(a) The Treasurer may invest or reinvest unexpended or surplus money over which the Treasurer has custody in:
(1) an obligation for which the United States has pledged its faith and credit for the payment of the principal and interest;
(2) an obligation that a federal agency or a federal instrumentality has issued in accordance with an act of Congress;
(3) a repurchase agreement collateralized in an amount not less than 102% of the principal amount by an obligation of the United States, its agencies or instrumentalities, provided the collateral is held by a custodian other than the seller designated by the buyer;
(4) bankers’ acceptances guaranteed by a financial institution with a short–term debt rating in the highest letter and numerical rating by at least one nationally recognized statistical rating organization as designated by either the United States Securities and Exchange Commission or the Treasurer;
(5) with respect to amounts treated by the Internal Revenue Service as bond sale proceeds only, bonds, notes, or other obligations of investment grade in the highest quality letter and numerical rating by at least one nationally recognized statistical rating organization as designated by the United States Securities and Exchange Commission issued by or on behalf of this or any other state or any agency, department, county, municipal or public corporation, special district, authority, or political subdivision thereof, or in any fund or trust that invests only in securities of the type described in this item;
(6) commercial paper that has received the highest letter and numerical rating by at least two nationally recognized statistical rating organizations as designated by the United States Securities and Exchange Commission, provided that such commercial paper may not exceed 10% of the total investments made by the Treasurer under this subsection;
(7) money market mutual funds that:
(i) are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, 15 U.S.C. § 80a–1 et seq., as amended;
(ii) are operated in accordance with Rule 2A–7 of the Investment Company Act of 1940, 17 C.F.R. § 270.2A–7, as amended; and
(iii) have received the highest possible rating from at least one nationally recognized statistical rating organization as designated by the United States Securities and Exchange Commission; and
(8) any investment portfolio created under the Maryland Local Government Investment Pool defined under §§ 17–301 through 17–309 of the Local Government Article of the Code that is administered by the Office of the State Treasurer.
(b) The Treasurer may sell, redeem, or exchange an investment or reinvestment made under this section in accordance with the limitations of this section.
Terms Used In Maryland Code, State Finance and Procurement 6-222
- assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- County: means a county of the State or Baltimore City. See
- fiduciary: A trustee, executor, or administrator.
- fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- including: means includes or including by way of illustration and not by way of limitation. See
- obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes an individual, receiver, trustee, guardian, personal representative, trusteefiduciary, representative of any kind, corporation, partnership, business trust, statutory trust, limited liability company, firm, association, or other nongovernmental entity. See
- State: means Maryland. See
- this Code: means a code of the public general laws of the State that has been adopted and made evidence of the public general laws of the State under § 10–201 of the Courts Article. See
(c) Subject to § 2–1246 of the State Government Article, the Treasurer shall report by January 3 of each year to the General Assembly on investment activities for unexpended or surplus money over which the Treasurer has custody which have been conducted during the previous fiscal year. At a minimum, the report shall specify for General Fund investments and all other investments:
(1) the inventory of investments with maturity dates and the book and market value as of June 30;
(2) the net income earned;
(3) the percentage share of each category of investment in the portfolio; and
(4) any sale of investments prior to the maturity date.
(d) An investment made pursuant to this section shall be made:
(1) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
(2) in a manner designed to reasonably match the anticipated cash flow of the State so that sufficient funds are available to pay obligations upon proper presentation for payment;
(3) so that a reasonable amount of cash or cash equivalents is available for unanticipated cash needs;
(4) with due regard for minimizing risk while maximizing return;
(5) using competitive purchasing practices except when impractical;
(6) in accordance with a written investment policy;
(7) so that the securities and collateral may continue to be priced on a market to market basis; and
(8) to avoid the enhancement of the personal financial position of the Treasurer or any employee of the Treasurer who has responsibilities for such investments.
(e) (1) (i) Consistent with minority business purchasing standards applicable to units of State government under this article and consistent with the fiduciary duties of the Treasurer, the Treasurer shall attempt to use to the greatest extent feasible minority business enterprises for brokerage and investment management services under this section.
(ii) For purposes of this subsection, brokerage and investment management services shall include services relating to all allocated asset classes as described in subsection (a) of this section.
(2) (i) To assist the Treasurer in achieving the goal described under paragraph (1) of this subsection, the Treasurer shall undertake measures to remove any barriers that limit full participation by minority business enterprises in brokerage and investment management services opportunities afforded under this section.
(ii) The measures undertaken by the Treasurer shall include the use of a wide variety of media, including the Treasurer’s Web site, to provide notice to a broad and varied range of potential providers about the brokerage and investment management services opportunities afforded by the Treasurer.
(3) In conjunction with the Governor’s Office of Minority Affairs, the Treasurer shall develop guidelines to assist in identifying and evaluating qualified minority business enterprises in order to help the Treasurer achieve the objective for greater use of minority business enterprises for brokerage and investment management services under this section.
(4) On or before September 1 each year, the Treasurer shall submit a report to the Governor’s Office of Minority Affairs and, subject to § 2–1246 of the State Government Article, the General Assembly on:
(i) the identity of the minority business enterprise brokerage and investment management services firms used by the Treasurer in the immediately preceding fiscal year;
(ii) the percentage and dollar value of the assets under the custody of the Treasurer that are under the investment control of minority business enterprise brokerage and investment management services firms for each allocated asset class; and
(iii) the measures the Treasurer undertook in the immediately preceding fiscal year in accordance with paragraph (2)(ii) of this subsection.