Amended in Senate August 25, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 130


Introduced by Committee on Budget (Weber (Chair), Bloom, Bonta, Campos, Chiu, Cooper, Gordon, Jones-Sawyer, McCarty, Mullin, Nazarian, O’Donnell, Rodriguez, Thurmond, Ting, and Williams)

January 9, 2015


begin deleteAn act relating to the Budget Act of 2015. end deletebegin insertAn act to amend Sections 89724 and 89725 of, and to add Section 89726 to, the Education Code, relating to the California State University.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 130, as amended, Committee on Budget. begin deleteBudget Act of 2015. end deletebegin insertCalifornia State University: fees: investments.end insert

begin insert

Existing law authorizes the Treasurer or chief fiscal officer of a campus of the California State University to invest certain money received by the California State University in eligible securities and in investment certificates or withdrawal shares in federal or state credit unions doing business in this state as long as any money invested in this manner is fully insured by the National Credit Union Administration.

end insert
begin insert

This bill would authorize the Treasurer or chief fiscal officer of a campus of the California State University to invest certain of those moneys in mutual funds subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, or in real estate investment trusts. The bill would impose specified requirements on the Trustees of the California State University relating to those types of investments.

end insert
begin insert

Existing law establishes the California State University Special Projects Fund, which consists of grants, revenues, and funds for the operation, support, and development of research, workshops, conferences, institutes, and special projects in the California State University. Existing law authorizes the Treasurer to invest money from the fund in eligible securities.

end insert
begin insert

This bill would authorize the Treasurer or chief fiscal officer of a campus of the California State University to invest the money in the California State University Special Projects Fund in mutual funds subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, or in real estate investment trusts.

end insert
begin insert

This bill would limit the total amount invested in these mutual funds and real estate investment trusts to specified amounts for each fiscal year, until, commencing with the 2019-20 fiscal year, up to 30% of that money could be invested in these asset categories.

end insert
begin delete

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2015.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 89724 of the end insertbegin insertEducation Codeend insertbegin insert is amended
2to read:end insert

3

89724.  

(a)  All money receivedbegin delete from the sale of publications
4pursuant to Section 90500, all money received under an agreement
5entered into pursuant to Section 89036, and, except as to the fees
6and charges specified in subdivisions (g) and (h) of Section 89721,
7all money collected as fees from students in any state university
8and from other persons under Section 89030, Sections 89036 to
989040, inclusive, and Sections 89700, 89705, 89708, 89709, 89720,
10and 89721, and by reason of Section 2080.9 of the Civil Code, is
11hereby appropriated for the support of the California State
12University in addition to such other amounts as may be
13appropriated therefor by the Legislature. Money end delete
begin insert in accordance
14with the following shall be appropriated for the support of the
15California State University in addition to other amounts as may
16be appropriated by the Legislature:end insert

begin insert

P3    1(1) All money received from the sale of California State
2University publications.

end insert
begin insert

3(2) All money received under an agreement entered into
4pursuant to Section 89036.

end insert
begin insert

5(3) Except as to the fees and charges specified in subdivisions
6(g) and (h) of Section 89721, all money collected as fees from
7students of the California State University and received from other
8persons under Sections 89030, 89036 to 89039, inclusive, 89700,
989705, 89708, 89709, 89720, and 89721, and money received
10pursuant to Section 2080.8 of the Civil Code.

