Amended in Assembly August 26, 2015

Amended in Assembly August 25, 2015

Senate Bill No. 104

Introduced by Committee on Budget and Fiscal Review

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

SB 104, as amended, Committee on Budget and Fiscal Review. 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 invest begin delete certain of those moneys end delete begin insert that money end 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:

SECTION 1.  

Section 89724 of the Education Code is amended
to read:

89724.  

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

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

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

(3) Except as to the fees and charges specified in subdivisions
(g) and (h) of Section 89721, all money collected as fees from
students of the California State University and received from other
persons under Sections 89030, 89036 to 89039, inclusive, 89700,
89705, 89708, 89709, 89720, and 89721, and money received
pursuant to Section 2080.8 of the Civil Code.

(b) Money received under Sections 89720 and 89721, or
received pursuant to Section 2080.8 of the Civil Code, is
appropriated pursuant to subdivision (a) without regard to fiscal
year. Money received pursuant to Section 2080.8 of the Civil Code
shall be used for student scholarships and loans pursuant to any
regulations the trustees shall begin delete provide, and while held pending the
grant of a scholarship or loan, may be invested by the Treasurer
upon approval of the trustees, in those eligible securities listed in
Section 16430 of the Government Code. All interest or other
earnings received pursuant to that investment shall also be used
for those scholarships and loans. end delete begin insert provide. end insert Money received pursuant
to Sections 89720 and 89721 may be invested, upon approval of
the trustees, by the Treasurer or by the chief fiscal officer of a
campus of the California State University, in those eligible
securities listed in Section 16430 of the Government Code. Money
received begin insert under Sections 89720 and 89721, and received end insert pursuant
to Section 2080.8 of the Civil Code, may begin insert also end insert be invested, upon
approval of the trustees and in accordance with Section 89726, by
the chief fiscal officer of a campus of the California State
University, 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. All
interest and other earnings received pursuant to the investment of
money received pursuant to Sections 89720 and 89721 shall also
be used for such purposes as may be established by the trustees
consistent with the terms and conditions of the gift, bequest, devise,
donation, or agreement under Sections 89720 and 89721. Except
as otherwise provided with respect to money received pursuant to
Section 2080.8 of the Civil Code and Sections 89720 and 89721,
all money received pursuant to this section shall augment the
support appropriation to the California State University for the
fiscal year to which the collections apply.

(c) All money received from the sale or the disposition of real
property acquired by or on behalf of a campus of the California
State University by gift, devise, or donation pursuant to Section
89720 or pursuant to the predecessor of that section is hereby
appropriated to the trustees for expenditure for capital outlay for
the acquisition and improvement of real property for the campus,
in addition to any other amounts appropriated by the Legislature.
All money received from the sale or other disposition of personal
property, other than money, acquired by or on behalf of a campus
of the California State University by gift, bequest, or donation
pursuant to Section 89720 or the predecessor of that section is
hereby appropriated to the trustees for expenditure for capital
outlay for, or the acquisition and improvement of real or personal
property for, the campus, in addition to other amounts appropriated
by the Legislature. No money shall be expended by the trustees
under this subdivision without the approval of the Director of
Finance. The money shall augment the support or capital outlay
appropriation of the California State University current at the date
of issuance of the Controller’s receipt as may be designated by the
trustees prior to begin delete their deposit end delete begin insert the deposit of that money end insert in the State
Treasury.

SEC. 2.  

Section 89725 of the Education Code is amended to
read:

89725.  

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

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

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

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

(e)  begin delete (1) end delete begin delete   end delete begin delete Except as provided in paragraph (2), moneys end delete begin insert Moneys end insert
in the California State University Special Projects Fund may be
invested by the Treasurer or by the chief fiscal officer of a campus
of the California State University, upon approval of the trustees,
begin delete only end delete in eligible securities listed in Section 16430 of the
Government begin delete Code. end delete

begin delete (2) end delete begin delete   end delete begin delete Money received pursuant to Section 2080.8 of the Civil
Code, may be invested, upon approval of the trustees and end delete begin insert Code,
or, end insert in accordance with Section 89726, begin delete by the Treasurer or by the
chief fiscal officer of a campus of the California State University, end delete
in mutual funds subject to registration by, and under the regulatory
authority of, the United States Securities and Exchange
begin delete Commission, end delete begin insert Commission end insert or in real estate investment trusts. All
interest or other earnings received pursuant to those investments
shall be collected by the Treasurer and shall be deposited in the
fund.

SEC. 3.  

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

89726.  

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

(2) A majority of the members of the committee shall be
individuals who have investment expertise and who are not begin delete trustees. end delete
begin insert employees of the California State University. end insert

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

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

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

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

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

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

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

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

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

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

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