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House Engrossed |
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State of Arizona House of Representatives Fifty-third Legislature First Regular Session 2017
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HOUSE BILL 2073 |
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AN ACT
Amending sections 6‑851, 9‑921, 9‑957, 35‑323.01, 35-466.05, 35-467.05, 45‑2283, 48‑1778, 48‑1798 and 48‑1915, Arizona Revised Statutes; relating to the investment of government monies.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 6-851, Arizona Revised Statutes, is amended to read:
6-851. Definitions
A. In this chapter, unless the context otherwise requires:
1. "Trust business" means the holding out by a person to the public at large by advertising, solicitation or other means that such the person is available to act as a fiduciary in this state and accepting and undertaking to perform the duties as such a fiduciary in the regular course of his business.
2. "Trust company" means a corporation holding a certificate issued under this article.
B. In this article, unless the context otherwise requires:
1. "Agent" means a person who receives compensation to regularly perform services specifically related to the conduct of the trust business.
2. "Asset" means any property or property right held by a licensee for the benefit of another.
3. "Capital" means the total of outstanding common stock, preferred stock and surplus and undivided profits.
4. "Certificate" means a certificate of authority issued under the provisions of this chapter to engage in trust business.
5. "Contingency plan" means a document stating a trust company's means of conducting business and preserving records in the event of any power outage, flood or other physical emergency.
6. "Discretionary assets" means those assets in which the trust company has the unilateral authority to determine investment strategies and execute investment transactions without seeking the concurrence, approval or authority from the customer or any other external party.
7. "Fiduciary" means a personal representative, administrator, guardian, conservator, trustee, agent or other person who acts in a fiduciary capacity and who is not exempt by section 6‑852.
8. "Impaired" or "insolvent" means the trust company does not possess assets that are at least equal to liabilities, required reserves and total issued and outstanding capital.
9. "Liquid capital" means capital in the form of certificates of deposit issued by banks, savings banks or savings and loan associations doing business in this state and insured by the federal deposit insurance corporation or any successor institution, including deposits to a single depository where excess deposit insurance is provided through a reciprocal deposit arrangement by participating banks, or direct obligations of the United States government with maturity of not more than five years.
10. "Nondiscretionary assets" means those assets for which the trust company must obtain from the customer, broker or investment advisor specific direction and instructions regarding both investment strategies and investment executions.
11. "Surplus" means the total amount paid by shareholders in excess of the par or stated value of the shares of capital stock of a trust business in consideration for the shares.
Sec. 2. Section 9-921, Arizona Revised Statutes, is amended to read:
9-921. Powers and duties of the board; audit
A. The police pension board shall have exclusive control and management of the police pension fund, subject to the provisions of this article. It shall make rules, not inconsistent with the provisions of this article, for its government, the conduct of its proceedings and the management of the fund, and shall do all things necessary to carry out the provisions of this article. It may compel witnesses to attend hearings, or produce records and papers, and testify with respect to applications for pensions, or upon on any matter connected with the fund, and any member of the board may administer oaths to such witnesses.
B. The board may invest or reinvest, in the name of the board, that portion of the fund which in its judgment is available for investment in such interest‑bearing securities as follows:
1. Bonds of the United States.
2. Federal housing insured mortgage bonds of the United States.
3. Bonds, debentures or other obligations issued by the federal land banks, the federal intermediate credit banks or the banks for cooperatives.
4. Any bonds upon on which the payment of interest and principal are is guaranteed by the United States.
5. Bonds issued by any United States government instrumentality or federal agency that qualify and are acceptable as security for public funds of the United States government.
6. General obligation bonds of the state or of the counties, incorporated cities and towns and school districts.
7. Revenue bonds of the incorporated cities and towns of this state, the Arizona board of regents, the Arizona power authority or any other legally constituted state authority or agency authorized by law to issue revenue bonds, except revenue bonds for recreational purposes issued by cities and towns.
8. Bonds of agricultural improvement districts and agricultural improvement and power districts organized under the laws of this state when issued or guaranteed, with the approval of the secretary of the interior, by corporations operating a United States reclamation project within the state.
9. Bonds of incorporated cities or towns of this state issued under the provisions of sections 9‑692 through 9‑707 48-595, 48-596, 48-597, 48‑598, 48-599, 48-600, 48-601, 48-602, 48-603, 48-604, 48-605, 48-606, 48-607, 48-608, 48-609, 48-609.01 and 48-610.
