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A08971 Summary:

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A08971 Floor Votes:

A08971 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8971
 
                   IN ASSEMBLY
 
                                    January 10, 2012
                                       ___________
 
        Introduced  by  M. of A. MAGNARELLI, JAFFEE, GALEF -- Multi-Sponsored by
          -- M. of A. MARKEY -- read once and referred to the Committee on Local
          Governments
 
        AN ACT to amend the general municipal law, the state finance law and the
          public authorities law, in relation to authorizing  the  state,  local
          governments  and public authorities to arrange for redeposit of moneys

          through a deposit placement program
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Paragraph a of subdivision 2 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    a. (i) The governing board of every local government  shall  designate
     5  one  or  more  banks or trust companies for the deposit of public funds,
     6  the disposition of which is not otherwise provided for by law,  received
     7  by  the  chief  fiscal officer or any other officer authorized by law to
     8  make deposits.  Such designation shall be by resolution of the governing
     9  board or, in the case of a city, such other body as may be authorized or
    10  required by law to designate depositaries.  Such resolution shall speci-

    11  fy the maximum amount which may be kept on deposit at any time  in  each
    12  such  bank  or  trust  company.    Such  designations and amounts may be
    13  changed at any time by further resolution.
    14    (ii) The governing board of a local government that has designated one
    15  or more banks or trust companies for the deposit of public funds  pursu-
    16  ant  to  subparagraph  (i)  of  this  paragraph  may, in its discretion,
    17  authorize the designated bank or trust company to arrange for the  rede-
    18  posit  of  the  local  government's  funds in one or more banking insti-
    19  tutions, as defined in section  nine-r  of  the  banking  law,  for  the
    20  account  of  the  local  government, through a deposit placement program
    21  that meets all of the following conditions:

    22    (A) On or after  the  date  that  the  local  government's  funds  are
    23  received,  the  designated  bank  or  trust company (I) arranges for the
    24  redeposit of such funds into deposit accounts in  one  or  more  banking
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11304-01-1
        A. 8971                             2
 
     1  institutions  and (II) serves as custodian for the local government with
     2  respect to the funds redeposited into such accounts.
     3    (B)  Local  government  funds  deposited in a designated bank or trust
     4  company in accordance with this subparagraph and held in the  designated

     5  bank  or  trust  company  in excess of the amount insured by the federal
     6  deposit insurance corporation pending redeposit of the funds pursuant to
     7  this subparagraph shall be secured in accordance with subdivision  three
     8  of this section.
     9    (C)  The  full  amount  of  local  government funds redeposited by the
    10  designated bank or trust company into deposit accounts in banking insti-
    11  tutions pursuant to this subparagraph (plus accrued  interest,  if  any)
    12  shall be insured by the federal deposit insurance corporation.
    13    (D)  At  the same time that the money of the local government is rede-
    14  posited pursuant to this subparagraph, the selected depository  receives
    15  an  amount  of  deposits  from customers of other financial institutions

    16  pursuant to the deposit placement program that are at least equal to the
    17  amount of the local government's funds  redeposited  by  the  designated
    18  bank or trust company.
    19    §  2.  Subdivision  2  of  section 11 of the general municipal law, as
    20  amended by chapter 708 of the laws  of  1992,  is  amended  to  read  as
    21  follows:
    22    2. a. The governing board of any local government or, if the governing
    23  board  so  delegates,  the  chief fiscal officer or other officer having
    24  custody of the moneys may temporarily invest  moneys  not  required  for
    25  immediate  expenditure,  except moneys the investment of which is other-
    26  wise provided for by law, either: (1) in special time  deposit  accounts
    27  in,  or  certificates  of  deposit  issued  by,  a bank or trust company

    28  located and authorized to do business in this state[, provided  however,
    29  that]; or (2) in accordance with all of the following conditions:
    30    (i)  the  moneys  are invested through a bank or trust company located
    31  and authorized to do business in this state;
    32    (ii) the bank or trust company arranges for the deposit of the  moneys
    33  in  certificates  of  deposit  in  one  or more banking institutions, as
    34  defined in section nine-r of the banking law, for  the  account  of  the
    35  local government;
    36    (iii)  the  full amount of principal and accrued interest of each such
    37  certificate of deposit must be insured by the federal deposit  insurance
    38  corporation;

