§ 9-4-831 — Investment of public funds

Wyoming § 9-4-831

• Jurisdiction: Wyoming
• Title 09: Administration of the Government
• Ch. 4: PUBLIC FUNDS
• Art. 8: DEPOSITS AND DEPOSITORIES

Text

(a) The state treasurer, or treasurer of any political
subdivision, municipality or special district of this state, and
the various boards of trustees and boards of directors of county
hospitals, airports, fairs and other duly constituted county
boards and commissions, may invest in:
(i) United States treasury bills, notes or bonds,
including stripped principal or interest obligations of such
issuances, or any other obligation or security issued by the
United States treasury or any other obligation guaranteed as to
principal and interest by the United States;
(ii) Bonds, notes, debentures, or any other
obligations or securities issued by or guaranteed by any federal
government agency or instrumentality, including but not limited
to the following to the extent that they remain federal
government agencies or instrumentalities, federal national
mortgage association, federal home loan bank, federal farm
credit bank, federal home loan mortgage corporation and
government national mortgage association. All federal agency
securities shall be direct issuances of federal agencies or
instrumentalities;
(iii) Repurchase agreements involving securities
which are authorized investments under paragraphs (i) and (ii)
of this subsection. The securities may be held in a custodial
arrangement with a member bank of the federal reserve system or
in a segregated account at a federal reserve system bank. The
repurchase agreement must provide for daily valuation and have a
minimum excess market price reserve of one hundred two percent
(102%) of the investment;
(iv) In accordance with W.S. 9-4-803 with respect to
the state and W.S. 9-4-817 with respect to local governments,
deposits in financial institutions located within the state of
Wyoming which offer federal deposit insurance corporation
insurance on deposits in the institutions;
(v) Mortgage backed securities that are obligations
of or guaranteed or insured issues of the United States, its
agencies, instrumentalities or organizations created by an act
of congress excluding those defined as high risk. High risk
mortgage backed securities are defined as any security which
meets either of the following criteria:
(A) Is rated V-6 or higher by Fitch Investors
Service or at an equivalent rating by another nationally
recognized rating service; or
(B) Is defined as a high risk mortgage security
under Section III of the Supervisory Policy Concerning Selection
of Securities Dealers and Unsuitable Investment Practices, as
amended by the Federal Financial Institutions Examination
Council as created under 12 U.S.C. 3301, et seq., or its
successor.
(vi) In bankers acceptances of United States banks
eligible for purchase by the federal reserve system;
(vii) In a guaranteed investment contract if issued
and guaranteed by a United States commercial bank or a United
States insurance company. The credit quality of the issuer and
guarantor shall be the highest category of either A. M. Best,
Moody's or Standard and Poor's rating service. The contract
shall provide the governmental entity a nonpenalized right of
withdrawal of the investment if the credit quality of the
investment is downgraded;
(viii) A commingled fund of eligible securities
listed in this section if the securities are held through a
trust department of a bank authorized to do business in this
state or through a trust company authorized to do business in
this state with total capital of at least ten million dollars
($10,000,000.00) or which has an unconditional guarantee with
respect to those securities from an entity with total capital of
at least one hundred million dollars ($100,000,000.00);
(ix) Interest bearing deposits of a savings and loan
association or a federal savings bank authorized to do business
in this state to the extent that they are fully insured by the
federal deposit insurance corporation, or:
(A) Secured by a pledge of assets and the
federal savings bank or savings and loan association is
otherwise authorized as a depository as prescribed by law; or
(B) The federal savings bank or savings and loan
association is otherwise authorized as a depository as
prescribed by law and:
(I) In lieu of a pledge of assets securing
an interest bearing deposit, a selected savings and loan
association or federal savings bank shall arrange for the
deposit of the public funds in interest bearing deposits in one
(1) or more banks or savings and loan associations or federal
savings banks wherever located in the United States, for the
account of the public funds depositor;
(II) At the same time the public funds are
deposited pursuant to this subparagraph, the selected savings
and loan association or federal savings bank shall receive an
amount of deposits from customers of other financial
institutions equal to the amount of the public funds initially
placed by the public funds depositor;
(III) Each interest bearing deposit shall
be insured by the federal deposit insurance corporation; and
(IV) The selected savings and loan
association or federal savings bank shall act as custodian for
the public funds depositor with respect to the interest bearing
deposits placed in the public funds depositor's account.
