BILL ANALYSIS Ó
AB 2638
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2638 (Gatto) - As Amended April 25, 2016
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|Policy |Banking and Finance |Vote:|11 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill extends the term of each appointed member of the Local
Investment Advisory Board (LIAB) from two to three years.
FISCAL EFFECT:
Negligible fiscal impact.
COMMENTS:
AB 2638
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1)Purpose. According to the author, allowing LIAB members to
serve longer terms gives these appointees the opportunity to
gain more experience working with the Local Agency Investment
Fund (LAIF). The LAIF is a very important fund for local
governments and offering appointees more time on the board may
render large dividends in the long run.
2)Background. The LAIF is a voluntary program that began in 1977
as an investment alternative for California's local
governments and special districts. This program offers local
agencies the opportunity to participate in a major portfolio,
which invests hundreds of millions of dollars, using the
investment expertise of the Treasurer's Office investment
staff at no additional cost to the taxpayer.
The LAIF is part of the Pooled Money Investment Account
(PMIA). The PMIA began in 1955 and oversight is provided by
the Pooled Money Investment Board (PMIB) and an in-house
Investment Committee. The PMIB members are the Treasurer,
Director of Finance, and State Controller.
The LIAB provides oversight of the LAIF. The Board consists of
five members as designated by statute. Additionally, the
PMIA has policies, goals and objectives for the portfolio to
make certain that the goals of safety, liquidity and yield are
not jeopardized and that prudent management prevails. These
policies are formulated by the Treasurer's investment division
staff and reviewed by both the PMIB and the LIAB on an annual
basis.
The LAIF has grown from 293 participants and $468 million in
1977 to 2,469 participants and $21.1 billion at the end of
March 2016.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
AB 2638
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319-2081