Agency Contact Information
Arizona State Treasurer- State Board of Investment
Authority
The State Board of Investment was established pursuant to requirements of the Arizona Constitution, Article 10, Section 7. Statutory authority is found at A.R.S. §§35-311.
Function
The Arizona Constitution requires the Legislature to establish a Board of Investment to serve as trustees of the state trust lands, now known as the Arizona Permanent Land Endowment Trust Fund (PLETF) and to provide for the management of the PLETF consistent with specific conditions (Arizona Constitution, Article 10, Section 7). The Board also reviews investment of state treasury monies and serves as trustee of any state, tribal and political subdivision endowment funds.
According to the State Treasurer's Investment Policy Statement, which the Board approves, the Treasurer manages investments for three main groups, collectively referred to as the "State's investment program," which includes the beneficiaries of the State Land Trust; local governments and political subdivisions of the State, and the State of Arizona and its respective agencies. The Board oversees investments for these groups pursuant to A.R.S. §35-311.
Currently, the Board is the trustee for the PLETF, the Arizona Endowment Trust Fund, the Arizona Family College Savings Program, pursuant to Laws 2020, Chapter 88, and any public pension prefunding plan investment accounts established pursuant to Laws 2020, Chapter 79. See www.aztreasury.gov
The Treasurer is required to provide a monthly report to the Board regarding the performance of current investments. The Board is authorized to order the Treasurer to sell any securities. An order must describe the specific securities to be sold and the time period during which they are to be sold.
History
Laws 1980, Chapter 108 established the State Board of Deposit to review investments for the permanent endowed funds, provide direction to the State Treasurer and to ensure that public monies were invested according to established guidelines. The Board of Deposit consisted of the State Treasurer, the Director of the Department of Administration, and the Superintendent of Banks.
Laws 1987, Chapter 184 established a five-member Board of Deposit, made up of the State Treasurer, the Director of the Department of Administration, the Superintendent of Banks and two members appointed by the Treasurer, and revised the duties of the Board.
Laws 1996, Chapter 64 required the Board to review investments of treasury monies, rather than permanent endowment funds.
Laws 1998, Chapter 69 changed the name of the Board to the "Board of Investment" and prescribed qualifications for the two members appointed by the State Treasurer.
Laws 1999, Chapter 74 specified the Board serve as trustees of the permanent state land funds and manage the assets according to requirements of the Arizona Constitution. (See Proposition 102, approved at the 1998 general election.)
Laws 2003, Chapter 264 required the State Treasurer and the Board of Investment to comply with agreements made by the School Facilities Board regarding investment of assets of the permanent state school fund (See section 34).
Laws 2004, Chapter 188 changed the name of the Arizona State Banking Department to the Department of Financial Institutions and made a conforming change to the title of the Board member representing that institution.
Laws 2008, Chapter 136 required the Board to serve as trustees of any state, tribal or political subdivision endowment funds established pursuant to agreement between the State Treasurer and the relevant governing body.
Laws 2011, Chapter 357 established the Defined Contribution and Retirement Study Committee consisting of 13 members, including the five members of the Board of Investment. A final report with recommendations on the feasibility and cost of transferring existing members of a public retirement system and providing a defined contribution plan for newly hired public employees was due by December 31, 2012.
Laws 2020, Chapter 79 established the Arizona Employers' Pension Prefunding Plan and authorized certain employers to prefund their required pension contributions. The measure authorized the State Board of Investment to serve as trustees of pension prefunding plan investment accounts for public employers that operate a defined benefit pension plan. In addition, the Board is authorized to adopt rules, policies and procedures to ensure the prefunding plan's income is not subject to federal income tax. (Note: the measure also authorized the Public Safety Personnel Retirement System to establish a pension prefunding plan. Those provisions are separate and not related to the Board of Investment.)
A second measure enacted in 2020 transferred responsibility for the Arizona Family College Savings Program from the Commission on Postsecondary Education to the Board of Investment. Effective October 1, 2020, the measure designates the Board as the Program trustee and the State Treasurer as the Program administrator. See Laws 2020, Chapter 88.
Sources
- Arizona Constitution
- Arizona Revised Statutes
- Session Laws
- Laws 1980, Chapter 108
- Laws 1987, Chapter 184
- Laws 1996, Chapter 64
- Laws 1998, Chapter 69
- Laws 1999, Chapter 74
- Laws 2003, Chapter 264
- Laws 2004, Chapter 188
- Laws 2008, Chapter 136
- Laws 2011, Chapter 357
- Laws 2020, Chapter 79 and Chapter 88
Arizona Secretary of State, Historical Election Information – 1998
Ballot Propositions - 1998
Arizona State Treasurer website