(x) Interest bearing deposits of a bank authorized to
do business in this state to the extent that they are fully
insured by the federal deposit insurance corporation or:
(A) Secured by a pledge of assets and the bank
is otherwise authorized as a depository as prescribed by law; or
(B) The bank is otherwise authorized as a
depository as prescribed by law and:
(I) In lieu of a pledge of assets securing
an interest bearing deposit, a selected bank shall arrange for
the deposit of the public funds in interest bearing deposits in
one (1) or more banks or savings and loan associations or
federal savings banks wherever located in the United States, for
the account of the public funds depositor;
(II) At the same time the public funds are
deposited pursuant to this subparagraph, the selected bank shall
receive an amount of deposits from customers of other financial
institutions equal to the amount of the public funds initially
placed by the public funds depositor;
(III) Each interest bearing deposit shall
be insured by the federal deposit insurance corporation; and
(IV) The selected bank shall act as
custodian for the public funds depositor with respect to the
interest bearing deposits placed in the public funds depositor's
account.
(xi) As authorized by W.S. 37-5-605, bonds of the
Wyoming energy authority;
(xii) Shares of a money market fund as specified in
subsection (g) of this section;
(xiii) Repealed By Laws 1996, ch. 112, § 3.
(xiv) Repealed By Laws 1996, ch. 112, § 3.
(xv) Repealed By Laws 1996, ch. 112, § 3.
(xvi) Repealed By Laws 1996, ch. 112, § 3.
(xvii) Repealed By Laws 1996, ch. 112, § 3.
(xviii) Repealed By Laws 1996, ch. 112, § 3.
(xix) Amended and Renumbered as (ix) by Laws 1996,
ch. 112, § 2.
(xx) Amended and Renumbered as (x) by Laws 1996, ch.
112, § 2.
(xxi) Amended and Renumbered as (xi) by Laws 1996,
ch. 112, § 2.
(xxii) Repealed By Laws 1996, ch. 112, § 3.
(xxiii) Repealed by Laws 1996, ch. 112, § 3.
(xxiv) Repealed by Laws 1996, ch. 112, § 3.
(xxv) Repealed by Laws 1996, ch. 112, § 3.
(xxvi) Commercial paper of corporations organized and
existing under the laws of any state of the United States,
provided that at the time of purchase, the commercial paper
shall:
(A) Have a maturity of not more than two hundred
seventy (270) days; and
(B) Be rated by Moody's as P-1 or by Standard &
Poor's as A-1+ or equivalent ratings indicating that the
commercial paper issued by a corporation is of the highest
quality rating.
(xxvii) Investments as provided in W.S. 9-4-715(a),
(d) and (e). Upon request by any county, municipality, school
district, joint powers board or any other local governmental
entity the state treasurer may provide an investment fund for
local government entities under the same terms and conditions as
provided in W.S. 9-1-416. The fund shall:
(A) Be a second local investment pool with more
long-term redemption options than the local investment pool
established under W.S. 9-1-416 and with additional penalties for
early withdrawal of funds as provided by rule and regulation
adopted by the state treasurer;
(B) Be subject to rules and regulations adopted
by the state treasurer as provided in W.S. 9-1-416;
(C) Be invested in a manner to obtain the
highest return possible consistent with the preservation of the
corpus; and
(D) Except as otherwise provided in this
paragraph, be managed in accordance with W.S. 9-1-416.
