Amended in Senate August 26, 2015

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


An act to amend Sections 89724 and 89725 of, and to add Section 89726 to, the Education Code, relating to the California State University.

LEGISLATIVE COUNSEL’S DIGEST

AB 130, as amended, Committee on Budget. California State University: fees: investments.

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.

This bill would authorize the Treasurer or chief fiscal officer of a campus of the California State University to investbegin delete certain of those moneysend deletebegin insert that moneyend insert 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.

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.

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.

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.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 89724 of the Education Code is amended
2to read:

3

89724.  

(a)  All money received in accordance with the
4following shall be appropriated for the support of the California
5State University in addition to other amounts as may be
6appropriated by the Legislature:

7(1) All money received from the sale of California State
8University publications.

9(2) All money received under an agreement entered into pursuant
10to Section 89036.

11(3) Except as to the fees and charges specified in subdivisions
12(g) and (h) of Section 89721, all money collected as fees from
13students of the California State University and received from other
14persons under Sections 89030, 89036 to 89039, inclusive, 89700,
1589705, 89708, 89709, 89720, and 89721, and money received
16pursuant to Section 2080.8 of the Civil Code.

17(b) Money received under Sections 89720 and 89721, or
18received pursuant to Section 2080.8 of the Civil Code, is
19appropriated pursuant to subdivision (a) without regard to fiscal
P3    1year. Money received pursuant to Section 2080.8 of the Civil Code
2shall be used for student scholarships and loans pursuant to any
3regulations the trustees shallbegin delete provide, and while held pending the
4grant of a scholarship or loan, may be invested by the Treasurer
5upon approval of the trustees, in those eligible securities listed in
6Section 16430 of the Government Code. All interest or other
7earnings received pursuant to that investment shall also be used
8for those scholarships and loans.end delete
begin insert provide.end insert Money received pursuant
9to Sections 89720 and 89721 may be invested, upon approval of
10the trustees, by the Treasurer or by the chief fiscal officer of a
11campus of the California State University, in those eligible
12securities listed in Section 16430 of the Government Code. Money
13receivedbegin insert under Sections 89720 and 89721, and receivedend insert pursuant
14to Section 2080.8 of the Civil Code, maybegin insert alsoend insert be invested, upon
15approval of the trustees and in accordance with Section 89726, by
16the chief fiscal officer of a campus of the California State
17University, in mutual funds subject to registration by, and under
18the regulatory authority of, the United States Securities and
19Exchange Commission, or in real estate investment trusts. All
20interest and other earnings received pursuant to the investment of
21money received pursuant to Sections 89720 and 89721 shall also
22be used for such purposes as may be established by the trustees
23consistent with the terms and conditions of the gift, bequest, devise,
24donation, or agreement under Sections 89720 and 89721. Except
25as otherwise provided with respect to money received pursuant to
26Section 2080.8 of the Civil Code and Sections 89720 and 89721,
27all money received pursuant to this section shall augment the
28support appropriation to the California State University for the
29fiscal year to which the collections apply.

30(c) All money received from the sale or the disposition of real
31property acquired by or on behalf of a campus of the California
32State University by gift, devise, or donation pursuant to Section
3389720 or pursuant to the predecessor of that section is hereby
34appropriated to the trustees for expenditure for capital outlay for
35the acquisition and improvement of real property for the campus,
36in addition to any other amounts appropriated by the Legislature.
37All money received from the sale or other disposition of personal
38property, other than money, acquired by or on behalf of a campus
39of the California State University by gift, bequest, or donation
40pursuant to Section 89720 or the predecessor of that section is
P4    1hereby appropriated to the trustees for expenditure for capital
2outlay for, or the acquisition and improvement of real or personal
3property for, the campus, in addition to other amounts appropriated
4by the Legislature. No money shall be expended by the trustees
5under this subdivision without the approval of the Director of
6Finance. The money shall augment the support or capital outlay
7appropriation of the California State University current at the date
8of issuance of the Controller’s receipt as may be designated by the
9trustees prior tobegin delete their depositend deletebegin insert the deposit of that moneyend insert in the State
10Treasury.

11

SEC. 2.  

Section 89725 of the Education Code is amended to
12read:

13

89725.  

