S. 717 2
S 3. Subdivisions 2, 3 and 4 of section 10 of the general municipal
law, as amended by chapter 623 of the laws of 1998, paragraphs a and b
of subdivision 3 as amended by chapter 545 of the laws of 2005, and
paragraph c of subdivision 3 as amended by chapter 615 of the laws of
2002, are amended to read as follows:
2. a. The governing board of every local government shall designate
one or more banks, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS, CREDIT
UNIONS or trust companies for the deposit of public funds, the disposi-
tion of which is not otherwise provided for by law, received by the
chief fiscal officer or any other officer authorized by law to make
deposits. Such designation shall be by resolution of the governing
board or, in the case of a city, such other body as may be authorized or
required by law to designate depositaries. Such resolution shall speci-
fy the maximum amount which may be kept on deposit at any time in each
such bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or
trust company. Such designations and amounts may be changed at any time
by further resolution.
THE GOVERNING BOARD OF EVERY LOCAL GOVERNMENT SHALL FORWARD A COPY OF
SUCH RESOLUTION TO THE OFFICE OF THE STATE COMPTROLLER WHO SHALL RETAIN
SUCH COPY UNTIL SUCH RESOLUTION IS AMENDED OR DISSOLVED. A COPY OF SUCH
RESOLUTION SHALL BE RETAINED BY THE STATE COMPTROLLER FOR RECORD KEEPING
PURPOSES ONLY.
b. Except as otherwise provided by law, all deposits shall be made to
the credit of the local government. The deposit of public funds pursu-
ant to this subdivision shall release the officer making the deposit and
his or her surety from any liability for loss of such public funds by
reason of the default or insolvency of any such bank, SAVINGS BANK,
SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company.
c. The governing board of a local government, in which a banking
development district has been designated by the superintendent of banks
pursuant to section ninety-six-d of the banking law, may designate a
bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, trust
company or national bank located in such district for the deposit of
public funds, the disposition of which is not otherwise provided for by
law, received by the chief fiscal officer or other officer authorized by
law to make such deposits. Such designation shall be by resolution of
the governing board or, in the case of a city, such other body as may be
authorized or required by law to designate depositories. Such resol-
ution shall specify the maximum amount which may be kept on deposit at
any time with such bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
CREDIT UNION, trust company or national bank located in such district.
THE GOVERNING BOARD OF EVERY LOCAL GOVERNMENT SHALL FORWARD A COPY OF
SUCH RESOLUTION TO THE OFFICE OF THE STATE COMPTROLLER WHO SHALL RETAIN
SUCH COPY UNTIL SUCH RESOLUTION IS AMENDED OR DISSOLVED. A COPY OF SUCH
RESOLUTION SHALL BE RETAINED BY THE STATE COMPTROLLER FOR RECORD KEEPING
PURPOSES ONLY. Subject to an agreement between such governing board and
such banking institution, public funds deposited in such banking insti-
tution may earn a fixed interest rate which is at or below such banking
institution's posted two year certificate of deposit rate. In those
instances where there is such an agreement, its terms and conditions
shall also be specified in the resolution. Any such designation,
amount, or agreement provisions may be changed at any time by further
resolution.
3. All public deposits in excess of the amount insured under the
provisions of the Federal Deposit Insurance Act OR BY THE NATIONAL CRED-
S. 717 3
IT UNION ADMINISTRATION UNDER THE FEDERAL CREDIT UNION ACT as now or
hereafter amended shall be secured in accordance with this subdivision:
a. The officers making a deposit may accept a pledge of eligible secu-
rities having in the aggregate a market value at least equal to the
aggregate amount of public deposits from such officers, or a pledge of a
pro rata portion of a pool of eligible securities having in the aggre-
gate a market value at least equal to the aggregate amount of public
deposits from all such officers within the state at such bank, SAVINGS
BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company,
together with a security agreement from the bank, SAVINGS BANK, SAVINGS
AND LOAN ASSOCIATION, CREDIT UNION or trust company. The security agree-
ment and custodial agreement referred to below may be the same agreement
including when the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
CREDIT UNION or trust company holding the public deposits holds the
collateral for the public body. The security agreement shall provide
that such eligible securities or pro rata portion of a pool of eligible
securities are being pledged by the bank or trust company as security
for the public deposits, together with agreed upon interest, if any, and
any costs or expenses arising out of the collection of such deposit upon
a default. It shall also provide for the conditions under which the
securities or pro rata portion of a pool of eligible securities held may
be sold, presented for payment, substituted or released and the events
of default which will enable the local government to exercise its rights
against the pledged securities. Such agreement shall include all
provisions deemed necessary and sufficient to secure in a satisfactory
manner the local government's interest in the collateral. The custodial
agreement shall provide that the pledged securities or pro rata portion
of a pool of eligible securities will be held by the custodial bank,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
ny as agent of, and custodian for, the local government, and will be
kept separate and apart from the general assets of the custodial bank,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
ny and it shall also provide for the manner in which the custodial bank,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
ny shall confirm the receipt, substitution or release of the collateral.
