Summary — HB 2152 (2025) — Public Moneys: Pooled-Collateral Method, Reporting, and Investment Rules
Status and timeline
- Introduced: Jan 28, 2025.
- Approved by Governor: April 3, 2025.
- Key effective date: the “public moneys pooled method” provisions take effect Jan 1, 2026.
Purpose
- Establish a statutory framework allowing (and in some versions requiring) banks, savings & loan associations, and savings banks designated as public depositaries to secure public deposits that exceed FDIC insurance by using a pooled-securities method; tighten reporting, oversight, and remedies for defaults; and modify certain municipal/state investment rules.
Key provisions and changes
1. Public moneys pooled method
- Defines a “pool of securities” as shares of registered investment companies whose assets are limited to obligations eligible for the institution and restricted by prospectus to statutorily enumerated securities.
- A public depositary must secure public deposits in excess of FDIC coverage by depositing/pledging/granting a security interest in such a pool whose aggregate market value is at least 102% of the uninsured deposit amount.
- Institutions must maintain daily accounting of public moneys secured and the pool’s aggregate market value.
- Institutions may substitute securities so long as the 102% test is maintained; must notify the administrator of any required collateral changes.
Administration, reporting and enforcement
- State Treasurer may serve as administrator or designate a qualified administrator (who may not accept public deposits while administering and must file conflict-of-interest disclosures). Administrator duties include assessing sufficiency of pools, adopting rules, and managing compliance.
- Monthly reporting: each institution using a single pool must submit, by the 10th of each month, a statement showing (as of the prior month’s last business day) uninsured public moneys by governmental unit, aggregate market value of the pool, and contact info for each governmental representative.
- Administrator must provide each listed governmental unit a report within 20 days after receipt, and must clearly notify units if collateral falls below required levels. Institutions have five business days to cure deficiencies or face fines/sanctions under Treasurer rules.
Default, repayment, and liquidation
- If a financial institution defaults, the administrator/Treasurer must determine uninsured exposures, amounts secured by pools, and notify affected governmental units; Treasurer may repay governmental units for uninsured public moneys (with pro rata distributions if proceeds are insufficient). Duties may be delegated to a federal deposit insurer if it is acting as receiver.
Investment adviser and municipal investment rules
- Prohibits an investment adviser that executes bids for the investment of public moneys from engaging in principal transactions with a governmental unit directly related to those moneys or from directly managing money from such bids.
- Permits governmental units to place deposits in interest‑bearing time deposits at rates agreed with eligible institutions; requires that PMIB-rate-based investments be used only when local eligible institutions cannot match PMIB-published rates.
- Municipal investment pool fund deposits must be accompanied by a certification that funds were first offered to eligible local financial institutions in the preceding year; eligible institutions may file written complaints with the Treasurer if they believe a governmental unit failed to comply.
Pooled Money Investment Board (PMIB) CD program
- Sets a cap on the maximum dollar amount invested in any one bank under the PMIB CD program (statute language references a cap of 2.5% of a bank’s certificate-of-deposit program).
Who is affected
- State and local governmental units (counties, cities, school districts, etc.) placing public deposits.
- Banks, savings & loans, and savings banks designated as public depositaries (new collateral and reporting requirements).
- State Treasurer’s Office (administration, rulemaking, enforcement).
- Investment advisers and participants in municipal investment pools and PMIB programs.
Fiscal impact (from fiscal note)
- Fiscal note estimates additional administrative costs to the State Treasurer’s office (e.g., roughly $250,000 FY2026 and ~$129,000 FY2027 per the fiscal note excerpt) and projects material impacts on State General Fund cash-management receipts (figures reported in the fiscal note). See the official fiscal note for full detail.
Procedural notes
- The bill includes rulemaking authority for the State Treasurer to implement procedures, reporting forms, conflict-of-interest standards, and enforcement mechanisms; noncompliance may trigger fines and sanctions.
