SB 238

Under current law, the Board of Commissioners of Public Lands (BCPL) may

invest moneys in the common school fund, the normal school fund, the university

fund, and the agricultural college fund (trust funds) in certain specified investments.

Under current law, BCPL also administers a state trust fund loan program under

which it makes loans from moneys belonging to the trust funds to school districts,

local governments, and certain other public entities for certain public purposes.

This bill authorizes BCPL, in addition to its authority under current law to

make loans that are the general obligation of the borrower, to make loans that are

secured by the revenue generated by the activity for which the loan is made (revenue

obligation loans). Under the bill, BCPL may make a revenue obligation loan only if

it is made for the purpose of financing, or refinancing, a project that is secured by a

pledge and first priority assignment of the revenue that the municipality will receive

from moneys generated by the project or for the purpose of financing, or refinancing,

project costs that are secured by a pledge and first priority assignment of tax

increments that will be allocated to the municipality for those costs by the

Department of Revenue under the tax incremental financing program. The bill

provides that a revenue obligation loan may be made for any term not exceeding 30

years and may be made payable in installments. The bill further specifies that if a

revenue obligation loan is secured by a pledge and assignment of tax increments,

then the loan may not exceed an amount that would require the municipality to make

annual payments of more than 80 percent of the municipality's shared revenue

payments received in the previous year.

The bill also does the following:

1. Provides that, in addition to BCPL's authority under current law to invest

in bonds issued by this state, or by a town, village, city, county, or school district, it

may also invest in notes or other instruments of indebtedness issued by any of those

entities.

2. Authorizes BCPL to invest in bonds, notes, and other instruments of

indebtedness issued by a metropolitan sewerage district or a technical college

district.

3. Authorizes BCPL to invest in financial institution accounts that are insured

by a deposit insurance corporation.

4. Specifies that all bonds, notes, or other instruments of indebtedness and

securities purchased by BCPL must be deposited in a manner determined by the

board. Under current law, the deposit must be made with the secretary of

administration.

5. Provides that if BCPL makes a loan for the purpose of paying off existing

indebtedness, the making of the loan and the payment of the existing indebtedness

must be treated as if they occur simultaneously.