SF4367

Purpose

This bill would let certain local government housing and redevelopment agencies expand how they can invest money. It adds long-term equity investment options to their allowed tools, with the goal of supporting local housing development while expanding investment choices.

Main provisions

• Adds new investment authority for qualifying local governments, allowing them to invest the amount described in subdivision 3 in:
  • index mutual funds based in the United States that track a broad U.S. equity index, with the requirement that purchases be made directly through the fund’s main sales office.
  • shares of a company that meet all of these criteria:
  • is registered with the U.S. Securities and Exchange Commission (SEC)
  • concentrates in investment-grade fixed income securities
  • holds at least 80% of its investments in federally insured or guaranteed securities (including government-sponsored entities)
  • has a mission to provide direct investment in local multifamily housing development
  • investments with the Minnesota State Board of Investment, subject to terms and minimum amounts set by the board.
• Applies to “qualifying governments” (local housing and redevelopment agencies) and modifies the types of investments they may use.

Significant changes to existing law

• Amends Minnesota Statutes 2024 section 118A.09, subdivision 2, by adding a new subdivision that creates three new investment options for qualifying governments:
  • US index mutual funds (purchased directly from the fund’s main sales office)
  • Shares of a qualifying company with the specified criteria (SEC-registered, investment-grade focus, 80% in insured/guaranteed securities, and a local multifamily housing development mission)
  • Investments via the Minnesota State Board of Investment (with board-determined terms and minimums)
• Expands the list of permitted investments for local housing and redevelopment agencies beyond existing authorities.

How it would operate

• The authority to invest in index funds and certain corporate shares would come from the amount described in subdivision 3.
• Purchases of index funds must be made directly with the fund’s main sales office.
• The corporate share option requires the company to meet all listed criteria, including a focus on local multifamily housing development.
• The option to invest through the Minnesota State Board of Investment would be governed by terms and minimum amounts set by the board.

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Relevant Terms - qualifying governments - local government - housing and redevelopment agencies - long-term equity investment authority - Minnesota Statutes 2024 section 118A.09 - subdivision 2 - subdivision 3 - index mutual funds - United States broad market equity index - main sales office - United States Securities and Exchange Commission (SEC) - investment grade fixed income securities - federally insured or guaranteed securities - government sponsored entities - local multifamily housing development - Minnesota State Board of Investment