MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Ways and Means
By: Representative Mayo
AN ACT TO AMEND SECTION 27-105-33, MISSISSIPPI CODE OF 1972, TO REVISE THE FORMULA FOR THE ALLOCATION OF EXCESS STATE FUNDS AMONG STATE DEPOSITORIES; TO REVISE THE TYPES OF INVESTMENTS IN WHICH THE STATE TREASURER IS AUTHORIZED TO INVEST STATE FUNDS; TO AMEND SECTIONS 21-33-401, 27-103-203, 27-103-303, 27-105-9, 31-19-5 AND 37-59-43, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PRECEDING PROVISIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-105-33, Mississippi Code of 1972, is amended as follows:
27-105-33. It shall be the
duty of the State Treasurer and the Executive Director of the Department of
Finance and Administration on or about the tenth day of each month, and in
their discretion at any other time, to analyze carefully the amount of cash in
the General Fund of the state and in all special funds credited to any special
purpose designated by the State Legislature or held to meet the budgets or
appropriations for maintenance, improvements and services of the several
institutions, boards, departments, commissions, agencies, persons or entities
of the state, and to determine in their opinion when the cash in * * *
those funds is in
excess of the amount required to meet the current needs and demands of no more
than seven (7) business days on * * * those funds and report their
findings to the Governor. It shall be the duty of the State Treasurer to
provide a cash flow model for forecasting revenues and expenditures on a
bimonthly basis and providing technical assistance for its operation. The
Department of Finance and Administration shall use the cash flow model
furnished by the State Treasurer, in analyzing the amount of funds on deposit
and available for investment.
The State Treasurer is * * *
authorized, empowered and
directed to invest all * * * suchthose excess general and special funds of the state
in the following manner:
(a) Funds required
for current operation shall be * * * deposited in one
or more demand deposit accounts with qualified state depositories * * *.
(b) * * *
Funds not required for
current operation, but that will be required for daily liquidity needs, shall
be deposited in one or more interest-bearing demand accounts with qualified
state depositories.
(c) * * *
The
balance, if any, of such excess general and special funds shall be offered to
qualified state depositories on a pro rata basis as provided in Section 27-105-9
to be invested in time certificates of deposit for maturities not to exceed
three (3) years. For those funds determined under prudent judgment of the
State Treasurer to be made available for investment in time certificates of
deposit, the rate of interest paid by the depositories shall be determined by
rules and regulations adopted and promulgated by the State Treasurer, which may
include competitive bids. At the time of investment, the interest rate on
those certificates of deposit under provisions of this paragraph shall be a
rate not less than the bond equivalent yield on direct obligations of the
United States Treasury with a similar length of maturity.
(d) To the extent that
the State Treasurer * * * finds
that general and special funds cannot be invested * * * under paragraphs (a), (b) and
(c) of this section * * *, the Treasurer may invest * * *
those funds, together
with any other funds required for current operation, as determined * * *
under this
section, in the following:
(i) * * *
Bonds,
bills, notes, or other obligations of the United States and its subsidiary
corporations and instrumentalities or entities sanctioned or authorized by the
United States government including, but not limited to, obligations or
securities issued or guaranteed by the Federal National Mortgage Association,
the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the
Government National Mortgage Association, the Federal Farm Credit Bank, the
Federal Agricultural Mortgage Corporation, the Import-Export Bank, the Small
Business Administration, the United States Department of Housing and Urban
Development and the Private Export Funding Corporation.
* * *
( * * *ii) Direct security repurchase
agreements and reverse direct security repurchase agreements of any federal
book entry of only those securities enumerated in * * * subparagraph * * * (i) above. "Direct
security repurchase agreement" means an agreement under which the state
buys, holds for a specified time, and then sells back those securities and
obligations enumerated in * * * subparagraph * * * (i) above. "Reverse
direct securities repurchase agreement" means an agreement under which the
state sells and after a specified time buys back any of the securities and
obligations enumerated in * * *subparagraphs subparagraph * * * (i) above. * * *
When market rates
with similar maturities are competitive, preference shall be for contracts with
qualified state depositories.
