Bill Text: MI SB0583 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Higher education; community colleges; investment of surplus funds in certain certificates of deposit; authorize. Amends sec. 142 of 1966 PA 331 (MCL 389.142).
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2009-12-17 - Assigned Pa 0179'09 With Immediate Effect [SB0583 Detail]
Download: Michigan-2009-SB0583-Introduced.html
SENATE BILL No. 583
May 19, 2009, Introduced by Senators STAMAS, ALLEN, RICHARDVILLE and PAPPAGEORGE and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1966 PA 331, entitled
"Community college act of 1966,"
by amending section 142 (MCL 389.142), as amended by 2008 PA 237.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 142. (1) Subject to subsections (3) and (4), the
treasurer of a community college district, if authorized by
resolution of the board of trustees, may invest debt retirement
funds, building and site funds, building and site sinking funds, or
general funds of the district, but investment is restricted to the
following:
(a) Bonds, bills, or notes of the United States, or of an
agency or instrumentality of the United States, or obligations of
this state.
(b) Negotiable certificates of deposit, saving accounts, or
other interest-earning deposit accounts of a financial institution.
(c) Bankers' acceptances that are issued by a bank that is a
member of the federal deposit insurance corporation.
(d) Commercial paper that is supported by an irrevocable
letter of credit issued by a bank that is a member of the federal
deposit insurance corporation.
(e) Commercial paper of corporations rated prime by at least 1
of the standard rating services.
(f) Mutual funds, trusts, or investment pools composed
entirely of instruments that are eligible collateral.
(g) Repurchase agreements against eligible collateral, the
market value of which must be maintained during the life of the
agreements at levels equal to or greater than the amounts advanced.
An undivided interest in the instruments pledged for these
agreements must be granted to the community college.
(h) Investment pools, as authorized by the surplus funds
investment pool act, 1982 PA 367, MCL 129.111 to 129.118, composed
entirely of instruments that are legal for direct investment by a
community college.
(i) Certificates of deposit issued in accordance with the
following conditions:
(i) The funds are initially invested through a financial
institution that is not ineligible to be a depository of surplus
funds belonging to this state under section 6 of 1855 PA 105, MCL
21.146.
(ii) The financial institution arranges for the investment of
the funds in certificates of deposit in 1 or more insured
depository institutions, as defined in 12 USC 1813, for the account
of the community college district.
(iii) The full amount of the principal and any accrued interest
of each certificate of deposit is insured by an agency of the
United States.
(iv) The financial institution acts as custodian for the
community college district with respect to each certificate of
deposit.
(v) At the same time that the funds of the community college
district are deposited and the certificate or certificates of
deposit are issued, the financial institution receives an amount of
deposits from customers of other insured depository institutions
equal to or greater than the amount of the funds initially invested
by the community college district through the financial
institution.
(2) The board of trustees, chief executive officer, or
treasurer of a community college district shall not commingle money
in the funds of the community college district for the purpose of
making an investment authorized by this section, and all earnings
on an investment shall become a part of the fund for which the
investment was made.
(3) The board of trustees, chief executive officer, or
treasurer of a community college district shall not invest or
deposit any funds of the community college district in any
financial institution that is not eligible to be a depository of
surplus funds belonging to this state under section 6 of 1855 PA
105, MCL 21.146.
(4) The board of trustees, chief executive officer, or
treasurer of a community college district shall comply with the
divestment from terror act in making investments or depositing
funds under this act.
(5) As used in this section:
(a) "Eligible collateral" means any securities that otherwise
would qualify for outright purchase under this act.
(b) "Financial institution" means a state or nationally
chartered bank or a state or federally chartered savings and loan
association, savings bank, or credit union whose deposits are
insured by an agency of the United States government and that
maintains a principal office or branch office located in this state
under the laws of this state or the United States.
