HF 159

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/09/2023 09:45am

A bill for an act
relating to local government; providing additional investment authority for
qualifying local units of government; amending Minnesota Statutes 2022, section
118A.09, subdivisions 1, 2, 3; proposing coding for new law in Minnesota Statutes,
chapter 118A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 118A.09, subdivision 1, is amended to read:

Subdivision 1.

Definition; qualifying government.

new text begin (a) new text end "Qualifying government" means:

(1) a county or statutory or home rule charter city with a population of more than 100,000; new text begin
or
new text end

(2) a county or statutory or home rule charter city deleted text begin which had its most recently issued
general obligation bonds rated in the highest category by a national bond rating agency; or deleted text end new text begin
whose most recent long-term, senior, general obligation rating by one or more national
rating organizations in the prior 18-month period is AA or higher.
new text end

deleted text begin (3) a self-insurance pool listed in section 471.982, subdivision 3.
deleted text end

new text begin (b) new text end A county or statutory or home rule charter city with a population of 100,000 or less
that is a qualifying government, but deleted text begin is deleted text end subsequently deleted text begin rated less than the highest category by
a national bond rating agency on a general obligation bond issue deleted text end new text begin does not meet the threshold
under paragraph (a), clause (2) new text end , may not invest additional funds under this section new text begin during
any time period when it does not meet the threshold, new text end but may continue to manage funds
previously invested under subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2022, section 118A.09, subdivision 2, is amended to read:

Subd. 2.

Additional investment authority.

Qualifying governments may invest the
amount described in subdivision 3:

(1) in index mutual funds based in the United States and indexed to a broad market
United States equity index new text begin , on the condition that index mutual fund investments must be
made directly with the main sales office of the fund new text end ; or

(2) with the Minnesota State Board of Investment subject to such terms and minimum
amounts as may be adopted by the board. deleted text begin Index mutual fund investments must be made
directly with the main sales office of the fund.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2022, section 118A.09, subdivision 3, is amended to read:

Subd. 3.

Funds.

(a) Qualifying governments may only invest under subdivision 2
according to the limitations in this subdivision. A qualifying government under subdivision
1, clause (1) or (2), may only invest its funds that are held for long-term capital plans
authorized by the city council or county board, or long-term obligations of the qualifying
government. Long-term obligations of the qualifying government include long-term capital
plan reserves, funds held to offset long-term environmental exposure, other postemployment
benefit liabilities, compensated absences, and other long-term obligations established by
applicable accounting standards.

(b) Qualifying governments under subdivision 1, clause (1) or (2), may invest up to 15
percent of the sum of:

(1) unassigned cash;

(2) cash equivalents;

(3) deposits; and

(4) investments.

deleted text begin This deleted text end new text begin (c) The new text end calculation new text begin in paragraph (b) new text end must be based on the qualifying government's
most recent audited statement of net position, which must be compliant and audited pursuant
to governmental accounting and auditing standards. Once the amount invested reaches 15
percent of the sum of unassigned cash, cash equivalents, deposits, and investments, no
further funds may be invested under this section; however, a qualifying government may
continue to manage the funds previously invested under this section even if the total amount
subsequently exceeds 15 percent of the sum of unassigned cash, cash equivalents, deposits,
and investments.

deleted text begin (c) A qualified government under subdivision 1, clause (3), may invest up to the lesser
of:
deleted text end

deleted text begin (1) 15 percent of the sum of its cash, cash equivalents, deposits, and investments; or
deleted text end

deleted text begin (2) 25 percent of its net assets as reported on the pool's most recent audited statement
of net position, which must be compliant and audited pursuant to governmental accounting
and auditing standards.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

new text begin [118A.10] SELF-INSURANCE POOLS; ADDITIONAL INVESTMENT
AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "qualifying government"
means a self-insurance pool listed in section 471.982, subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Additional investment authority. new text end

new text begin A qualifying government may invest in the
securities specified in section 11A.24.
new text end

new text begin Subd. 3. new text end

new text begin Approval. new text end

new text begin Before investing pursuant to this section, the governing body of a
qualifying government must adopt an investment policy pursuant to a resolution that includes
both of the following statements:
new text end

new text begin (1) the governing body understands that investments under this section have a risk of
loss; and
new text end

new text begin (2) the governing body understands the type of funds that are being invested and the
specific investment itself.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end