§ 39:98.2 — Investment of Millennium Trust

Louisiana § 39:98.2

• Jurisdiction: Louisiana
• Title 39: Procurement and Contract

Text

§98.2. Investment of Millennium Trust
NOTE: Subsection A eff. until ratification of the const. amend. proposed by Acts 2025, No.
222.
A. The treasurer is authorized and directed to invest monies in the Millennium Trust
which are available for investment in the investments permitted for the Louisiana Education
Quality Trust Fund, also known as the Kevin P. Reilly Sr. Louisiana Education Quality Trust
Fund, as set forth in R.S. 17:3803(B), (D), and (E).
NOTE: Subsection A eff. upon ratification of the const. amend. proposed by Acts 2025, No.
222.
A. The treasurer is authorized and directed to invest monies in the Millennium Trust
which are available for investment in any of the following:
(1) Time certificates of deposit of any bank domiciled or having a branch office in
the state of Louisiana, savings accounts or shares of savings and loan associations and
savings banks, as defined by R.S. 6:703, or share accounts and share certificate accounts
of federally or state-chartered credit unions issuing time certificates of deposit, issued for
the state treasurer under this authority. For those funds determined under prudent judgment
of the state treasurer to be made available for investment in time certificates of deposit, the
rate of interest paid by the banks shall be determined by rules and regulations adopted and
promulgated by the state treasurer. Competitive bidding may be used to establish the rate
of interest on fifty percent or less of the amount determined to be available as of that date
for investment in time certificates of deposit. Those financial institutions bidding on time
certificates of deposit shall meet the financial criteria established by rules and regulations
adopted and promulgated by the state treasurer. At the time of investment, the interest rate
under the provisions of this Subsection shall be a rate not less than the prevailing market
interest rate on direct obligations of the United States Treasury with a similar length of
maturity. The funds so invested shall not exceed at any time the amount insured by the
Federal Deposit Insurance Corporation (FDIC) in any one bank, savings bank, or savings
and loan association and shall not exceed at any time the amount insured by the National
Credit Union Administration, or other deposit insurance corporation, in any one credit
union, unless the uninsured portion is collateralized by the pledge of securities in the manner
provided by R.S. 49:321.
(2) Direct obligations of the United States government, a United States government
agency, a United States government instrumentality, or a United States government-sponsored enterprise, the timely payment of the principal and interest of which is fully and
explicitly guaranteed by the full faith and credit of the government of the United States of
America, and contained in a list promulgated by the state treasurer.
(3) Direct obligations of a United States government agency, United States
government instrumentality, or United States government-sponsored enterprise, the timely
payment of principal and interest of which is fully guaranteed by the issuing entity, but are
not explicitly guaranteed by the full faith and credit of the government of the United States,
and contained in a list promulgated by the state treasurer.
(4) Stocks of any corporation listed on the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers Automated Quotations
System, or other such stock exchange domiciled in the United States and registered with the
United States Securities and Exchange Commission, provided that the total investment in
such stocks at any one time shall not exceed the percentage authorized for the Millennium
Trust for investment in stocks.
(5)(a) Investment grade commercial paper issued in the United States, traded in the
United States markets, denominated in United States dollars, with a short-term rating of at
least A-1 by Standard & Poor's Financial Services LLC or P-1 by Moody's Investor Service,
Inc. or the equivalent rating by a nationally recognized statistical rating organization.
(b) Investment grade corporate notes and bonds issued in the United States, traded
in United States markets, denominated in United States dollars, rated BAA or better by
Moody's Investor Service, Inc., or BBB or better by Standard & Poor's Financial Services
LLC, and the trades of which are settled through The Depository Trust & Clearing
Corporation, a national clearinghouse in the United States for the settlement of securities
trades.
(6) Money market funds consisting solely of securities otherwise eligible for
investment by the treasurer pursuant to this Section.
(7) Open-end mutual funds, closed-end mutual funds, and unit investment trusts
consisting solely of securities otherwise eligible for investment by the state treasurer.
(8)(a) Tax exempt bonds and other taxable governmental bonds. In addition to all
other investment authority related to the Millennium Trust, the state treasurer may invest in
tax exempt bonds as defined in R.S. 49:342 and in taxable bonds issued by any state or a
political subdivision or public corporation of any state, provided that such taxable bonds are
rated at the time the investment is made by a nationally recognized rating agency in one of
the three highest rating categories of that rating agency.
(b) Bonds, debentures, notes, or other similar obligations issued in the United States
market, denominated in United States dollars and which are the direct legal obligations of
a foreign nation which the International Monetary Fund lists as an industrial country, for
which investments in and/or business transactions with are not prohibited or restricted by
