SB 1412, as amended, Block. California State University: 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 that money in mutual funds subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, or inbegin insert United States registeredend insert 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 that are appropriated 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 inbegin insert United States registeredend insert real estate investment trusts. Because the bill would authorize the expenditure of moneys from a continuously appropriated fund for new purposes, it would make an appropriation.
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.begin insert The bill would prohibit increases in tuition or reductions in course section offerings from being adopted because of investment losses sustained as a result of these provisions.end insert
Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 89724 of the Education Code is amended
2to read:
(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) (1) Money received under Sections 89720 and 89721, or
18received pursuant to Section 2080.8 of the Civil Code, is
P3 1appropriated pursuant to subdivision (a) without regard to fiscal
2year.
3(2) Money received pursuant to Section 2080.8 of the Civil
4Code shall be used for student scholarships and loans pursuant to
5any regulations the trustees provide.
6(3) Money received pursuant to Sections 89720 and 89721 may
7be invested, upon approval of the trustees, by the Treasurer or by
8the chief fiscal officer of a campus of the California State
9University, in those eligible securities listed in Section 16430 of
10the Government Code.
11(4) Money received under Sections 89720 and 89721, and
12received pursuant to Section 2080.8 of the Civil Code, may be
13invested, upon approval of the trustees and in accordance with
14Section 89726, by the chief fiscal officer of a campus of the
15California State University, in mutual funds subject to registration
16by, and under the regulatory authority of, the United States
17Securities and Exchange Commission, or inbegin insert United States
18registeredend insert real estate investment trusts. All interest and other
19earnings received pursuant to the investment of money received
20pursuant to Sections 89720 and 89721 shall also be used for
21purposes established by the trustees consistent with the terms and
22conditions of the gift, bequest, devise, donation, or agreement
23under Sections 89720 and 89721.
24(5) Except as otherwise provided with respect to money received
25pursuant to Section 2080.8 of the Civil Code and Sections 89720
26and 89721, all money received pursuant to this section shall
27augment the support appropriation to the California State
28University for the fiscal year to which the collections apply.
29(c) All money received from the sale or the disposition of real
30property acquired by or on behalf of a campus of the California
31State University by gift, devise, or donation pursuant to Section
3289720 or pursuant to the predecessor of that section is hereby
33appropriated to the trustees for expenditure for capital outlay for
34the acquisition and improvement of real property for the campus,
35in addition to any other amounts appropriated by the Legislature.
36All money
received from the sale or other disposition of personal
37property, other than money, acquired by or on behalf of a campus
38of the California State University by gift, bequest, or donation
39pursuant to Section 89720 or the predecessor of that section is
40hereby appropriated to the trustees for expenditure for capital
P4 1outlay for, or the acquisition and improvement of real or personal
2property for, the campus, in addition to other amounts appropriated
3by the Legislature. No money shall be expended by the trustees
4under this subdivision without the approval of the Director of
5Finance. The money shall augment the support or capital outlay
6appropriation of the California State University current at the date
7of issuance of the Controller’s receipt as may be designated by the
8trustees prior to the deposit of that money in the State Treasury.
Section 89725 of the Education Code is amended to
10read:
(a) Notwithstanding any law to the contrary, grants,
12revenues, and funds of any nature received by the trustees for
13research, workshops, conferences, institutes, and special projects
14from the state, federal government, local government, or private
15persons, may be transmitted to the Treasurer and, if transmitted,
16shall be deposited in the California State University Special
17Projects Fund, which is hereby established in the State Treasury.
18(b) All grants, revenues, and funds deposited in the California
19State University Special Projects Fund are appropriated without
20regard to fiscal year to the trustees for the operation, support, and
21
development of research, workshops, conferences, institutes, and
22special projects in the California State University.
23 (c) Provision shall be made by the trustees for reimbursements
24to the General Fund for the cost of space and services furnished
25to projects funded by the California State University Special
26Projects Fund.
27(d) Notwithstanding any law to the contrary, the trustees shall
28have authority to establish the rules and procedures under which
29the fund shall operate. All expenditures shall be made in accordance
30with the rules and procedures, without prior approval of the
31Department of General Services or the Department of Finance.
32Expenditures from the fund shall be audited as frequently as the
33Audits Division of the Department of Finance deems appropriate.
34(e) Moneys in the California State University Special Projects
35Fund may be invested by the Treasurer or by the chief fiscal officer
36of a campus of the California State University, upon approval of
37the trustees, only in eligible securities listed in Section 16430 of
38the Government Code, or, in accordance with Section 89726, in
39mutual funds subject to registration by, and under the regulatory
40authority of, the United States Securities and Exchange
P5 1Commission or inbegin insert United States registeredend insert real estate investment
2trusts. All interest or other earnings received pursuant to those
3investments shall be collected by the Treasurer, and shall be
4deposited in the
fund.
Section 89726 is added to the Education Code, to read:
(a) (1) The trustees may invest in securities or
7investments not listed in Section 16430 of the Government Code
8only if the trustees have established a committee to provide advice
9and expertise on investments.
10(2) A majority of the members of the committee shall be
11individuals who have investment expertise and who are not
12employees of the California State University.
13(3) The trustees shall allow the Treasurer to serve as a member
14of the committee or to appoint a deputy treasurer to serve as a
15member of the committee.
16(b) The total amount
invested in securities or investments not
17listed in Section 16430 of the Government Code shall not exceed
18the following amounts:
19(1) In the fiscal year ending June 30, 2017, two hundred million
20dollars ($200,000,000).
21(2) In the fiscal year ending June 30, 2018, four hundred million
22dollars ($400,000,000).
23(3) In the fiscal year ending June 30, 2019, six hundred million
24dollars ($600,000,000).
25(4) In the fiscal year ending June 30, 2020, and each fiscal year
26thereafter, 30 percent of all moneys invested pursuant to Sections
2789724 and 89725.
28(c) (1) The trustees shall receive an investment
performance
29report quarterly and distribute an annual report to the Legislature,
30in compliance with Section 9795 of the Government Code, and
31the Department of Finance.
32(2) The investment performance reports shall include investment
33returns, comparisons to benchmarks, holdings, market values, and
34fees.
35(d) Any additional moneys earned through investments in
36securities or investments not listed in Section 16430 of the
37Government Code shall be used only for capital outlay or
38maintenance, and shall not be used for ongoing operations.
39(e) The trustees shall not submit a request to the Department of
40Finance or the Legislature for any funds to compensate for
P6 1investment loss resulting from investments in securities or
2investments
not listed in Section 16430 of the Government Code.
3(f) The trustees shall not cite investment loss resulting from
4investments in securities or investments not listed in Section 16430
5of the Government Code to justify approval of an increase in
6student tuition or fees.begin insert No increase in tuition or reduction in course
7sections offered shall be adopted because of investment losses
8sustained as a result of this section.end insert
O
98