Bill Text: CA SB1412 | 2015-2016 | Regular Session | Chaptered
Bill Title: California State University: investments.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2016-09-09 - Chaptered by Secretary of State. Chapter 282, Statutes of 2016. [SB1412 Detail]
Download: California-2015-SB1412-Chaptered.html
BILL NUMBER: SB 1412 CHAPTERED
BILL TEXT
CHAPTER 282
FILED WITH SECRETARY OF STATE SEPTEMBER 9, 2016
APPROVED BY GOVERNOR SEPTEMBER 9, 2016
PASSED THE SENATE MAY 31, 2016
PASSED THE ASSEMBLY AUGUST 18, 2016
AMENDED IN SENATE APRIL 12, 2016
INTRODUCED BY Senator Block
FEBRUARY 19, 2016
An act to amend Sections 89724 and 89725 of, and to add Section
89726 to, the Education Code, relating to the California State
University, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1412, 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 in United States registered 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 in United
States registered 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. 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.
Appropriation: yes.
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) (1) 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.
(2) 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 provide.
(3) 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.
(4) Money received under Sections 89720 and 89721, and received
pursuant to Section 2080.8 of the Civil Code, may 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 United States registered 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 purposes established by the trustees consistent with the
terms and conditions of the gift, bequest, devise, donation, or
agreement under Sections 89720 and 89721.
(5) 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 the deposit of that money 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) Moneys 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, only in eligible securities listed in Section 16430 of the
Government Code, or, in accordance with Section 89726, in mutual
funds subject to registration by, and under the regulatory authority
of, the United States Securities and Exchange Commission or in United
States registered 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 employees
of the California State University.
(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, 30 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, and shall not
be used for ongoing operations.
(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. No increase in tuition or reduction in course
sections offered shall be adopted because of investment losses
sustained as a result of this section.
