House approves amended bill to alter permanent state trust fund investment rules after tense debate

The Utah House on March 4 voted 45-28 to pass first substitute House Bill 337, which changes investment rules for the Permanent State Trust Fund after lawmakers reconsidered earlier action and adopted amendment #1.

Supporters said the amendment, negotiated with the state treasurer and securities director, clarifies how the fund may pursue a longer-term investment strategy similar to the school trust fund. Representative Nielsen, sponsor of the motion to reconsider and a floor speaker on the measure, said, “the fund currently has about $130,000,000 in it,” and argued that applying a long-term strategy has historically produced higher returns.

Opponents raised concerns about fees, outsourcing and the state’s internal capacity to manage complex instruments. Representative Cunningham, who sponsored the floor amendment, warned that “past performance is no guarantee of future results” while explaining the amendment was designed to address those concerns. Representative Christiansen and others questioned whether state offices have sufficient staff and expertise, and asked how compensation and vendor selection would be controlled.

During debate proponents pointed to the school trust fund’s long-term performance as a model; legislators on the floor cited a 10-year annualized return of about 5.5 percent for the school trust fund compared with roughly 2.5 percent for shorter-term approaches historically used by the state permanent fund. Amendment #1 was presented after meetings with the state treasurer and securities director and reporters of stakeholder input; supporters said it codifies oversight steps and clarifies compensation and evaluation of asset managers.

The House adopted the amendment on the floor and then passed the amended bill. The bill will be transmitted to the Senate for further consideration.