AB 279, as amended, Dickinson. Financial affairs.
Existing law prescribes the instruments in and criteria by which a local agency, as defined, may invest and deposit its funds, including its surplus funds. Existing law authorizes a local agency to invest in specified certificates of deposit.
This bill wouldbegin insert, until January 1, 2019,end insert remove the term “certificates of deposit” and instead authorize a local agency to invest in depositsbegin insert, as specifiedend insert.begin delete This bill would also exclude from public funds reporting requirements specified deposits required under these provisions.end delete
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 53601.8 of the Government Code is
2amended to read:
Notwithstanding Section 53601 or any other provision
4of this code, a local agency that has the authority under law to
P2 1invest funds, at its discretion, may invest a portion of its surplus
2funds in deposits at a commercial bank, savings bank, savings and
3loan association, or credit union that uses a private sector entity
4that assists in the placement ofbegin delete deposits, provided that the deposits begin insert depositsend insert. The
5placed pursuant to this section, Section 53635.8, and subdivision
6(i) of Section 53601 do not, in total, exceed 30 percent of the
7agency’s funds that may be invested for this purposeend delete
8
following conditions shall apply:
9(a) The local agency shall choose a nationally or state chartered
10commercial bank, savings bank, savings and loan association, or
11credit union in this state to invest the funds, which shall be known
12as the “selected” depository institution.
13(b) The selected depository institution may submit the funds to
14a private sector entity that assists in the placement of deposits with
15one or more commercial banks, savings banks, savings and loan
16associations, or credit unions that are located in the United States,
17for the local agency’s account.
18(c) The full amount of the deposit placed pursuant tobegin delete this sectionend delete
19begin insert
subdivision (b) by the private sector entity end insert and the interest that
20may be accrued for eachbegin insert suchend insert deposit shall at all times be insured
21by the Federal Deposit Insurance Corporation or the National
22Credit Union Administration.
23(d) The selected depository institution shall serve as a custodian
24for eachbegin insert suchend insert deposit.
25(e) On the same date that the local agency’s funds arebegin delete depositedend delete
26begin insert placed end insert pursuant
tobegin delete this sectionend deletebegin insert
subdivision (b) by the private sector
27entityend insert, the selected depository institution shall receive an amount
28of insured deposits from other financial institutions that, in total,
29are equal to, or greater than, the full amount of the principal that
30the local agency initially deposited through the selected depository
31institution pursuant tobegin delete this sectionend deletebegin insert subdivision (b)end insert.
32(f) Notwithstanding subdivisions (a) to (e), inclusive, a credit
33union shall not act as a selected depository institution under this
34section or Section 53635.8 unless both of the following conditions
35are satisfied:
36(1) The credit union offers federal depository insurance through
37the National Credit Union Administration.
38(2) The credit union is in possession of written guidance or other
39written communication from the National Credit Union
40Administration authorizing participation of federally insured credit
P3 1unions in one or more deposit placement services and affirming
2that the moneys held by those credit unions while participating in
3a deposit placement service will at all times be insured by the
4federal government.
5(g) It is the intent of the Legislature that this section shall not
6restrict competition among private sector entities that provide
7placement services pursuant to this section.
8(h) Deposits received by the selected depository institution from
9other financial institutions pursuant to
subdivision (e) are not
10subject to public funds reporting requirements authorized under
11this article if the deposits are insured by the Federal Deposit
12Insurance Corporation or the National Credit Union Administration.
13(h) The deposits placed pursuant to this section and Section
1453635.8 shall not, in total, exceed 30 percent of the agency’s funds
15that may be invested for this purpose.
16(i) Purchases of certificates of deposit pursuant to this section,
17Section 53635.8, and subdivision (i) of Section 53601 shall not,
18in total, exceed 30 percent of the agency’s funds that may be
19invested for this purpose.