Such agreement shall provide for the frequency of revaluation of collat-
eral by the custodial bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
CREDIT UNION or trust company and the substitution of collateral when a
change in the rating of a security causes ineligibility pursuant to
paragraph [f] G of subdivision one of this section. Such agreement shall
include all provisions deemed necessary and sufficient to secure in a
satisfactory manner the local government's interest in the collateral.
Such agreement may also contain such other provisions as the governing
board may deem necessary.
b. Whenever eligible securities delivered to a custodial bank, SAVINGS
BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company pursu-
ant to this paragraph are transferred by entries on the books of a
federal reserve bank or other book-entry system operated by a federally
regulated entity without physical delivery of the evidence of such obli-
gations, the records of the custodial bank, SAVINGS BANK, SAVINGS AND
LOAN ASSOCIATION, CREDIT UNION or trust company shall show, at all
times, the interest of the local government in such securities or pro
rata portion of a pool of eligible securities as set forth in the secu-
rity agreement.
c. (i) In lieu of or in addition to the deposit of eligible securi-
ties, the officers making a deposit may accept an eligible surety bond
S. 717 4
payable to such local government as security for the payment of one
hundred percent, or an eligible letter of credit payable to such local
government as security for the payment of one hundred forty percent, of
the aggregate amount of public deposits from such officers and the
agreed upon interest, if any. The terms and conditions of any eligible
surety bond shall be approved by the governing board.
(ii) In lieu of or in addition to the deposit of eligible securities,
the officers making a deposit may, in the case of an irrevocable letter
of credit issued in favor of the local government by a federal home loan
bank whose commercial paper and other unsecured short-term debt obli-
gations are rated in the highest rating category by at least one
nationally recognized statistical rating organization, accept such
letter of credit payable to such local government as security for the
payment of one hundred percent of the aggregate amount of public depos-
its from such officers and the agreed upon interest, if any.
d. For purposes of determining the market value of securities as
required by this subdivision:
(i) The eligible securities described in subparagraphs (viii), (x) and
(xi) of paragraph [f] G of subdivision one of this section shall be
valued at eighty percent of their market value.
(ii) The eligible securities described in subparagraph (ix) of para-
graph [f] G of subdivision one of this section shall be valued at seven-
ty percent of their market value.
(iii) Of the eligible securities described in subparagraphs (v), (vi)
and (vii) of paragraph [f] G of subdivision one of this section, those
securities rated in the highest category shall be valued at one hundred
percent of their market value; those securities rated in the second
highest rating category shall be valued at ninety percent of their
market value; and those securities rated in the third highest rating
category shall be valued at eighty percent of their market value. When
two nationally recognized statistical rating organizations rate a secu-
rity in two different categories, the security shall be considered to be
rated in the higher of the two categories.
4. (a) Notwithstanding any other provision of law to the contrary, the
chief fiscal officer, or other officer authorized by law to make depos-
its, may, subject to the approval of the governing body of a local
government, by resolution, enter into a contract with a courier service
for the purpose of causing the deposit of public funds with a bank,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
ny as provided in this section.
(b) The entrusting of public funds for deposit pursuant to paragraph
(a) of this subdivision shall release the officer entrusting the public
funds to the courier service and his or her surety from any liability
for loss of such public funds by the courier service in the process of
delivering such public funds to the designated bank, SAVINGS BANK,
SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company.
(c) The local government authorizing the deposit of public funds by a
courier service pursuant to paragraph (a) of this subdivision shall
require the courier service to obtain a surety bond for the full amount
entrusted to the courier, payable to the local government and executed
by an insurance company authorized to do business in this state, the
claims paying ability of which is rated in the highest rating category
by at least two nationally recognized statistical rating organizations,
to insure against any loss of public funds entrusted to the courier
service for deposit or failure to deposit the full amount entrusted to
the courier.
S. 717 5
(d) A deposit made by a courier on behalf of a local government shall
be deemed to be a deposit made by the chief fiscal officer or other
officer entrusting such funds for purposes of the requirements contained
in this section for securing public deposits.
(e) A bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION
or trust company may, from time to time and as agreed upon with a local
government, reimburse all or part of, but not more than, the actual cost
incurred by the local government in transporting cash, negotiable
instruments or other items for deposit through a courier service. Any
such reimbursement agreement shall apply only to a specified deposit
transaction, and may be subject to such terms, conditions and limita-
tions as the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
UNION or trust company deems necessary to ensure sound banking prac-
tices, including, but not limited to, any terms, conditions or limita-
tions that may be required by the banking department or other federal or
state authority.
S 4. Subdivision 2 of section 11 of the general municipal law, as
amended by chapter 708 of the laws of 1992, is amended to read as
follows:
2. The governing board of any local government or, if the governing
board so delegates, the chief fiscal officer or other officer having
custody of the moneys may temporarily invest moneys not required for
immediate expenditure, except moneys the investment of which is other-
wise provided for by law, in special time INTEREST-BEARING deposit
accounts in, or certificates of deposit issued by, a bank, SAVINGS BANK,
SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company located and
authorized to do business in this state, provided however, that such
time deposit account or certificate of deposit shall be payable within
such time as the proceeds shall be needed to meet expenditures for which
such moneys were obtained and provided further that such time deposit
account or certificate of deposit be secured in the same manner as is
provided for securing deposits of public funds by subdivision three of
section ten of this article.
