Bill Text: CA SB1412 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Introduced.html

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BILL NUMBER: SB 1412	INTRODUCED
	BILL TEXT


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, as introduced, 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 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 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.
   Vote: majority. Appropriation: yes. 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  from the sale of
publications pursuant to Section 90500, all money received under an
agreement entered into pursuant to Section 89036, and, except as to
the fees and charges specified in subdivisions (g) and (h) of Section
89721, all money collected as fees from students in any state
university and from other persons under Section 89030, Sections 89036
to 89040, inclusive, and Sections 89700, 89705, 89708, 89709, 89720,
and 89721, and by reason of Section 2080.9 of the Civil Code, is
hereby appropriated for the support of the California State
University in addition to such other amounts as may be appropriated
therefor by the Legislature. Money   in accordance with
the following shall be appropriated for the support of the Califo
  rnia 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 
by reason of   pursuant to  Section  2080.9
  2080.8  of the Civil Code, is appropriated 
pursuant to subdivision (a)  without regard to fiscal year.
 Money 
    (2)     Money  received  by
reason of   pursuant to  Section  2080.9
  2080.8  of the Civil Code shall be used for
student scholarships and loans pursuant to any regulations the
trustees  shall 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 such investment shall also be used for those
scholarships and loans. Money   provide. 
      (3)     Money  received
 by reason of   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 and in investment
certificates or withdrawal shares in federal or state credit unions
which are doing business in this state and which have their accounts
insured by the National Credit Union Administration. Any money so
invested or deposited shall be invested or deposited in certificates,
shares, or accounts fully covered by the insurance.  
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 real estate
investment trusts.  All interest and other earnings received
pursuant to the investment of money received  by reason of
  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 
    (5)     Except  as otherwise provided
with respect to money received  by reason of  
pursuant to  Section  2080.9   2080.8 
of the Civil Code and Sections 89720 and  89721 of this
code,   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.

   (b) 
    (c)  All money received from the sale or the disposition
of real property acquired by or on behalf of a  particular
state university   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 
particular state university,   campus,  in addition
to any other amounts appropriated  therefor  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
 particular state university   campus of the
California State University  by gift, bequest, 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, or the acquisition and
improvement of real or personal property for, the  particular
state university,   campus,  in addition to other
amounts appropriated  therefor  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  therefor  as may be designated by the
trustees prior to  their   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 
other  provision of  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  State Treasury to the
credit of the  California State University Special Projects
Fund, which  fund  is hereby  created.
  established in the State Treasury.  
   All such 
    (b)     All  grants, revenues, and
funds  deposited in the California State University Special
Projects Fund  are  hereby  appropriated
without regard to fiscal  years   year  to
the trustees for the operation, support, and development of research,
workshops, conferences, institutes, and special projects in the
California State University. 
   Provision 
    (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. 
   Notwithstanding 
    (d)     Notwithstanding  any 
other   provision of the  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.  All expenditures shall receive an
annual postaudit by the Audits Division of the Department of Finance.
This requirement for an annual postaudit shall be effective until
July 1, 1992. On and after July 1, 1992, the expenditures 
 Expenditures  from the fund shall be audited as frequently
as the Audits Division  of the Department of Finance  deems
appropriate. 
   Moneys 
    (e)     Moneys  in the California
State University Special Projects Fund may be invested by the
 Treasurer,   Treasurer or by the chief fiscal
officer of a campus of the California State University,  upon
approval of the  trustees   trustees, only 
in  those  eligible securities listed in Section
16430 of the Government  Code. All   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 real estate
investment trusts. All  interest or other earnings received
pursuant to those investments shall be collected by the 
Treasurer   Treasurer,  and shall be deposited in
the  State Treasury to the credit of the California State
University Special Projects Fund.   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.