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42.500 State Investment Commission -- Powers.
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There shall be a State Investment Commission composed of the Governor who
shall be chairman; the State Treasurer who shall be vice chairman and serve
as chairman in the absence of the Governor; the secretary of the Finance and
Administration Cabinet; and two (2) persons appointed by the Governor.
The individuals appointed by the Governor shall be selected as follows: one (1)
to be selected from a list of five (5) submitted to the Governor by the Kentucky
Bankers Association, and one (1) to be selected from a list of five (5) submitted
to the Governor by the Independent Community Bankers Association.
The State Investment Commission shall meet at least quarterly to review
investment performance and conduct other business. This provision shall not
prohibit the commission from meeting more frequently as the need arises.
The Governor, State Treasurer, and secretary of the Finance and
Administration Cabinet shall each have the authority to designate, by an
instrument in writing over his or her signature and filed with the secretary of the
commission as a public record of the commission, an alternate with full
authority to:
(a) Attend in the member's absence, for any reason, any properly convened
meeting of the commission; and
(b) Participate in the consideration of, and vote upon, business and
transactions of the commission.
Each alternate shall be a person on the staff of the appointing member or in
the employ of the appointing member's state agency or department.
Any designation of an alternate may, at the appointing member's direction:
(a) Be limited upon the face of the appointing instrument to be effective for
only a specific meeting or specified business;
(b) Be shown on the face of the appointing instrument to be a continuing
designation, for a period of no more than four (4) years, whenever the
appointing member is unable to attend; or
(c) Be revoked at any time by the appointing member in an instrument in
writing, over his or her signature, filed with the secretary of the
commission as a public record of the commission.
Any person transacting business with, or materially affected by, the business of
the commission may accept and rely upon a joint certificate of the secretary of
the commission and any member of the commission concerning the
designation of any alternate, the time and scope of the designation, and, if it is
of a continuing nature, whether and when the designation has been revoked.
The joint certificate shall be made and delivered to the person requesting it
within a reasonable time after it has been requested in writing, with acceptable
identification of the business or transaction to which it refers and the requesting
person's interest in the business or transaction.
Any three (3) persons who are members of the commission or alternates
authorized under subsections (4) and (5) of this section shall constitute a
quorum and may, by majority vote, transact any business of the commission.
Any three (3) members of the commission may call a meeting.
(8)
(9)
The provisions of KRS 61.070 shall not apply to members of the commission.
The commission shall have authority and may, if in its opinion the cash in the
State Treasury is in excess of the amount required to meet current
expenditures, invest any and all of the excess cash in:
(a) Obligations and contracts for future delivery of obligations backed by the
full faith and credit of the United States or a United States government
agency, including but not limited to:
1.
United States Treasury;
2.
Export-Import Bank of the United States;
3.
Farmers Home Administration;
4.
Government National Mortgage Corporation; and
5.
Merchant Marine bonds;
(b) Obligations of any corporation of the United States government or
government-sponsored enterprise, including but not limited to:
1.
Federal Home Loan Mortgage Corporation;
2.
Federal Farm Credit Banks;
a.
Bank for Cooperatives;
b.
Federal Intermediate Credit Banks; and
c.
Federal Land Banks;
3.
Federal Home Loan Banks;
4.
Federal National Mortgage Association; and
5.
Tennessee Valley Authority obligations;
(c) Collateralized or uncollateralized certificates of deposit, issued by banks
rated in one (1) of the three (3) highest categories by a nationally
recognized statistical rating organization or other interest-bearing
accounts in depository institutions chartered by this state or by the United
States, except for shares in mutual savings banks;
(d) Bankers acceptances for banks rated in the highest short-term category
by a nationally recognized statistical rating organization;
(e) Commercial paper rated in the highest short-term category by a nationally
recognized statistical rating organization;
(f) Securities issued by a state or local government, or any instrumentality or
agency thereof, in the United States, and rated in one (1) of the three (3)
highest long-term categories by a nationally recognized statistical rating
organization;
(g) United States denominated corporate, Yankee, and Eurodollar securities,
excluding corporate stocks, issued by foreign and domestic issuers,
including sovereign and supranational governments, rated in one (1) of
the three (3) highest long-term categories by a nationally recognized
statistical rating organization;
(h) Asset-backed securities rated in the highest category by a nationally
recognized statistical rating organization; and
(i) Shares of mutual funds, each of which shall have the following
characteristics:
1.
The mutual fund shall be an open-end diversified investment
company registered under Federal Investment Company Act of
1940, as amended;
2.
The management company of the investment company shall have
been in operation for at least five (5) years;
3.
The mutual fund shall be rated in the highest category by a
nationally recognized statistical rating organization;
4.
All of the securities in the mutual fund shall be eligible investments
pursuant to this section; and
(j) State and local delinquent property tax claims which upon purchase shall
become certificates of delinquency secured by interests in real property
not to exceed twenty-five million dollars ($25,000,000) in the aggregate.
