURPOSE/FISCAL NOTE H 456