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GOVERNMENTCODE
<br />SECTION
<br />53601.
<br />This section shallapplyto a localagencythatis a city, a district,orotherlocalagencythatdoesnotpool
<br />moneyindepositsorinvestmentswithotherlocalagencies,otherthanlocalagenciesthathavethesame
<br />governingbody.However,Section53635shallapplytoalllocalagenciesthatpoolmoneyindepositsor
<br />investmentswithotherlocalagenciesthathaveseparategoverningbodies.Thelegislativebodyof a local
<br />agencyhavingmoneysin a sinkingfundormoneysinitstreasurynotrequiredfortheimmediateneedsof
<br />thelocalagencymayinvestanyportionofthemoneysthatitdeemswiseorexpedientinthoseinvestments
<br />set forthbelow. A localagencypurchasingorobtaininganysecuritiesprescribedinthissection,in a
<br />negotiable,bearer,registered,ornonregisteredformat,shallrequiredeliveryofthesecuritiestothelocal
<br />agency,includingthosepurchasedfortheagencybyfinancialadvisers,consultants,ormanagersusingthe
<br />agency’sfunds,bybookentry, physical delivery,orbythird-partycustodialagreement.Thetransferof
<br />securitiestothecounterpartybank’s customer bookentryaccountmaybeusedforbookentrydelivery.
<br />Forpurposesofthissection,“counterparty”meanstheotherpartytothetransaction. A counterpartybank’s
<br />trustdepartmentorseparatesafekeepingdepartmentmaybeusedforthephysicaldeliveryofthe securityif
<br />the security isheldinthenameofthelocalagency.Wherethis section specifies a percentagelimitationfor a
<br />particularcategoryofinvestment,thatpercentageisapplicableonlyatthedateofpurchase.Wherethis
<br />section doesnot specify a limitationonthetermorremainingmaturityatthetimeoftheinvestment,no
<br />investmentshallbemadeinany security, otherthan a security underlying a repurchaseorreverse
<br />repurchaseagreementorsecuritieslendingagreementauthorizedbythis section,thatatthetimeofthe
<br />investmenthas a termremainingtomaturityin excess offiveyears,unlessthelegislativebodyhasgranted
<br />expressauthoritytomakethatinvestmenteither specifically oras a partofaninvestmentprogramapproved
<br />bythelegislativebodyno less thanthreemonthspriortotheinvestment:
<br />(a)Bondsissuedbythelocalagency,includingbondspayablesolelyoutoftherevenuesfrom a revenue-
<br />producingpropertyowned,controlled,oroperatedbythelocalagencyorby a department,board,agency,or
<br />authorityofthelocalagency.
<br />(b)UnitedStatesTreasurynotes,bonds,bills,orcertificatesofindebtedness,orthoseforwhichthefaith
<br />andcreditoftheUnitedStatesarepledgedforthepaymentofprincipalandinterest.
<br />(c)Registeredstatewarrantsortreasurynotesorbondsofthisstate,includingbondspayablesolelyoutof
<br />therevenuesfrom a revenue-producingpropertyowned,controlled,oroperatedbythestateorby a
<br />department,board,agency,orauthorityofthestate.
<br />(d)Registeredtreasurynotesorbondsofanyoftheother49statesinadditiontoCalifornia,includingbonds
<br />payablesolelyoutoftherevenuesfrom a revenue-producingpropertyowned,controlled,oroperatedby a
<br />stateorby a department,board,agency, orauthorityofanyoftheother49 states, inadditiontoCalifornia.
<br />(e)Bonds,notes,warrants,orotherevidencesofindebtednessof a localagencywithinthisstate,including
<br />bondspayablesolelyoutoftherevenuesfrom a revenue-producingproperty owned,controlled,oroperated
<br />bythelocalagency,orby a department,board,agency,orauthorityofthelocalagency.
<br />(f)FederalagencyorUnitedStatesgovernment-sponsoredenterpriseobligations,participations,orother
<br />instruments,includingthose issuedbyorfullyguaranteedastoprincipalandinterestbyfederalagenciesor
<br />UnitedStatesgovernment-sponsoredenterprises.
<br />(g)Bankers’ acceptancesotherwiseknownasbillsofexchangeortimedraftsthataredrawnonand
<br />acceptedby a commercialbank.Purchasesofbankers’acceptancesshallnot exceed 180days’maturityor
<br />40percentoftheagency’smoneysthatmaybeinvestedpursuanttothissection.However,nomorethan30
<br />percentoftheagency’smoneysmaybeinvestedinthebankers’acceptancesofanyonecommercialbank
<br />pursuanttothissection.
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