IA SSB3075

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 public funds over the previous two fiscal years.

Joint investment trusts are prohibited from directly or indirectly paying any individual, association, or entity that does not provide direct investment management, administrative, custodial, or other bona fide operational services to the trust.

Governing bodies must execute a written acknowledgment before investing in joint investment trusts, affirming that funds may not be FDIC or NCUA insured, are not collateralized or guaranteed by the state, and are subject to potential loss of principal.

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

Credit unions are added as authorized entities for securities deposit alongside federal reserve banks, the Federal Home Loan Bank of Des Moines, and FINRA-registered broker-dealers.