    39    (iv) the bank or trust company acts as custodian for the local govern-
    40  ment  with  respect to such certificates of deposit issued for the local
    41  government's account; and
    42    (v) at the same time that the local government's moneys are  deposited
    43  and  the certificates of deposit are issued for the account of the local
    44  government, the bank or trust company receives  an  amount  of  deposits
    45  from  customers of other financial institutions equal to or greater than
    46  the amount of the moneys invested by the local  government  through  the
    47  bank or trust company.
    48    b.  For  any  investment made pursuant to paragraph a of this subdivi-
    49  sion, such time deposit account or certificate of deposit shall be paya-

    50  ble within such time as the proceeds shall be needed  to  meet  expendi-
    51  tures for which such moneys were obtained and provided further that such
    52  time  deposit  account  or certificate of deposit be secured in the same
    53  manner as is provided for securing deposits of public funds by  subdivi-
    54  sion three of section ten of this article.
    55    §  3.  Section 106 of the state finance law is amended by adding a new
    56  subdivision D to read as follows:
        A. 8971                             3
 
     1    D. In lieu of a security bond as prescribed  under  subdivision  A  of
     2  this section or other security as prescribed under subdivision B of this
     3  section, the comptroller may authorize a designated bank or trust compa-
     4  ny  to  arrange for the redeposit of the moneys through a deposit place-

     5  ment program that meets all of the following conditions:
     6    (1) The designated bank or trust company arranges for the redeposit of
     7  the  moneys into deposit accounts with one or more banking institutions,
     8  as defined in section nine-r of the banking law, for the account of  the
     9  state,  and serves as custodian for the state with respect to the moneys
    10  redeposited into such deposit accounts.
    11    (2) Moneys held by a designated bank or trust company pending redepos-
    12  it pursuant to paragraph one of this subdivision that are in  excess  of
    13  the amount insured by the federal deposit insurance corporation shall be
    14  secured in accordance with subdivision A or B of this section.
    15    (3)  The  full  amount of the moneys redeposited into deposit accounts

    16  pursuant to paragraph one of this subdivision, plus accrued interest, if
    17  any, shall be insured by the federal deposit insurance corporation.
    18    (4) At the same time that the moneys are redeposited pursuant to para-
    19  graph one of this subdivision, the  designated  bank  or  trust  company
    20  receives  an amount of deposits from customers of other financial insti-
    21  tutions pursuant to the deposit placement  program  that  are  at  least
    22  equal  to the amount of the moneys redeposited by the designated bank or
    23  trust company.
    24    § 4. The public authorities law is amended by  adding  a  new  section
    25  2927 to read as follows:
    26    §  2927.  Investment of funds by public authorities and public benefit

    27  corporations in deposits insured by the federal deposit insurance corpo-
    28  ration.
    29    Notwithstanding any inconsistent provision  of  this  chapter  or  any
    30  other  general,  special  or local law, every corporation whether or not
    31  such corporation is otherwise governed by this chapter, may  temporarily
    32  invest  moneys not required for immediate expenditure in accordance with
    33  the following conditions:
    34    1. the moneys are invested through a bank or trust company located and
    35  authorized to do business in this state selected by the corporation;
    36    2. the selected bank or trust company arranges for  the  redeposit  of
    37  the  moneys in certificates of deposit and other deposit accounts in one

    38  or more banking institutions, as defined in section nine-r of the  bank-
    39  ing law, for the account of the corporation;
    40    3.  the  full  amount  of  principal and accrued interest of each such
    41  deposit is insured by the federal deposit insurance corporation;
    42    4. the selected bank or trust company in this state acts as  custodian
    43  for  the  corporation  with respect to the funds redeposited pursuant to
    44  this section; and
    45    5. at the same time that  the  corporation's  moneys  are  redeposited
    46  pursuant  to  this  section,  the selected bank or trust company in this
    47  state receives an amount of deposits from customers of  other  financial
    48  institutions  equal to or greater than the amount of the moneys invested

    49  by the corporation through the selected bank or trust  company  in  this
    50  state.
    51    § 5. This act shall take effect immediately.