10. First lien bonds of sanitary districts issued pursuant to title 48, chapter 14.
11. Registered warrants of the state, or registered county or school district warrants when offered as security for monies of the county or school district by which they are issued.
12. Interest bearing Interest-bearing savings accounts or certificates of deposit in banks doing business in this state whose accounts are insured by the federal deposit insurance corporation, but only if such deposits in excess of the insured amount are secured by the depository to the same extent and in the same manner as required by the general depository law of the state.
13. Interest bearing Interest-bearing savings accounts or certificates of deposit in savings and loan associations doing business in this state whose accounts are insured by the federal savings and loan insurance corporation, but only if such deposits in excess of the insured amount are secured by the depository to the same extent and in the same manner as required by the general depository law of the state.
14. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
C. The board shall cause an annual audit and report of the fund to be made by a certified public accountant, and shall also cause actuarial studies of the fund to be made periodically, but not less than once in each three years, by a qualified actuary who is a member of the society of actuaries. The actuary shall make specific recommendations as to the contributions to be made to the fund in accordance with the provisions of section 9‑923, subsection A, paragraph 10 in order to maintain the fund on an actuarily actuarially sound basis.
Sec. 3. Section 9-957, Arizona Revised Statutes, is amended to read:
9-957. Powers and duties of board; investments; review of decisions
A. The board may compel witnesses to attend and testify upon on any matter pertaining to this article, and its president or any member may administer oaths. The board may provide for payment of its necessary expenses, except that no compensation is payable to members of the board for duties performed under this article.
B. Funds which that are not immediately required for the payment of pensions or benefits under this article may be invested or reinvested, at the discretion of the board of trustees, by the county treasurer or by the board of trustees, as follows:
1. In bonds of the United States.
2. In federal housing insured mortgage bonds of the United States.
3. In federal land bank bonds.
4. Any bonds upon on which the payment of interest and principal are is guaranteed by the United States.
5. Bonds issued by any United States government instrumentality or federal agency that qualify and are acceptable as security for public funds of the United States government.
6. General obligation bonds of this state or of the counties, incorporated cities and towns and school districts of this state.
7. Revenue bonds of the incorporated cities and towns of this state, the Arizona board of regents, the Arizona power authority, or any other legally constituted state authority or agency authorized by law to issue revenue bonds, except revenue bonds for recreational purposes issued by cities and towns.
8. Bonds of agricultural improvement districts and agricultural improvement and power districts organized under the laws of this state when issued or guaranteed, with the approval of the secretary of the interior, by corporations operating a United States reclamation project within the state.
9. Bonds of incorporated cities or towns of this state issued under the provisions of sections 9‑692 through 9‑707 48-595, 48-596, 48-597, 48‑598, 48-599, 48-600, 48-601, 48-602, 48-603, 48-604, 48-605, 48-606, 48-607, 48-608, 48-609, 48-609.01 and 48-610.
10. First lien bonds of sanitary districts issued pursuant to title 48, chapter 14.
11. Registered warrants of the state, or registered county or school district warrants when offered as security for monies of the county or school district by which they are issued.
12. Interest bearing Interest-bearing savings accounts or certificates of deposit in banks doing business in this state whose accounts are insured by the federal deposit insurance corporation, but only if such deposits in excess of the insured amount are secured by the depository to the same extent and in the same manner as required by the general depository law of the state.
13. Interest bearing Interest-bearing savings accounts or certificates of deposit in savings and loan associations doing business in this state, whose accounts are insured by the federal savings and loan insurance corporation, but only if such deposits in excess of the insured amount are secured by the depository to the same extent and in the same manner as required by the general depository law of this state.
14. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
C. All matters pertaining to the benefits granted by this article to fire fighters firefighters and their dependents shall be presented to the board, and any person aggrieved by a decision of the board, may at any time within thirty days after its decision, may petition for a writ of certiorari, and the court may on final hearing reverse or affirm, wholly or partly, or may modify, the decision reviewed.
Sec. 4. Section 35-323.01, Arizona Revised Statutes, is amended to read:
35-323.01. Investment of government monies in deposits; conditions; definition
A. If an investing entity invests in deposits pursuant to this section 9‑492, subsection C, section 15‑1025, subsection B, paragraph 7, section 35‑313, subsection A, paragraph 14, section 35‑323, subsection A, paragraph 2 or section 48-2979, subsection D, the investing entity in each case shall invest those monies in accordance with all of the following conditions:
1. The monies are initially invested through an eligible depository in this state selected by the investing entity.
2. The selected eligible depository arranges for the deposit of the monies in one or more federally insured banks or savings and loan associations wherever located, for the account of the investing entity.
