SB 971 — AN ACT CONCERNING THE STATE TREASURER AND CLIMATE CHANGE AND COASTAL RESILIENCY RESERVE FUNDS.

Senate General Assembly RaisedFile Bill No.

971559 January Session, 2021 LCOSubstitute Senate Bill No.

4121971 ReferredSenate, toApril 21, 2021 The Committee on PLANNINGPlanning ANDand DEVELOPMENTDevelopment Introducedreported by:through SEN.

(PD)CASSANO ANof ACTthe CONCERNING4th THEDist., STATEChairperson TREASURERof ANDthe CLIMATECommittee CHANGEon ANDthe COASTALpart RESILIENCYof RESERVEthe FUNDS.Senate, that the substitute bill ought to pass.

AN ACT CONCERNING THE STATE TREASURER AND CLIMATE CHANGE AND COASTAL RESILIENCY RESERVE FUNDS.

(c) The budget-making authority of such municipality may, from time to time, direct the treasurer to invest a portion of such Climate Change and Coastal Resiliency Reserve Fund as in the opinion of such authority is advisable, including in any trust fund administered, held or invested by the treasurerState Treasurer pursuant to chapter 32 and for which the treasurermayState Treasurer may adopt regulations,inaccordanceregulations, withchapterin 54,toaccordance with chapter 54, to allow for the investment of moneys held in any such reserve fund, provided:

(1) Not more than forty per cent, or with respect to such a reserve fund for which the budget-making authority has adopted an asset allocation and investment policy, fifty per cent, of the total amount ofsSB971 such/ reserveFile fund shall be invested in equity securities, and (2) any portion of such reserve fund not invested pursuant to subdivision (1) of this subsection LCO No.

4121559 1 ofsSB971 3File RaisedNo. Bill No.971 may be invested in:

(A)559 Bonds or obligations of, or guaranteed by, the state or the United States, or agencies or instrumentalities of thesuch Unitedreserve States,fund (B)shall certificatesbe ofinvested deposit, commercial paper, savings accounts and bank acceptances, (C) the obligations of any state of the United States or any political subdivision thereof or the obligations of any instrumentality, authority or agency of any state or political subdivision thereof, if, at the time of investment, such obligations are rated in theequity topsecurities, rating categories of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, and applicable(2) to such obligations, (D) the obligations of any regionalportion school district in this state, of any municipality in this state or any metropolitan district inthisstate, if,at thetime ofinvestment, suchobligationsofsuch government entity are rated in one of the top two rating categories of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, and applicable to such obligations,reserve (E) in any fund innot whichinvested a trustee may invest pursuant to sectionsubdivision 36a-353,(1) (F) investment agreements with financial institutions whose long-term obligations are rated in the top two rating categories of anythis nationallysubsection recognizedmay ratingbe serviceinvested orin: of any rating service recognized by the Banking Commissioner or whose short-term obligations are rated in the top rating category of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, or (G) investment agreements fully secured by obligations of, or guaranteed by, the United States or agencies or instrumentalities of the United States.

(A) Bonds or obligations of, or guaranteed by, the state or the United States, or agencies or instrumentalities of the United States, (B) certificates of deposit, commercial paper, savings accounts and bank acceptances, (C) the obligations of any state of the United States or any political subdivision thereof or the obligations of any instrumentality, authority or agency of any state or political subdivision thereof, if, at the time of investment, such obligations are rated in the top rating categories of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, and applicable to such obligations, (D) the obligations of any regional school district in this state, of any municipality in this state or any metropolitan district in this state, if, at the time of investment, such obligations of such government entity are ratedinoneofthetoptworatingcategoriesofanynationallyrecognized rating service or of any rating service recognized by the Banking Commissioner, and applicable to such obligations, (E) in any fund in which a trustee may invest pursuant to section 36a-353, (F) investment agreements with financial institutions whose long-term obligations are ratedinthetoptworatingcategoriesofanynationallyrecognizedrating service or of any rating service recognized by the Banking Commissioner or whose short-term obligations are rated in the top rating category of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, or (G) investment agreements fully secured by obligations of, or guaranteed by, the United States or agencies or instrumentalities of the United States.

Trustfundsasusedinsections3-13to3-13e,inclusive,and3-31bshall be construed to include Connecticut Municipal Employees' Retirement Fund A, Connecticut Municipal Employees' Retirement Fund B, Soldiers, Sailors and Marines Fund, Family and Medical Leave InsurancesSB971 Trust/ Fund,File State's Attorneys' Retirement Fund, Teachers' Annuity Fund, Teachers' Pension Fund, Teachers' Survivorship and Dependency Fund, School Fund, State Employees Retirement Fund, the LCO No.

4121559 2 ofsSB971 3File Raised Bill No.

971559 Insurance Trust Fund, State's Attorneys' Retirement Fund, Teachers' Annuity Fund, Teachers' Pension Fund, Teachers' Survivorship and Dependency Fund, School Fund, State Employees Retirement Fund, the Hospital Insurance Fund, Policemen and Firemen Survivor's Benefit Fund, any Climate Change andCoastalResiliency Reserve Fundcreated pursuant to section 7-159d, as amended by this act, that is administered, held or invested by the State Treasurer and all other trust funds administered, held or invested by the State Treasurer.

2 from passage 3-13c StatementPD ofJoint Purpose:Favorable Subst.

TosSB971 allow/ forFile moneysNo. held in Climate Change and Coastal Resiliency Reserve Funds created by municipalities to be invested in trust funds administered, held or invested by the treasurer.

that559 when3 thesSB971 entireFile text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.] LCO No.

4121559 3The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of 3the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

See Below Explanation The bill allows municipalities to invest a portion of a Climate Change and Coastal Resiliency Reserve Fund in any trust fund administered by the State Treasurer.

Any impact would vary based on the performance of any such trust funds relative to other investment options available to municipalities.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

sSB971 / File No.

559 4 sSB971 File No.

559 OLR Bill Analysis sSB 971 AN ACT CONCERNING THE STATE TREASURER AND CLIMATE CHANGE AND COASTAL RESILIENCY RESERVE FUNDS.

SUMMARY This bill expands the options municipalities have to invest climate change and costal resiliency reserve fund assets by allowing them to invest inany trust fund thestate treasurer holds,administers,or invests.

As with other investments of reserve fund assets, investments made through the state treasurer may only be in certain financial instruments authorized under existing law.

The bill also (1) authorizes the state treasurer to adopt regulations to allow for the investment of reserve fund assets and (2) makes technical and conforming changes.

EFFECTIVE DATE:

Upon passage AUTHORIZED INVESTMENTS Under existing law, themunicipality’s budget-making authority may direct the municipal treasurer to invest a portion of the reserve fund.

The bill additionally allows the funds to be invested in trust funds held, administered, or invested by the treasurer.

Existing law, unchanged by the bill, caps the amount that can be invested in equity securities at 40% of the total fund amount (50% if there is an asset allocation and investment policy).

Any portion of the reserve fund not invested in equity securities may be invested, for example, in the following (except where noted, referencestoobligations’ratingsmeansratedbyanationallyrecognized rating service or a rating service recognized by the state banking commissioner):

sSB971 / File No.

559 5 sSB971 File No.

559 1.

bonds or obligations of, or guaranteed by, Connecticut, the United States, or U.S.

agencies or instrumentalities;