(iii) * * * Corporate short-term
obligations of corporations or of wholly owned subsidiaries of corporations,
whose short-term obligations are rated A-2 or better by Standard and Poor's,
rated P-2 or better by Moody's Investment Service, or rated F-2 or better by
Fitch Ratings, Ltd.; or corporate bonds rated A or better, as rated by Standard
and Poor's, by Fitch Ratings, Ltd., or by Moody's Investment Service; or the
equivalent of these ratings if assigned by another United States Securities and
Exchange Commission designated Nationally Recognized Statistical Rating
Organization; provided that the maturity of the investment does not exceed five
(5) years.
(e) For the purposes
of this section, direct obligations issued by the United States of America
shall be deemed to include securities of, or other interests in, any open-end
or closed-end management type investment company or investment trust registered
under the provisions of * * * 15 USCS Section 80(a)‑1 et seq.the Investment Company
Act of 1940, provided that the portfolio of such investment company or
investment trust is limited to direct obligations issued by the United States
of America, United States government agencies, United States government
instrumentalities or United States government sponsored enterprises, and to
repurchase agreements fully collateralized by direct obligations of the United
States of America, United States government agencies, United States government
instrumentalities or United States government sponsored enterprises, and the
investment company or investment trust takes delivery of such collateral for
the repurchase agreement, either directly or through an authorized custodian. * * *
The total dollar
amount of funds invested in all open-end and closed-end management type
investment companies and investment trusts at any one time shall not exceed
twenty percent (20%) of the total dollar amount of funds invested under
paragraph (d) of this section.
(f) Investments
authorized by subparagraph * * * (i) of paragraph (d)
shall mature on such date or dates as determined by the State Treasurer in the
exercise of prudent judgment to generate a favorable return to the state and
will allow the monies to be available for use at such time as the monies will
be needed for state purposes. However, the maturity of securities purchased as
enumerated in * * * subparagraph * * * (i) shall not exceed ten (10)
years from date of purchase for United States Treasury and Agency
securities and shall not exceed thirty (30) years from the date of purchase and
six-year average life for mortgage-backed pass-through and
collateralized mortgage obligation securities. Special funds shall be
considered those funds created constitutionally, statutorily or
administratively * * * that
are not considered general funds. All funds invested for a period of thirty
(30) days or longer under paragraph (d) shall bear a rate at least equal to the * * *
prevailing market rates of comparable securities
of similar maturity.
(g) Any interest-bearing
deposits or certificates of deposit shall not exceed at any time the amount
insured by the Federal Deposit Insurance Corporation in any one (1) banking
institution * * * or other deposit insurance corporation approved by the
State Treasurer, unless the uninsured portion is collateralized by the pledge
of securities in the manner provided by Section 27-105-5.
(h) Unless otherwise provided, income from investments authorized by the provisions of this subsection shall be credited to the State General Fund.
(i) Not more than Five
Hundred Thousand Dollars ($500,000.00) of funds may be invested with foreign
financial institutions, and the State Treasurer may enter into price contracts
for the purchase or exchange of foreign currency or other arrangements for
currency exchange in an amount not to exceed Five Hundred Thousand Dollars
($500,000.00) upon specific direction of the * * * Mississippi
Development Authority. The State Treasurer shall promulgate all rules and
regulations for applications, qualifications and any other necessary matters
for foreign financial institutions.
Any liquidating agent of a
depository in liquidation, voluntary or involuntary, shall redeem from the
state any bonds and securities * * * that have been pledged to secure
state funds and * * * the
redemption shall be at the par value or market value thereof, whichever is
greater; otherwise, the liquidating agent or receiver may pay off the state in
full for its deposits and retrieve the pledged securities without regard to par
or market value.