end insert

11begin insert(b)end insertbegin insertend insertbegin insertMoney end insertreceived under Sections 89720 and 89721, or received
12begin delete by reason ofend deletebegin insert pursuant toend insert Sectionbegin delete 2080.9end deletebegin insert 2080.8end insert of the Civil Code,
13is appropriatedbegin insert pursuant to subdivision (a)end insert without regard to fiscal
14year. Money receivedbegin delete by reason ofend deletebegin insert pursuant toend insert Sectionbegin delete 2080.9end delete
15begin insert 2080.8end insert of the Civil Code shall be used for student scholarships
16and loans pursuant to any regulations the trustees shall provide,
17and while held pending the grant of a scholarship or loan, may be
18invested by the Treasurer upon approval of the trustees, in those
19eligible securities listed in Section 16430 of the Government Code.
20All interest or other earnings received pursuant tobegin delete suchend deletebegin insert thatend insert
21 investment shall also be used for those scholarships and loans.
22Money receivedbegin delete by reason ofend deletebegin insert pursuant toend insert Sections 89720 and
2389721 may be invested, upon approval of the trustees, by the
24Treasurer or by the chief fiscal officer of a campus of the California
25State University, in those eligible securities listed in Section 16430
26of the Governmentbegin delete Code and in investment certificatesend deletebegin delete orend delete
27begin delete withdrawal shares in federal or state credit unions which are doing
28business in this stateend delete
begin delete andend deletebegin delete which have their accounts insuredend deletebegin delete by theend delete
29begin delete National Credit Union Administration. Any money so investedend deletebegin delete orend delete
30begin delete deposited shall be invested or deposited in certificates, shares, or
31accounts fully covered by the insurance.end delete
begin insert Code. Money received
32pursuant to Section 2080.8 of the Civil Code, may be invested,
33upon approval of the trustees and in accordance with Section
3489726, by the chief fiscal officer of a campus of the California
35State University, in mutual funds subject to registration by, and
36under the regulatory authority of, the United States Securities and
37Exchange Commissionend insert
begin insert, orend insertbegin insert in real estate investment trusts.end insert All
38interest and other earnings received pursuant to the investment of
39money receivedbegin delete by reason ofend deletebegin insert pursuant toend insert Sections 89720 and 89721
40shall also be used for such purposes as may be established by the
P4    1trustees consistent with the terms and conditions of the gift,
2bequest, devise, donation, or agreement under Sections 89720 and
389721. Except as otherwise provided with respect to money
4receivedbegin delete by reason ofend deletebegin insert pursuant toend insert Sectionbegin delete 2080.9end deletebegin insert 2080.8end insert of the
5Civil Code and Sections 89720 andbegin delete 89721 of this code,end deletebegin insert 89721,end insert all
6money received pursuant to this section shall augment the support
7appropriation to the California State University for the fiscal year
8to which the collections apply.

begin delete

9(b)

end delete

10begin insert(c)end insert All money received from the sale or the disposition of real
11property acquired by or on behalf of abegin delete particular state universityend delete
12begin insert campus of the California State Universityend insert by gift, devise, or
13donation pursuant to Section 89720 or pursuant to the predecessor
14of that section is hereby appropriated to the trustees for expenditure
15for capital outlay for the acquisition and improvement of real
16property for thebegin delete particular state university,end deletebegin insert campus,end insert in addition to
17any other amounts appropriatedbegin delete thereforend delete by the Legislature. All
18money received from the sale or other disposition of personal
19property, other than money, acquired by or on behalf of abegin delete particular
20state universityend delete
begin insert campus of the California State Universityend insert by gift,
21bequest, or donation pursuant to Section 89720 orbegin delete pursuant toend delete the
22predecessor of that section is hereby appropriated to the trustees
23for expenditure for capital outlay for, or the acquisition and
24improvement of real or personal property for, thebegin delete particular state
25university,end delete
begin insert campus,end insert in addition to other amounts appropriated
26begin delete thereforend delete by the Legislature. No money shall be expended by the
27trustees under this subdivision without the approval of the Director
28of Finance. The money shall augment the support or capital outlay
29appropriation of the California State University current at the date
30of issuance of the Controller’s receiptbegin delete thereforend delete as may be designated
31by the trustees prior to their deposit in the State Treasury.

32begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 89725 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
33read:end insert

34

89725.  

begin insert (a)end insertbegin insertend insert Notwithstanding anybegin delete otherend deletebegin delete provision ofend delete law to the
35contrary, grants, revenues, and funds of any nature received by
36the trustees for research, workshops, conferences, institutes, and
37special projects from the state, federal government, local
38government, or private persons, may be transmitted to the Treasurer
39and, if transmitted, shall be deposited in thebegin delete State Treasury to the
P5    1credit of theend delete
California State University Special Projects Fund,
2whichbegin delete fundend delete is herebybegin delete created.end deletebegin insert established in the State Treasury.end insert

begin delete

3All such

end delete

4begin insert(b)end insertbegin insertend insertbegin insertAllend insert grants, revenues, and fundsbegin insert deposited in the California
5State University Special Projects Fundend insert
arebegin delete herebyend delete appropriated
6without regard to fiscalbegin delete yearsend deletebegin insert yearend insert to the trustees for the operation,
7support, and development of research, workshops, conferences,
8institutes, and special projects in the California State University.

