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House Amendment 5864

Amendment Text

PAG LIN
  1  1    Amend the amendment, H-5515, to Senate File 2245,
  1  2 as amended, passed, and reprinted by the Senate, as
  1  3 follows:
  1  4    #1.  By striking page 1, line 7, through page 2,
  1  5 line 49, and inserting the following:
  1  6    "Sec.    .  Section 12.8, unnumbered paragraph 3,
  1  7 Code 1995, is amended to read as follows:
  1  8    The treasurer of state, with the approval of the
  1  9 investment board of trustees of the Iowa public
  1 10 employees' retirement system, may conduct a program of
  1 11 lending securities in the Iowa public employees'
  1 12 retirement system portfolio.  When securities are
  1 13 loaned as provided by this paragraph, the treasurer
  1 14 shall act in the manner provided for investment of
  1 15 moneys in the Iowa public employees' retirement fund
  1 16 under section 97B.7.  The treasurer of state shall
  1 17 report at least annually to the investment board of
  1 18 trustees of the Iowa public employees' retirement
  1 19 system on the program and shall provide additional
  1 20 information on the program upon the request of the
  1 21 investment board of trustees or the employees of the
  1 22 Iowa public employees' retirement system division of
  1 23 the department of personnel.
  1 24    Sec.    .  Section 19A.1, subsection 3, paragraph
  1 25 c, Code 1995, is amended to read as follows:
  1 26    c.  The investment board of trustees of the Iowa
  1 27 public employees' retirement system created by section
  1 28 97B.8 97B.8A.
  1 29    Sec.    .  Section 68B.35, subsection 2, paragraph
  1 30 e, Code 1995, is amended to read as follows:
  1 31    e.  Members of the banking board, the ethics and
  1 32 campaign disclosure board, the credit union review
  1 33 board, the economic development board, the employment
  1 34 appeal board, the environmental protection commission,
  1 35 the health facilities council, the Iowa business
  1 36 investment corporation board of directors, the Iowa
  1 37 finance authority, the Iowa seed capital corporation,
  1 38 the Iowa public employees' retirement system
  1 39 investment board of trustees, the lottery board, the
  1 40 natural resource commission, the board of parole, the
  1 41 petroleum underground storage tank fund board, the
  1 42 public employment relations board, the state racing
  1 43 and gaming commission, the state board of regents, the
  1 44 tax review board, the transportation commission, the
  1 45 office of consumer advocate, the utilities board, and
  1 46 any full-time members of other boards and commissions
  1 47 as defined under section 7E.4 who receive an annual
  1 48 salary for their service on the board or commission.
  1 49    Sec.    .  Section 97B.1, Code 1995, is amended to
  1 50 read as follows:
  2  1    97B.1  SYSTEM CREATED – ORGANIZATIONAL
  2  2 DEFINITIONS.
  2  3    1.  The "Iowa Public Employees' Retirement System"
  2  4 is created.  The system is within the department of
  2  5 personnel, subject to the administration of the board.
  2  6    2.  As used in this chapter unless the context
  2  7 requires otherwise:
  2  8    a.  "Board" means the investment board of trustees
  2  9 created by section 97B.8 97B.8A.
  2 10    b.  "Department" means the department of personnel.
  2 11    c.  "Director" means the director of the department
  2 12 of personnel.
  2 13    d.  "System" means the Iowa public employees'
  2 14 retirement system.  
  2 15    Sec.    .  Section 97B.4, Code 1995, is amended to
  2 16 read as follows:
  2 17    97B.4  ADMINISTRATION OF SYSTEM – POWERS AND
  2 18 DUTIES – IMMUNITY.
  2 19    The department board, through the department and
  2 20 the chief investment officer and chief benefits
  2 21 officer, shall administer this chapter.  The
  2 22 department, upon the approval of the board, may adopt,
  2 23 amend, or rescind rules, employ persons, execute
  2 24 contracts with outside parties, make expenditures,
  2 25 require reports, make investigations, and take other
  2 26 action it deems necessary for the administration of
  2 27 the system in conformity with the requirements of this
  2 28 chapter, the applicable provisions of the Internal
  2 29 Revenue Code, and all other applicable federal and
  2 30 state laws.  The rules shall be effective upon
  2 31 compliance with chapter 17A.  Not later than the
  2 32 fifteenth day of December of each year, the department
  2 33 shall submit to the governor a report covering the
  2 34 administration and operation of this chapter during
  2 35 the preceding fiscal year and shall make
  2 36 recommendations for amendments to this chapter.  The
  2 37 report shall include a balance sheet of the moneys in
  2 38 the Iowa public employees' retirement fund.
