ASSEMBLY, No. 3441

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED OCTOBER 25, 2010

 


 

Sponsored by:

Assemblyman  GARY S. SCHAER

District 36 (Bergen, Essex and Passaic)

 

 

 

 

SYNOPSIS

     Makes permanent certain temporary authorizations that expanded permitted investment by Director of Division of Investment of State of New Jersey Cash Management Fund and State pension funds.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act making permanent certain temporary authorizations that expanded the range of investment vehicles in which the Director of the Division of Investment may invest moneys of the State of New Jersey Cash Management Fund and State pension funds, supplementing P.L.1977, c.281 (C.52:18A-90.4 et seq.) and supplementing P.L.1970, c.270 (C.52:18A-90.1 et seq.).

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a.  Notwithstanding the provision of any law or regulation to the contrary, the Director of the Division of Investment may invest the public moneys of the State of New Jersey Cash Management Fund or a separate fund created pursuant to subsection g. of section 1 of P.L.1977, c.281 (C.52:18A-90.4) in bonds or notes with maturities not greater than one year issued by the State and its authorities, or by any local government unit of the State, that are exempt from both federal and State taxes, in accordance with federal and State laws and regulations.

     b.    Notwithstanding the provision of any law or regulation to the contrary, the Director of the Division of Investment may invest the public moneys of the State of New Jersey Cash Management Fund or a separate fund created pursuant to subsection g. of section 1 of P.L.1977, c.281 (C.52:18A-90.4) without limitation as to amount or percentage invested in any one issue of obligations, and without limitation as to ratings, provided such issue of obligations is insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). Consistent with the director's fiduciary responsibilities, the director may give preference to investments issued by financial institutions that through participation in programs administered by the New Jersey Economic Development Authority, including the Preferred Lender Program, provide access to capital to businesses in New Jersey.

 

     2.    Notwithstanding the provision of any law or regulation to the contrary, the Director of the Division of Investment may invest the public moneys of Common Pension Fund B, created pursuant to section 1 of P.L.1970, c.270 (C.52:18A-90.1) and N.J.A.C.17:16-63.1 et seq., without limitation as to the amount or percentage invested in any one issue of obligations, and without limitation as to ratings, provided such issue of obligations is insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). Consistent with the director's fiduciary responsibilities, the director may give preference to investments issued by financial institutions that through participation in programs administered by the New Jersey Economic Development Authority, including the Preferred Lender Program, provide access to capital to businesses in New Jersey.

 

     3.    This act shall take effect immediately or upon the expiration of the authorizations contained in sections 2, 3, and 4 of P.L.2009, c.150, whichever is later.

 

 

STATEMENT

 

     The bill makes permanent temporary authorizations that expanded the range of investment vehicles in which the Director of the Division of Investment may invest moneys of the State of New Jersey Cash Management Fund and the State pension funds.

     Specifically, the bill makes permanent the authorization for the director to invest moneys of the State of New Jersey Cash Management Fund and Common Pension Fund B in obligations guaranteed by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). Additionally, the bill makes permanent the authority of the director to give preference to those investments issued by financial institutions that through participation in programs administered by the New Jersey Economic Development Authority, including the Preferred Lender Program, provide access to capital to businesses in New Jersey.  This preference is allowed only in so far as it is consistent with the director’s fiduciary duty. 

     The bill also makes permanent the explicit authorization for the director to invest moneys of the State of New Jersey Cash Management Fund in bonds or notes with maturities not greater than one year issued by the State and its authorities, or by any local government unit of the State, that are exempt from both federal and State taxes.

     Signed into law on November 22, 2009, P.L.2009, c.150 provided these same authorizations to the Director of the Division of Investment for a period of one year.  This bill makes these authorizations permanent.

     The bill takes effect immediately or upon the expiration of the underlying temporary authorizations, whichever occurs later.