Bill Text: NY S07415 | 2013-2014 | General Assembly | Introduced
Bill Title: Allows credit unions, savings banks, savings and loan associations and federal savings associations to accept and secure deposits from municipal corporations.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-05-14 - REFERRED TO LOCAL GOVERNMENT [S07415 Detail]
Download: New_York-2013-S07415-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7415
I N S E N A T E
May 14, 2014
___________
Introduced by Sen. SANDERS -- read twice and ordered printed, and when
printed to be committed to the Committee on Local Government
AN ACT to amend the general municipal law and the state finance law, in
relation to allowing credit unions, savings banks, savings and loan
associations and federal savings associations to accept and secure
deposits from municipal corporations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Paragraph c of subdivision 1 of section 10 of the general
2 municipal law, as amended by chapter 623 of the laws of 1998, is amended
3 to read as follows:
4 c. "Public deposits" shall mean deposits of public funds in a bank,
5 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, or trust
6 company which are available for all uses generally permitted by the
7 bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, or trust
8 company to the depositing local government for actually and finally
9 collected funds under the bank's, SAVINGS BANK'S, SAVINGS AND LOAN ASSO-
10 CIATION'S, CREDIT UNION'S, or trust company's account agreement or poli-
11 cies.
12 S 2. Paragraphs f, g and h of subdivision 1 of section 10 of the
13 general municipal law are relettered paragraphs g, h and i and three new
14 paragraphs f, j and k are added to read as follows:
15 F. "CREDIT UNION" SHALL MEAN A STATE-CHARTERED CREDIT UNION AS DEFINED
16 BY SUBDIVISION NINE OF SECTION TWO OF THE BANKING LAW OR A
17 FEDERALLY-CHARTERED CREDIT UNION AS DEFINED BY THE FEDERAL CREDIT UNION
18 ACT, LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK.
19 J. "SAVINGS BANK" SHALL MEAN A SAVINGS BANK AS DEFINED BY SUBDIVISION
20 FOUR OF SECTION TWO OF THE BANKING LAW OR ANY FEDERAL SAVINGS BANK.
21 K. "SAVINGS AND LOAN ASSOCIATION" SHALL MEAN A SAVINGS AND LOAN ASSO-
22 CIATION AS DEFINED BY SUBDIVISION EIGHT OF SECTION TWO OF THE BANKING
23 LAW OR ANY FEDERAL SAVINGS AND LOAN ASSOCIATION.
24 S 3. Subdivisions 2, 3 and 4 of section 10 of the general municipal
25 law, as amended by chapter 623 of the laws of 1998, paragraph a of
26 subdivision 2 as amended by chapter 128 of the laws of 2012, paragraphs
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04413-01-3
S. 7415 2
1 a and b of subdivision 3 as amended by chapter 545 of the laws of 2005,
2 paragraph c of subdivision 3 as amended by chapter 615 of the laws of
3 2002, and paragraph c of subdivision 2 and paragraph (e) of subdivision
4 4 as further amended by section 104 of part A of chapter 62 of the laws
5 of 2011, are amended to read as follows:
