MACo Supports Local Investing Bill

Robin Clark Eilenberg, MACo Research Director, testified in support of SB 631, Local Facility Closure Reserve Funds – Investments and Reinvestments, to the House Appropriations Committee on April 5, 2016.

This 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 supports this legislation, which could be a helpful tool for county governments. For example, this bill would allow counties to invest in 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 the MACo 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 – SB 631 would provide an extra incentive for local governments to responsibly commit current funds toward these liabilities.

This bill passed the Senate (45-0) on March 21, 2016 and received a favorable report from the House Appropriations Committee on April 8, 2016.

An identical cross-filed bill, HB 835, passed the General Assembly on April 7, 2016.

For more on 2016 MACo legislation, visit the Legislative Database.