BILL NUMBER: AB 2122	CHAPTERED  06/30/02

	CHAPTER  83
	FILED WITH SECRETARY OF STATE  JUNE 30, 2002
	APPROVED BY GOVERNOR  JUNE 28, 2002
	PASSED THE SENATE  JUNE 17, 2002
	PASSED THE ASSEMBLY  MAY 16, 2002

INTRODUCED BY   Assembly Member Washington

                        FEBRUARY 19, 2002

   An act to amend Section 53635 of the Government Code, relating to
local agency funds.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2122, Washington.  Local agency investments.
   Existing law authorizes the legislative body of a local agency
having money in a sinking fund of, or surplus money in, its treasury
not required for the immediate needs of the local agency to invest
any portion of the money that it deems wise or expedient in specified
securities and financial instruments.  One of the types of eligible
securities is commercial paper of prime quality, as described.
Existing law limits counties and cities and counties to investing no
more than 40% of their money in eligible commercial paper and limits
other local agencies, such as cities, to investing no more than 25%
of their money in eligible commercial paper.
   This bill would make the City of Los Angeles subject to the same
concentration limits for investment in eligible commercial paper as
counties and cities and counties.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 53635 of the Government Code is amended to
read:
   53635.  (a) This section shall apply to a local agency that is a
county, a city and a county, or other local agency that pools money
in deposits or investments with other local agencies, including local
agencies that have the same governing body.  However, Section 53601
shall apply to all local agencies that pool money in deposits or
investments exclusively with local agencies that have the same
governing body.
   This section shall be interpreted in a manner that recognizes the
distinct characteristics of investment pools and the distinct
administrative burdens on managing and investing funds on a pooled
basis pursuant to Article 6 (commencing with Section 27130) of
Chapter 5 of Division 2 of Title 3.
   A local agency that is a county or a city and county may invest in
commercial paper pursuant to subdivision (g) of Section 53601,
except that the local agency shall be subject to the following
concentration limits:
   (1) No more than 40 percent of the local agency's money may be
invested in eligible commercial paper.
   (2) No more than 10 percent of the local agency's money that may
be invested pursuant to this section may be invested in the
outstanding commercial paper of any single corporate issuer.
   (3) No more than 10 percent of the outstanding commercial paper of
any single corporate issuer may be purchased by the local agency.
   (b) Notwithstanding Section 53601, the City of Los Angeles shall
be subject to the concentration limits of this section for counties
and cities and counties with regard to the investment of money in
eligible commercial paper.
  SEC. 2.  The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the Constitution because of
the unique circumstances of the City of Los Angeles.  The facts
constituting the special circumstances are:
   The investment needs of the City of Los Angeles are such that it
is more appropriate to apply the concentration limits otherwise
applicable to counties and cities and counties.