6 2. a. (i) The governing board of every local government shall desig-
7 nate one or more banks, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS,
8 CREDIT UNIONS or trust companies for the deposit of public funds, the
9 disposition of which is not otherwise provided for by law, received by
10 the chief fiscal officer or any other officer authorized by law to make
11 deposits. Such designation shall be by resolution of the governing board
12 or, in the case of a city, such other body as may be authorized or
13 required by law to designate depositaries. Such resolution shall specify
14 the maximum amount which may be kept on deposit at any time in each such
15 bank, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS, CREDIT UNIONS or
16 trust company. Such designations and amounts may be changed at any time
17 by further resolution. THE GOVERNING BOARD OF EVERY LOCAL GOVERNMENT
18 SHALL FORWARD A COPY OF SUCH RESOLUTION TO THE OFFICE OF THE STATE COMP-
19 TROLLER WHO SHALL RETAIN SUCH COPY UNTIL SUCH RESOLUTION IS AMENDED OR
20 DISSOLVED. A COPY OF SUCH RESOLUTION SHALL BE RETAINED BY THE STATE
21 COMPTROLLER FOR RECORD KEEPING PURPOSES ONLY.
22 (ii) The governing board of a local government that has designated one
23 or more banks, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS, CREDIT
24 UNIONS or trust companies for the deposit of public funds pursuant to
25 subparagraph (i) of this paragraph may, in its discretion, authorize the
26 designated bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
27 UNION or trust company to arrange for the redeposit of the local govern-
28 ment's funds in one or more banking institutions, as defined in section
29 nine-r of the banking law, for the account of the local government,
30 through a deposit placement program that meets all of the following
31 conditions:
32 (A) On or after the date that the local government's funds are
33 received, the designated bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCI-
34 ATION, CREDIT UNION or trust company (I) arranges for the redeposit of
35 such funds into deposit accounts in one or more banking institutions and
36 (II) serves as custodian for the local government with respect to the
37 funds redeposited into such accounts.
38 (B) Local government funds deposited in a designated bank, SAVINGS
39 BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company in
40 accordance with this subparagraph and held in the designated bank,
41 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
42 ny in excess of the amount insured by the federal deposit insurance
43 corporation pending redeposit of the funds pursuant to this subparagraph
44 shall be secured in accordance with subdivision three of this section.
45 (C) The full amount of local government funds redeposited by the
46 designated bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
47 UNION or trust company into deposit accounts in banking institutions
48 pursuant to this subparagraph (plus accrued interest, if any) shall be
49 insured by the federal deposit insurance corporation.
50 (D) At the same time that the money of the local government is rede-
51 posited pursuant to this subparagraph, the selected depository receives
52 an amount of deposits from customers of other financial institutions
53 pursuant to the deposit placement program that are at least equal to the
54 amount of the local government's funds redeposited by the designated
55 bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust
56 company.
S. 7415 3
1 b. Except as otherwise provided by law, all deposits shall be made to
2 the credit of the local government. The deposit of public funds pursuant
3 to this subdivision shall release the officer making the deposit and his
4 or her surety from any liability for loss of such public funds by reason
5 of the default or insolvency of any such bank, SAVINGS BANK, SAVINGS AND
6 LOAN ASSOCIATION, CREDIT UNION or trust company.
7 c. The governing board of a local government, in which a banking
8 development district has been designated by the superintendent of finan-
9 cial services pursuant to section ninety-six-d of the banking law, may
10 designate a bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
11 UNION, trust company or national bank located in such district for the
12 deposit of public funds, the disposition of which is not otherwise
13 provided for by law, received by the chief fiscal officer or other offi-
14 cer authorized by law to make such deposits. Such designation shall be
15 by resolution of the governing board or, in the case of a city, such
16 other body as may be authorized or required by law to designate deposi-
17 tories. Such resolution shall specify the maximum amount which may be
18 kept on deposit at any time with such bank, SAVINGS BANK, SAVINGS AND
19 LOAN ASSOCIATION, CREDIT UNION, trust company or national bank located
20 in such district. THE GOVERNING BOARD OF EVERY LOCAL GOVERNMENT SHALL
21 FORWARD A COPY OF SUCH RESOLUTION TO THE OFFICE OF THE STATE COMPTROLLER
22 WHO SHALL RETAIN SUCH COPY UNTIL SUCH RESOLUTION IS AMENDED OR
23 DISSOLVED. A COPY OF SUCH RESOLUTION SHALL BE RETAINED BY THE STATE
24 COMPTROLLER FOR RECORD KEEPING PURPOSES ONLY. Subject to an agreement
25 between such governing board and such banking institution, public funds
26 deposited in such banking institution may earn a fixed interest rate
27 which is at or below such banking institution's posted two year certif-
28 icate of deposit rate. In those instances where there is such an agree-
29 ment, its terms and conditions shall also be specified in the resol-
30 ution. Any such designation, amount, or agreement provisions may be
31 changed at any time by further resolution.
