House Study Bill 542 



                                       SENATE/HOUSE FILE       
                                       BY  (PROPOSED IOWA FINANCE
                                            AUTHORITY BILL)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to allowable investments by the treasurer of
  2    state and other authorized state agencies.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 5386XD 82
  5 md/rj/8

PAG LIN



  1  1    Section 1.  Section 12B.10, subsection 4, paragraph a, Code
  1  2 2007, is amended by adding the following new subparagraph:
  1  3    NEW SUBPARAGRAPH.  (9)  Obligations of the Iowa finance
  1  4 authority issued pursuant to chapter 16, bearing interest at
  1  5 market rates, provided that at the time of purchase the Iowa
  1  6 finance authority has an issuer credit rating within the two
  1  7 highest classifications or the obligations to be purchased are
  1  8 rated within the two highest classifications, as established
  1  9 by at least one of the standard rating services approved by
  1 10 the superintendent of banking by rule adopted pursuant to
  1 11 chapter 17A.
  1 12    Sec. 2.  Section 12C.9, subsection 1, Code 2007, is amended
  1 13 to read as follows:
  1 14    1.  The treasurer of state and all other state agencies
  1 15 authorized to invest funds and the treasurer or other
  1 16 designated financial officer of each political subdivision
  1 17 including each school corporation shall invest the proceeds of
  1 18 notes, bonds, refunding bonds, and other evidences of
  1 19 indebtedness, and funds being accumulated for the payment of
  1 20 principal and interest or reserves in investments set out in
  1 21 section 12B.10, subsection 4, paragraph "a", subparagraphs (1)
  1 22 through (7) (9), section 12B.10, subsection 5, paragraph "a",
  1 23 subparagraphs (1) through (7), an investment contract, or
  1 24 tax=exempt bonds.  The investment shall be as defined and
  1 25 permitted by section 148 of the Internal Revenue Code and
  1 26 applicable regulations under that section.  An investment
  1 27 contract or tax=exempt bonds shall be rated within the two
  1 28 highest classifications as established by at least one of the
  1 29 standard rating services approved by the superintendent of
  1 30 banking by rule adopted pursuant to chapter 17A.
  1 31                           EXPLANATION
  1 32    Code section 12B.10, subsection 4, paragraph "a", restricts
  1 33 the types of investments that the treasurer of state and other
  1 34 authorized state agencies may invest in or purchase.  This
  1 35 bill adds obligations of the Iowa finance authority issued
  2  1 pursuant to Code chapter 16, bearing interest at market rates,
  2  2 to the list of allowable investments.  The bill also provides
  2  3 that obligations of the Iowa finance authority may only be
  2  4 purchased if at the time of purchase the Iowa finance
  2  5 authority has an issuer credit rating within the two highest
  2  6 classifications or the obligations to be purchased are rated
  2  7 within the two highest classifications as established by the
  2  8 superintendent of banking.
  2  9    The bill also updates an internal reference to Code section
  2 10 12B.10.
  2 11 LSB 5386XD 82
  2 12 md/rj/8