IA SF2286

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

Before investing in a joint investment trust, governing bodies must execute a written acknowledgment confirming they understand the funds may not be federally insured, are not collateralized or guaranteed by the state, and are subject to loss of principal.

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

Allows public funds invested through depositories to be placed in federally insured banks, credit unions, or savings associations regardless of location, and updates securities deposit requirements to include FINRA-registered broker-dealers.