32 D. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, NO BANK,
33 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION SHALL BE
34 DESIGNATED FOR DEPOSITS OF FUNDS PURSUANT TO THE PROVISIONS OF THIS
35 SECTION OR SECTION ELEVEN OF THIS ARTICLE UNLESS THE TAXES DESCRIBED IN
36 SUBDIVISION ONE OF SECTION TWO HUNDRED FIFTY-THREE OF THE TAX LAW ARE
37 PAID ON LOANS SECURED BY MORTGAGES THAT ARE PROVIDED BY ANY SUCH BANK,
38 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION. ANY FUNDS
39 DEPOSITED IN ANY SUCH BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION
40 OR CREDIT UNION SHALL BE WITHDRAWN IN ACCORDANCE WITH THE TERMS OF ANY
41 DEPOSIT AGREEMENT IF SUCH TAXES WERE NOT PAID AT THE TIME ANY SUCH MORT-
42 GAGES WERE RECORDED.
43 3. All public deposits in excess of the amount insured under the
44 provisions of the Federal Deposit Insurance Act OR BY THE NATIONAL CRED-
45 IT UNION ADMINISTRATION UNDER THE FEDERAL CREDIT UNION ACT as now or
46 hereafter amended shall be secured in accordance with this subdivision:
47 a. The officers making a deposit may accept a pledge of eligible secu-
48 rities having in the aggregate a market value at least equal to the
49 aggregate amount of public deposits from such officers, or a pledge of a
50 pro rata portion of a pool of eligible securities having in the aggre-
51 gate a market value at least equal to the aggregate amount of public
52 deposits from all such officers within the state at such bank, SAVINGS
53 BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company,
54 together with a security agreement from the bank, SAVINGS BANK, SAVINGS
55 AND LOAN ASSOCIATION, CREDIT UNION or trust company. The security agree-
56 ment and custodial agreement referred to below may be the same agreement
S. 7415 4
1 including when the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
2 CREDIT UNION or trust company holding the public deposits holds the
3 collateral for the public body. The security agreement shall provide
4 that such eligible securities or pro rata portion of a pool of eligible
5 securities are being pledged by the bank or trust company as security
6 for the public deposits, together with agreed upon interest, if any, and
7 any costs or expenses arising out of the collection of such deposit upon
8 a default. It shall also provide for the conditions under which the
9 securities or pro rata portion of a pool of eligible securities held may
10 be sold, presented for payment, substituted or released and the events
11 of default which will enable the local government to exercise its rights
12 against the pledged securities. Such agreement shall include all
13 provisions deemed necessary and sufficient to secure in a satisfactory
14 manner the local government's interest in the collateral. The custodial
15 agreement shall provide that the pledged securities or pro rata portion
16 of a pool of eligible securities will be held by the custodial bank,
17 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
18 ny as agent of, and custodian for, the local government, and will be
19 kept separate and apart from the general assets of the custodial bank,
20 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
21 ny and it shall also provide for the manner in which the custodial bank,
22 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
23 ny shall confirm the receipt, substitution or release of the collateral.
24 Such agreement shall provide for the frequency of revaluation of collat-
25 eral by the custodial bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
26 CREDIT UNION or trust company and the substitution of collateral when a
27 change in the rating of a security causes ineligibility pursuant to
28 paragraph [f] G of subdivision one of this section. Such agreement shall
29 include all provisions deemed necessary and sufficient to secure in a
30 satisfactory manner the local government's interest in the collateral.
31 Such agreement may also contain such other provisions as the governing
32 board may deem necessary.
33 b. Whenever eligible securities delivered to a custodial bank, SAVINGS
34 BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company pursu-
35 ant to this paragraph are transferred by entries on the books of a
36 federal reserve bank or other book-entry system operated by a federally
37 regulated entity without physical delivery of the evidence of such obli-
38 gations, the records of the custodial bank, SAVINGS BANK, SAVINGS AND
39 LOAN ASSOCIATION, CREDIT UNION or trust company shall show, at all
40 times, the interest of the local government in such securities or pro
41 rata portion of a pool of eligible securities as set forth in the secu-
42 rity agreement.