any law, regulation, or rule of the United States or the state of Louisiana, and for which the
full faith and credit of such nation has been pledged for the payment of principal and
interest; provided that any such security shall be rated at least A- or better by Standard &
Poor's Corporation or A3 or better by Moody's, Inc., or an equivalent investment grade by
a securities ratings organization accepted by the National Association of Insurance
Commissioners; and, provided further that the total investment in such foreign securities at
any one time shall not exceed five percent of the market value of all investments held by the
treasurer in the Millennium Trust, or any other fund or investment of funds subject to this
investment authority.
(9) Any investment managers hired on a contract basis to advise the treasurer
regarding such investments shall be selected by the treasurer, subject to the approval of the
State Bond Commission, in accordance with a request for proposal process using strict
selection criteria based on sound industry principles. The contract, as approved by the State
Bond Commission, shall be on a fee, together with minimum exchange fee, basis or on a
commission basis only. The state treasurer shall adopt and promulgate rules and
regulations for such investments and for the selection of outside investment managers.
(10) Open-end mutual funds, closed-end mutual funds, exchange-traded funds, and
unit investment trusts consisting solely of international securities constructed to match or
track the components of a market index provided by globally recognized index providers,
including but not limited to MSCI, FTSE, Dow Jones, Standard & Poor's, Barclays,
Citigroup, or any of their affiliates or successors and assigns; however, the total investment
in any and all such index funds at any one time shall not exceed ten percent of the market
value of all funds held by the treasurer in the Millennium Trust. Nothing in this Paragraph
shall be construed to allow the state treasurer to invest directly in the common stock of
foreign companies known to do business with nations that support terrorism.
B. Investments made under authority of this Section shall mature on such date
determined by the treasurer as will generate a favorable return to the state and will allow the
monies to be available for use at the time needed.
C. Banks issuing time certificates of deposit under authority of this Section shall pay
interest at a rate not less than the rate determined by the United States Treasury to have been
the average interest rate plus one percent per annum on the last previous sale of treasury bills
with the same length of maturity; provided that if at any time the interest rate so determined
is in excess of the maximum rate banks are permitted to pay on time certificates of deposit
for the same period of time by regulations of the Federal Reserve System or the Federal
Deposit Insurance Corporation, the interest rate shall be the maximum established by those
regulations.
D. The treasurer may enter into direct security repurchase agreements, reverse
security repurchase agreements, and securities lending contracts in order to generate passive
income. For the purposes of this Subsection:
(1) "Direct security repurchase agreement" means an agreement and transaction in
which securities are purchased by the state from a registered securities broker or dealer for
a rate and a guarantee to buy them back from the state, the state holds the securities for a
specified time, and then the state sells those securities back to the broker or dealer at an
agreed upon price.
(2) "Reverse security repurchase agreements" means an agreement and transaction
in which securities are sold by the state to a registered securities broker or dealer for a rate
and a guarantee to sell them back to the state, the broker or dealer holds the securities for a
specified time, and then the state buys back the securities from the broker or dealer at an
agreed upon price.
(3) "Securities lending contracts" means an agreement and transaction in which
securities are supplied to a registered securities broker or dealer for a rate and secured by a
pledge of collateral with a value equal to or greater than the securities supplied.
NOTE: Subsection E eff. until ratification of the const. amend. proposed by Acts 2025, No.
222.
E. On or before December first of each year, the treasurer shall prepare and submit
a report on the performance of the Millennium Trust to the Joint Legislative Committee on
the Budget and the commissioner of administration for their review. With respect to the
Education Excellence Fund, the report shall also be provided to the state superintendent of
education.
NOTE: Subsections E and F eff. upon ratification of the const. amend. proposed by Acts
2025, No. 222.
E.(1) In addition to all other investment authority granted for the Millennium Trust,
and notwithstanding any provision of law to the contrary, the state treasurer may enter into
direct security repurchase agreements, reverse security repurchase agreements, and
securities lending contracts in order to generate passive income.
(2) For the purposes of this Subsection, the terms "direct security repurchase
agreement" and "reverse security repurchase agreement" shall have the same meaning as
in R.S. 49:327(B) and the term "securities lending" shall have the same meaning as in R.S.
49:321.1.
F. On or before December first of each year, the treasurer shall prepare and submit
a report on the performance of the Millennium Trust to the Joint Legislative Committee on
the Budget and the commissioner of administration for their review.

Legislative History

Acts 1999, No. 1295, §1, eff. July 1, 2000; Acts 2006, No. 289, §2; Acts 2015, No. 463, §3; Acts 2020 1 st Ex. Sess., No. 21, §1, eff. July 1, 2020; Acts 2025, No. 385, §2, eff. See Act.