2005 California Financial Code Sections 7000-7002 Security; Public Funds

7000.  (a) Administrators, executors, custodians, conservators,
guardians, trustees, and other fiduciaries, insurance companies,
business and manufacturing companies, banks, trust companies, credit
unions, and other types of similar financial organizations,
charitable, educational, eleemosynary and public corporations, funds
and organizations, and municipalities and other public corporations
and bodies, and public officials are specifically authorized and
empowered to invest funds held by them, without any order of any
court, in savings accounts of associations and federal associations
and the investments are legal investments for those funds.
   (b) No association shall have on deposit at any one time funds of
the State of California, of the cities, counties, and other political
subdivisions of the state, and of the public corporations and
districts of the state, that, in the aggregate, exceed in amount 400
percent of its statutory net worth.  The amount of funds on deposit
secured by surety bonds shall not at any time, in the aggregate,
exceed 100 percent of statutory net worth.  The limitations of this
subdivision as to the amount of funds which may be on deposit at any
one time shall not apply to negotiable certificates of deposit.
   (c) An association or federal association may act as a depositary
or fiscal agent for the holding or  handling of public funds
notwithstanding the fact that a member of the legislative body or an
officer or employee of the depositor is an officer, employee, or
stockholder of the association or federal association, or of a
savings and loan holding company or service corporation of the
association or federal association.
   (d) Under this section a member of a legislative body, or an
officer or employee shall not be deemed "interested in any contract"
as that phrase is used in  Section 1090 of the Government Code, if
that person's sole interest is the fact that the person is an
officer, employee, or stockholder of the association or federal
association selected to act as depositary, paying agent, or fiscal
agent or of its savings and loan holding company or service
corporation.
   (e) An officer or employee of a local public agency shall be
deemed to have only a "remote interest" in a contract, as that term
is used in Section 1091 of the Government Code, where the contract is
entered into without competitive bidding under a procedure
established by law, if the sole interest is that of an officer,
director, or employee, of an association or federal association or
savings and loan holding company or service corporation of the
association or federal association with which a party to the contract
  has the relationship of borrower or depositor, debtor, or creditor,
and if the conditions of subdivision (a) of Section 1091 of the
Government Code are met.
7001.  (a) Whenever, under the laws of this state or otherwise, a
deposit of securities is required for any purpose, the savings
accounts and accounts made legal investments by this article shall be
acceptable deposits.
   (b) Whenever, under the laws of this state or otherwise, a bond is
required with security, the bond may be furnished, and the savings
accounts and accounts made legal investments by this article in the
amount of the bond shall be acceptable as security without other
security.
7002.  The provisions of this article supplement any and all other
laws relating to and declaring what shall be legal investments for
the persons, fiduciaries, corporations, organizations' funds,
municipalities, bodies, and officials referred to in this article and
supplement the laws relating to the deposit of securities and the
making and filing of bonds for any purpose.