20(j) This section shall remain in effect only until January 1, 2019,
21and as of that date is repealed, unless a later enacted statute, that
22is enacted before January 1, 2019, deletes or extends that date.
begin insertSection 53601.8 is added to the
end insertbegin insertGovernment Codeend insertbegin insert, to
24read:end insert
Notwithstanding Section 53601 or any other provision
26of this code, a local agency that has the authority under law to
27invest funds may, at its discretion, invest a portion of its surplus
28funds in certificates of deposit at a commercial bank, savings bank,
29savings and loan association, or credit union that uses a private
30sector entity that assists in the placement of certificates of deposit,
31provided that the purchases of certificates of deposit pursuant to
32this section, Section 53635.8, and subdivision (i) of Section 53601
33do not, in total, exceed 30 percent of the agency’s funds that may
34be invested for this purpose. The following conditions shall apply:
35(a) The local agency shall choose a
nationally or state-chartered
36commercial bank, savings bank, savings and loan association, or
37credit union in this state to invest the funds, which shall be known
38as the “selected” depository institution.
39(b) The selected depository institution may submit the funds to
40a private sector entity that assists in the placement of certificates
P4 1of deposit with one or more commercial banks, savings banks,
2savings and loan associations, or credit unions that are located
3in the United States for the local agency’s account.
4(c) The full amount of the principal and the interest that may
5be accrued during the maximum term of each certificate of deposit
6shall at all times be insured by the Federal Deposit Insurance
7Corporation or the National Credit Union
Administration.
8(d) The selected depository institution shall serve as a custodian
9for each certificate of deposit that is issued with the placement
10service for the local agency’s account.
11(e) At the same time the local agency’s funds are deposited and
12the certificates of deposit are issued, the selected depository
13institution shall receive an amount of deposits from other
14commercial banks, savings banks, savings and loan associations,
15or credit unions that, in total, are equal to, or greater than, the
16full amount of the principal that the local agency initially deposited
17through the selected depository institution for investment.
18(f) Notwithstanding subdivisions (a) to (e), inclusive, no credit
19union may act as a selected depository institution under this section
20or Section 53635.8 unless both of the following conditions are
21satisfied:
22(1) The credit union offers federal depository insurance through
23the National Credit Union Administration.
24(2) The credit union is in possession of written guidance or
25other written communication from the National Credit Union
26Administration authorizing participation of federally insured credit
27unions in one or more certificate of deposit placement services
28and affirming that the moneys held by those credit unions while
29participating in a deposit placement service will at all times be
30insured by the federal government.
31(g) It is the intent of the Legislature that this section shall not
32restrict competition among private sector entities that provide
33placement services pursuant to this section.
34(h) This section shall become operative on January 1, 2019.
Section 53635.8 of the
Government Code is amended
37to read:
Notwithstanding Section 53601 or any other provision
39of this code, a local agency that has the authority under law to
40invest funds, at its discretion, may invest a portion of its surplus
P5 1funds in deposits at a commercial bank, savings bank, savings and
2loan association, or credit union that uses a private sector entity
3that assists in the placement ofbegin delete deposits, provided that the deposits begin insert depositsend insert. The
4placed pursuant to this section, Section 53601.8, and subdivision
5(i) of Section 53601 do not, in total, exceed 30 percent of the
6agency’s funds that may be invested for this purposeend delete
7
following conditions shall apply:
8(a) The local agency shall choose a nationally or state-chartered
9commercial bank, savings bank, savings and loan association, or
10credit union in this state to invest the funds, which shall be known
11as the “selected” depository institution.
12(b) The selected depository institution may submit the funds to
13a private sector entity that assists in the placement of deposits with
14one or more commercial banks, savings banks, savings and loan
15associations, or credit unions that are located in the United States,
16for the local agency’s account.
17(c) The full amount of the deposit placed pursuant tobegin delete this sectionend delete
18begin insert
subdivision (b) by the private sector entity end insert and the interest that
19may be accrued for eachbegin insert suchend insert deposit shall at all times be insured
20by the Federal Deposit Insurance Corporation or the National
21Credit Union Administration.
22(d) The selected depository institution shall serve as a custodian
23for eachbegin insert suchend insert deposit.
24(e) On the same date that the local agency’s funds arebegin delete depositedend delete
25begin insert placed end insert pursuant
tobegin delete this sectionend deletebegin insert
subdivision (b) by the private sector
26entityend insert, the selected depository institution shall receive an amount
27of insured deposits from other financial institutions that, in total,
28are equal to, or greater than, the full amount of the principal that
29the local agency initially deposited through the selected depository
30institution for investment pursuant tobegin delete this sectionend deletebegin insert subdivision (b)end insert.
