SF 2286 — A bill for an act relating to the investment of public funds, and making penalties applicable.

Senate File 2286 - IntroducedReprinted SENATE FILE 2286 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO SSB 3075) (As Amended and Passed by the Senate April 8, 2026) A BILL FOR An Act relating to the investment of public funds, and making penalties applicable.

TLSBSF 5867SV2286 (1)(2) 91 sc/nssc/ns/mb S.F.

Aa. political subdivision of the state may invest up to twenty-five percent of the aggregate amount of its public funds in a joint investment trust authorized under section 12B.10, subsection 5, paragraph “a”, subparagraph (7).

Beginning April 30, 2027, a political subdivision of the state may invest up to twenty-five percent of the aggregate amount of its public funds in a joint investment trust authorized under section 12B.10, subsection 5, paragraph “a”, subparagraph (7).

b.

A political subdivision that exceeds the twenty-five percent limit solely as a result of fluctuations in fund balances, earnings, or valuation is not in violation of this subsection if the political subdivision acts in good faith to restore compliance within 30 days.

A joint investment trust shall not directly or indirectly pay an individual, association, or entity not providing direct investment management, administrative, custodial, or other bona fideSF operational2286 services(2) to91 the-1- trust.sc/ns/mb 1/3 S.F.

2286 fide operational services to the trust.

LSBa. 5867SV (1) 91 -1- sc/ns 1/4 S.F.

2286 a.

4.

A violation of this section is a breach of fiduciary duty and may subject the trust, the public entity, and the public entity’s officers and elected officials to criminal and civil remedies, including administrative remedies, applicable for a violation of section 12B.10, including the penalties provided by sections 12B.14 and 12B.15.

The securities shall be deposited with the federal reserve bank, the federal home loan bank of Des Moines, Iowa, a corporate central credit union organized under section 533.213 a securities broker-dealer registered as a member of the financial industry regulatory authority,authority , or a corporate credit union whose activities are subject to regulation by the national credit union administration pursuant to a bailment agreement or a pledge custody agreement.

Upon written request from the appropriate public officer but not less than monthly, the federal reserve bank, the federal home loan bank of Des Moines, Iowa, a corporate central credit union organized under section 533.213 a securities broker-dealer registered as a member of the financial industry LSBregulatory 5867SVauthority (1), or a corporate credit union whose SF 2286 (2) 91 -2- sc/nssc/ns/mb 2/42/3 S.F.

2286 regulatory authority, or a corporate credit union whose activities are subject to regulation by the national credit union administration shall report a description, the par value, and the market value of any pledged collateral by a credit union.

EXPLANATIONSF The2286 inclusion(2) of91 this-3- explanationsc/ns/mb does3/3 not constitute agreement with the explanation’s substance by the members of the general assembly.

This bill relates to the investment of public funds.

The bill allows the uninsured portion of any public funds invested through a depository to be invested in insured deposits or certificates of deposit that are placed in or issued by a credit union.

The bill provides that a political subdivision may invest up to 25 percent of its public funds in a joint investment trust authorized under Code section 12B.10(5).

A joint investment trust shall not pay an individual, association, or entity that does not provide direct investment management, administrative, custodial, or other bona fide operational services to the trust.

Before depositing or investing public funds with a joint investment trust, the governing body of the political subdivision must execute a written acknowledgment relating to the insurance and safety of the funds.

A violation of these provisions is a breach of fiduciary duty and may subject the trust, the public entity, and the public entity’s officers and elected officials to criminal and civil remedies, including administrative remedies, and may result in a variety of criminal penalties for a fraudulent practice (Code chapter 714), a simple misdemeanor for official delinquency, and liability for any fine imposed and any damages sustained by a person.

A simple misdemeanor is punishable by confinement for no more than 30 days and a fine of at least $105 but not more than $855.

The bill removes corporate central credit unions organized under Code section 533.213 from the list of entities with which LSB 5867SV (1) 91 -3- sc/ns 3/4 S.F.

2286 a credit union receiving public funds may deposit securities and allows a credit union which receives public funds to pledge securities owned by the credit union by depositing the securities with a securities broker-dealer registered as a member of the financial industry regulatory authority pursuant to a bailment agreement or a pledge custody agreement.

Such a securities broker-dealer must report a description, the par value, and the market value of any pledged collateral by a credit union at least monthly and upon written request of an appropriate public officer.

LSB 5867SV (1) 91 -4- sc/ns 4/4