SF 246 (LSB 1976XS (2) 91)

SENATE FILE 246

BY  EVANS

A BILL FOR

An Act relating to interest on state moneys invested in depository time certificates of deposit.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 12C.6, subsection 2, paragraph b, Code 2025, is amended to read as follows:
   b.  State funds invested in depository time certificates of deposit shall draw interest at not less than the rate established, effective on the date of investment.  The interest rate shall not be less than one-half of the effective federal funds rate, as published by the federal reserve bank of New York.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Under current law, state moneys invested in a depository time certificate of deposit (CD) must earn interest at no less than the rate established by the treasurer of state for state moneys placed in a time deposit. This bill requires that such a CD interest rate be at least one-half of the effective federal funds rate, as published by the federal reserve bank of New York. By operation of law, this applies to investments in CDs by a public body or officer other than the treasurer of state (Code section 12C.6(3)).