PRINTER'S NO. 1733
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1296
Session of
2015
INTRODUCED BY HARPER, JAMES, MURT, FEE, MILLARD, RADER, TOOHIL,
ZIMMERMAN, COHEN AND EVERETT, JUNE 8, 2015
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JUNE 8, 2015
AN ACT
Amending the act of July 25, 1973 (P.L.217, No.53), entitled "An
act authorizing cities of the first class and second class to
invest all funds received and deposited with the city
treasurer in certain commercial paper under certain terms and
conditions," providing for investment of public corporation
or authority funds.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of July 25, 1973 (P.L.217, No.53),
entitled "An act authorizing cities of the first class and
second class to invest all funds received and deposited with the
city treasurer in certain commercial paper under certain terms
and conditions," is amended by adding a section to read:
Section 1.1. (a) In addition to products otherwise
authorized by law, a public corporation or municipal authority
may invest and reinvest money of the public corporation or
municipal authority in any of the following financial products:
(1) Obligations, participations or other instruments of any
Federal agency, instrumentality or United States government-
sponsored enterprise, including those issued or fully guaranteed
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as the principal and interest by Federal agencies,
instrumentalities or United States government-sponsored
enterprises, if the debt obligations are rated at least "A" or
its equivalent by at least two nationally recognized statistical
ratings organizations.
(2) Repurchase agreements with respect to United States
Treasury bills or obligations, participations or other
instruments of or guaranteed by the United States or any Federal
agency, instrumentality or United States government- sponsored
enterprise.
(3) Negotiable certificates of deposit or other evidences of
deposit, with a remaining maturity of three years or less,
issued by a nationally or State-chartered bank , a Federal or
State savings and loan association or a State-licensed branch of
a foreign bank . For obligations with a maturity of one year or
less, the debt obligations of the issuing institution or its
parent must be rated in the top short-term rating category by at
least two nationally recognized statistical ratings
organizations . For obligations with a maturity in excess of one
year, the senior debt obligations of the issuing institution or
its parent must be rated at least "A" or its equivalent by at
least two nationally recognized statistical ratings
organizations.
(4) Bills of exchange or time drafts drawn on and accepted
by a commercial bank, otherwise known as bankers' acceptances,
if the bankers' acceptances do not exceed 180 days' maturity and
the accepting bank is rated in the top short-term category by at
least two nationally recognized statistical ratings
organizations.
(5) Commercial paper issued by corporations or other
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business entities organized in accordance with Federal or State
law, with a maturity not to exceed two hundred seventy days, if
the issuing corporation or business entity is rated in the top
short-term category by at least two nationally recognized
statistical ratings organizations.
(6) Shares of an investment company registered under the
Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1
et seq.) whose shares are registered under the Securities Act of
1933 (48 Stat. 74, 15 U.S.C. § 77a et seq.), if all of the
following conditions are met:
(i) The investments of the company are the authorized
investments under this subsection.
(ii) The investment company is managed in accordance with 17
CFR 270.2a-7 (relating to money market funds).
(iii) The investment company is rated in the highest
category by a nationally recognized rating agency.
(7) Deposits placed in accordance with the following
conditions:
(i) The money is initially invested through a federally
insured institution having a place of business in the
Commonwealth, which is selected by the public corporation or
municipal authority.
(ii) The selected institution arranges for the redeposit of
the money in deposits in one or more financial institutions
insured by the Federal Deposit Insurance Corporation, for the
account of the public corporation or municipal authority.
(iii) The full amount of principal and any accrued interest
of each such deposit is insured by the Federal Deposit Insurance
Corporation.
(iv) On the same date that the money is redeposited pursuant
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to paragraph (ii), the selected institution receives an amount
of deposits from customers of other financial institutions equal
to or greater than the amount of money initially invested
through the selected institution by the public corporation or
municipal authority.
(b) Nothing in subsection (a) shall be construed to
supersede or preempt other investment powers of public
corporations or municipal authorities as authorized by law.
(c) (1) Each local government investment trust or local
government investment pool that invests funds as provided for
under this section shall file with the Department of Community
and Economic Development, within one hundred twenty days of
completion of its fiscal year, an annual investment report for
the previous fiscal year. The report shall be made available to
the public, upon request, during normal business hours. Nothing
may prohibit the posting of the report on the Internet.
(2) The report shall provide all of the following:
(i) A listing of each investment authorized by this section
that was purchased during the fiscal year.
(ii) For each investment purchased, the listing must show
the issuer, date of purchase, maturity date, par amount, cost,
yield to maturity at the time of purchase, broker/dealer from
which the investment was purchased, if applicable, any
separately stated fees related to the purchase of the investment
and the name of the party receiving the fee.
(d) As used in this section, the following words and phrases
shall have the meanings given to them in this subsection unless
the context clearly indicates otherwise:
"Local government investment trust" or "local government
investment pool" shall mean a trust or pool offered by the State
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Treasurer or multiple public corporations or municipal
authorities, governed by a board of directors or board of
trustees for the exclusive benefit of the participating public
corporations or municipal authorities.
"Public corporation" shall have the same meaning as given to
it in section 1 of the act of May 16, 1929 (P.L.1773, No.581),
entitled, "An act to supplement an act approved the twentieth
day of April, one thousand eight hundred and seventy-four
(Pamphlet Laws, sixty-five), entitled 'An act to regulate the
manner of increasing the indebtedness of municipalities; to
provide for the redemption of the same; and to impose penalties
for illegal increase thereof,' by authorizing the sale of
property purchased by a public corporation out of funds provided
by increase of indebtedness of such corporation; and providing
for the disposition of the funds realized from such sale."
Section 2. This act shall take effect in 60 days.
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