43 c. (i) In lieu of or in addition to the deposit of eligible securi-
44 ties, the officers making a deposit may accept an eligible surety bond
45 payable to such local government as security for the payment of one
46 hundred percent, or an eligible letter of credit payable to such local
47 government as security for the payment of one hundred forty percent, of
48 the aggregate amount of public deposits from such officers and the
49 agreed upon interest, if any. The terms and conditions of any eligible
50 surety bond shall be approved by the governing board.
51 (ii) In lieu of or in addition to the deposit of eligible securities,
52 the officers making a deposit may, in the case of an irrevocable letter
53 of credit issued in favor of the local government by a federal home loan
54 bank whose commercial paper and other unsecured short-term debt obli-
55 gations are rated in the highest rating category by at least one
56 nationally recognized statistical rating organization, accept such
S. 7415 5
1 letter of credit payable to such local government as security for the
2 payment of one hundred percent of the aggregate amount of public depos-
3 its from such officers and the agreed upon interest, if any.
4 d. For purposes of determining the market value of securities as
5 required by this subdivision:
6 (i) The eligible securities described in subparagraphs (viii), (x) and
7 (xi) of paragraph [f] G of subdivision one of this section shall be
8 valued at eighty percent of their market value.
9 (ii) The eligible securities described in subparagraph (ix) of para-
10 graph [f] G of subdivision one of this section shall be valued at seven-
11 ty percent of their market value.
12 (iii) Of the eligible securities described in subparagraphs (v), (vi)
13 and (vii) of paragraph [f] G of subdivision one of this section, those
14 securities rated in the highest category shall be valued at one hundred
15 percent of their market value; those securities rated in the second
16 highest rating category shall be valued at ninety percent of their
17 market value; and those securities rated in the third highest rating
18 category shall be valued at eighty percent of their market value. When
19 two nationally recognized statistical rating organizations rate a secu-
20 rity in two different categories, the security shall be considered to be
21 rated in the higher of the two categories.
22 4. (a) Notwithstanding any other provision of law to the contrary, the
23 chief fiscal officer, or other officer authorized by law to make depos-
24 its, may, subject to the approval of the governing body of a local
25 government, by resolution, enter into a contract with a courier service
26 for the purpose of causing the deposit of public funds with a bank,
27 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
28 ny as provided in this section.
29 (b) The entrusting of public funds for deposit pursuant to paragraph
30 (a) of this subdivision shall release the officer entrusting the public
31 funds to the courier service and his or her surety from any liability
32 for loss of such public funds by the courier service in the process of
33 delivering such public funds to the designated bank, SAVINGS BANK,
34 SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company.
35 (c) The local government authorizing the deposit of public funds by a
36 courier service pursuant to paragraph (a) of this subdivision shall
37 require the courier service to obtain a surety bond for the full amount
38 entrusted to the courier, payable to the local government and executed
39 by an insurance company authorized to do business in this state, the
40 claims paying ability of which is rated in the highest rating category
41 by at least two nationally recognized statistical rating organizations,
42 to insure against any loss of public funds entrusted to the courier
43 service for deposit or failure to deposit the full amount entrusted to
44 the courier.
45 (d) A deposit made by a courier on behalf of a local government shall
46 be deemed to be a deposit made by the chief fiscal officer or other
47 officer entrusting such funds for purposes of the requirements contained
48 in this section for securing public deposits.
49 (e) A bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION
50 or trust company may, from time to time and as agreed upon with a local
51 government, reimburse all or part of, but not more than, the actual cost
52 incurred by the local government in transporting cash, negotiable
53 instruments or other items for deposit through a courier service. Any
54 such reimbursement agreement shall apply only to a specified deposit
55 transaction, and may be subject to such terms, conditions and limita-
56 tions as the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
S. 7415 6
1 UNION or trust company deems necessary to ensure sound banking prac-
2 tices, including, but not limited to, any terms, conditions or limita-
3 tions that may be required by the department of financial services or
4 other federal or state authority.