  2 39    In the administration of the investment of moneys
  2 40 in the fund and in making benefit recommendations,
  2 41 employees of the department and members of the board
  2 42 may travel outside the state for the purpose of
  2 43 meeting with investment and benefit firms and
  2 44 consultants and attending conferences and meetings to
  2 45 fulfill their fiduciary responsibilities.  This travel
  2 46 is not subject to section 421.38, subsection 2.
  2 47    The department, members of the investment board,
  2 48 and the treasurer of state are not personally liable
  2 49 for actions or omissions under this chapter that do
  2 50 not involve malicious or wanton misconduct even if
  3  1 those actions or omissions violate the standards
  3  2 established in section 97B.7.
  3  3    Sec.    .  Section 97B.7, subsection 2, paragraphs
  3  4 b and d, Code 1995, are amended to read as follows:
  3  5    b.  To invest the portion of the retirement fund
  3  6 which in the judgment of the department is not needed
  3  7 for current payment of benefits under this chapter.
  3  8 The department shall execute the disposition and
  3  9 investment of moneys in the retirement fund in
  3 10 accordance with the investment policy and goal
  3 11 statement established by the investment board.  In
  3 12 establishing the investment policy of the fund and the
  3 13 investment of the fund, the department and investment
  3 14 board shall exercise the judgment and care, under the
  3 15 circumstances then prevailing, which persons of
  3 16 prudence, discretion, and intelligence exercise in the
  3 17 management of their own affairs, not for the purpose
  3 18 of speculation, but with regard to the permanent
  3 19 disposition of the funds, considering the probable
  3 20 income, as well as the probable safety, of their
  3 21 capital.  Within the limitations of the standard
  3 22 prescribed in this section, the treasurer of state,
  3 23 the department, and the board may acquire and retain
  3 24 every kind of property and every kind of investment
  3 25 which persons of prudence, discretion, and
  3 26 intelligence acquire or retain for their own account.
  3 27    The department and investment board shall give
  3 28 appropriate consideration to those facts and
  3 29 circumstances that the department and investment board
  3 30 know or should know are relevant to the particular
  3 31 investment or investment policy involved, including
  3 32 the role the investment plays in the total value of
  3 33 the retirement fund.
  3 34    For the purposes of this paragraph, appropriate
  3 35 consideration includes, but is not limited to, a
  3 36 determination by the department and investment board
  3 37 that the particular investment or investment policy is
  3 38 reasonably designed to further the purposes of the
  3 39 retirement system, taking into consideration the risk
  3 40 of loss and the opportunity for gain or other return
  3 41 associated with the investment or investment policy
  3 42 and consideration of the following factors as they
  3 43 relate to the retirement fund:
  3 44    (1)  The composition of the retirement fund with
  3 45 regard to diversification.
  3 46    (2)  The liquidity and current return of the
  3 47 investments in the fund relative to the anticipated
  3 48 cash flow requirements of the retirement system.
  3 49    (3)  The projected return of the investments
  3 50 relative to the funding objectives of the retirement
  4  1 system.
  4  2    Consistent with this paragraph, investments made
  4  3 under this paragraph shall be made in a manner that
  4  4 will enhance the economy of this state, and in
  4  5 particular, will result in increased employment of the
  4  6 residents of this state.  Investments of moneys in the
  4  7 fund are not subject to sections 73.15 through 73.21.
  4  8    Except as provided in section 97B.4, if there is
  4  9 loss to the fund, the treasurer, the department, and
  4 10 the board are not personally liable, and the loss
  4 11 shall be charged against the retirement fund.  There
  4 12 is appropriated from the retirement fund the amount
  4 13 required to cover a loss.  Expenses incurred in the
  4 14 sale and purchase of securities belonging to the
  4 15 retirement fund shall be charged to the retirement
  4 16 fund, and there is appropriated from the retirement
  4 17 fund the amount required for the expenses incurred.
