Arkansas Code, Volume 19A, 2013 Supplement

2013·14.9 MB·English

by  State of Arkansas

Arkansas Code
OF
1987
Annotated
SUPPLEMENT
2013
VOLUME
19A
Place in pocket of bound volume
Prepared by the Editorial Staffofthe Publisher
Under the Direction and Supervision ofthe
ARKANSAS CODE REVISION COMMISSION
Senator David Johnson, Chair
Senator David Burnett
Representative John Vines
Representative Darrin Wilhams
Honorable Bettina E. Brownstein
Honorable Don Schnipper
Honorable David R. Matthews
Honorable Stacy Leeds, Dean, University ofArkansas at
Fayetteville, School ofLaw
Honorable Michael H. Schwartz, Dean, University ofArkansas at
Little Rock, School ofLaw
Honorable Warren T. Readnour, SeniorAssistant Attorney General
Honorable Matthew Miller, Assistant Director for Legal Services of
the Bureau ofLegislative Research
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(Pub.40604)
TITLE 19
PUBLIC FINANCE
(CHAPTERS 6-12 IN VOLUME 19B)
CHAPTER.
GENERAL PROVISIONS.
1. —
STATE REVENUES RECEIPTS AND EXPENDITURES GENERALLY.
2.
STATE TREASURY MANAGEMENT.
3.
STATE ACCOUNTINGAND BUDGETARY PROCEDURES.
4.
5. REVENUE STABILIZATION LAW.
CHAPTER
1
GENERAL PROVISIONS
subchapter.
2. Fiscal Duties of Department of FinanceandAdministration.
5. Investment of Public Funds.
7. Fiscal Impact Statements.
—
Subchapter 2 Fiscal Duties of Department of Finance and
Administration
section.
19-1-205. Office.
19-1-205. Office.
The Arkansas Building Authority shall assign to the Department of
Finance and Administration and divisions of the department suitable
office space with the necessary conveniences for the transaction ofthe
department's business and the safe-keeping of the department's re-
cords.
History.Acts 1955, No. 315, § 4;A.S.A. ity" for "officer or board having custody of
1947, § 13-204; Acts 2009, No. 251, § 1. thepubhcbuildings,"deleted"inthe State
Amendments. The 2009 amendment Capitol Building" following "office space,"
substituted "Arkansas Building Author- and made minor stylistic changes.
—
Subchapter 5 Investment of Public Funds
SECTION. SECTION.
19-1-501. Eligible investment securities. 19-1-504. Investments permitted.
19-1-502. Provisions supplemental. 19-1-505. Additional authority of certain
19-1-503. Construction. cities.
1
19-1-501 PUBLIC FINANCE 2
19-1-501. Eligible investment securities.
As used in this subchapter, "ehgible investment securities" means:
(1) A direct or guaranteed obhgation of the United States that is
backed by the full faith and credit ofthe United States Government;
(2) A direct obligation ofan agency, instrumentality, or government-
sponsored enterprise created by act ofthe United States Congress and
authorized to issue securities or evidences ofindebtedness, regardless
ofwhether the securities or evidences ofindebtedness are guaranteed
for repayment by the United States Government; and
(3) A bond or other debt of the state, a school district, a county
government, a municipal government, or an authority ofa governmen-
tal entity that:
(A) Is issued for an essential governmental purpose or is guaran-
teed by a state agency; and
(B) Has a debt rating from a nationally recognized credit rating
agency of"A" or better at the time ofpurchase.
History. Acts 1943, No. 273, § 2; 1973, Amendments. The 2011 amendment
No. 106, § 2; A.S.A. 1947, § 13-902; Acts rewrote the section.
2011, No. 629, § 1.
19-1-502. Provisions supplemental.
This subchapter does not repeal any prior legislation or affect any
statute pertaining to the conversion of funds of public officials and
agencies into investments authorized under this subchapter but is
supplemental to present law and confers additional powers.
History.Acts 1943, No. 273, § 3;A.S.A. Amendments. The 2011 amendment
1947, § 13-903; Acts 2011, No. 629, § 1. rewrote the section.
19-1-503. Construction.
(a) This subchapter does not affect the power ofcounties, municipali-
ties, improvement districts, and other public bodies to make a deposit of
funds in the form of a demand deposit, a savings deposit, or a time
deposit as authorized by law.
(b) The adoption of this subchapter does not affect or impair the
power of counties, municipalities, improvement districts, and other
public bodies to make investments offunds in their possession or under
their control as authorized by other laws.
History.Acts 1973, No. 106, § 3;A.S.A. deposit, or atime deposit" for"certificates
1947, § 13-904; Acts 2011, No. 629, § 1. of deposit" in (a) and made styhstic
Amendments. The 2011 amendment changes,
substituted "a demand deposit, a savings
3 GENERAL PROVISIONS 19-1-504
19-1-504. Investments permitted.
(a)(1) With the approval ofthe county or municipal depository board,
a treasurer may convert any funds in the treasurer's possession or
under the treasurer's control and not presently needed for other
purposes into one (1) or more ofthe following investments:
(A) Eligible investment securities having a maturity ofnot longer
than five (5) years from the date ofacquisition unless, as documented
at the time of acquisition, the investment is to fund or support a
specific purpose and there are no expectations that the investment
will be sold before maturity;
(B) An Arkansas bank certificate of deposit or a certificate of
deposit authorized under § 19-8-111;
(C) An account established by a local governmentjoint investment
trust authorized underthe Local GovernmentJoint InvestmentTrust
Act, § 19-8-301 et seq.; or
(D) An Arkansas financial institution repurchase agreement for
eligible investment securities in which the seller agrees to repur-
chase the investment at a price including interest earned during the
holding period as determined by the repurchase agreement.
(2) The following entities may convert funds that are in the posses-
sion of the entity or under the control of the entity and that are not
presently needed for other purposes into an investment listed in
subdivision (a)(1) ofthis section:
A
(A) county board or commission;
A
(B) municipal board or commission, includingwithout limitation
a board oftrustees of a policemen's pension and relieffund, a board
of trustees of a firemen's relief and pension fund, a waterworks
commission, and a sewer committee; and
(C) A drainage district, levee district, and improvement district,
including without limitation a waterworks district, electric light
district, municipal improvement district, and suburban improvement
district.
(3) This subsection does not apply to funds of a school district.
(b)(1) Unless otherwise provided by a signed written agreement
between the school district or districts and the county treasurer, funds
of a school district shall be invested by the:
(A) School district treasurer when the school district has a trea-
surer; or
(B) County treasurer when the school district does not have a
treasurer.
(2) To the extent directed by the board of directors of the school
district, investments shall be in:
(A) General obligation bonds ofthe United States;
(B) Bonds, notes, debentures, or other obligations issued by an
agency ofthe United States Government;
(C) General obligation bonds ofthe state; or
(D) Bank certificates of deposit.
19-1-505 PUBLIC FINANCE 4
(c) A school district may invest moneys held for the repayment of a
federally recognized qualified zone academy bond under 26 U.S.C.
§ 1397E, as it existed on January 1, 2005, in a guaranteed investment
contract or forward delivery agreement in which the school district is
guaranteed a certain rate of interest on its investment if the guaran-
teed investment contract or the forward delivery agreement is entered
into between the school district and the purchaser ofthe qualified zone
academy bond.
(d) A treasurer or other custodian ofpublic funds who is authorized
to purchase and hold eligible investment securities may use a broker-
age account to acquire, sell, and hold the investment ifthe investment
is established with a broker-dealer that:
(1) Has offices in the state;
(2) Is registered with the State Securities Department;
(3) Is a member ofthe Financial Industry RegulatoryAuthority; and
(4) Is a member ofthe Securities Investor Protection Corporation.
(e) Unless restrictions are established by the donor, a private dona-
tion to a city of the first class, a city of the second class, or an
incorporated town may be invested in accordance with the prudent
investor rule established under § 28-71-105.
History. Acts 1943, No. 273, § 1; 1973, substituted "1397E, as it existed onJanu-
No. 106, § 1; A.S.A. 1947, § 13-901; Acts ary 1, 2005" for "1379E" in (c).
1995, No. 402, § 1; 1997, No. 800, § 1; The 2011 amendment rewrote (a); sub-
2005, No. 2205, § 1; 2009, No. 251, § 2; stituted "state" for "State ofArkansas" in
2011, No. 629, § 1. (b)(2)(C); and added (d) and (e).
Amendments. The 2009 amendment
19-1-505. Additional authority of certain cities.
A
(a)(1) city that has real property assessed valuation in excess of
three hundred million dollars ($300,000,000) may invest the city's
funds in securities under § 23-47-401 and according to the investment
policy adopted by the governing body ofthe city.
(2) The investment policy adopted by the city's governing body may
authorize a maturity term exceeding the term stated in § 19-1-
504(a)(1)(A).
(b)(1) Each investment shall be made with the judgment and care
under prevailing circumstances that a person of prudence, discretion,
and intelligence would exercise in the management ofthe person's own
affairs, not for speculation but for investment, considering the probable
safety ofthe capital and the probable income to be derived.
