Bill Text: CA AB2481 | 2011-2012 | Regular Session | Amended
Bill Title: Financial institutions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2012-06-27 - In committee: Set, second hearing. Hearing canceled at the request of author. [AB2481 Detail]
Download: California-2011-AB2481-Amended.html
BILL NUMBER: AB 2481 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 18, 2012
AMENDED IN ASSEMBLY MARCH 29, 2012
INTRODUCED BY Assembly Member Morrell
FEBRUARY 24, 2012
An act to amend Section 16522 of the Government Code, relating to
financial institutions.
LEGISLATIVE COUNSEL'S DIGEST
AB 2481, as amended, Morrell. Financial institutions.
Existing law requires banks to deposit specified securities, which
include, among other things, specified letters of credit issued by
the Federal Home Loan Bank of San Francisco, with the Treasurer in
order to be eligible to receive and retain demand or time deposits of
state funds.
This bill would instead include letters of credit issued by any
Federal Home Loan Bank.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16522 of the Government Code is amended to
read:
16522. The following securities may be received as security for
demand and time deposits:
(a) Bonds, notes, or other obligations of the United States, or
those for which the faith and credit of the United States are pledged
for the payment of principal and interest, including the guaranteed
portions of small business administration loans, so long as those
loans are obligations for which the faith and credit of the United
States are pledged for the payment of principal and interest.
(b) Notes or bonds or any obligations of a local public agency (as
defined in the United States Housing Act of 1949) or any obligations
of a public housing agency (as defined in the United States Housing
Act of 1937) for which the faith and credit of the United States are
pledged for the payment of principal and interest.
(c) Bonds of this state or of any county, city, town, metropolitan
water district, municipal utility district, municipal water
district, bridge and highway district, flood control district, school
district, water district, water conservation district or irrigation
district within this state, and, in addition, revenue or tax
anticipation notes, and revenue bonds payable solely out of the
revenues from a revenue-producing property owned, controlled or
operated by this state, or such local agency or district, or by a
department, board, agency, or authority thereof.
(d) Registered warrants of this state.
(e) Bonds, consolidated bonds, collateral trust debentures,
consolidated debentures, or other obligations issued by the United
States Postal Service, federal land banks or federal intermediate
credit banks established under the Federal Farm Loan Act, as amended,
debentures and consolidated debentures issued by the Central Bank
for Cooperatives and banks for cooperatives established under the
Farm Credit Act of 1933, as amended, consolidated obligations of the
Federal Home Loan Banks established under the Federal Home Loan Bank
Act, bonds, debentures and other obligations of the Federal National
Mortgage Association and of the Government National Mortgage
Association established under the National Housing Act as amended, in
the bonds of any federal home loan bank established under said act,
bonds, debentures, and other obligations of the Federal Home Loan
Mortgage Corporation established under the Emergency Home Finance Act
of 1970, and in bonds, notes, and other obligations issued by the
Tennessee Valley Authority under the Tennessee Valley Authority Act,
as amended.
(f) Bonds and notes of the California Housing Finance Agency
issued pursuant to Chapter 7 (commencing with Section 41700) of Part
3 of Division 31 of the Health and Safety Code.
(g) Promissory notes secured by first mortgages and first trust
deeds upon residential real property located in California, provided
that:
(1) Notwithstanding Section 16521, the promissory notes shall at
all times be in an amount in value at least 50 percent in excess of
the amount deposited with the bank;
(2) The Treasurer issues regulations, establishes procedures for
determining the value of the promissory notes and develops standards
necessary to protect the security of the deposits so collateralized;
(3) The depository may exercise, enforce, or waive any right or
power granted to it by promissory note, mortgage, or deed of trust;
and
(4) The following may not be used as security for deposits:
(i)
(A) Any promissory note on which any payment is more
than 90 days past due,
(ii)
(B) Any promissory note secured by a mortgage or deed
of trust as to which there is a lien prior to the mortgage or deed of
trust, or
(iii)
(C) Any promissory note secured by a mortgage or deed
of trust as to which a notice of default has been recorded pursuant
to Section 2924 of the Civil Code or an action has been commenced
pursuant to Section 725a of the Code of Civil Procedure.
(h) Bonds issued by the State of Israel.
(i) Obligations issued, assumed, or guaranteed by the
International Bank for Reconstruction and Development, the
Inter-American Development Bank, the Asian Development Bank, the
African Development Bank, the International Finance Corporation, or
the Government Development Bank of Puerto Rico.
(j) Any municipal securities, as defined by Section 3(a)(29) of
the Securities Exchange Act of June 6, 1934, (15 U.S.C. 78, as
amended), which are issued by this state or any local agency thereof.
(k) Letters of credit issued by a Federal Home Loan Bank, which
shall be in the form and shall contain provisions as the Treasurer
may prescribe, and shall include the following terms:
(1) The Treasurer shall be the beneficiary of the letter of
credit.
(2) The letter of credit shall be clean and irrevocable, and shall
provide that the Treasurer may draw upon it up to the total amount
in the event of the failure of the bank or if the bank refuses to
permit the withdrawal of funds by the Treasurer or any other
authorized state officer or employee.