  4 18 Investment management expenses shall be charged to the
  4 19 investment income of the retirement fund, and there is
  4 20 appropriated from the retirement fund the amount
  4 21 required for the investment management expenses,
  4 22 subject to the limitations stated in this unnumbered
  4 23 paragraph.  The amount appropriated for a fiscal year
  4 24 under this unnumbered paragraph shall not exceed one-
  4 25 half four-tenths of one percent of the market value of
  4 26 the retirement fund.  The department shall report the
  4 27 investment management expenses for a fiscal year as a
  4 28 percent of the market value of the retirement fund in
  4 29 the annual report to the governor required in section
  4 30 97B.4.  A person who has signed a contract with the
  4 31 department for investment management purposes shall
  4 32 meet the requirements for doing business in Iowa
  4 33 sufficient to be subject to tax under rules of the
  4 34 department of revenue and finance.
  4 35    d.  To sell any securities or other property in the
  4 36 trust fund and reinvest the proceeds in accordance
  4 37 with the direction of the department when such action
  4 38 may be deemed advisable by the department for the
  4 39 protection of the trust fund or the preservation of
  4 40 the value of the investment.  Such sale of securities
  4 41 or other property of the trust fund shall only be made
  4 42 after advice from the investment board in the manner
  4 43 and to the extent provided in this chapter in regard
  4 44 to the purchase of investments.
  4 45    Sec.    .  NEW SECTION.  97B.8A  BOARD OF TRUSTEES.
  4 46    1.  BOARD ESTABLISHED.  A board is established to
  4 47 be known as the "Board of Trustees of the Iowa Public
  4 48 Employees' Retirement System", referred to in this
  4 49 chapter as the "board", whose duties are to establish
  4 50 policy for the department in matters relating to the
  5  1 administration of the system, including the investment
  5  2 of the trust funds and the disbursement of benefits
  5  3 provided to members of the system consistent with the
  5  4 goals established in section 97D.1.
  5  5    2.  REVIEW.
  5  6    a.  At least annually the board shall review the
  5  7 investment policies and procedures used by the
  5  8 department under section 97B.7, subsection 2,
  5  9 paragraph "b", and shall hold a public meeting on the
  5 10 investment policies and investment performance of the
  5 11 fund.  Following its review and the public meeting,
  5 12 the board shall establish an investment policy and
  5 13 goal statement which shall direct the investment
  5 14 activities of the department.  The development of the
  5 15 investment policy and goal statement and its
  5 16 subsequent execution shall be performed cooperatively
  5 17 between the board and the department.
  5 18    b.  At least every two years, the board, in
  5 19 consultation with the benefits advisory committee,
  5 20 shall review the benefits provided to members under
  5 21 chapter 97B and shall make recommendations to the
  5 22 general assembly concerning the benefits, benefits
  5 23 policy, and benefit goals, provided under this
  5 24 chapter.
  5 25    3.  MEMBERSHIP.
  5 26    a.  The board consists of thirteen members.  Eight
  5 27 of the members shall be appointed by the governor.  Of
  5 28 the members appointed by the governor, one member
  5 29 shall be an executive of a domestic life insurance
  5 30 company; one member shall be an executive of a state
  5 31 or national bank operating within the state of Iowa;
  5 32 one member shall be a certified financial planner; one
  5 33 member shall be a retirement benefits specialist; one,
  5 34 not a member of the system, who is a member of a
  5 35 county board of supervisors or local school board; one
  5 36 member shall be an active member who is an employee of
  5 37 a school district, area education agency, or merged
  5 38 area; one member shall be an active member who is not
  5 39 an employee of a school district, area education
  5 40 agency, or merged area; and one member who is a
  5 41 retired member of the system.  One member shall be
  5 42 appointed by the benefits advisory committee.  The
  5 43 president of the senate, after consultation with the
  5 44 majority leader and the minority leader of the senate,
  5 45 shall appoint one member from the membership of the
  5 46 senate and the speaker of the house of
  5 47 representatives, after consultation with the majority
  5 48 leader and the minority leader of the house of
  5 49 representatives, shall appoint one member from the
  5 50 membership of the house.  The director of the
  6  1 department of personnel, the treasurer of state or the
  6  2 treasurer's designee, and the two legislative members
  6  3 are ex officio, nonvoting members of the board.  Five
  6  4 voting members of the board shall constitute a quorum.
