This bill amends existing laws regarding the investment of public funds in Iowa. It allows the uninsured portion of public funds deposited in a depository to be invested in insured deposits or certificates of deposit issued by credit unions. Additionally, it permits political subdivisions to invest up to 25 percent of their public funds in a joint investment trust, provided that the trust complies with specific regulations. The bill mandates that before investing in such trusts, the governing body must acknowledge the risks associated with these investments, including the lack of federal insurance and the potential for loss of principal. Violations of these provisions are classified as breaches of fiduciary duty, exposing the involved parties to civil and criminal penalties.

Furthermore, the bill removes corporate central credit unions from the list of entities eligible to hold securities for public funds and introduces the option for credit unions to pledge securities through registered securities broker-dealers. These broker-dealers are required to report on the pledged collateral regularly. The changes aim to enhance the management and safety of public funds while ensuring accountability and compliance with investment regulations.

Statutes affected:
Introduced: 12B.10, 12C.2, 12C.17