3. The full amount of principal and any accrued interest of each such deposit is insured by the federal deposit insurance corporation.
4. The selected eligible depository acts as custodian for the investing entity with respect to such deposits.
5. On the same date that the investing entity's monies are deposited pursuant to paragraph 2 of this subsection, the selected eligible depository receives an amount of federally insured deposits from customers of other financial institutions equal to or greater than the amount of the monies initially invested by the investing entity through the selected eligible depository.
B. Monies invested in accordance with all of the conditions prescribed in this section are not subject to any security or collateral requirements.
C. For the purposes of this section, "investing entity" means this state, a political subdivision, the governing body of a municipality or the governing body of a school district.
Sec. 5. Section 35-466.05, Arizona Revised Statutes, is amended to read:
35-466.05. Investment of note proceeds; period of investment covenants
A. Note proceeds may be invested in any of the following securities:
1. Bonds or other evidences of indebtedness of the United States of America or any of its agencies or instrumentalities when such obligations are guaranteed as to principal and interest by the United States of America or by any agency or instrumentality of the United States.
2. Bonds or other evidences of indebtedness of this state, or any of the counties, incorporated cities or towns or duly organized school districts of this state.
3. Interest bearing Interest-bearing savings accounts or certificates of deposit of banks or savings and loan associations doing business in this state if such banks or savings and loan associations are insured by the federal deposit insurance corporation or the federal savings and loan insurance corporation. Amounts in excess of that covered by federal insurance shall be secured by the depository to the same extent and in the same manner as required by the general depository law of this state.
4. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
B. A resolution pertaining to the issuance of notes may contain covenants prescribing the period that proceeds may be invested and the maximum yield on such investments during any period mentioned in the covenant and any other covenants deemed necessary or desirable by the governing body.
Sec. 6. Section 35-467.05, Arizona Revised Statutes, is amended to read:
35-467.05. Investment of note proceeds; period of investment covenants
A. Note proceeds may be invested in any of the following:
1. Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities if such obligations are guaranteed as to principal and interest by the United States or by the agency or instrumentality.
2. Bonds or other evidences of indebtedness of this state, counties, cities, towns or school districts.
3. Interest bearing Interest-bearing savings accounts or certificates of deposit of banks or savings and loan associations doing business in this state if such banks or savings and loan associations are insured by the federal deposit insurance corporation or the federal savings and loan insurance corporation. Amounts in excess of those covered by federal insurance must be secured by the depository to the same extent and in the same manner as required by the general depository law of this state.
4. The local government pooled investment fund established pursuant to section 35‑326.
5. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
B. A resolution pertaining to the issuance of notes may contain covenants prescribing the period that proceeds may be invested and the maximum yield on such investments during any period mentioned in the covenant.
Sec. 7. Section 45-2283, Arizona Revised Statutes, is amended to read:
45-2283. Investment of revenues
The authority may invest revenues of the authority in securities and deposits with a maximum maturity of three years. All revenues shall be invested in eligible investments. Eligible investments include:
1. Certificates of deposit in eligible depositories as provided in title 35, chapter 2, article 2.1.
2. Interest bearing Interest-bearing savings accounts in banks and savings and loan institutions doing business in this state whose accounts are insured by federal deposit insurance for their industry.
3. Repurchase agreements with a maximum maturity of one hundred eighty days.
4. Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities if the obligations are guaranteed as to principal and interest by the United States or by any agency or instrumentality of the United States.
5. Bonds or other evidences of indebtedness of this state or any of its counties, incorporated cities or towns or school districts.
6. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
Sec. 8. Section 48-1778, Arizona Revised Statutes, is amended to read:
48-1778. Authority of directors to invest monies; approved investments
The board of directors may, in the best interests of the district, may invest and reinvest monies of the district in any of the following:
1. Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities if the obligations are guaranteed as to principal and interest by the United States or by any agency or instrumentality of the United States.
2. Bonds or other evidences of indebtedness of this state or of any county, incorporated city or town or duly organized school district of this state.
3. Bonds, notes or evidences of indebtedness of any county, municipality or municipal district utility within this state, which are payable from revenues or earnings specifically pledged for the payment of the principal and interest on the obligations and for the payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment or, if the obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased nor on any other obligations of the issuer within five years of the investment.
