Print Friendly SENATE BILL NO. 1173 – Public funds, investment
SENATE BILL NO. 1173
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S1173......................................................by STATE AFFAIRS
PUBLIC FUNDS - INVESTMENT - Amends existing law relating to public funds to
revise definitions; to provide for the investment of moneys in certain
circumstances; to provide that costs of investment may be deducted from
investment proceeds; to reference funds invested by the investment board;
to provide for certain audit expenses to be paid from earnings reserve
funds; to reference funds invested by the investment board; and to provide
for the appointment of a custodian for fund assets.
02/26 Senate intro - 1st rdg - to printing
02/27 Rpt prt - to St Aff
03/05 Rpt out - rec d/p - to 2nd rdg
03/06 2nd rdg - to 3rd rdg
03/08 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Cameron,
Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde,
Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little,
Lodge, Malepeai, McGee, McKague, McKenzie, Pearce, Richardson,
Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Burkett
Floor Sponsor - Little
Title apvd - to House
03/08 House intro - 1st rdg - to St Aff
03/14 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/20 3rd rdg - PASSED - 62-7-1
AYES -- Anderson, Andrus, Bayer, Bedke, Bell, Bilbao, Black, Block,
Bock, Boe, Bolz, Brackett, Chadderdon, Chew, Clark, Collins, Durst,
Edmunson, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence,
Raybould, Ring, Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer,
Shepherd(2), Shepherd(8), Shirley, Shively, Smith(30), Smith(24),
Snodgrass, Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27),
Wood(35), Mr. Speaker
NAYS -- Barrett, Bradford, Crane, Eskridge, Hagedorn, Hart, Harwood
Absent and excused -- Chavez
Floor Sponsor - Bilbao
Title apvd - to Senate
03/21 To enrol - Rpt enrol - Pres signed
03/22 Sp signed
03/23 To Governor
03/29 Governor signed
Session Law Chapter 263
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE SENATE
SENATE BILL NO. 1173
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO PUBLIC FUNDS; AMENDING SECTION 57-717, IDAHO CODE, TO REVISE DEFI-
3 NITIONS AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 57-720, IDAHO
4 CODE, TO REVISE DESCRIPTIVE LANGUAGE, TO PROVIDE FOR THE INVESTMENT OF
5 OTHER MONEYS IN CERTAIN CIRCUMSTANCES, TO PROVIDE THAT COSTS OF INVESTMENT
6 MAY BE DEDUCTED FROM INVESTMENT PROCEEDS, TO REFERENCE FUNDS INVESTED BY
7 THE INVESTMENT BOARD, TO PROVIDE FOR CERTAIN AUDIT EXPENSES TO BE PAID
8 FROM EARNINGS RESERVE FUNDS, TO REFERENCE ENDOWMENT FUNDS AND TO MAKE A
9 TECHNICAL CORRECTION; AMENDING SECTION 57-721, IDAHO CODE, TO REVISE
10 DESCRIPTIVE LANGUAGE, TO REFERENCE FUNDS INVESTED BY THE INVESTMENT BOARD,
11 TO PROVIDE FOR THE APPOINTMENT OF A CUSTODIAN FOR FUND ASSETS AND TO MAKE
12 TECHNICAL CHANGES; AND DECLARING AN EMERGENCY.
13 Be It Enacted by the Legislature of the State of Idaho:
14 SECTION 1. That Section 57-717, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 57-717. DEFINITIONS. The following words and phrases, when used in this
17 act chapter, shall, for the purposes of this act chapter, have the meanings
18 respectively ascribed to them in this section, except in those instances where
19 the context clearly indicates a different meaning:
20 (1) "Board" and "investment board" mean s the endowment fund investment
21 board herein established.
22 (2) "Endowment fund" means the financial proceeds of lands granted to or
23 acquired by the state by or from the general government and managed by the
24 state board of land commissioners pursuant to section 8, article IX, of the
25 constitution of the state of Idaho.
26 (3) "Income" means dividends and interest, which shall be distributable
27 income within the meaning of this act chapter.
