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H0509......................................................by STATE AFFAIRS
PERMANENT ENDOWMENT FUNDS - Amends existing law to provide that permanent
endowment funds and earnings reserve funds may be combined or pooled for
investment.
01/21 House intro - 1st rdg - to printing
01/22 Rpt prt - to St Aff
02/03 Rpt out - rec d/p - to 2nd rdg
02/04 2nd rdg - to 3rd rdg
02/05 3rd rdg - PASSED - 63-1-6
AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
Black, Block, Boe, Bradford, Campbell, Cannon, Clark(Jorgenson),
Collins, Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson,
Ellsworth, Eskridge, Field(18), Field(23), Garrett, Harwood, Jaquet,
Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez,
McGeachin, Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen,
Pasley-Stuart, Raybould, Ridinger, Ring, Ringo, Roberts, Robison,
Rydalch, Sali, Sayler, Shepherd, Shirley, Smith(30), Smith(24),
Smylie, Snodgrass, Stevenson, Trail, Wills, Wood
NAYS -- McKague
Absent and excused -- Bolz, Gagner, Henbest, Schaefer, Skippen, Mr.
Speaker
Floor Sponsor - Deal
Title apvd - to Senate
02/06 Senate intro - 1st rdg - to St Aff
02/23 Rpt out - rec d/p - to 2nd rdg
02/24 2nd rdg - to 3rd rdg
03/10 3rd rdg - PASSED - 34-0-1
AYES -- Andreason(Andreason), Bailey, Bunderson, Burkett, Burtenshaw,
Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
Marley, McKenzie, McWilliams, Noble, Noh, Pearce, Richardson,
Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Brandt
Floor Sponsor - Little
Title apvd - to House
03/11 To enrol
03/12 Rpt enrol - Sp signed
03/15 Pres signed
03/16 To Governor
03/19 Governor signed
Session Law Chapter 96
Effective: 01/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 509
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO ENDOWMENT FUND INVESTMENT BOARD; AMENDING SECTION
3 57-720, IDAHO CODE, TO PROVIDE THAT PERMANENT ENDOWMENT FUNDS AND EARNINGS
4 RESERVE FUNDS MAY BE COMBINED OR POOLED FOR INVESTMENT AND TO PROVIDE COR-
5 RECT TERMINOLOGY; DECLARING AN EMERGENCY AND PROVIDING FOR RETROACTIVE
6 APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 57-720, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 57-720. PERMANENT ENDOWMENT FUNDS -- EARNINGS RESERVE FUNDS -- INCOME
11 FUNDS -- INVESTMENT POLICY REGULATIONS POLICIES -- ANNUAL AUDIT. (1) The
12 investment board or its investment manager(s) may, and are hereby authorized
13 to, invest the permanent endowment funds and the earnings reserve funds of the
14 state of Idaho.
15 (2) The permanent endowment funds and the earnings reserve funds may be
16 combined or pooled for investment.
17 (3) Earnings reserve funds shall be accounted for separately from perma-
18 nent endowment funds.
19 (4) Gains and losses as defined in section 57-724, Idaho Code, shall be
20 annually allocated between the permanent endowment funds and the earnings
21 reserve funds at the end of each fiscal year. This allocation shall be made
22 based upon the proportion that the market value of the permanent endowment
23 funds and the market value of the earnings reserve funds bear to the combined
24 market value of both sets of funds, at the end of the fiscal year.
25 (5) The investment board shall formulate investment policy regulations
26 policies governing the investment of permanent endowment funds and earnings
27 reserve funds. The regulations policies shall pertain to the types, kinds or
28 nature of investment of any of the funds, and any limitations, conditions or
29 restrictions upon the methods, practices or procedures for investment,
30 reinvestments, purchases, sales or exchange transactions, provided such regu-
31 lations policies shall not conflict with nor be in derogation of any Idaho
32 constitutional provision or of the provisions of this act.
33 (6) Annually, the investment board shall cause an audit to be conducted
34 of the investment of permanent endowment funds and earnings reserve funds,
35 such audit to be conducted by a recognized certified public accountant. The
36 certified public accountant conducting the audit shall not be an employee of
37 the state. The expense of such audit shall be paid from the appropriation to
38 the investment board.
39 (7) The state treasurer shall invest the income funds of the respective
40 endowments and distribute the moneys in the income funds according to legisla-
41 tive appropriation.
42 SECTION 2. An emergency existing therefor, which emergency is hereby
2
1 declared to exist, this act shall be in full force and effect on and after its
2 passage and approval, and retroactively to January 1, 2004.
STATEMENT OF PURPOSE
RS 13601
The combination of funds allows the board to reduce fees incurred
in the investment of endowment funds. The board believes that it
may be advantageous to make combinations of funds as it invests in
new markets. For example, the board may receive reduced fee rates
or eliminate a duplication of fees if it combines the public school
funds with the higher education funds in a foreign equity
investment. Outside investment managers have requested
clarification of the authority for such combinations. This
legislation provides such clarification. This legislation further
provides technical changes clarifying that the board shall
formulate investment policies and that such policies are not to be
promulgated as rules. The legislation is effective January 01,
2004. This effective date allows the board to implement its plan
to reduce the investment costs to the endowment funds as early as
practicable in the calendar year.
FISCAL IMPACT
There will be no fiscal impact on the general fund. There will be
savings to the endowment earnings reserve accounts from reduced
trading and custodial fees.
Contact
Name: Matthew J. Haertzen
Idaho Endowment Fund Investment Board
Phone: 208/334-3311
STATEMENT OF PURPOSE/FISCAL NOTE H 509