(xxviii) Investments in equities, including stocks of
corporations, as part of an investment fund for local
governmental entities, upon request by any county, city, town,
school district, special district or any other political
subdivision, as provided in W.S. 9-1-419. Nothing in this
paragraph shall be construed to limit or alter the state
treasurer's authority to invest state funds in equities in
accordance with law. The investment fund under this paragraph
shall:
(A) Be a third local investment pool with more
long-term redemption options than the local investment pools
established in paragraph (xxvii) of this subsection and W.S. 9-
1-416 and that are in line with appropriate redemptions of
investments in equities;
(B) Have additional and appropriate penalties
for the early withdrawal of funds as provided by rules adopted
by the state treasurer;
(C) Be subject to rules adopted by the state
treasurer in accordance with W.S. 9-1-419;
(D) Subject to this paragraph, be managed in
accordance with W.S. 9-1-419.
(xxix) Equities, including stocks of corporations.
Investments made under this paragraph shall comply with all
provisions of investment policy statements applicable to local
government investing adopted by the state loan and investment
board. All risks associated with the investment of equities
under this paragraph shall be assumed by the governmental entity
making the investment. A political subdivision shall establish
an investment advisory board to provide advice and expertise on
investments made under this paragraph. Investments made under
this paragraph shall not be subject to paragraph (xxviii) of
this subsection or W.S. 9-1-419. The state loan and investment
board shall adopt investment policy statements for investments
made by local governments and political subdivisions under this
paragraph. The board shall include in the investment policy
statements requirements and conditions comparable to the
requirements and conditions specified in W.S. 9-4-715 and 9-4-
716 for the investment of public funds. Nothing in this
paragraph shall be construed to limit or alter the state
treasurer's authority to invest state funds in equities in
accordance with law.
(b) No investment of public funds under this section shall
be made by any of the officials above designated, until the
affected fiscal board of the state of Wyoming, the board of
county commissioners, the municipal council or the school
district board of trustees as the case may be, has first
authorized the same.
(c) Repealed By Laws 1996, ch. 112, § 3.
(d) Repealed By Laws 1997, ch. 63, § 2.
(e) Repealed By Laws 1996, ch. 112, § 3.
(f) Repealed By Laws 1996, ch. 112, § 3.
(g) Investments in shares of a diversified money market
fund are authorized except that no entity of Wyoming government
shall at any time own more than ten percent (10%) of the fund's
net assets or shares outstanding. Investments under this
subsection are limited to a diversified money market fund which
seeks to maintain a stable share value of one dollar ($1.00), is
registered under the Securities Act of 1933 and Investment
Company Act of 1940, as amended, and has qualified under state
registration requirements, if any, to sell shares in the state
and which:
(i) Invests its assets:
(A) Solely in securities or instruments that
have a remaining maturity of three hundred ninety-seven (397)
days or less at the time of purchase of shares;
(B) Solely in securities issued by the United
States treasury, obligations or securities issued by or
guaranteed by any federal government agency or instrumentality,
and repurchase agreements collateralized by such instruments at
not less than the repurchase price including accrued interest;
(C) So that an average dollar weighted maturity
of ninety (90) days or less is maintained at all times; and
(D) Under limitations such that the fund may
borrow funds for temporary purposes only by entering into
repurchase agreements and only to the extent permitted by
federal law.
(ii) Does not impose a sales charge;
(iii) Maintains the highest quality rating from at
least one (1) of the nationally recognized rating organizations,
such as Standard & Poor's Corporation or Moody's Investor
Services;
(iv) Has an operating history of not less than five
(5) consecutive years;
(v) Requires submission of sixty (60) days advance
notice of any investment policy change, in the case where such
policy changes may be approved without approval of the fund's
shareholders or requires approval by shareholders entitled to
vote a majority, as the term is defined under the Investment
Company Act of 1940, as amended, of the fund's shares;
(vi) Is purchased from a person licensed to sell
securities in Wyoming through or for an account with an entity
which, at the time the investment is made by the state or local
government:
(A) Has been continuously engaged in the
business of selling securities in Wyoming for the preceding two
(2) years or a financial institution authorized to do business
in Wyoming and qualified by law to act as a depository of public
funds in this state; and
(B) Currently, and during the preceding two (2)
years, continuously had at least one (1) established place of
business in this state. As used in this subparagraph,
"established place of business" means a place in this state
which is actually occupied either continuously or at regular
periods by employees or agents of the entity who are licensed to
sell securities in this state and where a large share of the
entity's business in this state is actually conducted.
