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HB17-1152

Federal Mineral Lease District Investment Authority

Concerning the authority of a federal mineral lease district to manage a portion of the direct distribution of money from the local government mineral impact fund to counties for the benefit of impacted areas.
Session:
2017 Regular Session
Subjects:
Fiscal Policy & Taxes
Natural Resources & Environment

The bill gives a federal mineral lease district (district) the option, but not the obligation, to invest a portion of the funding it receives from the local government mineral impact fund in a fund. Current law requires the district to distribute the funding to impacted areas in the district, but also allows the district to reserve all or a portion of the funding for use in subsequent years.

The bill specifies that the district may appropriate and disburse any part of the invested funding and all sums in excess thereof, including interest, dividends, or similar appreciated values, but specifies that the district shall do so only upon the enactment of a resolution identifying the reason for the appropriation and disbursement.

The bill specifies that the district may invest the funding subject to the district's investment policy and in any investment in which the board of trustees of the public employees' retirement association may invest the funds of the association, which are the same investments in which the state treasurer is authorized to invest the local government permanent fund, which is comprised of 50% of the federal mineral lease bonus payments.

The bill allows the board of directors to engage the services of investment advisors, but specifies that the selection of investment advisors must be made following an open and competitive process.

The bill also requires the district to adopt an investment policy resolution that must be reviewed annually and must include:

  • An acknowledgment of the board of director's fiduciary responsibility with respect to oversight of the district's investment policy;
  • Performance benchmarks for all investments and for all investment advisors who may be hired by the board of directors;
  • A requirement for the preparation and publication of annual financial statements that must include, at a minimum, information regarding starting balances, contributions, investment income, and losses, if any, and any investment fees incurred;
  • Careful consideration of investment fees or other brokerage costs which might reduce investment returns; and
  • A requirement that the board of directors annually review the investments and annually set appropriations to be included in the trust fund.
    (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Passed
Became Law

Bill Text