SECTIONS 10250-10251 - California Statutes

CORPORATIONS CODE

SECTION 10250-10251

10250. (a) Any corporation organized under the provisions of or for
the purposes set forth in Part 6 (commencing with Section 10000) of
this division or organized on or prior to December 31, 1979, under
the provisions of or for purposes set forth in Part 3 (commencing
with Section 10200) of this division, then in effect, or organized
under or subject to Part 2 (commencing with Section 5110), or
organized under or subject to Part 4 (commencing with Section 9110),
may, if authorized so to do by its articles of incorporation,
establish one or more common trust funds for the purpose of
furnishing investments to such corporation or to any church, parish,
congregation, society, chapel, mission, religious, beneficial,
charitable or educational institution affiliated with it, or to any
organization, society or corporation holding funds or property for
the benefit of any of the foregoing, or holding funds for the purpose
of supporting a bishop, priest, religious pastor, or teacher or any
building or buildings used by or owned by any of the foregoing,
whether holding such funds or property as fiduciary or otherwise.
Notwithstanding the provisions of any general or special law in any
way limiting the right of any of the foregoing or the officers or
directors thereof, as fiduciary or otherwise, to invest funds held by
them, it shall be lawful for any of the foregoing to invest any or
all of their funds or property in shares or interests of such common
trust fund or trust funds; provided, that, in the case of funds or
property held as fiduciary, such investment is not prohibited by the
wording of the will, deed or other instrument creating such fiduciary
relationship.
(b) The directors or trustees of any such common trust fund, or
trust funds, so organized, may employ such officers or agents as they
think best, define their duties, and fix their compensation. They
may also appoint a trust company or bank as custodian of the trust
estate and may employ an investment adviser or advisers, define their
duties, and fix their compensation. Securities which constitute part
or all of the trust estate may be deposited in a securities
depository, as defined in Section 30004 of the Financial Code, which
is licensed under Section 30200 of the Financial Code or exempted
from licensing thereunder by Section 30005 or 30006 of the Financial
Code, and such securities may be held by such securities depository
in the manner authorized by Section 775 of the Financial Code.
(c) The directors or trustees of any such common trust fund, or
trust funds, shall pay ratably among the holders of shares or
beneficial certificates then outstanding, semiannual dividends which
shall approximately equal, in each fiscal year, the net income of the
trust, or trusts.
(d) The provisions of the Corporate Securities Law (Division 1
(commencing with Section 25000) of Title 4) shall not apply to the
creation, administration, or termination of common trust funds
created hereunder, nor to participation therein.

10251. (a) "Educational institution," as used in this section,
means any nonprofit corporation organized under Chapter 4 (commencing
with Section 94400) or Chapter 7 (commencing with Section 94700) of
Part 59 of the Education Code or organized under Part 1 (commencing
with Section 9000) of this division in effect on December 31, 1979,
and designated on or after January 1, 1980, as a nonprofit public
benefit corporation, or organized for charitable or eleemosynary
purposes under Part 2 (commencing with Section 5110) of this
division, or Part 3 (commencing with Section 10200) of this division
in effect on December 31, 1979, and designated on or after January 1,
1980, as a nonprofit public benefit corporation for the purpose of
establishing, conducting or maintaining an institution offering
courses beyond high school and issuing or conferring a diploma or for
the purpose of offering or conducting private school instruction on
the high school or elementary school level and any charitable trust
organized for such purpose or purposes. "Educational institution," as
used in this section, also means the University of California, the
California State University, the California Community Colleges, and
any auxiliary organization, as defined in Section 89901 of the
Education Code, established for the purpose of receiving gifts,
property and funds to be used for the benefit of a state college.
(b) It shall be lawful for any educational institution to become a
member of a nonprofit corporation incorporated under the laws of any
state for the purpose of maintaining a common trust fund or similar
common fund in which nonprofit organizations may commingle their
funds and property for investment and to invest any and all of its
funds, whenever and however acquired, in the common fund or funds;
provided that, in the case of funds or property held as fiduciary,
the investment is not prohibited by the wording of the will, deed, or
other instrument creating the fiduciary relationship.
(c) An educational institution electing to invest in a common fund
or funds under this section may elect to receive distributions from
each fund in an amount not to exceed for each fiscal year the greater
of the income, as determined under the Uniform Principal and Income
Act, Chapter 3 (commencing with Section 16320) of Part 4 of Division
9 of the Probate Code, accrued on its interest in the fund or 10
percent of the value of its interest in the fund as of the last day
of its next preceding fiscal year. The educational institution may
expend the distribution or distributions for any lawful purpose
notwithstanding any general or special law characterizing the
distribution, or any part thereof, as principal or income; provided
that, in the case of funds or property invested as fiduciary, the
expenditure is not prohibited by the wording of the will, deed, or
other instrument creating the fiduciary relationship. No such
prohibition of expenditure shall be deemed to exist solely because a
will, deed, or other instrument, whether executed or in effect before
or after the effective date of this section, directs or authorizes
the use of only the "income," or "interest," or "dividends" or
"rents, issues or profits," or contains words of similar import.
(d) The Corporate Securities Law of 1968 shall not apply to the
creation, administration, or termination of common trust funds
authorized under this section, or to participation therein.
(e) This section shall become operative on January 1, 1997.