2005 California Government Code Sections 16430-16431 Article 1. General

16430.  Eligible securities for the investment of surplus moneys
shall be any of the following:
   (a) Bonds or interest-bearing notes or 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.
   (b) Bonds or interest-bearing notes on obligations that are
guaranteed as to principal and interest by a federal agency of the
United States.
   (c) Bonds and notes of this state, or those for which the faith
and credit of this state are pledged for the payment of principal and
interest.
   (d) Bonds or warrants, including, but not limited to, revenue
warrants, of any county, city, metropolitan water district,
California water district, California water storage district,
irrigation district in the state, municipal utility district, or
school district of this state.
   (e) Bonds, consolidated bonds, collateral trust debentures,
consolidated debentures, or other obligations issued by federal land
banks or federal intermediate credit banks established under the
Federal Farm Loan Act, as amended, in 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, in bonds or debentures of the Federal Home Loan Bank Board
established under the Federal Home Loan Bank Act, in stock, bonds,
debentures and other obligations of the Federal National Mortgage
Association established under the National Housing Act as amended,
and in the bonds of any federal home loan bank established under that
act, obligations of the Federal Home Loan Mortgage Corporation, in
bonds, notes, and other obligations issued by the Tennessee Valley
Authority under the Tennessee Valley Authority Act as amended, and
bonds, notes, and other obligations guaranteed by the Commodity
Credit Corporation for the export of California agricultural products
under the Commodity Credit Corporation Charter Act as amended.
   (f) (1) Commercial paper of "prime" quality as defined by a
nationally recognized organization that rates these securities.
Eligible paper is further limited to issuing corporations, trusts, or
limited liability companies approved by the Pooled Money Investment
Board that meet the conditions in either subparagraph (A) or
subparagraph (B):
   (A) Both of the following:
   (i) Organized and operating within the United States.
   (ii) Having total assets in excess of five hundred million dollars
($500,000,000).
   (B) Both of the following:
   (i) Organized within the United States as a special purpose
corporation, trust, or limited liability company.
   (ii) Having programwide credit enhancements including, but not
limited to, overcollateralization, letters of credit, or surety bond.
   (2) Purchases of eligible commercial paper may not exceed 180 days'
maturity, represent more than 10 percent of the outstanding paper of
an issuing corporation, trust, or limited liability company, nor
exceed 30 percent of the resources of an investment program. At the
request of the Pooled Money Investment Board, this investment shall
be secured by the issuer by depositing with the Treasurer securities
authorized by Section 53651 of a market value at least 10 percent in
excess of the amount of the state's investment.
   (g) Bills of exchange or time drafts drawn on and accepted by a
commercial bank, otherwise known as bankers acceptances, which are
eligible for purchase by the Federal Reserve System.
   (h) Negotiable certificates of deposits issued by a federally or
state-chartered bank or savings and loan association, a
state-licensed branch of a foreign bank, or a federally or
state-chartered credit union. For the purposes of this section,
negotiable certificates of deposits do not come within the provisions
of Chapter 4 (commencing with Section 16500) and Chapter 4.5
(commencing with Section 16600).
   (i) The portion of bank loans and obligations guaranteed by the
United States Small Business Administration or the United States
Farmers Home Administration.
   (j) Bank loans and obligations guaranteed by the Export-Import
Bank of the United States.
   (k) Student loan notes insured under the Guaranteed Student Loan
Program established pursuant to the Higher Education Act of 1965, as
amended (20 U.S.C. Sec. 1001 and following) and eligible for resale
to the Student Loan Marketing Association established pursuant to
Section 133 of the Education Amendments of 1972, as amended (20
U.S.C.  Sec. 1087-2).
   (l) 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.
   (m) Bonds, debentures, and notes issued by corporations organized
and operating within the United States.  Securities eligible for
investment under this subdivision shall be within the top three
ratings of a nationally recognized rating service.
16431.  Notwithstanding any other provisions of this code, funds
held by the state pursuant to a written agreement between the state
and employees of the state to defer a portion of the compensation
otherwise receivable by the state's employees and pursuant to a plan
for such deferral as adopted by the state and approved by the State
Board of Control, may be invested in the types of investments set
forth in Sections 53601 and 53602 of this code, and may additionally
be invested in corporate stocks, bonds, and securities, mutual funds,
savings and loan accounts, credit union accounts, annuities,
mortgages, deeds of trust, or other security interests in real or
personal property.  Nothing herein shall be construed to permit any
type of investment prohibited by the Constitution.
   Deferred compensation funds are public pension or retirement funds
for the purposes of Section 42 of Article XIII of the Constitution.