5 S 4. Subdivision 2 of section 11 of the general municipal law, as
6 amended by chapter 128 of the laws of 2012, is amended to read as
7 follows:
8 2. a. The governing board of any local government or, if the governing
9 board so delegates, the chief fiscal officer or other officer having
10 custody of the moneys may temporarily invest moneys not required for
11 immediate expenditure, except moneys the investment of which is other-
12 wise provided for by law, either: (1) in special time INTEREST-BEARING
13 deposit accounts in, or certificates of deposit issued by, a bank,
14 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
15 ny located and authorized to do business in this state; or (2) in
16 accordance with all of the following conditions:
17 (i) the moneys are invested through a bank, SAVINGS BANK, SAVINGS AND
18 LOAN ASSOCIATION, CREDIT UNION or trust company located and authorized
19 to do business in this state;
20 (ii) the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
21 UNION or trust company arranges for the deposit of the moneys in certif-
22 icates of deposit in one or more banking institutions, as defined in
23 section nine-r of the banking law, for the account of the local govern-
24 ment;
25 (iii) the full amount of principal and accrued interest of each such
26 certificate of deposit must be insured by the federal deposit insurance
27 corporation;
28 (iv) the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
29 UNION or trust company acts as custodian for the local government with
30 respect to such certificates of deposit issued for the local govern-
31 ment's account; and
32 (v) at the same time that the local government's moneys are deposited
33 and the certificates of deposit are issued for the account of the local
34 government, the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
35 UNION or trust company receives an amount of deposits from customers of
36 other financial institutions equal to or greater than the amount of the
37 moneys invested by the local government through the bank or trust compa-
38 ny.
39 b. For any investment made pursuant to paragraph a of this subdivi-
40 sion, such time INTEREST-BEARING deposit account or certificate of
41 deposit shall be payable within such time as the proceeds shall be need-
42 ed to meet expenditures for which such moneys were obtained and provided
43 further that such time INTEREST-BEARING deposit account or certificate
44 of deposit be secured in the same manner as is provided for securing
45 deposits of public funds by subdivision three of section ten of this
46 article.
47 S 5. Subdivision 1 and the opening paragraph of subdivision 2 of
48 section 105 of the state finance law, subdivision 1 as amended by chap-
49 ter 204 of the laws of 2002 and the opening paragraph of subdivision 2
50 as amended by chapter 154 of the laws of 1953, are amended and two new
51 subdivisions 7 and 8 are added to read as follows:
52 1. All moneys received by the commissioner of taxation and finance on
53 account of the state, excepting such moneys as are required by law to be
54 deposited to the credit of the comptroller, but including such moneys as
55 are thereafter paid into the state treasury by the comptroller, shall be
56 deposited by the commissioner of taxation and finance within three days
S. 7415 7
1 after the receipt thereof, either as a demand deposit or an interest-
2 bearing [time] deposit (other than a time certificate of deposit), as he
3 OR SHE and the comptroller may determine, in such banks, trust companies
4 [and industrial banks], SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS OR
5 CREDIT UNIONS as in his OR HER opinion and the opinion of the comp-
6 troller are secure. The moneys so deposited shall be placed to the
7 account of the commissioner of taxation and finance. He OR SHE shall
8 keep a bankbook in which shall be entered his OR HER account of deposit
9 in and moneys drawn from the banks [and], trust companies [and indus-
10 trial banks], SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS OR CREDIT
11 UNIONS in which deposits are made by him OR HER, which he OR SHE shall
12 exhibit to the comptroller for his OR HER inspection on the first Tues-
13 day of every month and oftener if required. He OR SHE shall not draw any
14 moneys from such banks, trust companies [or industrial banks unless by
15 checks signed and countersigned], SAVINGS BANKS, SAVINGS AND LOAN ASSO-
16 CIATIONS OR CREDIT UNIONS DESIGNATED in the manner prescribed by section
17 one hundred one OF THIS ARTICLE, unless otherwise provided by law. No
18 moneys shall be paid by any such bank, trust company [or industrial
19 bank], SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION out of
20 any such deposit except upon such checks. Moneys may be paid through
21 electronic transfer in accordance with procedures developed by the
22 commissioner of taxation and finance and the comptroller and consistent
23 with the requirements of this section for recording payments. Such
24 payments through electronic transfer shall be considered, for purposes
25 of this chapter, to be moneys drawn by check. Every such bank, trust
26 company [or industrial bank], SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION
27 OR CREDIT UNION shall transmit to the comptroller monthly statements of
28 all moneys received and paid by it on account of the commissioner of
29 taxation and finance.