The State Treasurer and the Executive Director of the Department of Finance and Administration shall make monthly reports to the Legislative Budget Office containing a full and complete statement of all funds invested by virtue of the provisions of this section and the revenues derived therefrom and the expenses incurred therewith, together with all such other information as may seem to each of them as being pertinent to inform fully the Mississippi Legislature with reference thereto.
The State Treasurer shall
not deposit any funds on demand deposit with any authorized depository, unless * * *
the depository has
contracted for interest-bearing accounts or time certificates of deposit.
Notwithstanding the
foregoing, any financial institution not meeting the prescribed ratio
requirement set forth in Section 27-105-5 whose accounts are insured by the
Federal Deposit Insurance Corporation, or any successor to that insurance
corporation, may receive state funds in an amount not exceeding the amount * * *
that is insured by * * *
that insurance * * *
corporation and may
qualify as a state depository to the extent of * * * that insurance for this purpose
only. * * *
The State Treasurer shall provide for the continuing support of the investment of excess state funds from funds appropriated therefore by the Legislature and/or from income earned on investment of excess state funds.
The State Treasurer may collect management fees for services rendered in conjunction with the investment and management of excess state funds. The amounts of those fees shall be set by the State Treasurer, and all those fees collected shall be paid into the State Treasury Special Fund.
SECTION 2. Section 21-33-401, Mississippi Code of 1972, is amended as follows:
21-33-401. (1) There is created in the State Treasury a special fund designated as the "Municipal Revolving Fund."
(2) The Municipal Revolving Fund shall not be considered as a surplus or available funds when adopting a balanced budget as required by law. The State Treasurer shall invest all sums in the Municipal Revolving Fund not needed for the purposes provided for in this section in certificates of deposit, repurchase agreements and other securities as authorized in Section 27-105-33 (c) and (d) or 7-9-103, as the State Treasurer may determine to yield the highest market rate available. Interest earned on this fund shall be deposited by the State Treasurer into the State General Fund.
(3) The Municipal Revolving Fund shall be distributed annually, during the month of October, to all municipalities on a population basis, using the latest federal census in computations, taking into consideration the entire population of each municipality in the state, and taking into consideration municipalities that have been incorporated since the last federal census, or will be incorporated before the next federal census, in which case the population shall be the official count used in procuring the charter of incorporation, and also taking into consideration any county seat that is not an incorporated municipality as though the county seat were an incorporated municipality. In making distribution to an unincorporated county seat, however, the funds computed to be due to the county seat shall be paid to the county treasury in which the county seat is located.
Funds made available to municipalities under the provisions of this section may be used for any lawful municipal purpose, except that where funds are made available by reason of the location of an unincorporated county seat in any county, the board of supervisors in that county shall use the funds for road, bridge and street construction or maintenance.
(4) Unexpended funds in the
Municipal Revolving Fund at the end of a fiscal year shall not lapse into the
State General Fund but shall remain in the fund for use under this section * * *.
SECTION 3. Section 27-103-203, Mississippi Code of 1972, is amended as follows:
27-103-203. (1) There is created in the State Treasury a special fund, separate and apart from any other fund, to be designated the Working Cash-Stabilization Reserve Fund.
(2) The Working Cash-Stabilization Reserve Fund shall not be considered as a surplus or available funds when adopting a balanced budget as required by law. The State Treasurer shall invest all sums in the Working Cash-Stabilization Reserve Fund not needed for the purposes provided for in this section in certificates of deposit, repurchase agreements and other securities as authorized in Section 27-105-33 (c) and (d) or 7-9-103, as the State Treasurer may determine to yield the highest market rate available. If the Ayers Settlement Fund is created under Section 37-101-27(5), the first Five Million Dollars ($5,000,000.00) of interest earned on those sums each fiscal year shall be deposited into that fund until a total of Seventy Million Dollars ($70,000,000.00) has been deposited into the fund. The interest, or the remaining interest if the Ayers Settlement Fund is created, that is earned on those sums shall be deposited in the Working Cash-Stabilization Reserve Fund until the balance of principal and interest in the fund reaches seven and one-half percent (7-1/2%) of the total General Fund appropriations for the current fiscal year, and all interest earned in excess of amounts necessary to maintain the seven and one-half percent (7-1/2%) fund balance requirement shall be deposited by the State Treasurer into the State General Fund.
