AB 2638

Bill Subjects

Abstract

(1) Existing law creates the Local Agency Investment Fund, a trust fund in the custody of the Treasurer, in which local governments and other specified governmental entities may deposit, for investment, moneys that are not required for immediate needs. Existing law authorizes the Treasurer, with the advice of the Local Investment Advisory Board, to invest the moneys in the fund. Existing law requires the board to be made up of 5 members, including the Treasurer or his or her representative, 2 members appointed by the Treasurer who are experienced in the field of investment, and 2 members appointed by the Treasurer who are treasurers, finance or fiscal officers, or business managers employed by a county, city or local district, or municipal corporation of this state. Existing law establishes that the term of office of each appointed member of the board is 2 years. This bill would extend the term of each of the appointed members of the board to 3 years. The bill would also make several nonsubstantive changes. (2) Existing law creates the Pooled Money Investment Board and authorizes it to determine whether any money on deposit in the State Treasury, with specified exceptions, is not necessary for immediate use and to designate that money as "surplus money." Existing law requires transfer of this surplus money to the Surplus Money Investment Fund and requires that the moneys be invested by the Treasurer in specified eligible investment vehicles. Existing law creates the Local Agency Investment Fund, a trust fund in the custody of the Treasurer, in which local governments and other specified governmental entities may deposit, for investment, moneys that are not required for immediate needs. Existing law authorizes the Treasurer, with the advice of the Local Investment Advisory Board, to invest the moneys in the fund in specified securities that are eligible for the investment of surplus state funds. This bill would create the Intermediate and Long Term Investment Fund to receive voluntary deposit of funds by a governmental entity so that those funds may benefit from the intermediate or long-term investments authorized by this bill. The bill would, in addition, authorize investment of moneys that are deposited in the Intermediate and Long Term Investment Fund in long-term corporate and government bonds, in gold, and in convertible securities. This bill would establish the Long Term Investment Board. The board would consist of 5 members with the Treasurer as the chair. The Treasurer would select the remaining 4 members, based upon specified criteria, for 2-year terms. The board's primary purpose would be to advise and assist the Treasurer in formulating the investment and reinvestment of moneys in the fund and the acquisition, retention, management, and disposition of investments of the fund. The bill would require the board to submit quarterly and annual reports regarding the performance of the investments in the fund to the Legislature and to the Department of Finance.