53079.
(a) “Local public entity,” as used in this section, means any city or county, whether general law or chartered, district, public authority, public agency, or public corporation but does not include any entity of the state.
(b) If a local public entity requires any person, on or after January 1, 1986, to furnish a security, in the form of cash or a cashier’s check made payable to the local public entity, to guarantee the performance of any act or agreement related to a construction project, and if the local public entity invests that cash or the proceeds of that check, the local public entity shall pay interest on all, or any portion, of the amount of the balance of the security deposit which is returned to the person who furnished the security if the security is held by the local public entity for more than 30 days. The local public entity shall pay interest on that amount. The minimum interest rate paid shall be the average rate of return earned by the local public entity on its investments during the four full calendar quarters last preceding the return of the security deposit, less 1 full percentage point. Interest shall be paid from the date the security is provided to the local public entity until the date that all, or any portion, of the balance of the security deposit is returned to the person who furnished the security.
(c) The Legislature finds and declares that the payment of interest by local public entities for security furnished, as described in subdivision (b), is a matter of statewide interest and concern and the Legislature intends by this section to occupy the field of this regulation.
(Added by Stats. 1985, Ch. 247, Sec. 1.)