(3) The Working Cash-Stabilization Reserve Fund, except for Fifteen Million Dollars ($15,000,000.00) and the amount of the interest and income earned on the principal of the Ayers Endowment Trust created by Section 37-101-27, shall be used by the State Treasurer for cash flow needs throughout the year when the Executive Director of the Department of Finance and Administration certifies that in his opinion there will be cash flow deficiencies in the State General Fund. No borrowing of monies from other special funds for such purposes as authorized by Section 31-17-101 et seq. shall be made as long as an unencumbered balance in excess of Fifteen Million Dollars ($15,000,000.00) and the interest and income earned on the principal of the Ayers Endowment Trust created by Section 37-101-27 remains in the fund. The State Treasurer shall reimburse the fund for all sums borrowed for those purposes from General Fund revenues collected during the fiscal year in which those funds are used. The State Treasurer shall immediately notify the Legislative Budget Office and the State Department of Finance and Administration of each transfer into and out of the fund. Fifteen Million Dollars ($15,000,000.00) in the Working Cash-Stabilization Reserve Fund shall remain available for exclusive use of the Ayers Endowment Trust created by Section 37-101-27. If the Ayers Settlement Fund is created under Section 37-101-27(5), beginning when a total of Fifty-five Million Dollars ($55,000,000.00) has been deposited into the fund, for each annual deposit of interest to that fund under subsection (2) of this section, the Ayers Endowment Trust created under Section 37-101-27(1) shall be reduced by an equal amount annually until the Ayers Endowment Trust reaches Zero Dollars ($0.00), at which time any requirements concerning the Ayers Endowment Trust in this section shall be null and void.
(4) The Working Cash-Stabilization Reserve Fund, except for Forty Million Dollars ($40,000,000.00), shall also be used for the purpose of covering any projected deficits that may occur in the General Fund at the end of a fiscal year as a result of revenue shortfalls. If the Governor determines that a deficit in revenues from all sources may occur, it shall be the duty of the Executive Director of the Department of Finance and Administration to transfer such funds as necessary to the General Fund to alleviate the deficit in accordance with Sections 27-104-13 and 31-17-123; however, not more than Fifty Million Dollars ($50,000,000.00) may be transferred from the fund for that purpose in any one (1) fiscal year.
(5) The Working Cash-Stabilization Reserve Fund also shall be used to provide funds for the Disaster Assistance Trust Fund when those funds are immediately needed to provide for disaster assistance under Sections 33-15-301 through 33-15-317. Any transfer of funds from the Working Cash-Stabilization Reserve Fund to the Disaster Assistance Trust Fund shall be made in accordance with the provisions of subsection (5) of Section 33-15-307.
(6) The Department of Finance and Administration shall immediately send notice of any transfers made, or other action taken under authority of this section, to the Legislative Budget Office.
(7) Funds deposited in the Working Cash-Stabilization Reserve Fund shall be used only for the purposes specified in this section, and as long as the provisions of this section remain in effect, no other expenditure, appropriation or transfer of funds in the Working Cash-Stabilization Reserve Fund shall be made except by act of the Legislature making specific reference to the Working Cash-Stabilization Reserve Fund as the source of those funds.
SECTION 4. Section 27-103-303, Mississippi Code of 1972, is amended as follows:
27-103-303. (1) There is created in the State Treasury a special fund, separate and apart from any other fund, to be designated the Capital Expense Fund.
(2) The Capital Expense Fund shall not be considered as a surplus or available funds when adopting a balanced budget as required by law. The State Treasurer shall invest all sums in the Capital Expense Fund not needed for the purposes provided for in this section in certificates of deposit, repurchase agreements and other securities as authorized in Section 27-105-33 (c) and (d) or 7-9-103, as the State Treasurer may determine to yield the highest market rate available. Interest earned on this fund shall be deposited by the State Treasurer into the State General Fund.
