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HB 550: "An Act relating to investments by fiduciaries; and providing for an effective date."

00 HOUSE BILL NO. 550                                                                                                      
01 "An Act relating to investments by fiduciaries; and providing for an effective                                          
02 date."                                                                                                                  
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 06.05.180(10) is amended to read:                                                                   
05   (10)  whenever the instrument or power governing the fiduciary                                                       
06 relationship directs, requires, authorizes, or permits investment in obligations of the                                 
07 United States government, or its agencies or instrumentalities, invest in those                                       
08 obligations either directly or [, FOR SHORT-TERM CASH MANAGEMENT                                                        
09 PURPOSES,] in the form of securities of, or other interests in, [A MONEY MARKET                                         
10 MUTUAL FUND OPERATING AS] an open-end or closed-end management type                                                   
11 investment company or investment trust registered under 15 U.S.C. 80a-1 - 80a-64                                        
12 (Investment Company Act of 1940) [,] if                                                                                 
13   (A)  the portfolio of the investment company or investment trust                                                    
14 is limited to                                                                                                           
01   (i)  obligations of the United States government, or its                                                        
02 agencies or instrumentalities;                                                                                          
03   (ii)  [AND] repurchase agreements fully collateralized by                                                         
04 the obligations identified in (i) of this subparagraph; and                                                            
05   (iii)  securities of, or other interests in, other open-end                                                        
06 or closed-end management type investment companies or                                                                   
07 investment trusts  registered under 15 U.S.C. 80a-1 - 80a-64 whose                                                      
08 portfolios are limited to the obligations and repurchase agreements                                                     
09 identified in (i) and (ii) of this subparagraph; and                                                                   
10   (B)  the investment company or investment trust takes delivery                                                      
11 of the collateral for any repurchase agreement directly or through an                                                 
12 authorized custodian.                                                                                                   
13    * Sec. 2.  AS 13.90.010, as added by sec. 4, ch. 10, SLA 1996, is amended to read:                                   
14  Sec. 13.90.010.  INVESTMENTS BY FIDUCIARIES.  (a)  Notwithstanding                                                    
15 other provisions of law, except for AS 13.36.300 and the standards of judgment and                                      
16 care established by law, and subject to any express provision or limitation contained                                   
17 in a particular instrument creating the fiduciary relationship, fiduciaries are authorized                              
18 to acquire and hold securities of an [OPEN-END OR CLOSED-END MANAGEMENT                                                 
19 TYPE] investment company [OR INVESTMENT TRUST IF THE COMPANY OR                                                         
20 TRUST IS REGISTERED UNDER 15 U.S.C. 80a-1 - 80a-64 (INVESTMENT                                                          
21 COMPANY ACT OF 1940), AS THAT ACT EXISTS NOW OR IS AMENDED IN                                                           
22 THE FUTURE].                                                                                                            
23  (b)  Whenever [UNDER (a) OF THIS SECTION, WHENEVER] an instrument                                                  
24 or power governing [CREATING] a fiduciary relationship directs, requires,                                              
25 authorizes, or permits investment in obligations of the United States government, or                                   
26 its agencies or instrumentalities, the fiduciary may invest in those [AND HOLD                                       
27 THE] obligations either directly or in the form of securities of, or other interests [AS                            
28 ANOTHER INTEREST] in, an investment company if                                                                          
29   (1)  the portfolio of the company is limited to                                                                    
30   (A)  obligations of the United States government, or its agencies                                                
31 or instrumentalities;                                                                                                   
01   (B)  [AND TO] repurchase agreements fully collateralized by the                                                    
02 obligations identified in (A) of this paragraph; [,] and                                                              
03   (C)  securities of, or other interests in, other investment                                                        
04 companies whose portfolios are limited to the obligations and repurchase                                                
05 agreements identified in (A) and (B) of this paragraph; and                                                             
06   (2)  [, IF A REPURCHASE AGREEMENT IS INVOLVED,] the                                                                 
07 investment company takes delivery of the collateral for any repurchase agreement                                      
08 either directly or through an authorized custodian.                                                                     
09  (c)  Under (a) and (b) of this section, if a bank or trust company is the                                           
10 fiduciary, the bank or trust company may invest or reinvest in the securities of an                                     
11 investment company even if the fiduciary or an affiliated bank or trust company                                         
12 provides services to the investment company and the fiduciary or affiliate receives                                     
13 reasonable compensation for the services.  Upon request of the person, the fiduciary                                    
14 shall furnish a copy of the prospectus relating to the securities acquired under this                                   
15 subsection to a person to whom a regular periodic accounting is ordinarily rendered                                     
16 under an instrument creating a fiduciary relationship.                                                                  
17  (d)  In this section,                                                                                                 
18   (1)  "affiliated"  means two or more banks or trust companies in which                                               
19   (A)  25 percent or more of the voting shares, excluding shares                                                      
20 owned by the United States or by a corporation or another entity wholly owned                                           
21 by the United States, is directly or indirectly owned or controlled by a holding                                        
22 company; or                                                                                                             
23   (B)  the election of a majority of the directors is controlled in                                                   
24 any manner by a holding company;                                                                                        
25   (2)  "bank" means an organization that is authorized by the United                                                   
26 States Comptroller of the Currency, or by the director of banking or the equivalent                                     
27 position in the state of its organization, to accept deposits and to make commercial                                    
28 loans, and whose deposits are insured by the Federal Deposit Insurance Corporation;                                     
29   (3)  "fiduciary" includes guardians and conservators under AS 13.26,                                                 
30 persons performing the trustee activities described under AS 06.05.180 whether or not                                   
31 the persons are covered by AS 06.05.180, and other persons acting in a fiduciary                                        
01 capacity;                                                                                                               
02   (4)  "investment company" means an open-end or closed-end                                                            
03 management type investment company or investment trust registered under 15 U.S.C.                                       
04 80a-1 - 80a-64 (Investment Company Act of 1940), as that act exists now or as                                           
05 amended in the future;                                                                                                  
06   (5)  "services" includes acting as an investment advisor, custodian,                                                 
07 transfer agent, registrar, sponsor, distributor, [OR] manager, and services related to                                 
08 acting as an investment advisor, custodian, transfer agent, registrar, sponsor,                                         
09 distributor, or manager;                                                                                               
10   (6)  "trust company" means a financial institution, corporation, or other                                            
11 legal entity, authorized to exercise general trust powers, but does not include a natural                               
12 person.                                                                                                                 
13    * Sec. 3.  If the effective date of  SB 131 am H, passed by the Nineteenth Alaska State                              
14 Legislature, is before sec. 2 of this Act takes effect, sec. 2 of this Act is retroactive to the                        
15 effective date of SB 131 am H.                                                                                          
16    * Sec. 4.  Section 2 of this Act takes effect on the effective date of SB 131 am H,  passed                          
17 by the Nineteenth Alaska State Legislature.