A bill before the House Government Operations Committee would expand the range of investments local governments may use under Public Act 20, proponents said Wednesday, while retaining safeguards intended to protect taxpayers.

"We focus on safety, liquidity, and yield in that order," John Globinski, Grand Rapids city treasurer, told the committee. Globinski and the bill sponsor said the change would allow local units to seek higher returns on reserve funds by adding narrowly defined options such as out‑of‑state time deposits, municipal bonds issued outside Michigan and short‑term corporate bonds purchased through qualified institutional channels.

Supporters said the current statute limits most local investments to U.S. government obligations, investments backed by state or local governments, bank savings accounts and certificates of deposit, which they say produced low yields during the prolonged low‑rate period following the COVID‑era downturn. Globinski said a modest increase in yield could produce measurable revenue: an extra 25 basis points on $500 million in reserves would yield roughly $1.25 million annually in interest.

The proposal includes multiple constraints, proponents said. Corporate debt would be limited to higher‑rated instruments, generally short maturities (no more than five years in the testimony) and purchases by qualified institutional buyers working through regulated advisers; some instruments would require the local unit to hold at least $100 million in assets or use pooled arrangements. Invested funds would remain subject to a municipal resolution, public transparency and annual review by the Michigan Department of Treasury under the bill’s structure, proponents said.

Supporters described extensive outreach to stakeholders in drafting the proposal, including the Michigan Department of Treasury, the Michigan Municipal Treasurers Association, the Michigan Association of County Treasurers, Michigan Municipal League, school finance officials and municipal investment pools such as Michigan CLASS. Globinski cited a survey of other states showing at least 33 jurisdictions allow broader options and said Michigan CLASS holds nearly $7 billion in assets across roughly 950 participants.

Committee members questioned oversight and the capacity of smaller local units. Globinski said larger cities use commission approval, fiscal committees and regular treasurer reporting plus annual audits; smaller villages and townships could start with existing pooled vehicles (such as Michigan CLASS) and training provided by professional associations before pursuing broader investment strategies. He warned against complex instruments such as fully callable bonds for less‑experienced units.

The chair and members also sought clarification that the bill would not permit cryptocurrencies or commodity investments; witnesses replied those are expressly excluded under current law and the proposal does not change that exclusion. Globinski emphasized that the bill is intended to add tools, not to compel changes in local policies.

Supporters noted the legislative analysis attached to the bill requires certain conditions (including the qualified institutional buyer threshold for corporate debt) and lists no direct fiscal impact to state or local government; proponents framed the bill as an opportunity to modestly increase investment return while preserving safety and public oversight.

If enacted, the measure would let local units adopt investment policies tailored to their size and risk tolerance, with larger institutional investors able to access a wider set of instruments under professional oversight and smaller units able to remain in more conservative, state‑accepted pooled arrangements.