S 5. Subdivision 1 and the opening paragraph of subdivision 2 of
section 105 of the state finance law, subdivision 1 as amended by chap-
ter 204 of the laws of 2002 and the opening paragraph of subdivision 2
as amended by chapter 154 of the laws of 1953, are amended and a new
closing paragraph is added to such section to read as follows:
1. All moneys received by the commissioner of taxation and finance on
account of the state, excepting such moneys as are required by law to be
deposited to the credit of the comptroller, but including such moneys as
are thereafter paid into the state treasury by the comptroller, shall be
deposited by the commissioner of taxation and finance within three days
after the receipt thereof, either as a demand deposit or an interest-
bearing [time] deposit (other than a time certificate of deposit), as he
OR SHE and the comptroller may determine, in such banks, trust companies
[and industrial banks], SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS OR
CREDIT UNIONS as in his OR HER opinion and the opinion of the comp-
troller are secure. The moneys so deposited shall be placed to the
account of the commissioner of taxation and finance. He OR SHE shall
keep a bankbook in which shall be entered his OR HER account of deposit
in and moneys drawn from the banks [and], trust companies [and indus-
trial banks], SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS OR CREDIT
UNIONS in which deposits are made by him OR HER, which he OR SHE shall
exhibit to the comptroller for his OR HER inspection on the first Tues-
day of every month and oftener if required. He OR SHE shall not draw any
S. 717 6
moneys from such banks, trust companies [or industrial banks unless by
checks signed and countersigned], SAVINGS BANKS, SAVINGS AND LOAN ASSO-
CIATIONS OR CREDIT UNIONS DESIGNATED in the manner prescribed by section
one hundred one OF THIS ARTICLE, unless otherwise provided by law. No
moneys shall be paid by any such bank, trust company [or industrial
bank], SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION out of
any such deposit except upon such checks. Moneys may be paid through
electronic transfer in accordance with procedures developed by the
commissioner of taxation and finance and the comptroller and consistent
with the requirements of this section for recording payments. Such
payments through electronic transfer shall be considered, for purposes
of this chapter, to be moneys drawn by check. Every such bank, trust
company [or industrial bank], SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION
OR CREDIT UNION shall transmit to the comptroller monthly statements of
all moneys received and paid by it on account of the commissioner of
taxation and finance.
Every bank, trust company [and industrial bank], SAVINGS BANK, SAVINGS
AND LOAN ASSOCIATION OR CREDIT UNION designated for the deposit of state
moneys under the provisions of this section shall, before deposits are
made:
PUBLIC FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL SAVINGS BANK,
CREDIT UNION, FEDERAL CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR
FEDERAL SAVINGS AND LOAN ASSOCIATION, SHALL BE LIMITED TO ONE MILLION
DOLLARS PER DEPOSITORY.
S 6. The opening, second and third undesignated paragraphs of section
106 of the state finance law, the second undesignated paragraph as
amended by chapter 293 of the laws of 1992, are amended and a new clos-
ing paragraph is added to such section to read as follows:
Such moneys received by the commissioner of taxation and finance as
are now deposited to the credit of the comptroller pursuant to statute,
and thereafter paid into the state treasury, shall be deposited by him
to the credit of the comptroller in such bank [or], trust company,
SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION, as shall be
designated by the comptroller at such rate of interest, if any, as shall
be agreed upon by the depositary and the comptroller.
All other moneys received by the commissioner of taxation and finance
except as provided in section one hundred five of this article and all
moneys received by any other state officer or other person receiving
moneys belonging to the state, or for which such state officer or other
person may be responsible in his official capacity, and all moneys
received by any state institution, except for moneys received pursuant
to a clinical practice plan established pursuant to subdivision fourteen
of section two hundred six of the public health law and all moneys
received from the state by any charitable or benevolent institution
supported in whole or in part by the state, shall be deposited to his or
its credit in such bank [or], trust company, SAVINGS BANK, SAVINGS AND
LOAN ASSOCIATION OR CREDIT UNION, as shall be designated by the comp-
troller at such rate of interest, if any, as shall be agreed upon by the
depositary and the comptroller.
Every [bank or trust company] DEPOSITARY designated by the comptroller
for the deposit of any such moneys:
PUBLIC FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL SAVINGS BANK,
CREDIT UNION, FEDERAL CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR
FEDERAL SAVINGS AND LOAN ASSOCIATION, SHALL BE LIMITED TO ONE MILLION
DOLLARS PER DEPOSITORY.
S. 717 7
S 7. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction to
be invalid, such judgment shall not affect, impair or invalidate such
clause, sentence, paragraph, section or part thereof directly involved
in the controversy in which such judgment shall have been rendered.
S 8. This act shall take effect immediately.