(h) Every political subdivision shall have on file a
"Statement of Investment Policy." Except for investments by
special hospital district boards pursuant to W.S. 35-2-403(d) or
county memorial hospitals pursuant to W.S. 18-8-104(d), this
policy shall be at least as restrictive with respect to the
types of investments authorized as those listed under subsection
(a) of this section. The policy shall require that before any
person effects any investment transaction on behalf of a
political subdivision or offers any investment advice to the
governing body of a political subdivision, that person shall
sign a statement indicating that he has read the policy and
agrees to abide by applicable state law with respect to advice
he gives and the transactions he undertakes on behalf of the
political subdivision. As used in this subsection, "person" does
not include any officer, employee or member of the governing
board of the political subdivision for which the investment is
made or to which advice is given. As used in this subsection and
subsection (j), "political subdivision" means the local
government entities listed in the introductory paragraph of
subsection (a) of this section. As used in this subsection,
"investment" for the purpose of "investment transactions" and
"investment advice" does not include deposits in financial
institutions as authorized by law. As used in this subsection
and paragraph (a)(iv) of this section, "financial institution"
means as defined in W.S. 13-1-101(a)(ix).
(j) To enhance the background and working knowledge of
political subdivision treasurers in governmental accounting,
portfolio reporting and compliance, and investments and cash
management, the state auditor and the state treasurer shall
conduct voluntary education programs for persons elected or
appointed for the first time to any office or as an employee of
any political subdivision where the duties of that office or
position of employment include taking actions related to
investment of public funds and shall also hold annual voluntary
continuing education programs for persons continuing to hold
those offices and positions of employment. The state treasurer
and state auditor may contract with other persons with special
knowledge in this area to provide the training and may also
charge a fee for attendance sufficient to defray the cost of the
educational program. Nothing in this subsection shall be
construed as preventing the state auditor and state treasurer
from allowing the general public to attend these education
programs upon payment of the appropriate fee.
(k) In connection with, or incidental to, the issuance or
carrying of bonds, but only for the purpose of reducing the
amount or duration of payment, interest rate, spread or similar
risk, or to result in a lower cost of borrowing, and not for
purposes of investment, the state treasurer or treasurer of any
political subdivision, municipality or special district of this
state and the various boards of trustees and boards of directors
of county hospitals, airports, fairs and other duly constituted
county boards and commissions may enter into contracts which are
determined to be necessary or appropriate to hedge risk or to
place the obligation of the bonds, in whole or in part, on the
interest rate, cash flow or other basis desired, including, but
not limited to, contracts commonly known as interest rate swap
agreements, interest rate caps or floors, forward payment
conversion agreements, futures or hedge contracts.
(m) Any local governmental entity, including the treasurer
of any political subdivision, municipality or special district
of this state, the various boards of trustees and boards of
directors of county hospitals, airports, fairs and other duly
constituted county boards and commissions, or their designee,
that invests public funds under subsection (a) of this section
shall:
(i) Exercise the judgment and care of a prudent
investor as specified by the Wyoming Uniform Prudent Investor
Act, W.S. 4-10-901 through 4-10-913;
(ii) If the local governmental entity contracts with
another person to aid in the investment of public funds, require
that the person:
(A) Submit to the jurisdiction of the courts of
this state; and
(B) Act as a fiduciary with respect to the
investment of public funds by acting solely in the interest of
the public and by acting with the care, skill and caution which
a prudent person in a like capacity and familiar with those
matters would use in the conduct of an activity of like
character and purpose. The contracted person shall incur only
costs that are appropriate and reasonable and shall act in
accordance with a good faith interpretation of the law governing
the investment of public funds.