The State of California cannot borrow or withhold LAIF moneys. Recent discussions have generated questions from LAIF agencies and their oversight boards about the safety and accessibility of money invested in LAIF.
Can the State borrow LAIF funds?
- No. California Government Code Section 16429.3 states that moneys placed with the Treasurer for deposit in the LAIF by cities, counties, special districts, nonprofit corporations, or qualified quasi-governmental agencies shall not be subject to either of the following:
(a) Transfer or loan pursuant to Sections 16310, 16312, or 16313.
(b) Impoundment or seizure by any state official or state agency.
Can the State withhold LAIF funds?
- No. California Government Code Section 16429.4 which was added to the LAIF's enabling legislation during the 2002 session states that the right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi-governmental agency, to withdraw its deposited money from the LAIF upon demand may not be altered, impaired, or denied in any way by any state official or state agency based upon the States failure to adopt a State Budget by July 1 of each new fiscal year.
Questions regarding the LAIF program may be directed to LAIF at (916) 653‑3001 or by email.