(a) A local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing with Section 53630) in inverse floaters, range notes, or mortgage-derived, interest-only strips.

(b) A local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing with Section 53630) in any security that could result in zero interest accrual if held to maturity. However, a local agency may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall not apply to local agency investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.) that are authorized for investment pursuant to subdivision (l) of Section 53601.

Terms Used In California Government Code 53601.6 v2

  • local agency: means county, city, city and county, including a chartered city or county, school district, community college district, public district, county board of education, county superintendent of schools, or any public or municipal corporation. See California Government Code 53600
  • Subdivision: means a subdivision of the section in which the term occurs unless some other section is expressly mentioned. See California Government Code 10

(c) This section shall become operative on January 1, 2026.

(Repealed (in Sec. 4) and added by Stats. 2020, Ch. 235, Sec. 5. (SB 998) Effective January 1, 2021. Section operative January 1, 2026, by it own provisions.)

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