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Introduced by   Senator Cummings of Washington District

Referred to Committee on


Subject:  Executive branch; treasurer; permitted investments

Statement of purpose:  This bill proposes to establish governmental investment pools for agencies, authorities, commissions, boards, municipalities, and political subdivisions of the state.


It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  32 V.S.A. § 433(a) is amended to read:

(a)  Investments of state funds shall be made in:

(1)  obligations of the United States, its agencies and instrumentalities, and any repurchase agreements whose underlying collateral consists of such obligations which have a liquid market with readily determinable market value;

(2)  certificates of deposit and other evidences of deposit at banks, credit unions, and savings and loan associations approved by the treasurer;

(3)  prime bankers’ acceptances issued by domestic banks where the guaranteeing bank is rated in the highest tier assigned to the investments by at least two nationally recognized rating agencies;

(4)  prime commercial paper rated in the highest tier by at least two nationally recognized rating agencies;

(5)  tax-exempt securities exempt from federal arbitrage provisions applicable to investments of proceeds of this state’s tax-exempt debt obligations investment-grade obligations of state or local governments, instrumentalities, and public authorities; or

(6)  domestic money market funds regulated by and in good standing with the securities and exchange commission, such mutual funds to be principally composed of other authorized investments repurchase agreements whose underlying purchased securities consist of any of the investments specified in subdivisions (1) through (5) of this subsection;

(7)  investment agreements or guaranteed investment contracts rated or guaranteed by a financial institution whose senior long-term debt obligations are rated, at the time such agreement or contract is entered into, in the highest tier assigned to such investments by a nationally recognized rating agency, and where the treasurer has the option to terminate each agreement in the event such rating is downgraded below the highest rating tier; and

(8)  money market mutual funds that either are regulated by the securities and exchange commission and whose portfolios consist only of dollar‑denominated securities or are managed in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940.

Sec. 2.  32 V.S.A. § 433a is added to read:


(a)  Notwithstanding any provision of law to the contrary, the state treasurer may establish one or more combined investment funds for the purpose of investing funds of the state of Vermont, and funds under the custody of agencies, authorities, commissions, boards, municipalities and political subdivisions of the state of Vermont, provided that the state treasurer shall adopt appropriate accounting procedures from which the exact interest of such funds so combined for investment can be determined.

(b)  The state treasurer may sell to all agencies, authorities, commissions, boards, municipalities, and political subdivisions of the state of Vermont participation units in any such combined investment fund.  The state treasurer may invest in only those instruments permitted pursuant to section 433 of this title.

(c)  The state treasurer may adopt such rules as may be necessary to administer the provisions of this section.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont