Senate Bill 16-035 Summary

• Creates a five-member Public School Fund Investment Board consisting of the State Treasurer (chair), one State Board of Land Commissioners member, and three appointees with investment expertise and diverse party affiliations to direct the State Treasurer on fund investments.

• Authorizes the Public School Fund to be invested in stocks and other financial assets through mutual funds and index funds (excluding direct corporate investments) in accordance with the Uniform Prudent Investor Act, expanding beyond traditional deposits and bonds.

• Establishes a tiered distribution system for fund interest and income: first $21 million goes to the state public school fund, with amounts between $21-31 million (fiscal 2017-19) or $21-41 million (fiscal 2019-20 onward) directed to the public school capital construction assistance fund, and excess amounts subject to General Assembly appropriation based on Board recommendations.

• Requires the Board to establish investment policies by March 31, 2017, including conflict of interest guidelines and allowable investment criteria, and to submit financial statements annually to the State Treasurer, Legislature, and relevant committees.

• Allows the Board to hire private professional fund managers through competitive bidding, with service costs paid from fund interest and income along with Board member reimbursements for travel and necessary expenses.