SB 542 Modifies provisions relating to the State Treasurer and expands eligibility for the Treasurer's Linked Deposit Loan Program
Sponsor: Pearce
LR Number: 2225S.02T Fiscal Note: 2225-02
Committee: Governmental Accountability and Fiscal Oversight
Last Action: 9/16/2009 - No Motion made to override Governor's veto Journal Page: S10 / H28
Title: SCS SB 542 Calendar Position: 12
Effective Date: August 28, 2009
House Handler: Flook

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Current Bill Summary


SCS/SB 542 - This act requires the State Treasurer's asset allocation plan to set diversification limits, which shall include a requirement that the total amount of time deposits placed with any one single banking institution not exceed 10% of the amount of all time deposits held by the Treasurer. The act requires that the interest rate on time deposits placed by the State Treasurer after January 1, 2014 shall be at the market rate, which shall be set by the Treasurer's director of investments. The act provides a year-by-year schedule for interest rates for time deposits through 2014.

The act expands the list of acceptable securities that banks may use as collateral for holding state deposits to include "other obligations" of certain political subdivisions and other states. The act modifies the total amount of certain types of securities that may be used as collateral, where U.S. Treasury securities and U.S. federal agency debentures issued by certain farm and home mortgage lenders must not exceed 105% of total time deposits and demand deposits, and all other certain securities must not exceed 115% of total time deposits and demand deposits.

The act adds two additional eligible participants in the State Treasurer's linked deposit loan program: individuals who want to produce their own energy from renewable resources; and political subdivisions seeking to finance capital improvements or other significant programs.

The act modifies criteria of several other eligible participants in the linked deposit loan program. It removes the requirement that alternative energy operations must sell fuel or power generated by their operations. It removes the requirement that farming operations must not possess more than 60% equity in the operation. The act makes an exception to the maximum loan per job requirement for job enhancement businesses that incur significant costs for equipment or capital improvements. The maximum number of employees of an eligible small business is increased from 25 to 100.

The act is substantially similar to the truly agreed to HCS/HB 883 (2009).

ERIKA JAQUES