For any certificates of delinquency that have been exonerated pursuant to
KRS 132.220(5), the Department of Revenue shall offset the loss suffered
by the Finance and Administration Cabinet against subsequent local
distributions to the affected taxing districts as shown on the certificate of
delinquency.
(10) The State Investment Commission shall promulgate administrative regulations
for the investment and reinvestment of state funds in shares of mutual funds,
and the regulations shall specify:
(a) The long and short term goals of any investment;
(b) The specification of moneys to be invested;
(c) The amount of funds which may be invested per instrument;
(d) The qualifications of instruments; and
(e) The acceptable maturity of investments.
(11) Any investment in obligations and securities pursuant to subsection (9) of this
section shall satisfy this section if these obligations are subject to repurchase
agreements, provided that delivery of these obligations is taken either directly
or through an authorized custodian.
(12) (a) Income earned from investments made pursuant to this section shall
accrue to the credit of the investment income account of the general fund,
except that interest from investments of excess cash in the road fund
shall be credited to the surplus account of the road fund and interest from
investments of excess cash in the game and fish fund shall be credited to
the game and fish fund, interest earned from investments of imprest cash
funds and funds in the trust and revolving fund for each state public
university shall be credited to the appropriate institutional account, and
interest earned from the investment of funds accumulated solely by
means of contributions and gifts shall not be diverted to any purpose
other than that stipulated by the donor, when the donor shall have
designated the use to which the interest shall be placed.
(b) Except as otherwise provided by law, or by the obligations and covenants
contained in resolutions and trust indentures adopted or entered into for
state bond issues, interest earned from the investment of moneys
appropriated to the capital construction accounts, trust and agency
accounts, and trust and agency revolving accounts shall accrue to the
capital construction investment income account.
(c) If there is a revenue shortfall, as defined in KRS 48.010, of five percent
(5%) or less, the secretary of the Finance and Administration Cabinet,
upon the recommendation of the state budget director, may direct the
transfer of excess unappropriated capital construction investment income
to the general fund investment income account. The amount of the
transfer shall not exceed the amount of the shortfall in general fund
revenues.
(d) If the capital construction investment income is less than that amount
appropriated by the General Assembly, the secretary of the Finance and
Administration Cabinet may, upon recommendation of the state budget
director, direct the transfer of excess unappropriated general fund
investment income to the capital construction investment income account.
The transfer of general fund investment income revenues to the capital
construction investment income account shall be made only when the
actual general fund revenues are in excess of the enacted estimates
under KRS 48.120 and shall be limited to the amount of the excess
general fund revenues. The amount of the transfer shall not exceed the
amount of the shortfall in the capital construction fund revenues.
(13) The authority granted by this section to the State Investment Commission shall
not extend to any funds that are specifically provided by law to be invested by
some other officer or agency of the state government.
(14) The authority granted by this section to the State Investment Commission shall
only be exercised pursuant to the administrative regulations mandated by KRS
42.525.
(15) Each member of the State Investment Commission, with the exception of the
Governor, shall post bond for his acts or omissions as a member thereof
identical in amount and kind to that posted by the State Treasurer.
Effective:June 25, 2013
History: Amended 2013 Ky. Acts ch. 60, sec. 1, effective June 25, 2013. -Amended 2009 Ky. Acts ch. 78, sec. 28, effective June 25, 2009. -- Amended
2005 Ky. Acts ch. 85, sec. 54, effective June 20, 2005. -- Amended 1998 Ky.
Acts ch. 209, sec. 19, effective March 30, 1998. -- Amended 1997 (1st Extra.
Sess.) Ky. Acts ch. 4, sec. 36, effective May 30, 1997. -- Amended 1996 Ky.
Acts ch. 101, sec. 1, effective July 15, 1996. -- Amended 1990 Ky. Acts ch. 277,
sec. 1, effective July 13, 1990; ch. 291, sec. 1, effective July 13, 1990; and
ch. 294, sec. 1, effective July 13, 1990. -- Amended 1988 Ky. Acts ch. 368,
sec. 2, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 408, sec. 1,
effective July 15, 1986. -- Amended 1984 Ky. Acts ch. 324, sec. 60, effective
July 13, 1984. -- Amended 1982 Ky. Acts ch. 300, sec. 5, effective July 15,
1982; repealed, reenacted and amended as KRS 42.500, ch. 382, sec. 6,
effective July 15, 1982; and amended ch. 450, sec. 58, effective July 1, 1983. -Amended 1980 Ky. Acts ch. 295, sec. 11, effective July 15, 1980; and ch. 347,
sec. 1, effective January 1, 1982. -- Amended 1954 Ky. Acts ch. 245, sec. 1,
effective June 17, 1954. -- Created 1952 Ky. Acts ch. 86, sec. 1.
Formerly codified as KRS 41.380.
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