California Senate Bill SB1412 Introduced / Bill

 BILL NUMBER: SB 1412INTRODUCED 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.