BILL NUMBER: AB 279 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 29, 2013
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Dickinson
FEBRUARY 11, 2013
An act to amend , repeal, and add Sections 53601.8 and
53635.8 of the Government Code, relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
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 would , until January 1, 2019, remove the term
"certificates of deposit" and instead authorize a local agency to
invest in deposits , as specified . This bill
would also exclude from public funds reporting requirements specified
deposits required under these provisions.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 53601.8 of the Government Code is amended to
read:
53601.8. Notwithstanding Section 53601 or any other provision of
this code, a local agency that has the authority under law to invest
funds, at its discretion, may invest a portion of its surplus funds
in deposits at a commercial bank, savings bank, savings and loan
association, or credit union that uses a private sector entity that
assists in the placement of deposits, provided that the
deposits placed pursuant to this section, Section 53635.8, and
subdivision (i) of Section 53601 do not, in total, exceed 30 percent
of the agency's funds that may be invested for this purpose
deposits . The following conditions shall apply:
(a) The local agency shall choose a nationally or state chartered
commercial bank, savings bank, savings and loan association, or
credit union in this state to invest the funds, which shall be known
as the "selected" depository institution.
(b) The selected depository institution may submit the funds to a
private sector entity that assists in the placement of deposits with
one or more commercial banks, savings banks, savings and loan
associations, or credit unions that are located in the United States,
for the local agency's account.
(c) The full amount of the deposit placed pursuant to
this section subdivision (b) by the private sector
entity and the interest that may be accrued for each such
deposit shall at all times be insured by the Federal Deposit
Insurance Corporation or the National Credit Union Administration.
(d) The selected depository institution shall serve as a custodian
for each such deposit.
(e) On the same date that the local agency's funds are
deposited placed pursuant to this
section subdivision (b) by the private sector entity
, the selected depository institution shall receive an amount
of insured deposits from other financial institutions that, in total,
are equal to, or greater than, the full amount of the principal that
the local agency initially deposited through the selected depository
institution pursuant to this section
subdivision (b) .
(f) Notwithstanding subdivisions (a) to (e), inclusive, a credit
union shall not act as a selected depository institution under this
section or Section 53635.8 unless both of the following conditions
are satisfied:
(1) The credit union offers federal depository insurance through
the National Credit Union Administration.
(2) The credit union is in possession of written guidance or other
written communication from the National Credit Union Administration
authorizing participation of federally insured credit unions in one
or more deposit placement services and affirming that the moneys held
by those credit unions while participating in a deposit placement
service will at all times be insured by the federal government.
(g) It is the intent of the Legislature that this section shall
not restrict competition among private sector entities that provide
placement services pursuant to this section.
(h) Deposits received by the selected depository institution from
other financial institutions pursuant to subdivision (e) are not
subject to public funds reporting requirements authorized under this
article if the deposits are insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration.
(h) The deposits placed pursuant to this section and Section
53635.8 shall not, in total, exceed 30 percent of the agency's funds
that may be invested for this purpose.
(i) Purchases of certificates of deposit pursuant to this section,
Section 53635.8, and subdivision (i) of Section 53601 shall not, in
total, exceed 30 percent of the agency's funds that may be invested
for this purpose.
(j) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
SEC. 2. Section 53601.8 is added to the
Government Code , to read:
53601.8. Notwithstanding Section 53601 or any other provision of
this code, a local agency that has the authority under law to invest
funds may, at its discretion, invest a portion of its surplus funds
in certificates of deposit at a commercial bank, savings bank,
savings and loan association, or credit union that uses a private
sector entity that assists in the placement of certificates of
deposit, provided that the purchases of certificates of deposit
pursuant to this section, Section 53635.8, and subdivision (i) of
Section 53601 do not, in total, exceed 30 percent of the agency's
funds that may be invested for this purpose. The following conditions
shall apply:
(a) The local agency shall choose a nationally or state-chartered
commercial bank, savings bank, savings and loan association, or
credit union in this state to invest the funds, which shall be known
as the "selected" depository institution.
(b) The selected depository institution may submit the funds to a
private sector entity that assists in the placement of certificates
of deposit with one or more commercial banks, savings banks, savings
and loan associations, or credit unions that are located in the
United States for the local agency's account.
(c) The full amount of the principal and the interest that may be
accrued during the maximum term of each certificate of deposit shall
at all times be insured by the Federal Deposit Insurance Corporation
or the National Credit Union Administration.
(d) The selected depository institution shall serve as a custodian
for each certificate of deposit that is issued with the placement
service for the local agency's account.
(e) At the same time the local agency's funds are deposited and
the certificates of deposit are issued, the selected depository
institution shall receive an amount of deposits from other commercial
banks, savings banks, savings and loan associations, or credit
unions that, in total, are equal to, or greater than, the full amount
of the principal that the local agency initially deposited through
the selected depository institution for investment.
(f) Notwithstanding subdivisions (a) to (e), inclusive, no credit
union may act as a selected depository institution under this section
or Section 53635.8 unless both of the following conditions are
satisfied:
(1) The credit union offers federal depository insurance through
the National Credit Union Administration.
(2) The credit union is in possession of written guidance or other
written communication from the National Credit Union Administration
authorizing participation of federally insured credit unions in one
or more certificate of deposit placement services and affirming that
the moneys held by those credit unions while participating in a
deposit placement service will at all times be insured by the federal
government.