28 SECTION 2. That Section 57-720, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 57-720. PERMANENT ENDOWMENT FUNDS -- EARNINGS RESERVE FUNDS -- INCOME
31 FUNDS INVESTMENT AUTHORITY -- INVESTMENT POLICIES -- ANNUAL AUDIT. (1) The
32 investment board or its investment manager(s) may, and are hereby authorized
33 to, invest the permanent endowment funds and the earnings reserve funds of the
34 state of Idaho and other moneys as required by law. The investment board may,
35 with the approval of the state board of land commissioners, invest other funds
36 that are exempt from section 67-1210, Idaho Code, provided however, that the
37 costs of investment of such funds may be deducted by the investment board from
38 investment proceeds.
39 (2) The permanent endowment funds and the earnings reserve funds invested
40 by the investment board may be combined or pooled for investment.
41 (3) Earnings reserve funds shall be accounted for separately from perma-
1 nent endowment funds.
2 (4) Prior to the annual calculation of gains and losses pursuant to sec-
3 tion 57-724, Idaho Code, the investment board shall allocate the end of fiscal
4 year market value between the permanent endowment funds and the earnings
5 reserve funds. This allocation shall be made based upon the proportion that
6 the market value of the permanent endowment funds and the market value of the
7 earnings reserve funds bear to the combined market value of both sets of
8 funds, at the end of the fiscal year.
9 (5) The investment board shall formulate investment policies governing
10 the investment of permanent endowment funds and earnings reserve funds and the
11 investment of other funds accepted for investment by the investment board pur-
12 suant to subsection (1) of this section. The policies shall pertain to the
13 types, kinds or nature of investment of any of the funds, and any limitations,
14 conditions or restrictions upon the methods, practices or procedures for
15 investment, reinvestments, purchases, sales or exchange transactions, provided
16 such policies shall not conflict with nor be in derogation of any Idaho con-
17 stitutional provision or of the provisions of this act chapter.
18 (6) Annually, the investment board shall cause an audit to be conducted
19 of the investment of permanent endowment funds and earnings reserve funds,
20 such audit to be conducted by a recognized certified public accountant. The
21 certified public accountant conducting the audit shall not be an employee of
22 the state. The expense of such audit shall be paid from the appropriation to
23 the investment board earnings reserve funds.
24 (7) The state treasurer shall invest the income funds of the respective
25 endowment s funds and distribute the moneys in the income funds according to
26 legislative appropriation.
27 SECTION 3. That Section 57-721, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 57-721. MANAGEMENT OF PERMANENT ENDOWMENT FUNDS BY MANAGER OF INVESTMENTS
30 -- APPOINTMENT OF CUSTODIAN. OF PERMANENT ENDOWMENT FUNDS. (1) The investment
31 board shall contract with or employ a manager of investments to manage the
32 permanent endowment funds, and the earnings reserve funds, and such other
33 funds as the investment board is authorized to invest. The manager of invest-
34 ments who is employed or contracted with shall, subject to the direction of
35 the investment board, exert control over the funds as though the manager of
36 investments were the owner thereof.
37 (2) The investment board may select and contract with a minimum of one
38 (1) bank or trust company to act as custodian of endowment fund assets and
39 provide safekeeping thereof.
40 SECTION 4. An emergency existing therefor, which emergency is hereby
41 declared to exist, this act shall be in full force and effect on and after its
42 passage and approval.
STATEMENT OF PURPOSE
The purpose of this legislation is to provide for an
investment vehicle for funds of a permanent nature to provide that
costs of investments may be deducted from the proceeds, to provide
that certain audit expenses be paid from earnings reserve funds; to
correct technical language in the legislation as referenced, and to
provide for the appointment of a custodian for fund assets. Also
provides an emergency clause for the immediate use of funds in the
event of an emergency.
This will allow funds to be invested to a higher long-term
period at a higher rate to the beneficiary.
Name: Senator Brad Little
STATEMENT OF PURPOSE/FISCAL NOTE S 1173