IA HF2592

Political subdivisions may invest up to 25% of their aggregate public funds in joint investment trusts organized under Chapter 28E, calculated based on the average of funds over the previous two fiscal years.

Joint investment trusts are prohibited from paying individuals, associations, or entities that do not provide direct investment management, administrative, custodial, or other bona fide operational services.

Governing bodies must execute written acknowledgments before investing in joint investment trusts, confirming they understand funds are not FDIC-insured, not collateralized or guaranteed by any government entity, and are subject to potential loss of principal.

Violations of joint investment trust regulations constitute a breach of fiduciary duty and may subject the trust, public entity, officers, and elected officials to criminal, civil, and administrative remedies under sections 12B.14 and 12B.15.

Securities pledged as collateral for public deposits may be held by FINRA-registered broker-dealers or corporate credit unions regulated by the National Credit Union Administration, with monthly reporting required on pledged collateral descriptions, par values, and market values.