(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 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 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 of Division of the Probate Code, accrued on its interest in the fund or 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 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.