Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                        CHAPTER 187-S.F.No. 581 
           An act relating to commerce; authorizing certain 
          investments in obligations of or guaranteed by the 
          United States and certain other authorized securities; 
          amending Minnesota Statutes 1984, sections 48.61, by 
          adding a subdivision; 475.66, subdivision 3; 501.125, 
          by adding a subdivision; and 501.66, subdivision 6. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 48.61, is 
amended by adding a subdivision to read: 
    Subd. 5.  In the absence of an express provision to the 
contrary, whenever any statute, regulation, charter, trust 
indenture, authorizing resolution, or other instrument governing 
the investment of funds of a banking institution, as defined in 
section 48.01, subdivision 2, directs, requires, authorizes, or 
permits investment in obligations of the United States or 
obligations, the payment of the principal of and interest on 
which is unconditionally guaranteed by the United States, 
investment in these obligations may be made either directly or 
in the form of securities of, or other interests in, an 
investment company (1) registered under the Federal Investment 
Company Act of 1940, whose shares are registered under the 
Federal Securities Act of 1933, and (2) whose investments are 
limited to these obligations and repurchase agreements fully 
collateralized by these obligations, if the repurchase 
agreements are entered into only with those primary reporting 
dealers that report to the Federal Reserve Bank of New York and 
with the 100 largest United States commercial banks.  
    Investment company shares authorized pursuant to this 
subdivision shall not exceed 20 percent of the banks' capital 
stock and paid in surplus.  These obligations shall be carried 
at the lower of cost or market on the banks' books and adjusted 
to market on a quarterly basis. 
    Sec. 2.  Minnesota Statutes 1984, section 475.66, 
subdivision 3, is amended to read:  
    Subd. 3.  Subject to the provisions of any resolutions or 
other instruments securing obligations payable from a debt 
service fund, any balance in the fund may be invested 
    (a) in any security which is a direct obligation of or is 
guaranteed as to payment of principal and interest by the United 
States or any agency or instrumentality of the United States, 
    (b) in shares of an investment company (1) registered under 
the federal investment company act of 1940, whose shares are 
registered under the federal securities act of 1933, 
and (2) whose only investments are in securities described in 
the preceding clause and repurchase agreements fully 
collateralized by those securities, if the repurchase agreements 
are entered into only with those primary reporting dealers that 
report to the Federal Reserve Bank of New York and with the 100 
largest United States commercial banks, 
    (c) in any security which is a general obligation of the 
state of Minnesota or any of its municipalities, 
    (d) in bankers acceptances of United States banks eligible 
for purchase by the Federal Reserve System, or 
    (e) in commercial paper issued by United States 
corporations or their Canadian subsidiaries that is of the 
highest quality and matures in 270 days or less. 
    The fund may also be used to purchase any obligation, 
whether general or special, of an issue which is payable from 
the fund, at such price, which may include a premium, as shall 
be agreed to by the holder, or may be used to redeem any 
obligation of such an issue prior to maturity in accordance with 
its terms.  The securities representing any such investment may 
be sold or hypothecated by the municipality at any time, but the 
money so received remains a part of the fund until used for the 
purpose for which the fund was created. 
    Sec. 3.  Minnesota Statutes 1984, section 501.125, is 
amended by adding a subdivision to read:  
    Subd. 6.  [INVESTMENT COMPANIES.] In the absence of an 
express prohibition in the trust instrument, whenever the 
instrument directs, requires, authorizes, or permits investment 
in obligations of the United States or obligations, the payment 
of the principal of and interest on which is unconditionally 
guaranteed by the United States, the trustee may invest in and 
hold those obligations either directly or in the form of 
securities of, or other interests in, an investment company (1) 
registered under the Federal Investment Company Act of 1940, 
whose shares are registered under the Federal Securities Act of 
1933, and (2) whose investments are limited to these obligations 
and repurchase agreements fully collateralized by these 
obligations, if the repurchase agreements are entered into only 
with those primary reporting dealers that report to the Federal 
Reserve Bank of New York and with the 100 largest United States 
commercial banks.  
    Nothing in this subdivision shall be construed to alter the 
degree of care and judgment required of trustees by subdivision 
1.  
    Sec. 4.  Minnesota Statutes 1984, section 501.66, 
subdivision 6, is amended to read: 
    Subd. 6.  The trustee may invest and reinvest trust assets 
in any property or any undivided interest therein wherever 
located, including but not limited to bonds, debentures, notes, 
secured or unsecured, stocks of corporations, whether preferred 
or common, mutual funds, real estate or improvements thereon, or 
any interest therein, oil and mineral leases or royalty or 
similar interests and interests in trusts, including investment 
trusts and common trust funds maintained by a corporate trustee, 
contracts which insure the life of a person who is or may become 
a trust beneficiary, and any such investments may be made, 
regardless of any lack of diversification. 
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 to 4 are effective the day following final 
enactment. 
    Approved May 23, 1985