(3) The Capital Expense Fund shall be used for capital expense needs, repair and renovation of state-owned properties and specific projects authorized by the Legislature. The Legislature shall designate those capital expense projects, repair and renovation projects and other authorized projects in an appropriation act passed by the Legislature, which shall direct the Director of the Department of Finance and Administration to administer the projects.
(4) In addition to the purposes specified in subsection (3) of this section, the Capital Expense Fund shall be used to provide funds for emergency repairs on state-owned buildings, upon requisition of the Director of the Department of Finance and Administration. Whenever the director determines that funds are immediately needed for emergency repairs on state-owned buildings, he shall requisition the funds needed from the Capital Expense Fund, which shall be subject to the limitations set forth in this subsection. At the same time he makes the requisition, the director shall notify the Lieutenant Governor, the Speaker of the House of Representatives, the respective Chairmen of the Senate Appropriations Committee, the Senate Finance Committee, the House Appropriations Committee and the House Ways and Means Committee and the Legislative Budget Office of his determination of the need for the funds, the amount that he has requisitioned and where the funds will be used. If the amount requisitioned is available in the Capital Expense Fund, is not allocated for any specific projects as authorized in subsection (3) of this section and is within the limitations set forth below in this subsection, then the director may escalate the budget of the Bureau of Building, Grounds and Real Property Management to use the full amount of the requisitioned funds for the emergency repairs, and transfer that amount to the bureau for that purpose. If the amount requisitioned is more than the amount available in the Capital Expense Fund or above the limitations set forth below in this subsection, then the director may escalate the budget of the bureau to use the amount that is available within the limitations for the emergency repairs, and transfer that amount to the bureau for that purpose. The maximum amount that may be transferred from the Capital Expense Fund to the bureau for any single emergency shall be Five Hundred Thousand Dollars ($500,000.00), and the maximum amount that may be transferred to the bureau for all emergencies during any fiscal year shall be Two Million Dollars ($2,000,000.00).
(5) Funds deposited in the Capital Expense Fund shall be used only for the purposes specified in this section, and as long as the provisions of this section remain in effect, no other expenditure, appropriation or transfer of funds in the Capital Expense Fund shall be made except by act of the Legislature making specific reference to the Capital Expense Fund as the source of those funds.
(6) Unexpended funds in the Capital Expense Fund at the end of a fiscal year shall not lapse into the State General Fund but shall remain in the fund for use under this section.
* * *
SECTION 5. Section 27-105-9, Mississippi Code of 1972, is amended as follows:
27-105-9. The State
Treasurer shall give notice of the provisions of this article once a month to
each eligible bank and financial institution in the state having an amount of
state funds less than the amount authorized to be allocated to the bank or
financial institution under * * * this section,
and shall receive * * * any
applications as they or any of them may make for the privilege of keeping any
part of public funds on forms to be furnished by the Treasurer, and shall place
the state funds with the institutions applying for them if the depository
application has been duly approved by the Treasurer.
The Treasurer, when considering the various depository applications, shall review the financial statement of the applying depository and become satisfied regarding its liquidity and capital ratio so as to assure the safety of all public funds, and likewise to give the equitable apportionment of the state funds throughout the state.
* * * When any depository holding state demand
accounts receives an order from the Treasurer or his designee to transfer
collected funds out of those accounts to any interest-bearing accounts or time
certificates of deposit in the depository or any other depository under the
provisions of this chapter, the transfer shall be made immediately or as soon
thereafter as practicable. If the Treasurer finds that any depository is not
transferring funds as provided above, the depository shall be disqualified from
holding or receiving any state demand accounts for a period of time not to
exceed one (1) year.
