Existing law governs how local agencies may invest public funds and contains numerous statutes specifying permissible investments, investment limits, fiduciary standards, and rules concerning particular securities and financial instruments.
SB 1438 substantially revises and reorganizes those investment provisions. Among other changes, SB 1438 expands the securities and financial instruments in which local agencies may invest, including specified commercial paper issued by federally or state-chartered banks or licensed branches of foreign banks and obligations of the Inter-American Investment Corporation. It also removes the January 1, 2031, sunset date applicable to the existing exception permitting certain United States government investments during periods of negative market interest rates, thereby making that exception indefinite. SB 1438 further recasts the statutory framework governing investment standards and fiduciary duties and repeals numerous duplicative or superseded provisions.
SB 1438 amends the following: (1) Education Code sections 41015, 41033, and 42651; (2) Harbors and Navigation Code sections 6509.5, 6509.7, 6558, 16431, 27000.1, 27000.3, 53600, 53620, 53630, 53631, 53652.2, 53651, 53682, 53684, 53844, 57603, 59283, 67476, and 67480 of the Government Code; sections 1702 and 6077.6; (3) Health and Safety Code sections 9066 and 9067; (4) Public Utilities Code sections 12368, 28818, and 107015; and (5) Revenue and Taxation Code section 100.06.
SB 1438 also amends and renumbers Sections 53600.5, 53600.6, 53601, and 53601.8 of the Government Code, as well as repeals Sections 53600.3, 53601, 53601.1, 53601.2, 53601.5, 53601.6, 53602, 53603, 53604, 53605, 53606, 53607, 53608, 53609, 53610, 53630.5, and 53635 of the Government Code.