30 Every bank, trust company [and industrial bank], SAVINGS BANK, SAVINGS
31 AND LOAN ASSOCIATION OR CREDIT UNION designated for the deposit of state
32 moneys under the provisions of this section shall, before deposits are
33 made:
34 7. PUBLIC FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL SAVINGS BANK,
35 CREDIT UNION, FEDERAL CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR
36 FEDERAL SAVINGS AND LOAN ASSOCIATION, SHALL BE LIMITED TO ONE MILLION
37 DOLLARS PER SAVINGS BANK, FEDERAL SAVINGS BANK, CREDIT UNION, FEDERAL
38 CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR FEDERAL SAVINGS AND LOAN
39 ASSOCIATION.
40 8. FOR PURPOSES OF THIS SECTION, THE TERMS "CREDIT UNION", "SAVINGS
41 BANK" AND "SAVINGS AND LOAN ASSOCIATION" SHALL HAVE THE MEANING PROVIDED
42 IN SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
43 S 6. Section 106 of the state finance law, as amended by chapter 155
44 of the laws of 2012 and subdivision D as added by chapter 128 of the
45 laws of 2012, is amended to read as follows:
46 S 106. Deposit of moneys by state officers, state institutions and
47 charitable and benevolent institutions. 1. Such moneys received by the
48 commissioner of taxation and finance as are now deposited to the credit
49 of the comptroller pursuant to statute, and thereafter paid into the
50 state treasury, shall be deposited by him or her to the credit of the
51 comptroller in such bank [or], trust company, SAVINGS BANK, SAVINGS AND
52 LOAN ASSOCIATION OR CREDIT UNION, as shall be designated by the comp-
53 troller at such rate of interest, if any, as shall be agreed upon by the
54 depositary and the comptroller.
55 2. All other moneys received by the commissioner of taxation and
56 finance except as provided in section one hundred five of this article
S. 7415 8
1 and all moneys received by any other state officer or other person
2 receiving moneys belonging to the state, or for which such state officer
3 or other person may be responsible in his or her official capacity, and
4 all moneys received by any state institution, except for moneys received
5 pursuant to a clinical practice plan established pursuant to subdivision
6 fourteen of section two hundred six of the public health law and all
7 moneys received from the state by any charitable or benevolent institu-
8 tion supported in whole or in part by the state, shall be deposited to
9 his, her, or its credit in such bank [or], trust company, SAVINGS BANK,
10 SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION, as shall be designated by
11 the comptroller at such rate of interest, if any, as shall be agreed
12 upon by the depositary and the comptroller.
