Bill Text: CA AB2481 | 2011-2012 | Regular Session | Amended

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

---

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 ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Morrell

                        FEBRUARY 24, 2012

   An act to amend Section  5003   16522 
of the Government Code, relating to  bonds.  
financial institutions. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2481, as amended, Morrell.  Public bonds. 
 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.  
   Existing law regulates the issuance of public bonds and
obligations. Existing law provides for the registration of public
bonds, after which the principal and interest of the bond is payable
to the registered owner.  
   This bill would make a technical, nonsubstantive change in these
provisions. 
   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) Any promissory note on which any payment is more than 90 days
past due,
   (ii) 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) 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  the   a
 Federal Home Loan Bank  of San Francisco  ,
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. 
  SECTION 1.    Section 5003 of the Government Code
is amended to read:
   5003.  After a bond is registered, the principal and interest of
the bond are payable to the registered owner.