All funds allocated to
approved depositories under the provisions of subsection * * * (c) of Section 27-105-33 shall be
allocated to qualified depositories of the state on a pro rata basis determined
as follows:
(a) Each qualified depository shall be assigned a numerator, which shall be the sum of (i) thirty-five percent (35%) of that portion of its Mississippi-based deposits that does not exceed Two Hundred Fifty Million Dollars ($250,000,000.00), plus (ii) twenty-five percent (25%) of that portion of its Mississippi-based deposits that exceed Two Hundred Fifty Million Dollars ($250,000,000.00) but does not exceed Five Hundred Million Dollars ($500,000,000.00), plus (iii) fifteen percent (15%) of that portion of its Mississippi-based deposits that exceeds Five Hundred Million Dollars ($500,000,000.00).
(b) Each such
numerator shall be divided by a denominator, which shall be the sum of (i)
thirty-five percent (35%) of the first Two Hundred Fifty Million Dollars
($250,000,000.00) or portion thereof of the Mississippi-based deposits of each
qualified depository, plus (ii) twenty-five percent (25%) of the next Two
Hundred Fifty Million Dollars ($250,000,000.00) or portion thereof of the
Mississippi-based deposits of each qualified depository, plus (iii) fifteen
percent (15%) of the Mississippi-based deposits of each qualified depository in
excess of Five Hundred Million Dollars ($500,000,000.00), being the sum of the
numerators of all depositories. The resulting percentage shall be the pro rata
share of the depository in funds allocated under Section 27-105-33 * * * (c).
(c) All such computations shall be determined annually by December 1 on the basis of the deposits held by the depositories at deposit facilities located in the State of Mississippi as reported in the Federal Deposit Insurance Corporation's Market Share Report -- Deposits of All FDIC-Insured Institutions Operating in Mississippi on June 30 of each year. For the purposes of this section, "Mississippi-based deposits" means the total deposits held at deposit facilities located in the State of Mississippi on June 30 as reported annually by the Federal Deposit Insurance Corporation in the above-referenced report.
State funds allocated to
each approved depository shall not be more than four percent (4%) of the
depository's Mississippi-based deposits. Interest-bearing time certificates of
deposit and other interest-bearing deposits, either general or special, made
under Section 27-105-33, may be treated as not coming within this percentage
if, in the discretion of the Treasurer, the best interest of the state can be
served to increase its earnings and decrease its expenses in the handling of
the state funds; however, any and all depositories must first qualify and be
approved by the Treasurer to receive demand deposits subject to withdrawal or
transfer by check of the Treasurer when properly presented and so demanded. * * *
The state depository contract shall be for one (1) year, but may be renewed from year to year upon proper review and approval of the Treasurer. Each applicant shall furnish to the Treasurer a financial statement sworn to by a duly elected officer, and on such date or dates as the Treasurer may provide.
SECTION 6. Section 31-19-5, Mississippi Code of 1972, is amended as follows:
31-19-5. Any funds received
from the sale of bonds, notes, or certificates of indebtedness heretofore or
hereafter sold by the State of Mississippi or any agency or department thereof
or by any county, municipality, road district, levee district, development
district, utility district, school district, drainage district or other entity
authorized by law to issue bonds, notes, or certificates of indebtedness, which
are not immediately required for disbursement for the purpose for which issued,
may be invested by the proper authorities in any direct obligation issued by or
guaranteed in full as to principal and interest by the United States of America
or in certificates of deposit issued by or through a qualified depository of
the State of Mississippi as approved by the State Treasurer, maturing or being
redeemable by the holder on or * * * before the date upon which * * *
those funds will be
required for disbursement and bearing interest at a rate per annum not less
than a simple interest rate numerically equal to the average bank discount rate
on United States Treasury bills of comparable maturity or the current rate of
interest paid on certificates of deposit or on United States Treasury
obligations of comparable maturities, whichever is the higher, * * *
however, * * *
the proceeds from the sale of
bonds issued * * * under Sections 57-1-131 through 57-1-145 * * * or Chapter 3 of
Title 57, Mississippi Code of 1972, may be invested in certificates of deposit
issued by or through qualified depositories of the State of Mississippi bearing
interest at any rate per annum * * * that may be mutually agreed upon,
but in no case shall * * * that
rate be less than * * * the
average bank discount rate.
