Elections and Government Services Administrative Rules of Montana Business Services Notary and Certification Records and Information Management

2008 Ballot Issue C-44

Ballot Language of Constitutional Amendment No. 44

CONSTITUTIONAL AMENDMENT NO. 44
AN AMENDMENT TO THE CONSTITUTION PROPOSED BY THE LEGISLATURE

AN ACT SUBMITTING TO THE QUALIFIED ELECTORS OF MONTANA AN AMENDMENT TO ARTICLE VIII, SECTION 13, OF THE MONTANA CONSTITUTION TO ALLOW UP TO 25 PERCENT OF CERTAIN PUBLIC FUNDS TO BE INVESTED IN PRIVATE CORPORATE CAPITAL STOCK; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.

The 2007 Legislature submitted this proposal for a vote.  This measure would amend the Montana Constitution to allow up to 25 percent of all state trust fund assets to be invested in private corporate capital stock. Currently, the Constitution allows only Retirement Funds and Workers’ Compensation Insurance Funds to be invested in private corporate capital stock.

In the short term, it is expected that income will be reduced while trust monies are transferred from bonds to stocks. In the long term, if historical investment performance continues, trust fund income may increase because aggregate stock values are expected to appreciate, while bond values do not.

[ ] FOR allowing up to 25% of all public funds presently restricted to fixed income investments to be invested in private corporate capital stock.

[ ] AGAINST allowing up to 25% of all public funds presently restricted to fixed income investments to be invested in private corporate capital stock.

THE COMPLETE TEXT OF CONSTITUTIONAL AMENDMENT NO. 44 (C-44)

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

     Section 1.  Article VIII, section 13, of The Constitution of the State of Montana is amended to read:

     "Section 13. Investment of public funds and public retirement system and state compensation insurance fund assets. (1) The legislature shall provide for a unified investment program for public funds and public retirement system and state compensation insurance fund assets and provide rules therefor, including supervision of investment of surplus funds of all counties, cities, towns, and other local governmental entities. Each fund forming a part of the unified investment program shall be separately identified. Except as provided in subsections (3) and (4), no public up to 25 percent of public funds shall may be invested in private corporate capital stock in the same manner that a prudent expert acting in a fiduciary capacity and familiar with the circumstances would use. The investment program shall be audited at least annually and a report thereof submitted to the governor and legislature.

     (2) The public school fund and the permanent funds of the Montana university system and all other state institutions of learning shall be safely and conservatively invested in:

     (a) Public securities of the state, its subdivisions, local government units, and districts within the state, or

     (b) Bonds of the United States or other securities fully guaranteed as to principal and interest by the United States, or

     (c) Such other safe investments bearing a fixed rate of interest as may be provided by law. that a prudent expert acting in a fiduciary capacity and familiar with the circumstances would use in investing a fund guaranteed against loss or diversion.

     (3) Investment of public retirement system assets shall be managed in a fiduciary capacity in the same anner that a prudent expert acting in a fiduciary capacity and familiar with the circumstances would use in the conduct of an enterprise of a similar character with similar aims. Public retirement system assets may be invested in private corporate capital stock, and the restrictions in subsection (1) on the percentage that may be invested in private capital stock do not apply.

     (4) Investment of state compensation insurance fund assets shall be managed in a fiduciary capacity in the same manner that a prudent expert acting in a fiduciary capacity and familiar with the circumstances would use in the conduct of a private insurance organization. State compensation insurance fund assets may be invested in private corporate capital stock. However, the stock investments shall not exceed 25 percent of the book value of the state compensation insurance fund's total invested assets."

     Section 2.  Effective date. This amendment is effective upon approval by the electorate.

     Section 3.  Submission to electorate. This amendment shall be submitted to the qualified electors of Montana at the general election to be held in November 2008 by printing on the ballot the full title of this act and the following:

     [ ]       FOR allowing up to 25% of all public funds presently restricted to fixed income investments to be invested in private corporate capital stock.

     [ ]       AGAINST allowing up to 25% of all public funds presently restricted to fixed income investments to be invested in private corporate capital stock.