<a id="pl.1.3"></a><var>1.3</var>holding of municipal funds;amending Minnesota Statutes 2008, sections <br/>
<a id="pl.1.4"></a><var>1.4</var>118A.05, subdivision 3; 118A.06.<br/>
<a id="pl.1.5"></a><var>1.5</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
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<a id="bill.0.1.0"></a><a id="pl.1.6"></a><var>1.6</var>    Section 1. Minnesota Statutes 2008, section 118A.05, subdivision 3, is amended to read:<br/>
<a id="pl.1.7"></a><var>1.7</var>    Subd. 3. <b>Securities lending agreements.</b> Securities lending agreements, including <br/>
<a id="pl.1.8"></a><var>1.8</var>custody agreements, may be entered into with a financial institution meeting the <br/>
<a id="pl.1.9"></a><var>1.9</var>qualifications of subdivision 2, clause (1) or (2), and having its principal executive office <br/>
<a id="pl.1.10"></a><var>1.10</var>an office located in Minnesota. Securities lending transactions may be entered into with <br/>
<a id="pl.1.11"></a><var>1.11</var>entities meeting the qualifications of subdivision 2 and the collateral for such transactions <br/>
<a id="pl.1.12"></a><var>1.12</var>shall be restricted to the securities described in this section and section 
         <statute_ref>118A.04</statute_ref>.  <br/>
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<a id="bill.0.2.0"></a><a id="pl.1.13"></a><var>1.13</var>    Sec. 2. Minnesota Statutes 2008, section 118A.06, is amended to read:<br/>
<a id="pl.1.14"></a><var>1.14</var><b>118A.06 SAFEKEEPING; ACKNOWLEDGEMENTS.</b><br/>
<a id="pl.1.15"></a><var>1.15</var>(a) Investments, contracts, and agreements may be held in safekeeping with:<br/>
<a id="pl.1.16"></a><var>1.16</var>(1) any Federal Reserve bank;<br/>
<a id="pl.1.17"></a><var>1.17</var>(2) any bank authorized under the laws of the United States or any state to exercise <br/>
<a id="pl.1.18"></a><var>1.18</var>corporate trust powers, including, but not limited to, the bank from which the investment <br/>
<a id="pl.1.19"></a><var>1.19</var>is purchased;<br/>
<a id="pl.1.20"></a><var>1.20</var>(3) a primary reporting dealer in United States government securities to the Federal <br/>
<a id="pl.1.21"></a><var>1.21</var>Reserve Bank of New York; or<br/>
<a id="pl.1.22"></a><var>1.22</var>(4) a securities broker-dealer having its principal executive office in Minnesota, <br/>
<a id="pl.1.23"></a><var>1.23</var>licensed under chapter 80A, or an affiliate of it, and that meets the following requirements:<br/>
<a id="pl.2.1"></a><var>2.1</var>(i) it is registered as a broker-dealer under chapter 80A or is exempt from the <br/>
<a id="pl.2.2"></a><var>2.2</var>registration requirements;<br/>
<a id="pl.2.3"></a><var>2.3</var>(ii) it is regulated by the Securities and Exchange Commission; provided that; and<br/>
<a id="pl.2.4"></a><var>2.4</var>(iii) it maintains insurance through the Securities Investor Protection Corporation <br/>
<a id="pl.2.5"></a><var>2.5</var>or excess insurance coverage in an amount equal to or greater than the value of the <br/>
<a id="pl.2.6"></a><var>2.6</var>securities held.<br/>
<a id="pl.2.7"></a><var>2.7</var>(b) The government entity's ownership of all securities is under paragraph (a) must <br/>
<a id="pl.2.8"></a><var>2.8</var>be evidenced by written acknowledgments identifying the securities by the names of the <br/>
<a id="pl.2.9"></a><var>2.9</var>issuers, maturity dates, interest rates, CUSIP number, or other distinguishing marks.<br/>