(2) Investment of funds shall be governed by the following invest-
ment objectives in order ofpriority:
(A) Preservation and safety ofthe principal;
(B) Liquidity; and
(C) Yield.
(c) In determining whether an investment officer has exercised
prudence with respect to an investment decision, the determination
shall be made taking into consideration:
5 GENERAL PROVISIONS 19-1-703
(1) The investment ofcity funds and funds under the officer's control
and over which the officer had responsibihty, rather than a consider-
ation as to the prudence of a single investment; and
(2) Whether the investment decision is consistent with the written
investment policy ofthe city.
History. Acts 2011, No. 629, § 1.
—
Subchapter 7 Fiscal Impact Statements
SECTION.
19-1-701. Definition.
19-1-703. Required for bills.
19-1-701. Definition.
(a) As used in this subchapter, "fiscal impact statement" means a
realistic statement of the purpose of a proposed law, or a regulation
promulgated under a law, and the estimated financial cost to the state
or any local school district of implementing or complying with the
proposed law or regulation.
A
(b) fiscal impact statement shall be developed with the guidance of
the Office of Economic and Tax Policy of the Bureau of Legislative
Research and with the approval ofthe Department ofEducation.
History. Acts 1995, No. 1253, § 1; The2011 amendmentinserted"Officeof
2009, No. 251, § 3; 2011, No. 856, § 1. Economic and Tax Policy ofthe" in (b).
Amendments. The 2009 amendment
deleted"Office ofEconomicandTaxPolicy
ofthe" preceding "Bureau" in (b).
19-1-703. Required for bills.
(a) Any bill filed in the House ofRepresentatives or Senate that will
impose a new or increased cost obligation for education on the state or
anylocal school district shall have a fiscal impact statement attached to
it, prepared by the author of the bill and filed with the chair of the
committee to which the bill is referred:
(1) At least seven (7) days before the bill may be called up for final
action in the committee during a regular session of the General
Assembly;
(2) At least seven (7) days before the bill may be called up for final
action in the committee during a fiscal session; and
(3) At least one (1) daybefore the bill maybe called up forfinal action
in the committee during a special session.
(b) Ifthe author ofany House or Senate bill affected by this section
shall fail to comply with subsection (a) of this section, any member of
the House ofRepresentatives or Senate committee to which the bill is
referred may object and thereby prevent its being called up for final
action in the committee until a fiscal impact statement is made
19-2-508 PUBLIC FINANCE 6
available.An affirmativevote oftwo-thirds (2/3) ofa quorum present and
voting shall override such objection.
(c)(1)(A) Ifany such House or Senate bill is called up forfinal passage
in the House of Representatives or Senate and a fiscal impact
statement has not been provided by the author ofthe bill, or by the
committee to which the bill was referred, any member ofthe House of
Representatives or Senate may object to the bill's being called up for
final passage until a fiscal impact statement is prepared and made
available on the desk ofeach member ofthe House ofRepresentatives
or Senate atleast one (1) daypriorto the bill's beingcalledup forfinal
passage.
(B) An affirmative vote oftwo-thirds (%) ofa quorum present and
voting shall override such objection.
(2) If an objection is made without override, the presiding officer of
the House of Representatives or Senate shall cause the bill to be
referred to the Office of Economic and Tax Policy of the Bureau of
Legislative Research for the preparation of a fiscal impact statement,
which shall be filed with the presiding officer not laterthan five (5) days
from the date ofthe request.
(d) Failure of the author of a bill to provide the fiscal impact
statement required in this section shall not prohibit consideration of
the bill in the committee to which it is referred or on the floor of the
house in which the bill is called up for final passage, ifno objection to
it is made at the time such action is taken.
History. Acts 1995, No. 1253, § 3; thefollowingsubdivision as (a)(3); deleted
2009, No. 962, § 37. "of the General Assembly" at the end of
Amendments. The 2009 amendment (a)(3); and made related changes,
inserted present (a)(2) and redesignated
CHAPTER
2
—
STATE REVENUES RECEIPTS AND EXPENDITURES
GENERALLY
subchapter.
5. Canceled Checks.
—
Subchapter 5 Canceled Checks
SECTION.
19-2-508. [Repealed.]
19-2-508. [Repealed.]
Publisher's Notes. This section, con- 2009, No. 251, § 4. The section was de-
cerning compliance, was repealed byActs rived fromActs 1999, No. 648, § 8.
