House Bill 0823c1

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    Florida House of Representatives - 1998              CS/HB 823

        By the Committee on Finance & Taxation and Representatives
    Gay and Feeney





  1                      A bill to be entitled

  2         An act relating to financial matters; amending

  3         s. 18.10, F.S., which provides requirements for

  4         deposit and investment of state money; revising

  5         the standards that certain corporate

  6         obligations and state and local government

  7         obligations must meet to be qualified for such

  8         investment; authorizing investment in certain

  9         foreign bonds and certain convertible debt

10         obligations of corporations domiciled in the

11         United States; providing an effective date.

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13  Be It Enacted by the Legislature of the State of Florida:

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15         Section 1.  Subsection (2) of section 18.10, Florida

16  Statutes, is amended to read:

17         18.10  Deposits and investments of state money.--

18         (2)  The Treasurer shall make funds available to meet

19  the disbursement needs of the state. Funds which are not

20  needed for this purpose shall be placed in qualified public

21  depositories that will pay rates established by the Treasurer

22  at levels not less than the prevailing rate for United States

23  Treasury securities with a corresponding maturity. In the

24  event money is available for interest-bearing time deposits or

25  savings accounts as provided herein and qualified public

26  depositories are unwilling to accept such money and pay

27  thereon the rates established above, then such money which

28  qualified public depositories are unwilling to accept shall be

29  invested in:

30         (a)  Direct United States Treasury obligations.

31         (b)  Obligations of the Federal Farm Credit Banks.

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    Florida House of Representatives - 1998              CS/HB 823

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  1         (c)  Obligations of the Federal Home Loan Bank and its

  2  district banks.

  3         (d)  Obligations of the Federal Home Loan Mortgage

  4  Corporation, including participation certificates.

  5         (e)  Obligations guaranteed by the Government National

  6  Mortgage Association.

  7         (f)  Obligations of the Federal National Mortgage

  8  Association.

  9         (g)  Commercial paper of prime quality of the highest

10  letter and numerical rating as provided for by at least one

11  nationally recognized rating service.

12         (h)  Time drafts or bills of exchange drawn on and

13  accepted by a commercial bank, otherwise known as "bankers

14  acceptances," which are accepted by a member bank of the

15  Federal Reserve System having total deposits of not less than

16  $400 million or which are accepted by a commercial bank which

17  is not a member of the Federal Reserve System with deposits of

18  not less than $400 million and which is licensed by a state

19  government or the Federal Government, and whose senior debt

20  issues are rated in one of the two highest rating categories

21  by a nationally recognized rating service and which are held

22  in custody by a domestic bank which is a member of the Federal

23  Reserve System.

24         (i)  Intermediate-term Corporate obligations or

25  corporate master notes of any corporation within the United

26  States, if the long-term obligations of such corporation are

27  rated by at least two nationally recognized rating services in

28  any one of the four three highest classifications. However, if

29  such obligations are rated by on ly one nationally recognized

30  rating service, then the obligations shall be rated in any one

31  of the two highest classifications.

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    Florida House of Representatives - 1998              CS/HB 823

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  1         (j)  Obligations of the Student Loan Marketing

  2  Association.

  3         (k)  Obligations of the Resolution Funding Corporation.

  4         (l)  Asset-backed or mortgage-backed securities of the

  5  highest credit quality.

  6         (m)  Any obligations not previously listed which are

  7  guaranteed as to principal and interest by the full faith and

  8  credit of the United States Government or are obligations of

  9  United States agencies or instrumentalities which are rated in

10  the highest category by a nationally recognized rating

11  service.

12         (n)  Commingled no-load investment funds or no-load

13  mutual funds in which all securities held by the funds are

14  authorized in this subsection.

15         (o)  Money market mutual funds as defined and regulated

16  by the Securities and Exchange Commission.

17         (p)  Obligations of state and local governments rated

18  in any of the four three highest classifications by at least

19  two one or more nationally recognized rating services if their

20  purchase is for the purpose of meeting federal investment

21  requirements for funds accumulated from bonds or other

22  obligations. However, if such obligations are rated by only

23  one nationally recognized rating service, then the obligations

24  shall be rated in any one of the two highest classifications.

25         (q)  Derivatives of investment instruments authorized

26  in paragraphs (a) through (m).

27         (r)  Covered put and call options on investment

28  instruments authorized in this subsection for the purpose of

29  hedging transactions by investment managers to mitigate risk

30  or to facilitate portfolio management.

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    Florida House of Representatives - 1998              CS/HB 823

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  1         (s)  Negotiable certificates of deposit issued by

  2  financial institutions whose long-term debt is rated in one of

  3  the three highest categories by at least two nationally

  4  recognized rating services, the investment in which shall not

  5  be prohibited by any provision of chapter 280.

  6         (t)  Foreign bonds denominated in United States dollars

  7  and registered with the Securities and Exchange Commission for

  8  sale in the United States, if the long-term obligations of

  9  such issuers are rated by at least two nationally recognized

10  rating services in any one of the four highest

11  classifications.  However, if such obligations are rated by

12  only one nationally recognized rating service, the obligations

13  shall be rated in any one of the two highest classifications.

14         (u)  Convertible debt obligations of any corporation

15  domiciled within the United States, if the convertible debt

16  issue is rated by at least two nationally recognized rating

17  services in any one of the four highest classifications.

18  However, if such obligations are rated by only one nationally

19  recognized rating service, then the obligations shall be rated

20  in any one of the two highest classifications.

21         (v)(t)  Securities not otherwise described in this

22  subsection. However, not more than 3 percent of the funds

23  under the control of the Treasurer shall be invested in

24  securities described in this paragraph.

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26  These investments may be in varying maturities and may be in

27  book-entry form. Investments made pursuant to this subsection

28  may be under repurchase agreement. The Treasurer is authorized

29  to hire registered investment advisers and other consultants

30  to assist in investment management and to pay fees directly

31  from investment earnings. Investment securities, proprietary

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    Florida House of Representatives - 1998              CS/HB 823

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  1  investment services related to contracts, performance

  2  evaluation services, investment-related equipment or software

  3  used directly to assist investment trading or investment

  4  accounting operations including bond calculators, telerates,

  5  Bloombergs, special program calculators, intercom systems, and

  6  software used in accounting, communications, and trading, and

  7  advisory and consulting contracts made under this section are

  8  exempt from the provisions of chapter 287.

  9         Section 2.  This act shall take effect July 1 of the

10  year in which enacted.

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