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Senate panel hears SB152 to allow equities in coal severance trust; board warns of short-term spending drop
Summary
Senators heard competing views on SB152, which would amend the Montana Constitution to permit some coal severance trust funds to be invested in equities. The Board of Investments warned equities could reduce short-term distributable income and recommended alternatives such as a new equity-focused trust.
Senator Fern introduced Senate Bill 152, a proposed constitutional amendment to allow a portion of the coal severance tax trust to be invested in equities, and presented an amendment limiting that authority to funds distributed after the initiative’s passage. "This bill seeks to amend the Montana Constitution, allowing a portion of the coal trust severance fund to be invested in equities," Fern said during opening remarks.
The Board of Investments’ executive director, speaking in opposition, cautioned the committee that moving existing trust assets into equities could create an "asset-liability mismatch." He told senators that equities typically deliver lower current dividend income than the trust’s bond and…
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