Fiscal Note - SB 0449 - Broadening of State Treasurer Investment Duties
L.R. NO. 1702-01
BILL NO. Truly Agreed To And Finally Passed SB 449
SUBJECT: Treasurer, State
TYPE: Original
DATE: May 13, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
All State Funds $0 $0 Unknown
Total Estimated
Net Effect on All
State Funds $0 $0 Unknown
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials of the State Treasurer stated that the proposal would not cause
requests for additional resources. They also stated that, if financial
markets continue behaving as they have in recent years, the state could
receive $7,000,000 to $10,000,000 per year in additional earnings on
non-Investment Trust investments. These additional earnings are reflected in
the fiscal note for HJR 18.
Officials of the State Auditor stated that the proposal would not cause their
office to request additional resources at this time.
Investment Trust earnings would benefit from a provision of HJR 18 which
would extend the maximum allowable maturity of state-fund investment
instruments from three to five years.
The requirement that political subdivisions adopt investment policies would
not have any direct fiscal effect on those subdivisions.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
MISSOURI INVESTMENT TRUST
Income - Increased Investment Earnings $0 $0 Unknown
NET EFFECT TO MISSOURI
INVESTMENT TRUST $0 $0 UNKNOWN
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
$0 $0 $0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal would establish the Missouri Investment Trust to hold and
invest funds or property of the state under terms of agreements with the
state. The General Assembly would determine by law, approved by the Governor,
which funds would be appropriate for long-term investment and which the
Treasurer would convey to the Investment Trust.
This proposal would also require the State Treasurer to prepare a written
investment policy governing investment of state funds not needed for current
government operations.
Political subdivisions authorized to invest monies would also be required to
have and adhere to written investment policies which would include
prohibitions on the use of derivatives, leveraging, and short selling.
The Treasurer would prepare a model investment policy which would be made
available to political subdivisions and any political subdivision adopting
the model investment policy would be in compliance with this proposal.
The State Auditor would audit the Investment Trust each year.
This legislation is not federally mandated, would not duplicate any other
program, would not require additional capital improvements or rental space,
and could affect total state revenue.
SOURCES OF INFORMATION
State Auditor
State Treasurer
This Fiscal Note is not an official copy and should not be quoted or cited.