4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law if the principal and interest of the obligations are payable from assessments on real property within the local improvement district. The board of directors shall not make the investment if the face value of all the obligations, and similar obligations outstanding, exceeds fifty per cent percent of the market value of the real property and improvements upon on which the bonds or the assessments for the payment of principal and interest on the bonds are liens inferior only to the liens for general ad valorem property taxes. The board of directors may make the investment only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment or, if the obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased nor on any other obligation of the issuer within five years of the investment.
5. Interest bearing Interest-bearing savings accounts or certificates of deposit insured in banks or savings and loan associations doing business in this state by the federal deposit insurance corporation or the federal savings and loan insurance corporation but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of this state. Security is not required for that portion of any deposit that is insured under any law of the United States.
6. Bonds, debentures or other obligations issued by the federal land banks, the federal intermediate credit banks, the banks for cooperatives or by the national rural utility cooperative finance corporations.
7. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
Sec. 9. Section 48-1798, Arizona Revised Statutes, is amended to read:
48-1798. Bond retirement fund; investment of fund
A. Beginning with the third year after issuance of any bonds, the board of directors shall include in the certificate provided for in section 48‑1773 an amount sufficient to create a sinking fund which that will pay the outstanding bonds when they become due. All probable income or increase of income from the sources referred to in section 48‑1774 shall be taken into account in certifying the annual requirements of the sinking fund.
B. When the sinking fund amounts to five hundred dollars or any multiple thereof, the monies in the fund may be loaned on farmlands at not more than thirty-five per cent percent of their cash value, but such loans shall mature not later than the bonds which that the funds monies loaned were raised to pay.
C. In addition to the provisions of subsection B of this section, the board of directors may invest funds monies in the fund in:
1. Interest bearing Interest-bearing savings accounts or certificates of deposit in banks doing business in this state whose accounts are insured by the federal deposit insurance corporation, but only if such deposits in excess of the insured amount are secured by the depository to the same extent and in the same manner as required by the general depository law of the state.
2. Interest bearing Interest-bearing savings accounts or certificates of deposit in savings and loan associations doing business in this state whose accounts are insured by the federal savings and loan insurance corporation, but only if such deposits in excess of the insured amount are secured by the depository to the same extent and in the same manner as required by the general depository law of the state.
3. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
Sec. 10. Section 48-1915, Arizona Revised Statutes, is amended to read:
48-1915. Deposit and payment of district monies; investment and reinvestment of sinking fund
A. Monies received for a hospital district from any source shall be deposited with the county treasurer of the organizing county to the credit of the hospital district, and paid out only upon on warrants approved by the board of directors of the district.
B. The board of directors of the district, with the consent of the board of supervisors, may invest and reinvest all money monies belonging or credited to the district as a sinking fund. The investment shall be made for the best interests of the district.
C. The funds monies in the fund may be invested and reinvested under the authority of the federal farm credit act of 1933, or invested and reinvested in any of the following:
1. Bonds or other evidences of indebtedness of the United States of America or any of its agencies or instrumentalities when such obligations are guaranteed as to principal and interest by the United States of America or by any agency or instrumentality thereof.
2. Bonds or other evidences of indebtedness of this state or of any of the counties, or incorporated cities, or towns, or duly organized school districts of this state.
3. Bonds, notes or evidences of indebtedness of any county, municipality, or municipal district utility within this state which that are payable from revenues or earnings specifically pledged for the payment of the principal and interest on such obligations, and for the payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or, if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligations of the issuer within five years of such an investment.
4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law, if the principal and interest of such obligations are payable from assessments on real property within such a local improvement district. No such investment shall be made if the face value of all such obligations, and similar obligations outstanding, exceed fifty per cent percent of the market value of the real property and improvements upon on which such bonds or the assessments for the payment of principal and interest thereon are liens inferior only to the liens for general ad valorem property taxes. Such an investment shall be made only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or, if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligation of the issuer within five years of such an investment.
5. Interest bearing Interest-bearing saving accounts or certificates of deposit insured in banks or savings and loan associations doing business in Arizona by the federal deposit insurance corporation, or the federal savings and loan insurance corporation, but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of the state. Security shall not be required for that portion of any deposit that is insured under any law of the United States.
6. Deposits placed in accordance with the procedures prescribed in section 35‑323.01.
D. The purchase of the securities shall be made by the county treasurer upon on authority of a resolution of the board of directors, approved by the board of supervisors. The county treasurer shall be the custodian of all securities so purchased. The bonds may be sold upon on an order of the board of directors with the consent of the board of supervisors.
E. All money monies earned as interest or otherwise derived by virtue of the provisions of this section shall be credited to the sinking fund.