7 STATE TREASURY MANAGEMENT 19-3-101
CHAPTER
3
STATE TREASURY MANAGEMENT
subchapter.
1. General Provisions.
5. State Treasury Management Law.
6. State Treasury Money Management Trust.
7. State Board of Finance.
—
Subchapter 1 General Provisions
SECTION.
19-3-101. [Repealed.]
19-3-101. [Repealed.]
Publisher's Notes. This section, con- section was derived from Acts 1955, No.
cerning the State Board of Finance, was 338, § 1; 1965 (1st Ex. Sess.), No. 12,
repealed byActs 2013, No. 1088, § 5. The § 12; A.S.A. 1947, § 13-401.
—
Subchapter 5 State Treasury Management Law
SECTION. SECTION.
19-3-501. Title. funds not needed for im-
19-3-502. Definitions. mediate cash require-
19-3-503. State Treasury accounts. ments.
19-3-504. Record and report of financial 19-3-513. Interest income on deposits.
transactions. 19-3-514. List ofdeposits.
19-3-505. Disposition ofmoneys received 19-3-515. Charges on deposits.
by Treasurer ofState. 19-3-516. Discontinuance asbankdeposi-
19-3-506. Custodian —ofmoneys and secu- tory
—rities Internal controls 19-3-517. Effect ofproper deposits.
Annual audit.
19-3-507. Bank depositories generally. 19-3-518. Investments in securities and
bank certificates of de-
19-3-508. Deposits in ineligible institu-
posit.
tions.
19-3-509. Maximum amount of d—eposits 19-3-519. State Treasury Certificate of
and investments Pro- Deposit Investment Pro-
tection of State Treasury gram.
funds. 19-3-520. Minimum balance to be main-
19-3-510. Types ofaccount—s for deposits. tained.
19-3-511. Term ofdeposit Interest. 19-3-521. Securities Reserve Fund.
19-3-512. Estimate and investment of 19-3-522. Servicing state debt.
A.C.R.C. Notes. Acts 2013, No. 1088, ofthis act until January 1, 2014, to com-
§ 4, provided: "Grace period. ply with:
"Upon application and for good cause "(1) An eligibility requirement estab-
the State Board ofFinance may allow an lishedaftertheeffectivedateofthisact;or
entity that was a bank depository or in- "(2) Arequirementof§ 19-3-501 etseq.
vestment depository on the effective date established by this act."
19-3-501 PUBLIC FINANCE 8
19-3-501. Title.
This subchapter shall be known and may be cited as the "State
Treasury Management Law".
History. Acts 1997, No. 847, § 1; 2013, inserted"shallbeknown and" anddeleted
No. 1088, § 2. "referred to and" preceding "cited."
Amendments. The 2013 amendment
19-3-502. Definitions.
As used in this subchapter:
(1) "Bank" means:
(A) A state bank, a national bank, or an out-of-state state-char-
tered bank that has received a certificate of authority under § 23-
48-1001; and
(B) A foreign bank organized under the laws of a territory of the
United States, Puerto Rico, Guam, American Samoa, or the United
States Virgin Islands ifthe deposits ofthe foreign bank are insured
by the Federal Deposit Insurance Corporation;
(2) "Bank depository" means a bank or savings and loan association
that accepts a deposit offunds from the State Treasury;
(3) "Capital base" means the sum of a bank's capital stock, surplus,
and undivided profits, plus any additions and less any subtractions
which the commissioner may by regulation prescribe;
(4) "Cash Account" means the asset account in the State Treasury
consisting of all cash:
(A) In the hands ofthe Treasurer of State; and
(B) On deposit in the name of the Treasurer of State in a bank
depository;
(5) "Certificate of Deposit Account" means the asset account in the
State Treasury consistingofall, but only, certificates ofdeposit acquired
by the Treasurer of State through the State Treasury Certificate of
Deposit Investment Program;
(6) "Fund account" means a specifically named liability account in
the State Treasury to which moneys are credited upon receipt and
charged upon withdrawal that:
(A) Is created or authorized by law; and
(B) Reflects the amount ofmoney owed to an agency or instrumen-
tality ofthe State ofArkansas;
(7) "Gross treasury fund balances" means the aggregate total
amount ofthe balances standing to the credit ofall funds on the records
ofthe Treasurer of State;
(8) "Investment depository" means a person or entity that accepts
money or securities from the State Treasury for investment purposes;
(9) "National bank" means a national banking association organized
to carry on the business of banking under Title 12, Chapter 2, of the
United States Code;
(10) "SafekeepingAccount" means the account in the State Treasury
administered by the Treasurer of State for the benefit ofother govern-