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HomeGovernment CodeDiv. 4Pt. 3Ch. 4Art. 3§ 31966 Public Fund Investment Rules

§ 31966 Public Fund Investment Rules

Government Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 31966 Public Fund Investment Rules

Key Takeaways

  • •The board must invest the system's money carefully and can sell investments to reinvest the money.
  • •They can only invest in safe things like government-approved bonds, certain housing-related investments, and bank deposits.
  • •Investments can also include shares in savings and loan associations or credit unions that have insurance protection.
  • •The goal is to keep the money safe and growing, not to take big risks.

Example

Imagine the board has extra money from a retirement fund that isn't needed right now.

Instead of just sitting on the money, they can invest it in safe options like government-backed bonds or insured bank deposits. They can't put it into risky stuff like stocks or cryptocurrency. If they invest in a credit union, it must have insurance to protect the money.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 31966 Public Fund Investment Rules

The board shall invest and reinvest the funds of the system, and may from time to time sell any securities held by it and invest and reinvest the proceeds therefrom and all unappropriated income of the funds. All funds received by it not required for current disbursements shall be invested only in: (a) Securities that are legal for savings bank investments or any bonds which, pursuant to the statutes or laws providing for the issuance of those bonds are entitled to the same force or value or use as bonds issued by any municipality, or any bonds issued pursuant to those acts, statutes or laws of this state wherein the law specifically states by reference or otherwise that the bonds shall be legal investments for either savings banks, insurance companies, all trust funds, state school funds and any funds that may be invested in bonds of cities, counties, cities and counties, school districts, or municipalities in the state, or any bonds that have been investigated and approved by a commission or board now or hereafter authorized by law to conduct that investigation and give that approval and by authority of which those bonds are declared to be legal investments for insurers. (b) Obligations issued pursuant to Title IV of the National Housing Act, approved June 27, 1934. (c) Shares, share accounts, or investment certificates of any savings and loan association that has the protection provided by Title IV of the National Housing Act, approved June 27, 1934, to the extent of that insurance protection. (d) Deposits at interest in any state or national bank doing business with the county pursuant to the law authorizing and controlling the deposit of public funds in banks. (e) Shares, share accounts, or certificates of funds of a credit union that has the protection provided by the National Credit Union Share Insurance Fund or other private insurance or guaranty of share accounts that is acceptable to the Commissioner of Financial Institutions. (Amended by Stats. 2002, Ch. 664, Sec. 118. Effective January 1, 2003.)

Last verified: January 22, 2026

Key Terms

insurancesecuritiesschoolobligationcommissionprotectionthe boardnational housing act

Related Statutes

  • § 32271 Public Fund Investment Rules
  • § 54702.10 Bond Investment Eligibility Rules
  • § 31967 County Treasurer Securities Transfer
  • § 53801 Public Building Funding Certificates
  • § 21337 Retiree Purchasing Power Adjustments

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Government Code. Section 31966.
View Official Source