  6  5    b.  The members who are an executive of a domestic
  6  6 life insurance company, an executive of a state or
  6  7 national bank operating within the state of Iowa, a
  6  8 certified financial planner, a retirement benefits
  6  9 specialist, a member of a county board of supervisors
  6 10 or school board, the member who is a retired member of
  6 11 the system, and, if an active member is not selected,
  6 12 the member selected by the benefits advisory committee
  6 13 shall be paid their actual expenses incurred in
  6 14 performance of their duties and shall receive a per
  6 15 diem as specified in section 7E.6 for each day of
  6 16 service not exceeding forty days per year.
  6 17 Legislative members shall be paid the per diem
  6 18 specified in section 2.10, subsection 6, for each day
  6 19 of service, and their actual expenses incurred in the
  6 20 performance of their duties.  The per diem and
  6 21 expenses of the legislative members shall be paid from
  6 22 funds appropriated under section 2.12.  The following
  6 23 members shall be paid their actual expenses incurred
  6 24 in the performance of their duties as members of the
  6 25 board and the performance of their duties as members
  6 26 of the board shall not affect their salaries,
  6 27 vacations, or leaves of absence for sickness or
  6 28 injury:  the director of the department of personnel;
  6 29 the treasurer of state, or the treasurer's designee;
  6 30 the active member who is an employee of a school
  6 31 district, area education agency, or merged area; the
  6 32 active member who is not an employee of a school
  6 33 district, area education agency, or merged area; and,
  6 34 if an active member is selected, the active member
  6 35 selected by the benefits advisory committee.  The
  6 36 appointive terms of the members appointed by the
  6 37 governor and the member selected by the benefits
  6 38 advisory committee are for a period of six years
  6 39 beginning and ending as provided in section 69.19.  A
  6 40 vacancy in the membership of the board shall be filled
  6 41 in the same manner as the original appointment.
  6 42 Gubernatorial appointees to the board are subject to
  6 43 confirmation by the senate.
  6 44    4.  ADMINISTRATIVE AUTHORITY.  The authority of the
  6 45 department to carry out its duties as provided by this
  6 46 chapter are, notwithstanding provisions of this
  6 47 chapter to the contrary, subject to the approval of
  6 48 the board.
  6 49    Sec.    .  NEW SECTION.  97B.8B  BENEFITS ADVISORY
  6 50 COMMITTEE.
  7  1    A benefits advisory committee shall be established
  7  2 whose duties are to make recommendations to the board
  7  3 of trustees concerning the disbursement of benefits to
  7  4 members of the system and to select a member of the
  7  5 board of trustees.
  7  6    The benefits advisory committee shall be comprised
  7  7 of representatives of constituent groups concerned
  7  8 with the system and shall consist of representatives
  7  9 of employers, active members, and retired members.
  7 10 The Iowa public employees' retirement system division
  7 11 of the department shall adopt rules under chapter 17A
  7 12 to provide for the selection of members to the
  7 13 committee."
  7 14    #2.  Page 35, by inserting after line 23 the
  7 15 following:
  7 16    "Sec.    .  Section 473.11, subsection 2,
  7 17 unnumbered paragraph 1, Code 1995, is amended to read
  7 18 as follows:
  7 19    The treasurer of state shall be the custodian of
  7 20 the energy conservation trust and shall invest the
  7 21 moneys in the trust, in consultation with the energy
  7 22 fund disbursement council established in subsection 3
  7 23 and the investment board of trustees of the Iowa
  7 24 public employees' retirement system, in accordance
  7 25 with the following guidelines:
  7 26    Sec.    .  BOARD TRANSITION – EFFECTIVE DATE.
  7 27    1.  Notwithstanding provisions of section 97B.8A,
  7 28 as enacted in this Act, to the contrary, the initial
  7 29 board of trustees of the Iowa public employees'
  7 30 retirement system shall consist of the following
  7 31 members, who shall serve the following terms:
  7 32    a.  The governor shall appoint to the initial board
  7 33 of trustees one member, not a member of the system,
  7 34 who is a member of a county board of supervisors or
  7 35 local school board and one member who is a retirement
  7 36 benefits specialist.  The terms of these two members
  7 37 appointed under this paragraph shall commence on July
  7 38 1, 1996 and expire on April 30, 2002.
