HB871: HB871 Local government; additional authorized investments; provide

Current Georgia law (O.C.G.A. § 36-83-4) lists the specific types of investments local governments are allowed to put public money into, such as government bonds, bank acceptances, and repurchase agreements. This bill adds three new categories to that list. Local governments would be allowed to invest in shares of certain no-load, open-end mutual funds or investment trusts registered under a federal investment law, in commingled stable net asset value investment trusts set up jointly by two or more local governments, and in commercial paper (short-term corporate debt) issued by companies that carry top-tier credit ratings from Moody's, Standard and Poor's, or Fitch. The bill does not remove any existing investment options, and it repeals any conflicting laws. No specific effective date is stated beyond the standard process.

• Adds mutual funds and investment trusts registered under the federal Investment Company Act of 1940 to the list of investments local governments may use.
• Allows local governments to invest in a commingled stable net asset value investment trust formed jointly by two or more local governments.
• Permits investment in commercial paper (short-term corporate debt) issued by companies rated at least P-1, A-1, or F-1 by major credit rating agencies.
• Leaves all previously authorized investment types, such as U.S. and state government obligations and repurchase agreements, unchanged.

City and county governments and other local government bodies in Georgia that manage and invest public funds, along with the financial officers who make investment decisions on their behalf.

Local governments would gain more places to put taxpayer money while it sits uninvested, potentially earning different returns than under current law. The change affects how cities and counties manage cash reserves, not how much money they have to spend.

• Section 1 revises paragraph (1) of subsection (a) of O.C.G.A. § 36-83-4, the code section governing which investments local governments may make.
• Adds subparagraph (I) allowing investment in no-load, open-end management type investment companies or trusts registered under the federal Investment Company Act of 1940.
• Adds subparagraph (J) allowing investment in a commingled stable net asset value investment trust created by intergovernmental agreement among two or more local governments.
• Adds subparagraph (K) allowing investment in commercial paper from domestic corporations rated P-1 (Moody's), A-1 (Standard and Poor's), or F-1 (Fitch).
• Section 2 repeals any conflicting laws.

1. 2025-03-31House Second Readers (House)
2. 2025-03-28House First Readers (House)
3. 2025-03-27House Hopper (House)

• Victor Anderson (R, HD-010)Primary sponsor
• Bruce Williamson (R, HD-112)
• Kimberly New (R, HD-040)
• David Clark (R, HD-100)
• Ron Stephens (R, HD-164)
• Billy Mitchell (D, HD-088)

• local government finance
• public funds investment
• municipal bonds
• commercial paper
• financial regulation