The bill defines nationally recognized statistical rating organizations and negotiable certificate of deposit.
The bill also modifies statutes governing the legal investments of public funds as follows:
- Modifies and standardizes the credit rating requirements for securities invested in by public entities;
- Clarifies that negotiable certificates of deposit are a legal investment and not deposits subject to the limitation of the "Public Deposit Protection Act";
- Requires money market funds invested in by public funds to have an investment policy or objective which seeks to maintain a stable net asset value of one dollar per share;
- Includes the secured overnight financing rate, the federal funds rate, or other reference rates which are similar to the United States dollar London interbank offer rate, the secured overnight financing rate, and the federal funds rate as permissible reference rates; and
- Allows public entities to invest in local government investment pools.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)