Today's Law As Amended


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AB-2638 Government finance: investment.(2015-2016)



As Amends the Law Today


SECTION 1.

 Section 16429.2 of the Government Code is amended to read:

16429.2.
 There is created the Local Investment Advisory Board consisting of five members. The chairman chair  shall be the State  Treasurer or his or her designated representative. Two members who are qualified by training and experience in the field of investment or finance, shall be appointed by the State  Treasurer. Two members who are treasurers, finance or fiscal officers officers,  or business managers, managers  employed by any county, city or local district district,  or municipal corporation of this the  state, shall be appointed by the Treasurer.
The term of office of each appointed member of the board is two three  years, but each appointed member serves at the pleasure of the appointing authority. A vacancy in the appointed membership, occurring other than by expiration of term, shall be filled in the same manner as the original appointment, but for the unexpired term only.
Members of the board who are not state officers or employees shall not receive a salary, but shall be entitled to a per diem allowance of fifty dollars ($50) for each day’s attendance at a meeting of the board, not to exceed three hundred dollars ($300) in any month. All members shall be entitled to reimbursement for expenses incurred in the performance of their duties under this part, including travel and other necessary expenses.
The board’s primary purpose shall be to advise and assist the State  Treasurer in formulating the investment and reinvestment of moneys in the Local Agency Investment Fund, and the acquisition, retention, management, and disposition of investments of the fund. The board, from time to time, shall review those policies and advise therein as it considers necessary or desirable. The board shall advise the State  Treasurer in the management of the fund and consult the State  Treasurer on any matter relating to the investment and reinvestment of moneys in the fund.

SEC. 2.

 Article 12 (commencing with Section 16429.50) is added to Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code, to read:

Article  12. Intermediate and Long Term Investment Fund
16429.50.
 (a) The Intermediate and Long Term Investment Fund is hereby created. The Treasurer shall administer the fund and shall maintain a separate account within the fund for each governmental unit having deposits in this fund.
(b) The purpose of the fund is to permit voluntary deposit of funds by a governmental entity where those funds may benefit from the intermediate or long-term investments authorized by this article.
(c) The moneys deposited into the Intermediate and Long Term Investment Fund shall be subject to the requirements of Section 16430, except that the moneys may also be invested in corporate bonds with a maturity of up to three years, in government bonds with a maturity of up to 30 years, in physical gold, and in convertible securities.
(d)  The Intermediate and Long Term Investment Advisory Board shall recommend to the Treasurer the moneys in the Surplus Money Investment Fund or the Local Agency Investment Fund which qualify to participate in the Intermediate and Long Term Investment Fund.
(e) The Treasurer may refuse to accept deposits into the fund if, in the judgment of the Treasurer, the deposit would adversely affect the state’s portfolio.
(f) Money in the fund shall be invested to achieve the objective of the fund, which is to realize the maximum return consistent with safe and prudent management.
(g) All instruments of title of all investments of the fund shall remain in the Treasurer’s vault or be held in safekeeping under control of the Treasurer in any federal reserve bank, or any branch thereof, or the Federal Home Loan Bank of San Francisco, with any trust company, or the trust department of any state or national bank.
(h) Immediately at the conclusion of each calendar quarter, all interest earned and other increment derived from investments shall be distributed by the Controller to the contributing governmental units or trustees or fiscal agents, nonprofit corporations, and quasi-governmental agencies in amounts directly proportionate to the respective amounts deposited in the Intermediate and Long Term Investment Fund and the length of time the amounts remained therein. An amount equal to the reasonable costs incurred in carrying out the provisions of this section, not to exceed a maximum of 5 percent of the earnings of this fund and not to exceed the amount appropriated in the annual Budget Act for this function, shall be deducted from the earnings prior to distribution. However, if the 13-week Daily Treasury Bill Rate, as published by the United States Department of the Treasury, on the last day of the state’s fiscal year is below 1 percent, then the above-noted reasonable costs shall not exceed a maximum of 8 percent of the earnings of this fund for the subsequent fiscal year, shall not exceed the amount appropriated in the annual Budget Act for this function, and shall be deducted from the earnings prior to distribution. The amount of the deduction shall be credited as reimbursements to the state agencies, including the Treasurer, the Controller, and the Department of Finance, having incurred costs in carrying out the provisions of this article.
16429.52.
 (a) Moneys placed with the Treasurer for deposit in the Intermediate and Long Term Investment Fund from the Local Agency Investment Fund shall be held in trust. Those funds shall not be subject to either of the following:
(1) Transfer or loan pursuant to Section 16310, 16312, or 16313.
(2) Impoundment or seizure by any state official or state agency.
(b) (1) The right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi-governmental agency to withdraw its deposited moneys from the Intermediate and Long Term Investment Fund, upon demand, shall not be altered, impaired, or denied, in any way, by any state official or state agency based upon the state’s failure to adopt a State Budget by July 1, of each new fiscal year.
(2) Notwithstanding paragraph (1), if an agency prematurely withdraws moneys deposited in a medium- or long-term investment, the agency shall pay its fair share of any penalty imposed, as determined by the Treasurer.
16429.54.
 (a) The Intermediate and Long Term Investment Advisory Board is hereby established, consisting of five members. The chairperson shall be the Treasurer or his or her designated representative. Two members who are qualified by training and experience in the field of investing and finance shall be appointed by the Treasurer. Two members who are treasurers, finance or fiscal officers, or business managers, employed by any county, city, or local district or municipal corporation of this state, shall be appointed by the Treasurer. No member of either the Local Investment Advisory Board or the Pooled Money Investment Board is eligible to be selected by the Treasurer for the Intermediate and Long Term Investment Board.
(b) The term of office of each appointed member of the board is two years, but each appointed member serves at the pleasure of the appointing authority. A vacancy in the appointed membership, occurring other than by expiration of term, shall be filled in the same manner as the original appointment, but for the unexpired term only.
(c) Members of the board who are not state officers or employees shall not receive a salary, but shall be entitled to a per diem allowance of fifty dollars ($50) for each day’s attendance at a meeting of the board, not to exceed three hundred dollars ($300) in any month. All members shall be entitled to reimbursement for expenses incurred in the performance of their duties under this part, including travel and other necessary expenses.
(d) The board’s primary purpose shall be to advise and assist the Treasurer in formulating the investment and reinvestment of moneys in the Intermediate and Long Term Investment Fund and the acquisition, retention, management, and disposition of investments of the fund. The board, from time to time, shall review those policies and advise therein as it considers necessary or desirable.
(e) The board shall distribute investment performance reports quarterly and distribute an annual report to the Legislature, in compliance with Section 9795 of the Government Code, and to the Department of Finance. The investment performance reports shall include investment returns, comparisons to benchmarks, holdings, market values, and fees.