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Senate Study Bill 2177

Conference Committee Text

PAG LIN
  1  1    Section 1.  Section 412.4, Code 1995, is amended to read as
  1  2 follows:
  1  3    412.4  LEGAL RESERVE INSURANCE.
  1  4    The council, board of waterworks trustees, or other board
  1  5 or commission, whichever is authorized by law to manage and
  1  6 operate any such waterworks, or other municipally owned and
  1  7 operated public utility, shall have the right and power to
  1  8 contract with any legal reserve insurance company, authorized
  1  9 to conduct its business in the state, or any bank located in
  1 10 Iowa having trust powers for the investment of funds
  1 11 contributed to an annuity or pension system, for the payment
  1 12 of the pensions or annuities provided in such pension or
  1 13 annuity retirement system, and may pay the premiums or make
  1 14 the contribution of such contract out of the fund provided in
  1 15 section 412.2.  Funds contributed to a bank pursuant to such a
  1 16 contract shall be invested in the manner prescribed in section
  1 17 633.123 or 633.123A, and may be commingled with and invested
  1 18 as a part of a common or master fund managed for the benefit
  1 19 of more than one public utility.
  1 20    Sec. 2.  Section 633.123, subsection 2, unnumbered
  1 21 paragraphs 3 and 4, Code 1995, are amended by striking the
  1 22 paragraphs.
  1 23    Sec. 3.  NEW SECTION.  633.123A  INVESTMENTS IN INVESTMENT
  1 24 COMPANIES AND INVESTMENT TRUSTS.
  1 25    1.  Notwithstanding any other provision of law, a bank or
  1 26 trust company acting as a fiduciary, in addition to other
  1 27 investments authorized by law for the investment of funds by a
  1 28 fiduciary or by the instrument governing the fiduciary and in
  1 29 the exercise of its investment discretion or at the direction
  1 30 of another person authorized to direct investment of funds
  1 31 held by the fiduciary, may invest and reinvest such funds in
  1 32 the securities of an open-end or closed-end management
  1 33 investment company or investment trust registered under the
  1 34 federal Investment Company Act of 1940, 15 U.S.C. } 80a-1 et
  1 35 seq.  Investment and reinvestment under this section is
  2  1 allowed as long as the portfolio of such investment company or
  2  2 investment trust consists substantially of investments not
  2  3 otherwise prohibited by section 633.123 or by the governing
  2  4 instrument.
  2  5    Investment and reinvestment under this section is not
  2  6 precluded merely because the bank or trust company or an
  2  7 affiliate of the bank or trust company provides the services
  2  8 of an investment advisor, custodian, transfer agent,
  2  9 registrar, sponsor, distributor, or manager to the investment
  2 10 company or investment trust and receives a reasonable fee for
  2 11 the services.
  2 12    2.  This section is applicable to all fiduciaries whether
  2 13 the will, agreement, or other instrument under which they are
  2 14 acting now exists on or before the effective date of this
  2 15 section.  
  2 16                           EXPLANATION
  2 17    This bill creates a new section 633.123A which provides
  2 18 that all fiduciaries may invest and reinvest in open-end and
  2 19 closed-end management investment companies and investment
  2 20 trusts registered under the federal Investment Company Act of
  2 21 1940.  Investment and reinvestment under this section is
  2 22 allowed so long as the portfolio of such investment company or
  2 23 investment trust consists substantially of investments not
  2 24 otherwise prohibited by section 633.123 or by the governing
  2 25 instrument.  Currently, such authority is provided in section
  2 26 633.123, the model Prudent Person Investment Act, and is
  2 27 limited to fiduciaries acting under the jurisdiction of the
  2 28 court.
  2 29    Section 412.4 is amended to conform with the creation of
  2 30 the new section.  
  2 31 LSB 4228SC 76
  2 32 mj/cf/24
     

Text: SSB02176                          Text: SSB02178
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