GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2011
H 2
HOUSE BILL 72
Committee Substitute Favorable 3/22/11
Short Title: Community College Investment Flexibility. |
(Public) |
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Referred to: |
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February 14, 2011
A BILL TO BE ENTITLED
AN ACT granting community colleges additional flexibility with regard to investments.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 115D-58.6 reads as rewritten:
"§ 115D-58.6. Investment of idle cash.
(a) Definitions. - As used in this section:
(1) "Cash balance" means the amount equal to all moneys received into institutional fund accounts minus all expenses and withdrawals from those accounts in an official depository of the institution as designated by the local board of trustees consistent with G.S. 115D-58.7.
(2) "Official depository" means one or more banks, savings and loan associations, or trust companies in North Carolina that a community college board of trustees has designated consistent with G.S. 115D-58.7.
(a1) Deposits. - The
institution may deposit at interest or invest all or part of the cash
balance of any fund in an official depository of the institution. The
institution shall manage investments subject to whatever restrictions and
directions the board of trustees may impose. The institution shall have the
power to purchase, sell, and exchange securities on behalf of the board of
trustees. The investment program shall be so managed that investments and
deposits can be converted into cash when needed. Moneys may be deposited
at interest in any official depository of the institution in the form of
certificates of deposit or such other forms of time deposits as may be approved
for county governments. In addition, moneys may be deposited in the form of
certificates of deposit as provided for a local government or public authority
in G.S. 159-30(b1). Investment deposits shall be secured as provided in
G.S. 159-31(b).
(b) Moneys
may be deposited at interest in any bank, savings and loan association or trust
company in this State in the form of certificates of deposit or such other forms
of time deposits as may be approved for county governments. In addition, moneys
may be deposited in the form of certificates of deposit as provided for a local
government or public authority in G.S. 159-30(b1). Investment deposits
shall be secured as provided in G.S. 159-31(b).
(c)(b) Investments. - The
institution may invest all or part of the cash balance of any fund in an
official depository of the institution. The institution shall manage
investments subject to whatever restrictions and directions the board of
trustees may impose. The institution shall have the power to purchase, sell,
and exchange securities on behalf of the board of trustees. The investment
program shall be so managed that investments and deposits can be converted into
cash when needed.
(1) Moneys may
shall only be invested in the form of investments pursuant to
G.S. 159-30(c) to county governments and no others.or in any
form of investment established or managed by an investment advisor who is
registered and in good standing with either the Securities and Exchange
Commission or the North Carolina Secretary of State, Securities Division, and
is a member of the Securities Investor Protection Corporation. Money in
endowment funds may be invested pursuant to G.S. 147-69.2. Provided,
however, the institution may elect to deposit at interest any local funds with
the State Treasurer for investment as special trust funds pursuant to the
provisions of G.S. 147-69.3, and the interest thereon shall accrue to the
institution as local funds.
(d) Investment
(2) The investment securities listed in G.S. 159-30(c) may be bought, sold, and traded by private negotiation, and the institutions may pay all incidental costs thereof and all reasonable costs of administering the investment and deposit program from local funds. The institution shall be responsible for their safekeeping and for keeping accurate investment accounts and records.
(e)(c) Interest earned on
deposits and investments shall be credited to the fund whose cash is deposited
or invested. Cash of several funds may be combined for deposit or investment if
not otherwise prohibited by law; and when such joint deposits or investments
are made, interest earned shall be prorated and credited to the various funds
on the basis of the amounts thereof invested, figured according to an average
periodic balance or some other sound accounting principle. Interest earned on
the deposit or investment of bond funds shall be deemed a part of the bond
proceeds.
(f)(d) Registered securities
acquired for investment may be released from registration and transferred by
signature of the official designated by the board of trustees."trustees.
(e) The Board of Trustees shall appoint an Investment Committee which shall consist of a minimum of three people who have sufficient financial background to review and evaluate investment options. These individuals should have experience in institutional or retail investment management with knowledge of fixed income and public equities. This committee shall make recommendations to the Board on those investment options, as well as monitor the performance of investments once made.
(f) The Board of Trustees shall discharge their duties with respect to the management and investment of college funds as follows:
(1) Investment decisions shall be solely in the interest of the college, and the students, faculty, and staff of the college.
(2) The investments shall be for the exclusive purpose of providing an adequate return to the college.
(3) Investments shall be made with the care, skill, and caution under the circumstances then prevailing which a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose.
(4) Investment decisions shall be made impartially, taking into account the best interest of the college, with special attention to conflicts of interest or potential conflicts of interest.
(5) Investments shall incur only costs that are appropriate and reasonable."
SECTION 2. G.S. 147-69.2 is amended by adding a new subdivision to read:
"(20) Institutional funds of the colleges of the North Carolina Community College System."
SECTION 3. This act becomes effective July 1, 2011.