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MISSISSIPPI LEGISLATURE 2026 Regular Session To: Appropriations A By: Representatives Read, Cockerham House Bill 1650 (As Sent to Governor) AN ACT TO AMEND SECTION 27-105-3, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERMS "POOLED INVESTMENT VEHICLE," "STATE AGENCY" AND "STATE FISCAL OFFICER"; TO CREATE NEW SECTION 27-105-32, MISSISSIPPI CODE OF 1972, TO REQUIRE THE STATE TREASURER TO ANNUALLY REVIEW EACH PUBLIC FUND, ACCOUNT OR TRUST THAT RECEIVES INTEREST ALLOCATION FROM A POOLED INVESTMENT VEHICLE TO DETERMINE IF THE FUND, ACCOUNT OR TRUST THAT RECEIVES INTEREST HAD NO TRANSACTIONAL ACTIVITY, OTHER THAN THE RECEIPT OF INTEREST WITHIN THE PRIOR FISCAL YEAR; TO AUTHORIZE THE STATE TREASURER TO PRECLUDE CERTAIN FUNDS, ACCOUNTS OR TRUSTS FROM RECEIVED INTEREST; TO DIRECT CERTAIN FUNDS TO BE CLOSED OR CONSOLIDATED WITHIN THE STATE TREASURY; TO AMEND SECTION 27-105-33, MISSISSIPPI CODE OF 1972, TO AUTHORIZE AN EXCEPTION TO THE INVESTMENT REQUIREMENTS OF THIS CHAPTER UPON A DEMONSTRATION OF SUFFICIENT JUSTIFICATION; TO CREATE NEW SECTION 27-105-34, MISSISSIPPI CODE OF 1972, TO REQUIRE EACH STATE AGENCY TO REVIEW ITS FUNDS, ACCOUNTS AND TRUSTS WITHIN AND OUTSIDE OF THE STATE TREASURY AND REPORT CERTAIN INFORMATION TO THE TREASURER; TO REQUIRE THE TREASURER TO REPORT CERTAIN COMPILED INFORMATION TO THE LEGISLATIVE BUDGET OFFICE AND THE SENATE AND HOUSE LEGISLATIVE SERVICES OFFICE; TO AMEND SECTION 27-105-1, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR RELATED PURPOSES. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: SECTION 1. Section 27-105-3, Mississippi Code of 1972, is amended as follows: 27-105-3. As used in this chapter: (a) The words "bank" or "banks," whenever used in this chapter, shall include trust companies. (b) The term "pooled investment vehicle" means any investment fund, account or trust in which public monies from two (2) or more funds, accounts or trusts are combined for the purpose of collective investment and management. The term includes investments required under this chapter and investments made pursuant to an exception to the requirements of this chapter under Section 27-105-33(4). (c) The term "state agency" has the meaning as defined in Section 27-103-103(3). (d) The term "State Fiscal Officer" means the Executive Director of the Department of Finance and Administration. SECTION 2. The following shall be codified as Section 27-105-32, Mississippi Code of 1972: 27-105-32. (1) No later than August 1 of each year, the State Treasurer shall review each public fund, account or trust that receives interest allocation from a pooled investment vehicle to determine if the fund, account or trust that receives interest had no transactional activity, other than the receipt of interest allocation from a pooled investment vehicle, within the prior fiscal year. (2) Unless the fund, account or trust identified under subsection (1) of this section was created by law that authorized the retention of interest earned or investment earnings, the State Treasurer may preclude its allocation of interest from a pooled interest vehicle. (3) Unless an amendment to law is required to do so, the State Treasurer, the State Fiscal Officer and the state agency associated with the fund, account or trust identified under subsection (1) of this section, shall close or consolidate the fund, account or trust. SECTION 3. Section 27-105-33, Mississippi Code of 1972, is amended as follows: 27-105-33. (1) It shall be the duty of the State Treasurer and the * * * Executive Director of the Department of Finance and Administration State Fiscal Officer on or about the tenth day of each month, and in their discretion at any other time, to analyze carefully the amount of cash in the General Fund of the state and in all special funds credited to any special purpose designated by the State Legislature or held to meet the budgets or appropriations for maintenance, improvements and services of the several institutions, boards, departments, commissions, agencies, persons or entities of the state, and to determine in their opinion when the cash in such funds is in excess of the amount required to meet the current needs and demands of no more than seven (7) business days on such funds and report their findings to the Governor. It shall be the duty of the State Treasurer to provide a cash flow model for forecasting revenues and expenditures on a bimonthly basis and providing technical assistance for its operation. The Department of Finance and Administration shall use the cash flow model furnished by the State Treasurer, in analyzing the amount of funds on deposit and available for investment. (2) The State Treasurer is hereby authorized, empowered and directed to invest all such excess general and special funds of the state in the following manner: (a) Funds shall be allocated equally among all qualified state depositories which do not have demand accounts in excess of One Hundred Fifty Thousand Dollars ($150,000.00) until each qualified depository willing to accept the same shall have on deposit or in security repurchase agreements or in other securities authorized in paragraph (d) of this subsection at interest the sum of Three Hundred Thousand Dollars ($300,000.00). For the purposes of this subsection, no branch bank or branch office shall be counted as a separate depository. (b) The