begin delete

9Provision

end delete

10begin insert (c)end insertbegin insertend insertbegin insertProvisionend insert shall be made by the trustees for reimbursements
11to the General Fund for the cost of space and services furnished
12to projects funded by the California State University Special
13Projects Fund.

begin delete

14Notwithstanding

end delete

15begin insert(d)end insertbegin insertend insertbegin insertNotwithstandingend insert anybegin delete otherend deletebegin delete provision of theend delete law to the
16contrary, the trustees shall have authority to establish the rules and
17procedures under which the fund shall operate. All expenditures
18shall be made in accordance with the rules and procedures, without
19prior approval of the Department of General Services or the
20Department of Finance.begin delete All expenditures shall receive an annual
21postaudit by the Audits Division of the Department of Finance.
22This requirement for an annual postaudit shall be effective until
23July 1, 1992. On and after July 1, 1992, the expendituresend delete

24begin insert Expendituresend insert from the fund shall be audited as frequently as the
25Audits Divisionbegin insert of the Department of Financeend insert deems appropriate.

begin delete

26Moneys

end delete

27begin insert(e)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insertExcept as provided in paragraph (2), moneysend insert in the
28California State University Special Projects Fund may be invested
29by thebegin delete Treasurer,end deletebegin insert Treasurer or by the chief fiscal officer of a
30campus of the California State University,end insert
upon approval of the
31begin delete trusteesend deletebegin insert trustees, onlyend insert inbegin delete thoseend delete eligible securities listed in Section
3216430 of the Government Code.begin delete Allend delete

33begin insert(2)end insertbegin insertend insertbegin insertMoney received pursuant to Section 2080.8 of the Civil
34Code, may be invested, upon approval of the trustees and in
35accordance with Section 89726, by the Treasurer or by the chief
36fiscal officer of a campus of the California State University, in
37mutual funds subject to registration by, and under the regulatory
38authority of, the United States Securities and Exchange
39Commission, or in real estate investment trusts. Allend insert
interest or
40other earnings received pursuant to those investments shall be
P6    1collected by the Treasurer and shall be deposited in thebegin delete State
2Treasury to the credit of the California State University Special
3Projects Fund.end delete
begin insert fund.end insert

4begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 89726 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
5

begin insert89726.end insert  

(a) (1) The trustees may invest in securities or
6investments not listed in Section 16430 of the Government Code
7only if the trustees have established a committee to provide advice
8and expertise on investments.

9(2) A majority of the members of the committee shall be
10individuals who have investment expertise and who are not trustees.

11(3) The trustees shall allow the Treasurer to serve as a member
12of the committee or to appoint a deputy treasurer to serve as a
13member of the committee.

14(b) The total amount invested in securities or investments not
15listed in Section 16430 of the Government Code shall not exceed
16the following amounts:

17(1) In the fiscal year ending June 30, 2017, two hundred million
18dollars ($200,000,000).

19(2) In the fiscal year ending June 30, 2018, four hundred million
20dollars ($400,000,000).

21(3) In the fiscal year ending June 30, 2019, six hundred million
22dollars ($600,000,000).

23(4) In the fiscal year ending June 30, 2020, and each fiscal year
24thereafter, thirty percent of all moneys invested pursuant to
25Sections 89724 and 89725.

26(c) (1) The trustees shall receive an investment performance
27report quarterly and distribute an annual report to the Legislature,
28in compliance with Section 9795 of the Government Code, and the
29Department of Finance.

30(2) The investment performance reports shall include investment
31returns, comparisons to benchmarks, holdings, market values, and
32fees.

33(d) Any additional moneys earned through investments in
34securities or investments not listed in Section 16430 of the
35Government Code shall be used only for capital outlay or
36maintenance.

37(e) The trustees shall not submit a request to the Department
38of Finance or the Legislature for any funds to compensate for
39investment loss resulting from investments in securities or
40investments not listed in Section 16430 of the Government Code.

P7    1(f) The trustees shall not cite investment loss resulting from
2investments in securities or investments not listed in Section 16430
3of the Government Code to justify approval of an increase in
4student tuition or fees.

end insert
begin delete
5

SECTION 1.  

It is the intent of the Legislature to enact statutory
6changes relating to the Budget Act of 2015.

end delete


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