Local Investing Bill Passes House and Senate

A bill to create a modest extension of local investment policy has been passed by both the House and the Senate chambers in Annapolis. One of the bills must still be passed by the opposite chamber to proceed to the Governor’s office for his signature.

The bill will allow local governments to invest facility closure reserve funds like long-term funds, outside the tight restrictions placed on short-term investments. Both the House and Senate versions of the bill have passed their respective chambers and crossed-over.

MACo supported this legislation, which could be a helpful tool for county governments. An example of how this law could be applied is by allowing counties to invest landfill closure reserve funds.

Counties already set-aside funds in reserve for many years before a landfill closure.  The bill language would also cover closure reserves for locally operated composting or other similar facilities without the need for additional legislation.

As described in MACo’s testimony,

MACo supports this legislation as a reasonable and appropriate extension of current local government investment policy. The current list of exceptions to the “public funds” definition has been opened up piecemeal to allow counties to invest postemployment benefits, trust funds, and self- insurance funds following guidelines for pension fund investments. In each case the investments are still subject to a locally approved investment policy.

This bill’s additional exception for local facility closure reserve funds fits with the state’s policy intent, and allows county governments to invest these funds accordingly. The bill’s fiscal note identifies the widespread nature of these long term obligations – HB 835 would provide an extra incentive for local governments to responsibly commit current funds toward these liabilities.

For more information, see HB 835 and SB 631’s bill information from the Department of Legislative Services: Local Facility Closure Reserve FundInvestments and Reinvestments.