SACRAMENTO – Assemblyman Marc Steinorth (R-Rancho Cucamonga) announced his bill, AB 1770, has been signed into law, which removes the requirement that the issuer be rated and continue limiting local agencies to purchasing highly-rated securities, preserving the safety of agencies’ portfolios.
“We must empower our local agencies to safely invest in securities that see a greater return while protecting taxpayer dollars,” said Assemblyman Marc Steinorth. “With overwhelming, unanimous and bipartisan support of AB 1770, we are bringing greater flexibility to local agencies and their ability to make effective investments. This is a great opportunity to work toward tackling our growing pension obligations in the state.”
Specifically, AB 1770 modernizes and clarifies which authorized asset-backed and pass-through securities local agencies are allowed to purchase. Current law limits local agencies to only purchasing securities that are “AA” rated or better and are issued by an issuer with a rating of “A” or better. Since this law was implemented decades ago, the relationship between loan originators, issuers, and asset-backed and pass-through securities has changed significantly.
Assemblyman Marc Steinorth (R-Rancho Cucamonga) represents the 40th Assembly District in the California Legislature, which includes the cities of Redlands, Highland, Loma Linda, and portions of San Bernardino and Rancho Cucamonga.