51-7-11 - Authorized deposits or investments of public funds.
51-7-11. Authorized deposits or investments of public funds.
(1) (a) Except as provided in Subsection (1)(b), a public treasurer may conductinvestment transactions only through qualified depositories, certified dealers, or directly withissuers of the investment securities.
(b) A public treasurer may, in furtherance of his duties, designate a certified investmentadviser to make trades on behalf of the public treasurer.
(2) The remaining term to maturity of the investment may not exceed the period ofavailability of the funds to be invested.
(3) Except as provided in Subsection (4), all public funds may be deposited or investedonly in the following assets that meet the criteria of Section 51-7-17:
(a) negotiable or nonnegotiable deposits of qualified depositories;
(b) qualifying or nonqualifying repurchase agreements and reverse repurchaseagreements with qualified depositories using collateral consisting of:
(i) Government National Mortgage Association mortgage pools;
(ii) Federal Home Loan Mortgage Corporation mortgage pools;
(iii) Federal National Mortgage Corporation mortgage pools;
(iv) Small Business Administration loan pools;
(v) Federal Agriculture Mortgage Corporation pools; or
(vi) other investments authorized by this section;
(c) qualifying repurchase agreements and reverse repurchase agreements with certifieddealers, permitted depositories, or qualified depositories using collateral consisting of:
(i) Government National Mortgage Association mortgage pools;
(ii) Federal Home Loan Mortgage Corporation mortgage pools;
(iii) Federal National Mortgage Corporation mortgage pools;
(iv) Small Business Administration loan pools; or
(v) other investments authorized by this section;
(d) commercial paper that is classified as "first tier" by two nationally recognizedstatistical rating organizations, one of which must be Moody's Investors Service or Standard andPoor's, which has a remaining term to maturity of 270 days or less;
(e) bankers' acceptances that:
(i) are eligible for discount at a Federal Reserve bank; and
(ii) have a remaining term to maturity of 270 days or less;
(f) fixed rate negotiable deposits issued by a permitted depository that have a remainingterm to maturity of 365 days or less;
(g) obligations of the United States Treasury, including United States Treasury bills,United States Treasury notes, and United States Treasury bonds;
(h) obligations other than mortgage pools and other mortgage derivative products issuedby, or fully guaranteed as to principal and interest by, the following agencies or instrumentalitiesof the United States in which a market is made by a primary reporting government securitiesdealer, unless the agency or instrumentality has become private and is no longer considered to bea government entity:
(i) Federal Farm Credit banks;
(ii) Federal Home Loan banks;
(iii) Federal National Mortgage Association;
(iv) Federal Home Loan Mortgage Corporation;
(v) Federal Agriculture Mortgage Corporation; and
(vi) Tennessee Valley Authority;
(i) fixed rate corporate obligations that:
(i) are rated "A" or higher or the equivalent of "A" or higher by two nationallyrecognized statistical rating organizations, one of which must be by Moody's Investors Service orStandard and Poor's;
(ii) are publicly traded; and
(iii) have a remaining term to final maturity of 365 days or less or is subject to a hard putat par value or better, within 365 days;
(j) tax anticipation notes and general obligation bonds of the state or of any county,incorporated city or town, school district, or other political subdivision of this state, includingbonds offered on a when-issued basis without regard to the limitation in Subsection (7);
(k) bonds, notes, or other evidence of indebtedness of any county, incorporated city ortown, school district, or other political subdivision of the state that are payable from assessmentsor from revenues or earnings specifically pledged for payment of the principal and interest onthese obligations, including bonds offered on a when-issued basis without regard to the limitationin Subsection (7);
(l) shares or certificates in a money market mutual fund as defined in Section 51-7-3;
(m) variable rate negotiable deposits that:
(i) are issued by a qualified depository or a permitted depository;
(ii) are repriced at least semiannually; and
(iii) have a remaining term to final maturity not to exceed two years;
(n) variable rate securities that:
(i) (A) are rated "A" or higher or the equivalent of "A" or higher by two nationallyrecognized statistical rating organizations, one of which must be by Moody's Investors Service orStandard and Poor's;
(B) are publicly traded;
(C) are repriced at least semiannually; and
(D) have a remaining term to final maturity not to exceed two years or are subject to ahard put at par value or better, within 365 days; and
(ii) are not mortgages, mortgage-backed securities, mortgage derivative products, or anysecurity making unscheduled periodic principal payments other than optional redemptions.
(4) The following public funds are exempt from the requirements of Subsection (3):
(a) the Employers' Reinsurance Fund created in Section 34A-2-702;
(b) the Uninsured Employers' Fund created in Section 34A-2-704; and
(c) a local government other post-employment benefits trust fund under Section51-7-12.2.
(5) If any of the deposits authorized by Subsection (3)(a) are negotiable or nonnegotiablelarge time deposits issued in amounts of $100,000 or more, the interest shall be calculated on thebasis of the actual number of days divided by 360 days.
(6) A public treasurer may maintain fully insured deposits in demand accounts in afederally insured nonqualified depository only if a qualified depository is not reasonablyconvenient to the entity's geographic location.
(7) The public treasurer shall ensure that all purchases and sales of securities are settledwithin 15 days of the trade date.
Amended by Chapter 324, 2008 General Session