H.F. _____ Section 1. Section 12B.10, subsection 5, paragraph a, 1 subparagraph (7), subparagraph division (a), unnumbered 2 paragraph 1, Code 2026, is amended to read as follows: 3 A joint investment trust organized pursuant to chapter 28E 4 that is in compliance with section 12B.10D , provided that the 5 joint investment trust shall be one of the following: 6 Sec. 2. Section 12B.10, subsection 7, unnumbered paragraph 7 1, Code 2026, is amended to read as follows: 8 Notwithstanding sections 12C.2 , 12C.4 , and 12C.6 , and any 9 other provision of law relating to the deposits of public 10 funds, if public funds are deposited in a depository, as 11 defined in section 12C.1 , any uninsured portion of the public 12 funds invested through the depository may be invested in 13 insured deposits or certificates of deposit arranged by 14 the depository that are placed in or issued by one or more 15 federally insured banks , credit unions, or savings associations 16 regardless of location for the account of the public funds 17 depositor if all of the following requirements are satisfied: 18 Sec. 3. NEW SECTION . 12B.10D Regulation of joint investment 19 trusts. 20 1. A political subdivision of the state may invest up to 21 twenty-five percent of the aggregate amount of its public funds 22 in a joint investment trust authorized under section 12B.10, 23 subsection 5, paragraph “a” , subparagraph (7). The twenty-five 24 percent limit must be calculated based on the average of all of 25 the political subdivision’s public funds over the previous two 26 fiscal years. 27 2. A joint investment trust shall not directly or indirectly 28 pay an individual, association, or entity not providing direct 29 investment management, administrative, custodial, or other bona 30 fide operational services to the trust. 31 3. Before depositing or investing public funds with a joint 32 investment trust organized under chapter 28E, the governing 33 body of the political subdivision shall execute a written 34 acknowledgment stating all of the following: 35 -1- LSB 5867YC (3) 91 sc/ns 1/ 4

H.F. _____ a. That the participant understands and affirms that funds 1 invested in the joint investment trust may not be deposits 2 insured by the federal deposit insurance corporation, national 3 credit union administration, or any other government insurance 4 program comparable to those offered by a local financial 5 institution. 6 b. That the participant understands and affirms that such 7 funds are not collateralized or guaranteed by the state, a 8 political subdivision, or any other entity. 9 c. That the participant acknowledges that the safety of such 10 funds depends on the investment performance and management of 11 the joint investment trust and is subject to loss of principal. 12 4. A violation of this section is a breach of fiduciary duty 13 and may subject the trust, the public entity, and the public 14 entity’s officers and elected officials to criminal and civil 15 remedies, including administrative remedies, applicable for a 16 violation of section 12B.10, including the penalties provided 17 by sections 12B.14 and 12B.15. 18 Sec. 4. Section 12C.17, subsection 1, paragraph c, Code 19 2026, is amended to read as follows: 20 c. The securities shall be deposited with the federal 21 reserve bank, the federal home loan bank of Des Moines, Iowa, 22 a corporate central credit union organized under section 23 533.213 a securities broker-dealer registered as a member of 24 the financial industry regulatory authority , or a corporate 25 credit union whose activities are subject to regulation by the 26 national credit union administration pursuant to a bailment 27 agreement or a pledge custody agreement. 28 Sec. 5. Section 12C.17, subsection 4, Code 2026, is amended 29 to read as follows: 30 4. Upon written request from the appropriate public officer 31 but not less than monthly, the federal reserve bank, the 32 federal home loan bank of Des Moines, Iowa, a corporate central 33 credit union organized under section 533.213 a securities 34 broker-dealer registered as a member of the financial industry 35 -2- LSB 5867YC (3) 91 sc/ns 2/ 4

H.F. _____ regulatory authority , or a corporate credit union whose 1 activities are subject to regulation by the national credit 2 union administration shall report a description, the par value, 3 and the market value of any pledged collateral by a credit 4 union. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill relates to the investment of public funds. 9 The bill allows the uninsured portion of any public funds 10 invested through a depository to be invested in insured 11 deposits or certificates of deposit that are placed in or 12 issued by a credit union. 13 The bill provides that a political subdivision may invest up 14 to 25 percent of its public funds in a joint investment trust 15 authorized under Code section 12B.10(5). A joint investment 16 trust shall not pay an individual, association, or entity that 17 does not provide direct investment management, administrative, 18 custodial, or other bona fide operational services to the 19 trust. Before depositing or investing public funds with a 20 joint investment trust, the governing body of the political 21 subdivision must execute a written acknowledgment relating to 22 the insurance and safety of the funds. A violation of these 23 provisions is a breach of fiduciary duty and may subject the 24 trust, the public entity, and the public entity’s officers and 25 elected officials to criminal and civil remedies, including 26 administrative remedies, and may result in a variety of 27 criminal penalties for a fraudulent practice (Code chapter 28 714), a simple misdemeanor for official delinquency, and 29 liability for any fine imposed and any damages sustained by a 30 person. A simple misdemeanor is punishable by confinement for 31 no more than 30 days and a fine of at least $105 but not more 32 than $855. 33 The bill removes corporate central credit unions organized 34 under Code section 533.213 from the list of entities with which 35 -3- LSB 5867YC (3) 91 sc/ns 3/ 4

H.F. _____ a credit union receiving public funds may deposit securities 1 and allows a credit union which receives public funds to 2 pledge securities owned by the credit union by depositing the 3 securities with a securities broker-dealer registered as a 4 member of the financial industry regulatory authority pursuant 5 to a bailment agreement or a pledge custody agreement. Such 6 a securities broker-dealer must report a description, the par 7 value, and the market value of any pledged collateral by a 8 credit union at least monthly and upon written request of an 9 appropriate public officer. 10 -4- LSB 5867YC (3) 91 sc/ns 4/ 4