Appropriations panel backs bills to codify treasurer investment practices, limit speculative investments and keep LGIP in-house

The Appropriations Committee advanced two treasury-related bills aimed at codifying current practices at the State Treasurer's Office.

HB2303 would require the treasurer to prioritize safety and principal preservation and prohibit speculative investments and misuse of insider information. Committee staff explained speculative investments are defined in the bill as high-risk assets that rely on near-term price appreciation rather than income. Deputy Treasurer Jeff Cross told the committee the office manages about $32.5 billion in assets and that its current investment policy already emphasizes safety, liquidity and yield; the bill codifies those practices to bind future treasurers. Members asked whether custody of a state Bitcoin reserve or prior holdings (e.g., NVIDIA exposure) would be affected; Cross said custody arrangements and mainstream equity holdings are not intended to be prohibited and that enforcement could include state causes of action enforced by the attorney general.

HB2344 directs the treasurer to manage the Local Government Investment Pool (LGIP) and allows a third-party contract only as a disaster backup. Cross said the LGIP currently manages about $7.8 billion for 183 local government clients at a fee of 5.5 basis points (0.055%), and argued that codifying in statute preserves local liquidity and low fees and prevents a future treasurer from outsourcing and increasing costs. Members pressed on local choice, whether cities could opt out (they can), and the contingency arrangements for emergency backup. Both bills moved forward on due-pass recommendations (HB2303: 15 yes, 0 no, 2 present, 1 not voting; HB2344: 12 yes, 2 no, 3 present, 1 not voting).