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Bill > HF2592

IA HF2592

IA HF2592
A bill for an act relating to the investment of public funds, and making penalties applicable.(Formerly HSB 633.)

summary

Introduced
02/18/2026
In Committee
Crossed Over
Passed
Dead

Introduced Session

91st General Assembly

Bill Summary

This bill relates to the investment of public funds. The bill allows the uninsured portion of any public funds invested through a depository to be invested in insured deposits or certificates of deposit that are placed in or issued by a credit union. The bill provides that a political subdivision may invest up to 25 percent of its public funds in a joint investment trust authorized under Code section 12B.10(5). A joint investment trust shall not pay an individual, association, or entity that does not provide direct investment management, administrative, custodial, or other bona fide operational services to the trust. Before depositing or investing public funds with a joint investment trust, the governing body of the political subdivision must execute a written acknowledgment relating to the insurance and safety of the funds. A violation of these provisions is a breach of fiduciary duty and may subject the trust, the public entity, and the public entity’s officers and elected officials to criminal and civil remedies, including administrative remedies, and may result in a variety of criminal penalties for a fraudulent practice (Code chapter 714), a simple misdemeanor for official delinquency, and liability for any fine imposed and any damages sustained by a person. A simple misdemeanor is punishable by confinement for no more than 30 days and a fine of at least $105 but not more than $855. The bill removes corporate central credit unions organized under Code section 533.213 from the list of entities with which a credit union receiving public funds may deposit securities and allows a credit union which receives public funds to pledge securities owned by the credit union by depositing the securities with a securities broker-dealer registered as a member of the financial industry regulatory authority pursuant to a bailment agreement or a pledge custody agreement. Such a securities broker-dealer must report a description, the par value, and the market value of any pledged collateral by a credit union at least monthly and upon written request of an appropriate public officer.

AI Summary

This bill allows public funds that are not insured by federal programs, when invested through a financial institution called a depository, to be placed in insured deposits or certificates of deposit offered by credit unions, in addition to banks and savings associations. It also permits political subdivisions, which are local government entities, to invest up to 25% of their public funds in a joint investment trust, a type of pooled investment fund authorized by law, provided the trust only pays entities that provide direct operational services. Before investing in such a trust, the governing body of the political subdivision must acknowledge in writing that the funds may not be insured or guaranteed and that their safety depends on the trust's performance, potentially leading to losses. Violating these provisions is considered a breach of fiduciary duty and can result in criminal and civil penalties, including fines and liability for damages. The bill also removes corporate central credit unions from a list of entities where credit unions receiving public funds can deposit securities, and instead allows these credit unions to deposit securities with a registered securities broker-dealer, which must report details of the pledged collateral monthly or upon request.

Sponsors (0)

No sponsors listed

Other Sponsors (1)

State Government (House)

Last Action

Introduced, placed on calendar. H.J. 332. (on 02/18/2026)
(3 Companion Bills)

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