State Codes and Statutes
Statutes > Utah > Title-51 > Chapter-07 > 51-7-12-151-7-12.1. Deposit or investment of Tobacco Settlement Endowment -- Authorizeddeposits and investments -- Asset manager.
(1) Notwithstanding the requirements of Section 51-7-11, money in the permanent statetrust fund created by and operated under Utah Constitution Article XXII, Section 4, shall bedeposited or invested only in the following:
(a) any deposit or investment authorized by Section 51-7-11;
(b) equity securities, including common and preferred stock issued by corporations listedon a major securities exchange, in accordance with the following criteria applied at the time ofinvestment:
(i) the treasurer may not invest more than 5%, determined on a cost basis, of the totalendowment assets in the securities of any one issuer;
(ii) the treasurer may not invest more than 25%, determined on a cost basis, of the totalendowment assets in a particular industry;
(iii) the treasurer may not invest more than 5%, determined on a cost basis, of the totalendowment assets in securities of corporations that have been in continuous operation for lessthan three years;
(iv) the endowment may not hold in excess of 5% of the outstanding voting securities ofany one corporation; and
(v) at least 75% of the corporations in which investments are made under Subsection(1)(b) must appear on the Standard and Poor's 500 Composite Stock Price Index;
(c) fixed-income securities, including bonds, notes, mortgage securities, zero couponsecurities, and convertible securities issued by domestic corporations rated A or higher byMoody's Investor's Service, Inc. or by Standard and Poor's Corporation in accordance with thefollowing criteria applied at the time of investment:
(i) the treasurer may not invest more than 5%, determined on a cost basis, of the totalendowment assets in the securities of any one issuer;
(ii) the treasurer may not invest more than 25%, determined on a cost basis, of the totalendowment assets in a particular industry;
(iii) the treasurer may not invest more than 5%, determined on a cost basis, of the totalfund assets in the securities of corporations that have been in continuous operation for less thanthree years; and
(iv) the dollar-weighted average maturity of fixed-income securities acquired underSubsection (1)(c) may not exceed 10 years;
(d) fixed-income securities issued by agencies of the United States andgovernment-sponsored organizations, including mortgage-backed pass-through certificates andmortgage-backed bonds;
(e) shares of an open-end diversified management investment company established under the Investment Company Act of 1940; and
(f) shares of or deposits in a pooled-investment program.
(2) (a) No more than 80% of the total fund assets of any of this endowment, on a costbasis, may be invested in common or preferred stocks at any one time.
(b) At least 20% of the total assets of this endowment shall be invested in fixed-incomesecurities authorized by Subsections (1)(a), (c), and (d).
(3) The treasurer shall use appropriate investment strategies to protect the principal of theendowment administered under this section during periods of financial market volatility.
(4) (a) The treasurer may employ professional asset managers to assist in the investmentof assets of the endowment.
(b) The treasurer may provide compensation to asset managers from earnings generatedby the funds' investments.
(5) The council shall give suggestions, advice, and opinions to the treasurer in regard tothis section.
Enacted by Chapter 351, 2000 General Session