13 3. Every [bank or trust company] DEPOSITARY designated by the comp-
14 troller for the deposit of any such moneys
15 [A.] A. Shall give a bond with sufficient sureties for the security of
16 such deposit, to be approved by the comptroller and filed in his or her
17 office,
18 [B.] B. Or shall, in lieu of such surety bond, with the permission of
19 the comptroller deposit with the comptroller such outstanding unmatured
20 bonds or notes or such certified check or checks as are described in
21 section one hundred five of this article. The comptroller may, in his or
22 her discretion, accept and substitute for any surety bond or undertaking
23 given, pursuant to this section, a bond or undertaking in such form and
24 with other surety or sureties, or other security as required by this
25 section, for such sums as may be prescribed and approved by the comp-
26 troller for the safe keeping and prompt payment of such moneys on legal
27 demand therefor with interest, if any, and the comptroller may thereupon
28 execute and deliver to the surety or sureties, upon the former bond or
29 undertaking, a release of such surety or sureties from any liability
30 accruing subsequent to the date of such release. Such release shall not
31 relieve such surety or sureties from any obligation for losses incurred
32 prior to the date thereof. On the withdrawal of all moneys from any such
33 depository and a closing and settlement of the account thereof, the
34 comptroller may in his or her discretion certify to such settlement and
35 release to the obligor or owner or owners entitled thereto, of such
36 surety bond, undertaking, certified check or checks, or other security
37 deposited with him or her.
38 [C.] C. Notwithstanding any other provisions of this section, the
39 comptroller shall not designate for the deposit of moneys by state offi-
40 cers, state institutions and charitable and benevolent institutions
41 supported in whole or in part by the state a banking institution to
42 which the Community Reinvestment Act of 1977, United States P.L. 95-128,
43 applies unless such institution shall have received a record of perform-
44 ance no lower than "satisfactory" as determined under such act in
45 accordance with section twenty-eight-b of the banking law.
46 [D.] D. In lieu of a security bond as prescribed under subdivision [A]
47 A of this section or other security as prescribed under subdivision [B]
48 B of this section, the comptroller may authorize a designated bank or
49 trust company to arrange for the redeposit of the moneys through a
50 deposit placement program that meets all of the following conditions:
51 (1) The designated bank or trust company arranges for the redeposit of
52 the moneys into deposit accounts with one or more banking institutions,
53 as defined in section nine-r of the banking law, for the account of the
54 state, and serves as custodian for the state with respect to the moneys
55 redeposited into such deposit accounts.
S. 7415 9
1 (2) Moneys held by a designated bank or trust company pending redepos-
2 it pursuant to paragraph one of this subdivision that are in excess of
3 the amount insured by the federal deposit insurance corporation shall be
4 secured in accordance with subdivision [A or B] A OR B of this section.
5 (3) The full amount of the moneys redeposited into deposit accounts
6 pursuant to paragraph one of this subdivision, plus accrued interest, if
7 any, shall be insured by the federal deposit insurance corporation.
8 (4) At the same time that the moneys are redeposited pursuant to para-
9 graph one of this subdivision, the designated bank or trust company
10 receives an amount of deposits from customers of other financial insti-
11 tutions pursuant to the deposit placement program that are at least
12 equal to the amount of the moneys redeposited by the designated bank or
13 trust company.
14 4. This section shall not apply to any funds held by the superinten-
15 dent of financial services in a fiduciary capacity.
16 5. PUBLIC FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL SAVINGS BANK,
17 CREDIT UNION, FEDERAL CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR
18 FEDERAL SAVINGS AND LOAN ASSOCIATION, SHALL BE LIMITED TO ONE MILLION
19 DOLLARS PER SAVINGS BANK, FEDERAL SAVINGS BANK, CREDIT UNION, FEDERAL
20 CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR FEDERAL SAVINGS AND LOAN
21 ASSOCIATION.
22 6. FOR PURPOSES OF THIS SECTION, THE TERMS "CREDIT UNION", "SAVINGS
23 BANK" AND "SAVINGS AND LOAN ASSOCIATION" SHALL HAVE THE MEANING PROVIDED
24 IN SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
25 S 7. Severability. If any clause, sentence, paragraph, section or part
26 of this act shall be adjudged by any court of competent jurisdiction to
27 be invalid, such judgment shall not affect, impair or invalidate such
28 clause, sentence, paragraph, section or part thereof directly involved
29 in the controversy in which such judgment shall have been rendered.
30 S 8. This act shall take effect immediately; provided, however, that
31 sections three and six of this act shall take effect October 3, 2013.