  7 39    b.  The members of the investment board established
  7 40 under section 97B.8, Code 1995, who are an executive
  7 41 of a domestic life insurance company, an executive of
  7 42 a state or national bank, an active member who is an
  7 43 employee of a school district, area education agency,
  7 44 or merged area, an active member who is not an
  7 45 employee of a school district, area education agency,
  7 46 or merged area, and a retired member shall cease
  7 47 membership on the investment board and commence
  7 48 membership on the initial board of trustees on July 1,
  7 49 1996.  The terms of these members on the initial board
  7 50 of trustees shall expire on the same date as their
  8  1 terms would have expired on the investment board in
  8  2 accordance with section 97B.8, Code 1995.
  8  3    c.  The term of the member of the investment board
  8  4 established under section 97B.8, Code 1995, who is an
  8  5 executive of an industrial corporation located within
  8  6 the state of Iowa shall cease on July 1, 1996.  The
  8  7 governor shall appoint to the initial board of
  8  8 trustees one member who is a certified financial
  8  9 planner, for a term which shall commence on July 1,
  8 10 1996, and expire on the same date as the term would
  8 11 have expired of the member of the investment board
  8 12 established under section 97B.8, Code 1995, who is an
  8 13 executive of an industrial corporation.
  8 14    d.  The benefits advisory committee established in
  8 15 section 97B.8B, as enacted in this Act, shall appoint
  8 16 one member to the initial board of trustees for a term
  8 17 which shall commence on July 1, 1996, and expire on
  8 18 April 30, 2000.
  8 19    e.  The members of the investment board established
  8 20 under section 97B.8, Code 1995, who are legislative
  8 21 members shall cease membership on the investment board
  8 22 and commence membership on the initial board of
  8 23 trustees on July 1, 1996.  The terms of these members
  8 24 shall expire at the pleasure of the appointing
  8 25 authorities as provided in section 97B.8A, as enacted
  8 26 in this Act.
  8 27    f.  The director of the department of personnel
  8 28 shall cease membership on the investment board
  8 29 established under section 97B.8, Code 1995, and
  8 30 commence membership on the initial board of trustees
  8 31 on July 1, 1996.  The director of the department of
  8 32 personnel shall serve on the board of trustees as
  8 33 provided in section 97B.8A, as enacted in this Act.
  8 34    g.  The treasurer of state or the treasurer's
  8 35 designee shall commence membership on the initial
  8 36 board of trustees on July 1, 1996, and shall serve on
  8 37 the board of trustees as provided in section 97B.8A,
  8 38 as enacted in this Act.
  8 39    2.  Initial appointments by the governor under this
  8 40 section are subject to confirmation by the senate.  If
  8 41 a vacancy occurs as to a member of the initial board
  8 42 of trustees who is appointed by the governor prior to
  8 43 the expiration of a term as provided in this section,
  8 44 the governor shall appoint a member to serve the
  8 45 remainder of the term so that the membership
  8 46 requirements of section 97B.8A, as enacted in this
  8 47 Act, are fulfilled, and the appointment shall be
  8 48 subject to confirmation by the senate.  If a vacancy
  8 49 occurs as to the member appointed by the benefits
  8 50 advisory committee prior to the expiration of the term
  9  1 established in this section, the benefits advisory
  9  2 committee shall appoint a member to serve the
  9  3 remainder of the term.  Upon the expiration of a term
  9  4 established in this section, a member shall be
  9  5 appointed in the manner and for a term of service as
  9  6 specified in section 97B.8A, as enacted in this Act.
  9  7 Except as otherwise provided in this section, the
  9  8 initial board of trustees shall be subject to the
  9  9 requirements of section 97B.8A, as enacted in this
  9 10 Act.
  9 11    3.  In order to provide for the appointments to the
  9 12 initial board of trustees, this section of this Act,
  9 13 being deemed of immediate importance, takes effect
  9 14 upon enactment.
  9 15    Sec.    .  REPEAL.  Section 97B.8, Code 1995, is
  9 16 repealed."
  9 17    #3.  Page 51, by inserting after line 20 the
  9 18 following:
  9 19    "   .  The section of this Act which enacts section
  9 20 97B.8B, being deemed of immediate importance, takes
  9 21 effect upon enactment."
  9 22    #4.  By renumbering and correcting internal
  9 23 references as necessary.  
  9 24 
  9 25 
  9 26                              
  9 27 LARKIN of Lee
  9 28 SF 2245.318 76
  9 29 ec/cf
     

Text: H05863                            Text: H05865
Text: H05800 - H05899                   Text: H Index
Bills and Amendments: General Index     Bill History: General Index

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