SEC. 2. Section 53651 of the Government
Code is amended to read:
53651. Eligible securities are any of the following:
(a) United States Treasury notes, bonds, bills or certificates of
indebtedness, or obligations for which the faith and credit of the
United States are pledged for the payment of principal and interest,
including the guaranteed portions of small business administration
loans, so long as the loans are obligations for which the faith and
credit of the United States are pledged for the payment of principal
and interest.
(b) Notes or bonds or any obligations of a local public agency (as
defined in the United States Housing Act of 1949) or any obligations
of a public housing agency (as defined in the United States Housing
Act of 1937) for which the faith and credit of the United States are
pledged for the payment of principal and interest.
(c) Bonds of this state or of any local agency or district of the
State of California having the power, without limit as to rate or
amount, to levy taxes or assessments to pay the principal and
interest of the bonds upon all property within its boundaries subject
to taxation or assessment by the local agency or district, and in
addition, limited obligation bonds pursuant to Article 4 (commencing
with Section 50665) of Chapter 3 of Division 1, senior obligation
bonds pursuant to Article 5 (commencing with Section 53387) of
Chapter 2.7, and revenue bonds and other obligations payable solely
out of the revenues from a revenue-producing property owned,
controlled or operated by the state, local agency or district or by a
department, board, agency or authority thereof.
(d) Bonds of any public housing agency (as defined in the United
States Housing Act of 1937, as amended) as are secured by a pledge of
annual contributions under an annual contribution contract between
the public housing agency and the Public Housing Administration if
such contract shall contain the covenant by the Public Housing
Administration which is authorized by subsection (b) of Section 22 of
the United States Housing Act of 1937, as amended, and if the
maximum sum and the maximum period specified in the contract pursuant
to that subsection 22(b) shall not be less than the annual amount
and the period for payment which are requisite to provide for the
payment when due of all installments of principal and interest on the
obligations.
(e) Registered warrants of this state.
(f) Bonds, consolidated bonds, collateral trust debentures,
consolidated debentures, or other obligations issued by the United
States Postal Service, federal land banks or federal intermediate
credit banks established under the Federal Farm Loan Act, as amended,
debentures and consolidated debentures issued by the Central Bank
for Cooperatives and banks for cooperatives established under the
Farm Credit Act of 1933, as amended, consolidated obligations of the
federal home loan banks established under the Federal Home Loan Bank
Act, bonds, debentures and other obligations of the Federal National
Mortgage Association or of the Government National Mortgage
Association established under the National Housing Act, as amended,
bonds of any federal home loan bank established under that act,
bonds, debentures and other obligations of the Federal Home Loan
Mortgage Corporation established under the Emergency Home Finance Act
of 1970, and obligations of the Tennessee Valley Authority.
(g) Notes, tax anticipation warrants or other evidence of
indebtedness issued pursuant to Article 7 (commencing with Section
53820), Article 7.5 (commencing with Section 53840) or Article 7.6
(commencing with Section 53850) of this Chapter 4.
(h) State of California notes.
(i) Bonds, notes, certificates of indebtedness, warrants or other
obligations issued by: (1) any state of the United States (except
this state), or the Commonwealth of Puerto Rico, or any local agency
thereof having the power to levy taxes, without limit as to rate or
amount, to pay the principal and interest of such obligations, or (2)
any state of the United States (except this state), or the
Commonwealth of Puerto Rico, or a department, board, agency or
authority thereof except bonds which provide for or are issued
pursuant to a law which may contemplate a subsequent legislative
appropriation as an assurance of the continued operation and solvency
of the department, board, agency or authority but which does not
constitute a valid and binding obligation for which the full faith
and credit of such state or the Commonwealth of Puerto Rico are
pledged, which are payable solely out of the revenues from a
revenue-producing source owned, controlled or operated thereby;
provided the obligations issued by an entity described in (1), above,
are rated in one of the three highest grades, and such obligations
issued by an entity described in (2), above, are rated in one of the
two highest grades by a nationally recognized investment service
organization that has been engaged regularly in rating state and
municipal issues for a period of not less than five years.
(j) Obligations issued, assumed or guaranteed by the International
Bank for Reconstruction and Development, Inter-American Development
Bank, the Government Development Bank of Puerto Rico, the Asian
Development Bank, the International Finance Corporation, or the
African Development Bank.
(k) Participation certificates of the Export-Import Bank of the
United States.
( l ) Bonds and notes of the California Housing Finance
Agency issued pursuant to Chapter 7 (commencing with Section 51350)
of Part 3 of Division 31 of the Health and Safety Code.
(m) Promissory notes secured by first mortgages and first trust
deeds which comply with Section 53651.2.
(n) Any bonds, notes, warrants, or other evidences of indebtedness
of a nonprofit corporation issued to finance the construction of a
school building or school buildings pursuant to a lease or agreement
with a school district entered into in compliance with the provisions
of Section 39315 or 81345 of the Education Code, and also any bonds,
notes, warrants or other evidences of indebtedness issued to
refinance those bonds, notes, warrants, or other evidences of
indebtedness as specified in Section 39317 of the Education Code.
(o) Any municipal securities, as defined by Section 3(a)(29) of
the Securities Exchange Act of June 6, 1934, (15 U.S.C. Sec. 78, as
amended), which are issued by this state or any local agency thereof.
(p) With the consent of the treasurer, letters of credit issued by
the Federal Home Loan Bank of San Francisco which comply with
Section 53651.6.
