SF No. 341 provides state or locally owned hospitals a broad exemption from generally applicable restrictions on the investment of local public funds by allowing the investment of hospital funds in any security recommended by an investment advisor, or by a bank or trust company exercising its trust powers.
Currently, Minnesota Statutes, section 144.581, subdivision 1, grants state or locally owned hospitals the authority and legal capacity of a nonprofit corporation under Chapter 317A, which permits nonprofit corporations to invest in securities. The power to invest local public funds in securities, however, is limited by Chapter 118A. Chapter 118A limits (1) what funds may be invested, and (2) what investment vehicles are permitted. Currently permissible investment vehicles for local public funds include United States securities; state and local securities that meet varying bond rating thresholds; certain highly rated commercial paper; and certain general obligation bonds.