HSB 187 (LSB 2121HC (2) 85)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON COWNIE)

A BILL FOR

An Act relating to authorized investments of public funds by a joint investment trust.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 12B.10, subsection 5, paragraph a, subparagraph (7), Code 2013, is amended to read as follows:
   (7)
  (a)  A joint investment trust organized pursuant to chapter 28E prior to and existing in good standing on the effective date of this Act or a joint investment trust organized pursuant to chapter 28E after April 28, 1992, provided that the joint investment trust shall either be rated within the two highest classifications by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to chapter 17A and operated in accordance with 17 C.F.R. § 270.2a-7, or be registered with the federal securities and exchange commission under the federal Investment Company Act of 1940, 15 U.S.C. § 80a, and operated in accordance with 17 C.F.R. § 270.2a-7. The manager or investment advisor of the joint investment trust shall be registered with the federal securities and exchange commission under the Investment Advisor Act of 1940, 15 U.S.C. § 80b.
   (b)  A joint investment trust described in subparagraph division (a) may invest in obligations of any state or a political subdivision or agency of any state, provided that such obligations are rated at the time of purchase within the two highest classifications established by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to chapter 17A.
EXPLANATION
   This bill relates to authorized investments of public funds.
   Currently, Code section 12B.10, subsection 5, authorizes a political subdivision of the state to invest in a joint investment trust organized pursuant to Code chapter 28E. The bill expands the forms of investment a joint investment trust can make to include obligations of any state or a political subdivision or agency of any state. The bill provides that such obligations must be rated at the time of purchase within the two highest classifications established by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to Code chapter 17A.