Funds received * * *
under this
section shall be invested as heretofore described or may be invested, pursuant
to rules promulgated by the State Treasurer, in obligations described in
Section 27-105-33 (c) and (d) * * *; however, funds
described in this section may not be invested in securities of, or interests
in, any open-end or closed-end management-type investment company or investment
trust, such as those described in Section 27-105-33(e).
SECTION 7. Section 37-59-43, Mississippi Code of 1972, is amended as follows:
37-59-43. (1) Whenever any
school district or levying authority, as defined in Section 37-57-1(1)(b),
acting on behalf of a school district, * * * has on hand any bond and
interest funds, any funds derived from the sale of bonds, or any other funds in
excess of the sums * * * that
will be required for payment of current obligations and expenses as they come
due, and * * * that
are not needed or cannot by law be used for the payment of the current
obligations or expenses of the school district, the school board of the
district shall have the power and authority to invest * * * those excess funds in any bonds or
other direct obligations of the United States of America or the State of
Mississippi, or of any county or municipality of this state, which * * *
county or municipal bonds have
been approved by a reputable bond attorney or have been validated by a decree
of the chancery court; or in interest-bearing time certificates of deposit or
interest-bearing accounts with or through any financial institution approved
for the deposit of state funds; and * * * the institution shall be eligible to
hold school district funds to the extent that it is qualified as a depository
for state funds; or in any type of investment permitted by Sections 27-105-33 (c),
(d) and * * * (e).
The rate of interest on * * * suchthose time certificates of deposit and interest-bearing
accounts may be negotiated. The negotiated rate of interest shall be at the
highest rate possible at the date of purchase or investment for * * *
those time certificates
of deposit or interest-bearing accounts. In any event, the bonds or
obligations in which * * * the
funds are invested shall mature or be redeemable * * * before the time the funds so
invested will be needed for expenditure. When bonds or other obligations have
been so purchased, the same may be sold or surrendered for redemption at any
time, except certificates of deposit * * * that must mature, by order or
resolution of * * * the
school board, and the president of the school board, when authorized by * * *
the order or
resolution, shall have the power and authority to execute all instruments and
take * * * any
other action as may be necessary to effectuate the sale or redemption thereof.
In addition to the foregoing, any school board may invest any such funds in the
same manner as provided for the investment of sixteenth section principal funds * * *
under Section 29-3-113.
(2) The provisions of
subsection (1) of this section shall also apply to funds of community and
junior college districts, and the governing authorities of * * *
those districts are
vested with all power and authority with respect to * * * those funds and matters * * *
mentioned in this section
as are vested in the other boards mentioned * * * in this section with respect to * * *
those matters.
(3) All earnings from funds
other than bond funds or bond sinking funds in excess of One Hundred Dollars
($100.00) in any fiscal year, invested according to the provisions of
subsections (1) and (2) of this section shall be deposited in the district fund
from which the investment was made, or the treasury of the community or
junior college, as the case may be. Earnings from * * * those school district funds * * *
that are less than One
Hundred Dollars ($100.00) in any fiscal year may be deposited in the school
district maintenance fund, or in the district fund from which the investment
was made, in the discretion of the school board. Earnings from funds invested
out of bond funds or bond sinking funds, together with the principal thereof,
shall be deposited in the fund from which the investment was made.
(4) Nothing contained in
this section shall be construed to prevent the payment of a portion of the
earnings derived from the investment of bond proceeds or any other amounts in
the bond fund or related reserve or sinking funds to the federal government to
the extent required by the federal laws applicable to * * * those bonds or the interest income
thereon in order to maintain their tax exempt status.
SECTION 8. This act shall take effect and be in force from and after July 1, 2014.