03/29/1994 01:33 PM Senate L&C

 SENATOR KELLY announced  SB 359  (INVESTMENT POOLS FOR PUBLIC                 
 ENTITIES) to be up for consideration.                                         
                                                                               
 DAVE ROSE, Financial Advisor, Alaska Municipal League Investment              
 Pool, said they are seeking clarification of what investment pools            
 can do.  AS 37.23. permits cities and boroughs to place money into            
 an investment pool for the purpose of trying to enhance their yield           
 or provide liquidity, and to secure professional funds management.            
                                                                               
 Section 1 clarifies the use of floating rate securities which are             
 reviewed annually or more frequently for rate.  The second change             
 in section 1 deals with the purchase of securities which are issued           
 by domestic branch banks whose parent may be a foreign bank.  These           
 are called Yankee securities which are denominated in dollars.                
                                                                               
 Section 2 is a new section which deals with lending of securities             
 providing collateral is received.  This is pretty much conventional           
 in the industry under the prudent investor rule; they are just                
 seeking explicit language.                                                    
                                                                               
 Section 3 removes a restriction which limits the amount of bank               
 paper that can be held by the portfolio, MR. ROSE said.                       
                                                                               
 SENATOR LINCOLN noted in a letter from Commissioner Rexwinkle there           
 was is a language change in section 2 that used "provided such                
 securities are fully collateralized" not "if the securities are..."           
 and asked the reason for that.  MR. ROSE said there was no reason             
 that he knew of and that the drafting attorneys did that.  He did             
 not think that was a major change.                                            
                                                                               
 Number 460                                                                    
                                                                               
 SENATOR RIEGER moved to pass SB 359 from committee with individual            
 recommendations.  There were no objections and it was so ordered.             
                                                                               
 SENATOR KELLY asked if this bill affected the Permanent Fund.  MR.            
 ROSE said it has no affect on it or any other state entity.