31(f) Notwithstanding subdivisions (a) to (e), inclusive, a credit
32union shall not act as a selected depository institution under this
33section or Section 53601.8 unless both of the following conditions
34are satisfied:
35(1) The credit union offers federal depository insurance through
36the National Credit Union Administration.
37(2) The credit union is in possession of written guidance or other
38written communication from the National Credit Union
39Administration authorizing participation of federally insured credit
40unions in one or more deposit placement services and affirming
P6 1that the moneys held by those credit unions while participating in
2a deposit placement service will at all times be insured by the
3federal government.
4(g) It is the intent of the Legislature that this section shall not
5restrict competition among private sector entities that provide
6placement services pursuant to this section.
7(h) Deposits received by the selected depository institution from
8other financial institutions
pursuant to subdivision (e) are not
9subject to public funds reporting requirements authorized under
10this article if the deposits are insured by the Federal Deposit
11Insurance Corporation or the National Credit Union Administration.
12(h) The deposits placed pursuant to this section and Section
1353601.8 shall not, in total, exceed 30 percent of the agency’s funds
14that may be invested for this purpose.
15(i) Purchases of certificates of deposit pursuant to this section,
16Section 53601.8, and subdivision (i) of Section 53601 shall not,
17in total, exceed 30 percent of the agency’s funds that may be
18invested for this purpose.
19(j) This section shall remain in effect only until January 1, 2019,
20and as of that date is repealed, unless a later enacted statute, that
21is enacted before January 1, 2019, deletes or extends that date.
begin insertSection 53635.8 is added to the
end insertbegin insertGovernment Codeend insertbegin insert, to
23read:end insert
Notwithstanding Section 53601 or any other provision
25of this code, a local agency that has the authority under law to
26invest funds, at its discretion, may invest a portion of its surplus
27funds in certificates of deposit at a commercial bank, savings bank,
28savings and loan association, or credit union that uses a private
29sector entity that assists in the placement of certificates of deposit,
30provided that the purchases of certificates of deposit pursuant to
31this section, Section 53601.8, and subdivision (i) of Section 53601
32do not, in total, exceed 30 percent of the agency’s funds that may
33be invested for this purpose. The following conditions shall apply:
34(a) The local agency shall choose a
nationally or state-chartered
35commercial bank, savings bank, savings and loan association, or
36credit union in this state to invest the funds, which shall be known
37as the “selected” depository institution.
38(b) The selected depository institution may submit the funds to
39a private sector entity that assists in the placement of certificates
40of deposit with one or more commercial banks, savings banks,
P7 1savings and loan associations, or credit unions that are located
2in the United States, for the local agency’s account.
3(c) The full amount of the principal and the interest that may
4be accrued during the maximum term of each certificate of deposit
5shall at all times be insured by the Federal Deposit Insurance
6Corporation or the National Credit Union
Administration.
7(d) The selected depository institution shall serve as a custodian
8for each certificate of deposit that is issued with the placement
9service for the local agency’s account.
10(e) At the same time the local agency’s funds are deposited and
11the certificates of deposit are issued, the selected depository
12institution shall receive an amount of deposits from other
13commercial banks, savings banks, savings and loan associations,
14or credit unions that, in total, are equal to, or greater than, the
15full amount of the principal that the local agency initially deposited
16through the selected depository institution for investment.
17(f) Notwithstanding subdivisions (a) to (e), inclusive, a credit
18union shall not act as a selected depository institution under this
19section or Section 53601.8 unless both of the following conditions
20are satisfied:
21(1) The credit union offers federal depository insurance through
22the National Credit Union Administration.
23(2) The credit union is in possession of written guidance or
24other written communication from the National Credit Union
25Administration authorizing participation of federally insured credit
26unions in one or more certificate of deposit placement services
27and affirming that the moneys held by those credit unions while
28participating in a deposit placement service will at all times be
29insured by the federal government.
30(g) It is the intent of the Legislature that this section shall not
31restrict competition among private sector entities that provide
32placement services pursuant to this section.
33(h) This section shall become operative on January 1, 2019.
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