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Indicates Matter Stricken
Indicates New Matter
March 22, 2001
S. Printed 3/22/01--S.
Read the first time January 25, 2001.
To whom was referred a Bill (S. 219) to amend Section 11-9-660, as amended, Code of Laws of South Carolina, 1976, relating to investment of funds of the state by the State Treasurer, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
HUGH K. LEATHERMAN, SR. for Committee.
This bill is not expected to impact general fund revenue in FY 2001-02.
This bill would allow the State Treasurer the full power to invest and reinvest all funds of the State in dollar denominated obligations of a corporation, state, or political subdivision. This bill would also change a necessary requirement for investment from an obligation rated by "any of the three highest ratings" to "an investment grade rating" of at least two nationally recognized rating services. This would allow investments in obligations of the top four rating categories from each of at least two nationally recognized rating services. This bill may permit more flexibility and diversification in selecting investments to reduce exposure to risk and maximize the rate of return on the State's investment portfolio. This bill would also allow the investment in foreign companies located in the U.S., but headquartered in foreign countries, such as BMW, Roche Pharmaceuticals, and Michelin. This bill would also permit the investment of state funds in the long-term, unsecured debt of domestic or foreign insurance company or other financial institutions. This bill is not expected to impact general fund revenue in FY 2001-02.
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 11-9-660, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INVESTMENT OF FUNDS OF THE STATE BY THE STATE TREASURER, SO AS TO AUTHORIZE INVESTMENTS IN CORPORATIONS AND IN STATES AND POLITICAL SUBDIVISIONS OUTSIDE OF SOUTH CAROLINA SO LONG AS THE OBLIGATIONS ARE DENOMINATED IN UNITED STATES DOLLARS, TO MODIFY THE INVESTMENT GRADE RATING REQUIREMENT FOR INVESTMENT IN OBLIGATIONS, TO PROVIDE FOR INVESTMENT IN CERTAIN GUARANTEED INVESTMENT CONTRACTS ISSUED BY A DOMESTIC OR FOREIGN INSURANCE COMPANY OR OTHER FINANCIAL INSTITUTION, AND TO AUTHORIZE THE STATE TREASURER TO CONTRACT TO LEND INVESTED SECURITIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 11-9-660 of the 1976 Code, as last amended by Section 66A, Part II, Act 164 of 1993, is further amended to read:
"Section 11-9-660. (A)The State Treasurer has full power to invest and reinvest all funds of the State in any of the following:
(1) obligations of the United States, its agencies and instrumentalities;
obligations of this State or any of its political subdivisions;
(3) obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, the African Development Bank, and the Asian Development Bank;
(4)(3) obligations of any a corporation, within the state, or political subdivision denominated in United States dollars, if such the obligations bear any of the three highest ratings an investment grade rating of at least two nationally recognized rating services;
(5)(4) certificates of deposit, where if the certificates are secured collaterally secured by securities of the type types described in items (1) and (2) of this section and held by a third party as escrow agent or custodian , and are of a market value not less than the amount of the certificates of deposit so secured, including interest; but except that this collateral is not required to the extent the certificates of deposit are insured by an agency of the federal government; and
(6)(5) repurchase agreements, when if collateralized by securities of the type types described in items (1) and (2) of this section and held by a third party as escrow agent or custodian , and of a market value not less than the amount of the repurchase agreement so collateralized, including interest; and
(6) guaranteed investment contracts issued by a domestic or foreign insurance company or other financial institution, whose long-term unsecured debt rating bears the two highest ratings of at least two nationally recognized rating services.
(B) The State Treasurer may contract to lend securities invested pursuant to this section."
SECTION 2. This act takes effect upon approval by the Governor.
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