SB 595: Local government: investments and financial reports.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

(1)Existing law regulates the investment of public funds by local agencies, as defined. Existing law authorizes the legislative body of a local agency, as specified, that has money in a sinking fund or in its treasury not required for the immediate needs of the local agency to invest the money as it deems wise or expedient in certain securities and financial instruments, subject to various requirements. These permissible investments include, among others, commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recognized statistical rating organization that is issued by entities meeting certain criteria, if the eligible commercial paper has a maximum maturity of 270 days or less.

This bill would revise the maximum maturity periods for the investments in prime quality commercial paper to 397 days.

Existing law, until January 1, 2026, authorizes local agencies, as specified, that have less than $100,000,000 of investment assets under management to invest no more than 25%, and those local agencies that have $100,000,000 or more of investment assets under management to invest no more than 40%, of their moneys in eligible commercial paper, as specified. Existing law, beginning January 1, 2026, instead authorizes those local agencies regardless of the amount of investment assets they have under management to invest no more than 25% of their moneys in eligible commercial paper, as specified.

This bill would instead repeal the former provisions on January 1, 2031, and would postpone the operative date for the latter provisions until January 1, 2031.

Existing law prohibits a local agency from investing specified public funds in any security that could result in zero-interest accrual if held to maturity, as specified. Existing law, until January 1, 2026, authorizes a local agency as an exception to that provision to invest in securities issued by, or backed by, the United States government that could result in zero-interest accrual if held to maturity, as specified.

This bill would instead repeal the above-described exception on January 1, 2031.

Sponsors

Sponsors by party (alphabetical): Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. October 3, 2025Chaptered by Secretary of State. Chapter 323, Statutes of 2025.
2. October 3, 2025Approved by the Governor.
3. September 22, 2025Enrolled and presented to the Governor at 2 p.m.
4. September 11, 2025Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2871.) Ordered to engrossing and enrolling.
5. September 8, 2025In Senate. Concurrence in Assembly amendments pending.
6. September 8, 2025Read third time. Passed. (Ayes 78. Noes 0. Page 2981.) Ordered to the Senate.
7. September 3, 2025Ordered to third reading.
8. September 3, 2025Read third time and amended.
9. August 18, 2025Ordered to third reading.
10. August 18, 2025From consent calendar on motion of Assembly Member Aguiar-Curry.
11. July 17, 2025Read second time. Ordered to consent calendar.
12. July 16, 2025From committee: Do pass. Ordered to consent calendar. (Ayes 13. Noes 0.) (July 16).