(a)  Notwithstanding any law to the contrary, grants,
14revenues, and funds of any nature received by the trustees for
15research, workshops, conferences, institutes, and special projects
16from the state, federal government, local government, or private
17persons, may be transmitted to the Treasurer and, if transmitted,
18shall be deposited in the California State University Special
19Projects Fund, which is hereby established in the State Treasury.

20(b) All grants, revenues, and funds deposited in the California
21State University Special Projects Fund are appropriated without
22regard to fiscal year to the trustees for the operation, support, and
23 development of research, workshops, conferences, institutes, and
24special projects in the California State University.

25 (c) Provision shall be made by the trustees for reimbursements
26to the General Fund for the cost of space and services furnished
27to projects funded by the California State University Special
28Projects Fund.

29(d) Notwithstanding any law to the contrary, the trustees shall
30have authority to establish the rules and procedures under which
31the fund shall operate. All expenditures shall be made in accordance
32with the rules and procedures, without prior approval of the
33Department of General Services or the Department of Finance.
34Expenditures from the fund shall be audited as frequently as the
35Audits Division of the Department of Finance deems appropriate.

36(e) begin delete(1)end deletebegin deleteend deletebegin deleteExcept as provided in paragraph (2), moneys end deletebegin insertMoneysend insertbegin insert end insert
37in the California State University Special Projects Fund may be
38invested by the Treasurer or by the chief fiscal officer of a campus
39of the California State University, upon approval of the trustees,
P5    1begin delete onlyend delete in eligible securities listed in Section 16430 of the
2Governmentbegin delete Code.end delete

3begin delete(2)end deletebegin deleteend deletebegin deleteMoney received pursuant to Section 2080.8 of the Civil
4Code, may be invested, upon approval of the trustees andend delete
begin insert Code,
5or,end insert
in accordance with Section 89726,begin delete by the Treasurer or by the
6chief fiscal officer of a campus of the California State University,end delete

7 in mutual funds subject to registration by, and under the regulatory
8authority of, the United States Securities and Exchange
9begin delete Commission,end deletebegin insert Commissionend insert or in real estate investment trusts. All
10interest or other earnings received pursuant to those investments
11shall be collected by the Treasurer and shall be deposited in the
12fund.

13

SEC. 3.  

Section 89726 is added to the Education Code, to read:

14

89726.  

(a) (1) The trustees may invest in securities or
15investments not listed in Section 16430 of the Government Code
16only if the trustees have established a committee to provide advice
17and expertise on investments.

18(2) A majority of the members of the committee shall be
19individuals who have investment expertise and who are notbegin delete trustees.end delete
20begin insert employees of the California State University.end insert

21(3) The trustees shall allow the Treasurer to serve as a member
22of the committee or to appoint a deputy treasurer to serve as a
23member of the committee.

24(b) The total amount invested in securities or investments not
25listed in Section 16430 of the Government Code shall not exceed
26the following amounts:

27(1) In the fiscal year ending June 30, 2017, two hundred million
28dollars ($200,000,000).

29(2) In the fiscal year ending June 30, 2018, four hundred million
30dollars ($400,000,000).

31(3) In the fiscal year ending June 30, 2019, six hundred million
32dollars ($600,000,000).

33(4) In the fiscal year ending June 30, 2020, and each fiscal year
34thereafter, thirty percent of all moneys invested pursuant to
35Sections 89724 and 89725.

36(c) (1) The trustees shall receive an investment performance
37report quarterly and distribute an annual report to the Legislature,
38in compliance with Section 9795 of the Government Code, and
39the Department of Finance.

P6    1(2) The investment performance reports shall include investment
2returns, comparisons to benchmarks, holdings, market values, and
3fees.

4(d) Any additional moneys earned through investments in
5securities or investments not listed in Section 16430 of the
6Government Code shall be used only for capital outlay or
7maintenance.

8(e) The trustees shall not submit a request to the Department of
9Finance or the Legislature for any funds to compensate for
10investment loss resulting from investments in securities or
11investments not listed in Section 16430 of the Government Code.

12(f) The trustees shall not cite investment loss resulting from
13investments in securities or investments not listed in Section 16430
14of the Government Code to justify approval of an increase in
15student tuition or fees.



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