Committee approves bill to extend state oversight of local government investment pools

The Banking Committee unanimously approved LC 620295 after hearing from treasury staff that the measure would place any locally created investment pools that are marketed to other public entities under state depository-board review.

Treasury testimony described the existing local government investment pool (LGIP) used voluntarily by cities, counties and institutions: "we manage about $80,000,000,000 in our office," the treasurer said, adding that the LGIP currently has more than 550 local government participants and is audited annually with AAA ratings for certain offerings.

Sponsor and treasurer testimony framed the bill as a protective step: state oversight would set governance standards and audit requirements for any future local pools offered to other governments, preventing the creation of unregulated or poorly governed pools that could expose municipalities to liquidity risk or fraud. The sponsor cited past failures in other states as reasons to retain robust oversight.

Committee members asked whether digital assets or unrated securities could be included; treasury witnesses said the state's standards would guide approvals and that contracting options exist (for example, partnering with other states or third‑party custodians) so the state would not necessarily build physical vaults or assume direct fiscal exposure.

A motion to pass the bill was made, seconded and approved by the committee without recorded opposition. The bill will proceed for further legislative action.