BILL NUMBER: SB 1033 CHAPTERED
BILL TEXT
CHAPTER 44
FILED WITH SECRETARY OF STATE JUNE 27, 2012
APPROVED BY GOVERNOR JUNE 27, 2012
PASSED THE SENATE JUNE 27, 2012
PASSED THE ASSEMBLY JUNE 27, 2012
AMENDED IN ASSEMBLY JUNE 25, 2012
INTRODUCED BY Committee on Budget and Fiscal Review
FEBRUARY 6, 2012
An act to add Section 16340 to the Government Code, relating to
state and local government, and making an appropriation therefor, to
take effect immediately, bill related to the budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 1033, Committee on Budget and Fiscal Review. State and local
government.
Existing law establishes the Local Agency Investment Fund,
authorizes a local government having money in its treasury not
required for immediate needs to remit it to the Treasurer for deposit
in that fund for the purpose of investment, and prescribes the
handling of that money.
This bill would establish the Voluntary Investment Program Fund
within the State Treasury for the receipt of voluntary deposits from
local entities, as specified. The bill would provide that the
deposits in the fund may be used only to cover short-term cash needs
of the state, as specified.
This bill would appropriate $1,000 from the General Fund to the
Department of Finance for the administration of its provisions.
This bill would declare that it is to take effect immediately as a
bill providing for appropriations related to the Budget Bill.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16340 is added to the Government Code, to read:
16340. (a) (1) The Voluntary Investment Program Fund is hereby
created within the State Treasury, for the receipt of voluntary
deposits from local entities.
(2) For purposes of this section, a "local entity" includes, but
is not limited to, any city, county, school district, or special
district.
(b) Each local entity that is approved by its governance body to
deposit moneys in the fund shall deposit no less than a total of two
hundred million dollars ($200,000,000). The total amount of moneys
that may be deposited in the fund from all eligible sources shall not
exceed, at any point in time, a total of ten billion dollars
($10,000, 000,000), or lesser amount as determined by the Director of
Finance, in consultation with the Treasurer.
(c) The terms and conditions of deposits made into the fund shall
be set by the Director of Finance, in consultation with the
Treasurer. Those terms shall include, but not be limited to, the size
of the deposit from a particular local entity, the length of time
those moneys shall be held in deposit in the fund, the availability
of funds for withdrawal by the local entity depositing the funds, and
the annual rate of interest paid on deposits, as described in
subdivision (e). However, the director and the Treasurer may only
permit deposits that do not exceed funds needed to address an actual
or anticipated cash shortfall in the General Fund not exceeding the
amounts of existing appropriations, including continuing and
continuous appropriations, to which resulting proceeds are to be
applied.
(d) Moneys held in the Fund shall be invested by the Treasurer in
investments authorized pursuant to Sections 16430 and 16480 through
the Pooled Money Investment Account, and whenever the Controller
determines that moneys in the General Fund, after allowing for
internal borrowing from other funds are, or are expected to be,
insufficient for the payment of all appropriations made by the
Legislature which are to be paid out of the moneys in the General
Fund, the State Controller may, based upon his or her estimate of the
probable income to the General Fund during the then fiscal year and
the probable dates of receipt thereof, may draw a demand or demands
against appropriations made from the General Fund to be paid in the
then current fiscal year prior to the receipt of the income, and
deliver the demand or demands to the Treasurer. The Treasurer shall
register the demand or demands for nonpayment and may borrow moneys
from the fund in an amount or amounts that is no greater than the
demand or demands provided. The borrowing, together with the interest
owed upon the account thereon, shall be paid exclusively from moneys
in the General Fund on probable or reasonably anticipated revenues
that are expected to be forthcoming within a short period of time,
but not excepting recourse to internal borrowing from other funds in
the event insufficient moneys are available from the General Fund.
Repayment of any of those borrowings shall be considered a priority
payment, equivalent to any other loan repayment made from the General
Fund to another state fund.
(e) Notwithstanding any other law, the rate of interest to be
earned by the depositors shall be the base apportionment rate based
on their pro rata share of the earnings of the Pooled Money
Investment Account on a quarterly basis at the end of each quarter
plus an enhanced amount. The pro rata share shall be determined by a
dollar-day participation. The base apportionment rate applied to
dollar-day participation in the fund shall be the quarter-to-date
average yield of the Pooled Money Investment Account for the current
quarter. The enhancement amount paid to depositors in the fund shall
be determined by the Director of Finance, in consultation with the
Treasurer, and shall be added to the base rate earned by the Pooled
Money Investment Account at the time the apportionment is made. The
total interest cost described in this subdivision shall not exceed
that provided for in paragraph (1) of subdivision (d) of Section
16731.
(f) Notwithstanding Section 13340, moneys in the fund are hereby
continuously appropriated for payment of interest expenditures to
depositors calculated in accordance with subdivision (e), other
related expenses as determined by the Department of Finance, and
return of deposits to depositors according to terms and conditions
set by the Director of Finance, in consultation with the Treasurer.
The amounts paid for interest and other related expenses shall be
attributable to the fiscal year in which the borrowing occurred which
is also the fiscal year upon which the appropriations against which
the demand or demands were made.
(g) The Department of Finance shall determine the budget items to
be used for the recording and reporting of interest expenditures and
other related expenses pursuant to this section.
(h) Deposits in the fund shall be tracked separately for each
participant in the state's accounting system, and shall be deemed to
be assets of each participant. These assets shall be reflected as
such on each participant's individual financial statements.
(i) These deposits are, and may only be used, to cover short-term
cash needs of the state and are, and shall be, in compliance with the
provisions of Proposition 58 of March 2004 as stated in subdivision
(c), Section 1.3 of Article XVI of the California Constitution.
Deposits and borrowing from the fund shall comply with the state's
debt limit restrictions.
(j) Actions by the Director of Finance, in consultation with the
Treasurer, in implementing and administering the investment program
provided for in this section and the Treasurer's and Controller's
actions in borrowing from the fund shall be exempt from the
provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3).
(k) Upon projection of insufficient cash in the General Fund, the
Director of Finance, in consultation with the Treasurer and
Controller, may utilize provisions similar to Section 16381 to
facilitate the implementation of the program.
SEC. 2. The sum of one thousand dollars ($1,000) is hereby
appropriated from the General Fund to the Department of Finance to
implement this act.
SEC. 3. This act is a bill providing for appropriations related to
the Budget Bill within the meaning of subdivision (e) of Section 12
of Article IV of the California Constitution, has been identified as
related to the budget in the Budget Bill, and shall take effect
immediately.