Recent Legislative Updates Affecting Local Agency Investments Effective 2026
Thursday, January 15, 2026
 Recent Legislative Updates Affecting Local Agency Investments Effective 2026By: Jason Al-Imam, 2026 Professional Standards Chair In 2025, Governor Newsom signed two Senate bills that introduce important changes affecting how California local agencies manage investments and comply with related disclosure requirements. Senate Bill 595 and Senate Bill 852 both take effect on January 1, 2026, and together update investment authority, reporting timelines, and transparency requirements. Senate Bill 595 modernizes and extends several local agency investment provisions that were set to expire at the end of 2025. The bill increases the maximum maturity for eligible commercial paper from 270 days to 397 days, aligning state law more closely with federal standards and expanding short term investment flexibility. It also extends through January 1, 2031, the authority for local agencies with at least $100 million in assets under management to invest up to 40 percent of their portfolios in eligible commercial paper. In addition, SB 595 continues through January 1, 2031, the authorization for local agencies to invest in U.S. government securities that may accrue zero or negative interest during periods of negative market rates. Senate Bill 852 amends the Political Reform Act to strengthen financial disclosure requirements for public officials who manage public investments. Beginning in 2026, these officials are required to file their Statement of Economic Interests, Form 700, electronically with the Fair Political Practices Commission through its e filing system rather than with their local agency. This change applies to officials and consultants with discretionary investment authority and is intended to centralize reporting and promote consistent disclosure practices. Together, SB 595 and SB 852 enhance investment flexibility while reinforcing accountability and transparency in local agency financial management. If you have questions regarding this topic, contact Jason Al-Imam, Chair of the Professional Standards Committee at jalimam@newportbeachca.gov.
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