(g) It is the intent of the Legislature that this section shall
not restrict competition among private sector entities that provide
placement services pursuant to this section.
(h) This section shall become operative on January 1, 2019.
SEC. 2. SEC. 3. Section 53635.8 of
the Government Code is amended to read:
53635.8. Notwithstanding Section 53601 or any other provision of
this code, a local agency that has the authority under law to invest
funds, at its discretion, may invest a portion of its surplus funds
in deposits at a commercial bank, savings bank, savings and loan
association, or credit union that uses a private sector entity that
assists in the placement of deposits, provided that the
deposits placed pursuant to this section, Section 53601.8, and
subdivision (i) of Section 53601 do not, in total, exceed 30 percent
of the agency's funds that may be invested for this purpose
deposits . The following conditions shall apply:
(a) The local agency shall choose a nationally or state-chartered
commercial bank, savings bank, savings and loan association, or
credit union in this state to invest the funds, which shall be known
as the "selected" depository institution.
(b) The selected depository institution may submit the funds to a
private sector entity that assists in the placement of deposits with
one or more commercial banks, savings banks, savings and loan
associations, or credit unions that are located in the United States,
for the local agency's account.
(c) The full amount of the deposit placed pursuant to this
section subdivision (b) by the private sector entity
and the interest that may be accrued for each such
deposit shall at all times be insured by the Federal Deposit
Insurance Corporation or the National Credit Union Administration.
(d) The selected depository institution shall serve as a custodian
for each such deposit.
(e) On the same date that the local agency's funds are
deposited placed pursuant to this
section subdivision (b) by the private sector entity
, the selected depository institution shall receive an amount
of insured deposits from other financial institutions that, in total,
are equal to, or greater than, the full amount of the principal that
the local agency initially deposited through the selected depository
institution for investment pursuant to this section
subdivision (b) .
(f) Notwithstanding subdivisions (a) to (e), inclusive, a credit
union shall not act as a selected depository institution under this
section or Section 53601.8 unless both of the following conditions
are satisfied:
(1) The credit union offers federal depository insurance through
the National Credit Union Administration.
(2) The credit union is in possession of written guidance or other
written communication from the National Credit Union Administration
authorizing participation of federally insured credit unions in one
or more deposit placement services and affirming that the moneys held
by those credit unions while participating in a deposit placement
service will at all times be insured by the federal government.
(g) It is the intent of the Legislature that this section shall
not restrict competition among private sector entities that provide
placement services pursuant to this section.
(h) Deposits received by the selected depository institution from
other financial institutions pursuant to subdivision (e) are not
subject to public funds reporting requirements authorized under this
article if the deposits are insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration.
(h) The deposits placed pursuant to this section and Section
53601.8 shall not, in total, exceed 30 percent of the agency's funds
that may be invested for this purpose.
(i) Purchases of certificates of deposit pursuant to this section,
Section 53601.8, and subdivision (i) of Section 53601 shall not, in
total, exceed 30 percent of the agency's funds that may be invested
for this purpose.
(j) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
SEC. 4. Section 53635.8 is added to the
Government Code , to read:
53635.8. Notwithstanding Section 53601 or any other provision of
this code, a local agency that has the authority under law to invest
funds, at its discretion, may invest a portion of its surplus funds
in certificates of deposit at a commercial bank, savings bank,
savings and loan association, or credit union that uses a private
sector entity that assists in the placement of certificates of
deposit, provided that the purchases of certificates of deposit
pursuant to this section, Section 53601.8, and subdivision (i) of
Section 53601 do not, in total, exceed 30 percent of the agency's
funds that may be invested for this purpose. The following conditions
shall apply:
(a) The local agency shall choose a nationally or state-chartered
commercial bank, savings bank, savings and loan association, or
credit union in this state to invest the funds, which shall be known
as the "selected" depository institution.
(b) The selected depository institution may submit the funds to a
private sector entity that assists in the placement of certificates
of deposit with one or more commercial banks, savings banks, savings
and loan associations, or credit unions that are located in the
United States, for the local agency's account.
(c) The full amount of the principal and the interest that may be
accrued during the maximum term of each certificate of deposit shall
at all times be insured by the Federal Deposit Insurance Corporation
or the National Credit Union Administration.
(d) The selected depository institution shall serve as a custodian
for each certificate of deposit that is issued with the placement
service for the local agency's account.
(e) At the same time the local agency's funds are deposited and
the certificates of deposit are issued, the selected depository
institution shall receive an amount of deposits from other commercial
banks, savings banks, savings and loan associations, or credit
unions that, in total, are equal to, or greater than, the full amount
of the principal that the local agency initially deposited through
the selected depository institution for investment.
(f) Notwithstanding subdivisions (a) to (e), inclusive, a credit
union shall not act as a selected depository institution under this
section or Section 53601.8 unless both of the following conditions
are satisfied:
(1) The credit union offers federal depository insurance through
the National Credit Union Administration.
(2) The credit union is in possession of written guidance or other
written communication from the National Credit Union Administration
authorizing participation of federally insured credit unions in one
or more certificate of deposit placement services and affirming that
the moneys held by those credit unions while participating in a
deposit placement service will at all times be insured by the federal
government.
(g) It is the intent of the Legislature that this section shall
not restrict competition among private sector entities that provide
placement services pursuant to this section.
(h) This section shall become operative on January 1, 2019.