balance, if any, of such excess general and special funds shall be offered to qualified depositories of the state on a pro rata basis as provided in Section 27-105-9. For the purposes of this subsection, the pro rata share of each depository shall be reduced by the amount of the average daily collected earning balance of demand deposits maintained by the State Treasurer pursuant to Section 27-105-9 during the preceding calendar year, and such reduction shall be allocated pro rata among other eligible depositories. (c) Funds offered pursuant to paragraphs (a) and (b) above shall be invested for periods of up to one (1) year, and shall bear interest at an interest rate no less than that numerically equal to the bond equivalent yield on direct obligations of the United States Treasury of comparable maturity, as determined by the State Treasurer. In determining such rate, the State Treasurer shall consider the Legislature's desire to distribute funds equitably throughout the state to the maximum extent possible. (d) To the extent that the State Treasurer shall find that general and special funds cannot be invested pursuant to paragraphs (a), (b) and (c) of this subsection for the stated maturity up to one (1) year, the Treasurer may invest such funds, together with any other funds required for current operation, as determined pursuant to this section, in the following: (i) Time certificates of deposit or interest-bearing accounts with qualified state depositories. For those funds determined under prudent judgment of the State Treasurer to be made available for investment in time certificates of deposit, the rate of interest paid by the depositories shall be determined by rules and regulations adopted and promulgated by the State Treasurer which may include competitive bids. At the time of investment, the interest rate on such certificates of deposit under the provisions of this subparagraph shall be a rate not less than the bond equivalent yield on direct obligations of the United States Treasury with a similar length of maturity. (ii) Direct United States Treasury obligations, the principal and interest of which are fully guaranteed by the government of the United States. (iii) United States government agency, United States government instrumentality or United States government-sponsored enterprise obligations, the principal and interest of which are fully guaranteed by the government of the United States, such as the Government National Mortgage Association; or United States governmental agency, United States government instrumentality or United States government-sponsored enterprise obligations, the principal and interest of which are guaranteed by any United States government agency, United States government instrumentality or United States government-sponsored enterprise contained in a list promulgated by the State Treasurer. (iv) Direct security repurchase agreements and reverse direct security repurchase agreements of any federal book entry of only those securities enumerated in subparagraphs (ii) and (iii) above. "Direct security repurchase agreement" means an agreement under which the state buys, holds for a specified time, and then sells back those securities and obligations enumerated in subparagraphs (ii) and (iii) above. "Reverse direct securities repurchase agreement" means an agreement under which the state sells and after a specified time buys back any of the securities and obligations enumerated in subparagraphs (ii) and (iii) above. A qualified state depository shall be given preference for such agreements when possible. (v) Bonds issued, assumed or guaranteed by the Country of Israel, provided that: 1. Investments in such instruments shall be denominated in United States currency; 2. Such bonds must be of investment grade as rated by at least one (1) nationally recognized statistical rating agency; and 3. The amount of funds invested in such bonds at any time shall not exceed Fifty Million Dollars ($50,000,000.00). (vi) Corporate bonds and taxable municipal bonds; or corporate short-term obligations of corporations or of wholly owned subsidiaries of corporations, whose short-term obligations are rated A-1 or better by Standard and Poor's, rated P-1 or better by Moody's Investment Service, F-1 or better by Fitch Ratings, Ltd., or the equivalent of these ratings if assigned by another United States Securities and Exchange Commission designated Nationally Recognized Statistical Rating Organization. (e) For the purposes of this section, direct obligations issued by the United States of America shall be deemed to include securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the provisions of 15 USCS Section 80(a)-1 et seq., provided that the portfolio of such investment company or investment trust is limited to direct obligations issued by the United States of America, United States government agencies, United States government instrumentalities or United States government-sponsored enterprises, and to repurchase agreements fully collateralized by direct obligations of the United States of America, United States government agencies, United States government instrumentalities or United States government-sponsored enterprises, and the investment company or investment trust takes delivery of such collateral for the repurchase agreement, either directly or through an authorized custodian. The State Treasurer and the * * * Executive Director of the Department of Finance and Administration State Fiscal Officer shall review and approve the investment companies and investment trusts in which funds invested under paragraph (d) of this subsection may be invested. The total dollar amount of funds invested in all open-end and closed-end management type investment companies and investment trusts at any one time shall not exceed twenty percent (20%) of the total dollar amount of funds invested under paragraph (d) of this subsection. (f) Investments authorized by subparagraphs (ii) and (iii) of paragraph (d) shall mature on such date or dates as determined by the State Treasurer in the exercise of prudent judgment to generate a favorable return to the state and will allow the monies to be available for use at such time as the monies will be needed for state purposes. However, the maturity of securities purchased as enumerated in subparagraphs (ii) and (iii) shall not exceed ten (10) years from date of purchase. Special funds shall be considered those funds created constitutionally, statutorily or administratively which are not considered general funds. All funds invested for a period of thirty (30) days or longer under paragraph (d) shall bear a rate at least equal to the current established rate under paragraph (c) of this subsection. (g) Any interest-bearing deposits or certificates of deposit shall not exceed at any time the amount insured by the Federal Deposit Insurance Corporation in any one (1) banking institution, the Federal Savings and Loan Insurance Corporation in any one (1) savings and loan association, or other deposit insurance corporation approved by the State Treasurer, unless the uninsured portion is collateralized by the pledge of securities in the manner provided by Section 27-105-5. (h) Unless otherwise provided, income from investments authorized by the provisions of this subsection shall be credited to the State General Fund. (i) Not more than Five Hundred Thousand Dollars ($500,000.00) of funds may be invested with foreign financial institutions, and the State Treasurer may enter into price contracts for the purchase or exchange of foreign currency or other arrangements for currency exchange in an amount not to exceed Five Hundred Thousand Dollars ($500,000.00) upon specific direction of the Department of Economic and Community Development. The State Treasurer shall promulgate all rules and regulations for applications, qualifications and any other necessary matters for foreign financial institutions. (3) Any liquidating agent of a depository in liquidation, voluntary or involuntary, shall redeem from the state any bonds and securities which have been pledged to secure state funds and such redemption shall be at the par value or market value thereof, whichever is greater; otherwise, the liquidating agent or receiver may pay off the state in full for its deposits and retrieve the pledged securities without regard to par or market value. (4) (a) Upon written request of a state agency, the State Treasurer may grant exceptions to the investment requirements of this chapter if a state agency provides sufficient justification as to why certain public monies may not bear interest under Section 27-105-21 or may not be held within the public funds guaranty pool provided by this chapter. Sufficient justification shall include restrictions by other law or a justification determined to be reasonable by the Treasurer. The State Fiscal Officer shall assist the Treasurer and shall provide any necessary information to make the determination under this subsection (4)(a). (b) To the extent allowed by other law, a state agency shall seek to retain public monies excepted from the requirements of the chapter in a pooled investment vehicle not regulated by this chapter. If the public monies excepted from the requirements of this chapter cannot be held in a pooled investment vehicle not regulated by this chapter, to the extent allowed by other law, a state agency shall seek to retain public monies excepted from the requirements of the chapter in an interest-bearing account. (5) The State Treasurer and the * * * Executive Director of the Department of Finance and Administration State Fiscal Officer shall make monthly reports to the Legislative Budget Office containing a full and complete statement of all funds invested by virtue of the provisions of this section and the revenues derived therefrom and the expenses incurred therewith, together with all such other information as may seem to each of them as being pertinent to inform fully the Mississippi Legislature with reference thereto. (6) The State Treasurer shall not deposit any funds on demand deposit with any authorized depository, unless such depository has contracted for interest-bearing accounts or time certificates of deposit. (7) Notwithstanding the foregoing, any financial institution not meeting the prescribed ratio requirement set forth in Section 27-105-5 whose accounts are insured by the Federal Deposit Insurance Corporation, or any successor to that insurance corporation, may receive state funds in an amount not exceeding the amount which is insured by such insurance corporations and may qualify as a state depository to the extent of such insurance for this purpose only. The paid-in and earned capital funds of such financial institution shall not be included in the computations specified in Section 27-105-9(a) and (b). SECTION 4. The following shall be codified as Section 27-105-34, Mississippi Code of 1972: 27-105-34. (1) Each state agency shall review its funds, accounts or trusts held within and outside of the State Treasury and shall report to the State Treasurer and the Department of Finance and Administration no later than September 30, 2026, the following information: (a) The name of each of its funds, accounts or trusts; (b) The code or number of each of its funds, accounts or trusts; (c) The purpose of each of its funds, accounts or trusts; (d) Whether the fund, account or trust was created by the state agency or by law; (e) If created by law, a reference to the law or statute, as applicable; (f) Whether the fund, account or trust retains the interest earned on monies in it or provides where the interest earned on such monies is transferred; (g) Whether there is any restriction on transferring the interest earned on the monies in the fund, account or trust to the General Fund; (h) Whether the fund, account or trust can be closed or consolidated with another fund, account or trust due to the fund not having transactional activity other than the deposit of any earned interest; (i) If it is determined that the fund can be closed or consolidated, a statement as to whether the action must be effectuated by legislation; (j) A statement as to whether the fund, account or trust is held in an interest-bearing account regulated by this chapter; (k) If the fund is not being held in an interest-bearing account regulated by this chapter, a statement that an exception has been received from the Treasurer under Section 27-105-33(4); (l) A statement as to whether the fund is held within the public funds guaranty pool under this chapter; (m) If the fund is not being held within the public funds guaranty pool under this chapter, a statement that an exception has been received from the Treasurer under Section 27-105-33(4); and (n) Whether an agency has a fund created by law without an associated fund created in the State Treasury. (2) The Treasurer shall review the information submitted by the agencies for accuracy and compile the information submitted in subsection (1) of this section in a report to the Legislative Budget Office to be delivered by December 15, 2026. The report shall also include a recommendation on which funds should be closed or combined, a listing of idle funds receiving interest allocation from pooled interest investments, and recommended changes to the general laws of Mississippi related to the information provided by the agencies. The Department of Finance and Administration shall assist the Treasurer with any information necessary to complete the report. (3) Beginning with calendar year 2028 and each calendar year following a statewide election as provided in Section 23-15-193 thereafter: (a) All state agencies shall provide the information required by subsection (1) of this section to the department and the Treasurer no later than September 30; and (b) The Treasurer shall complete the required reporting in subsection (2) of this section and provide it in a report to the Legislative Budget Office and the Senate and House Legislative Services Offices by December 15. (4) In addition to the four-year report, the state agencies shall file interim reports with the Treasurer including the information required by subsection (1) of this section for any new funds created by state agencies by September 30 of each year when a four-year report is not required. The Treasurer shall compile the interim reports under this subsection and provide it in a report to the Legislative Budget Office by December 15 of each year when a four-year report is not required. (5) The State Fiscal Officer may disapprove of payments from the State Treasury if a state agency does not timely provide the information required by this section. SECTION 5. Section 27-105-1, Mississippi Code of 1972, is amended as follows: 27-105-1. Wherever the term "State Depository Commission" appears in any law, the same shall mean the State Treasurer. All funds deposited or invested by and through the State Treasurer shall be deposited in the manner prescribed in Section 27-105-33. All such deposits shall be subject to payment when demanded by the State Treasurer, except time deposits as provided by Section 27-105-33. Such time deposits shall be subject to payment as specified by the contract or certificate of deposit. All deposits made by the State Treasurer shall also be subject to such regulations as are imposed by law and by rules promulgated by the State Treasurer for such deposits. The State Treasurer, a state institution or a state agency may compensate depositories for the expense in maintaining deposit accounts and in handling items related thereto, subject to approval by the State Treasurer and * * * Executive Director of the Department of Finance and Administration State Fiscal Officer. The Commissioner of Banking and Consumer Finance shall serve to advise the State Treasurer as to the condition and safety as a state depository of any financial institution, especially as to any impairment of capital or surplus. Such information or recommendation shall be considered confidential information and shall not be disclosed. SECTION 6. This act shall take effect and be in force from and after its passage.
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