S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    439
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 9, 2019
                                ___________
 
 Introduced  by M. of A. STECK -- read once and referred to the Committee
   on Banks
 
 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:
 
   Section 1. Paragraph c of subdivision 1 of section 10 of  the  general
 municipal law, as amended by chapter 623 of the laws of 1998, is amended
 to read as follows:
   c.  "Public  deposits"  shall mean deposits of public funds in a bank,
 SAVINGS BANK, SAVINGS AND  LOAN  ASSOCIATION,  CREDIT  UNION,  or  trust
 company  which  are  available  for  all uses generally permitted by the
 bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, or trust
 company to the depositing local  government  for  actually  and  finally
 collected funds under the bank's, SAVINGS BANK'S, SAVINGS AND LOAN ASSO-
 CIATION'S, CREDIT UNION'S, or trust company's account agreement or poli-
 cies.
   §  2.  Paragraphs  f,  g  and  h of subdivision 1 of section 10 of the
 general municipal law are relettered paragraphs g, h and i and three new
 paragraphs f, j and k are added to read as follows:
   F. "CREDIT UNION" SHALL MEAN A STATE-CHARTERED CREDIT UNION AS DEFINED
 BY SUBDIVISION NINE OF SECTION TWO OF THE BANKING LAW  OR  A  FEDERALLY-
 CHARTERED  CREDIT  UNION  AS  DEFINED  BY  THE FEDERAL CREDIT UNION ACT,
 LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK.
   J. "SAVINGS BANK" SHALL MEAN A SAVINGS BANK AS DEFINED BY  SUBDIVISION
 FOUR OF SECTION TWO OF THE BANKING LAW OR ANY FEDERAL SAVINGS BANK.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03608-01-9
              

 A. 439                              2
 
   K.  "SAVINGS AND LOAN ASSOCIATION" SHALL MEAN A SAVINGS AND LOAN ASSO-
 CIATION AS DEFINED BY SUBDIVISION EIGHT OF SECTION TWO  OF  THE  BANKING
 LAW OR ANY FEDERAL SAVINGS AND LOAN ASSOCIATION.
   §  3.  Subdivisions  2, 3 and 4 of section 10 of the general municipal
 law, as amended by chapter 623 of the  laws  of  1998,  paragraph  a  of
 subdivision  2 as amended by chapter 128 of the laws of 2012, paragraphs
 a and b of subdivision 3 as amended by chapter 545 of the laws of  2005,
 paragraph  c  of  subdivision 3 as amended by chapter 615 of the laws of
 2002, and paragraph c of subdivision 2 and paragraph (e) of  subdivision
 4  as further amended by section 104 of part A of chapter 62 of the laws
 of 2011, are amended to read as follows:
   2. a. (i) The governing board of every local government  shall  desig-
 nate  one  or  more banks, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS,
 CREDIT UNIONS or trust companies for the deposit of  public  funds,  the
 disposition  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 specify
 the maximum amount which may be kept on deposit at any time in each such
 bank, SAVINGS BANKS, SAVINGS AND LOAN  ASSOCIATIONS,  CREDIT  UNIONS  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 COMP-
 TROLLER  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.
   (ii) The governing board of a local government that has designated one
 or  more  banks,  SAVINGS  BANKS,  SAVINGS AND LOAN ASSOCIATIONS, CREDIT
 UNIONS or trust companies for the deposit of public  funds  pursuant  to
 subparagraph (i) of this paragraph may, in its discretion, authorize the
 designated  bank,  SAVINGS  BANK,  SAVINGS  AND LOAN ASSOCIATION, CREDIT
 UNION or trust company to arrange for the redeposit of the local govern-
 ment's funds in one or more banking institutions, as defined in  section
 nine-r  of  the  banking  law,  for the account of the local government,
 through a deposit placement program that  meets  all  of  the  following
 conditions:
   (A)  On  or  after  the  date  that  the  local government's funds are
 received, the designated bank, SAVINGS BANK, SAVINGS  AND  LOAN  ASSOCI-
 ATION,  CREDIT  UNION or trust company (I) arranges for the redeposit of
 such funds into deposit accounts in one or more banking institutions and
 (II) serves as custodian for the local government with  respect  to  the
 funds redeposited into such accounts.
   (B)  Local  government  funds  deposited in a designated bank, SAVINGS
 BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION  or  trust  company  in
 accordance  with  this  subparagraph  and  held  in the designated bank,
 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
 ny in excess of the amount insured  by  the  federal  deposit  insurance
 corporation pending redeposit of the funds pursuant to this subparagraph
 shall be secured in accordance with subdivision three of this section.
   (C)  The  full  amount  of  local  government funds redeposited by the
 designated bank, SAVINGS BANK,  SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT
 UNION  or  trust  company  into deposit accounts in banking institutions
 pursuant to this subparagraph (plus accrued interest, if any)  shall  be
 insured by the federal deposit insurance corporation.

 A. 439                              3
 
   (D)  At  the same time that the money of the local government is rede-
 posited pursuant to this subparagraph, the selected depository  receives
 an  amount  of  deposits  from customers of other financial institutions
 pursuant to the deposit placement program that are at least equal to the
 amount  of  the  local  government's funds redeposited by the designated
 bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or  trust
 company.
   b.  Except as otherwise provided by law, all deposits shall be made to
 the credit of the local government. The deposit of public funds pursuant
 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 finan-
 cial  services  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 offi-
 cer  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 deposi-
 tories.  Such resolution 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 institution may earn  a  fixed  interest  rate
 which  is at or below such banking institution's posted two year certif-
 icate of deposit rate.  In those instances where there is such an agree-
 ment, its terms and conditions shall also be  specified  in  the  resol-
 ution.    Any  such  designation, amount, or agreement provisions may be
 changed at any time by further resolution.
   D. NOTWITHSTANDING ANY PROVISION OF LAW  TO  THE  CONTRARY,  NO  BANK,
 SAVINGS  BANK,  SAVINGS  AND  LOAN  ASSOCIATION OR CREDIT UNION SHALL BE
 DESIGNATED FOR DEPOSITS OF FUNDS PURSUANT  TO  THE  PROVISIONS  OF  THIS
 SECTION  OR SECTION ELEVEN OF THIS ARTICLE UNLESS THE TAXES DESCRIBED IN
 SUBDIVISION ONE OF SECTION TWO HUNDRED FIFTY-THREE OF THE  TAX  LAW  ARE
 PAID  ON  LOANS SECURED BY MORTGAGES THAT ARE PROVIDED BY ANY SUCH BANK,
 SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT  UNION.  ANY  FUNDS
 DEPOSITED  IN  ANY SUCH BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION
 OR CREDIT UNION SHALL BE WITHDRAWN IN ACCORDANCE WITH THE TERMS  OF  ANY
 DEPOSIT AGREEMENT IF SUCH TAXES WERE NOT PAID AT THE TIME ANY SUCH MORT-
 GAGES WERE RECORDED.
   3.  All  public  deposits  in  excess  of the amount insured under the
 provisions of the Federal Deposit Insurance Act OR BY THE NATIONAL CRED-
 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

 A. 439                              4
 
 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
 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

 A. 439                              5
 
 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.
   (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.

 A. 439                              6
 
   (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 department of financial services or
 other federal or state authority.
   § 4. Subdivision 2 of section 11 of  the  general  municipal  law,  as
 amended  by  chapter  128  of  the  laws  of 2012, is amended to read as
 follows:
   2. a. 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, either: (1) 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 compa-
 ny  located  and  authorized  to  do  business  in this state; or (2) in
 accordance with all of the following conditions:
   (i) the moneys are invested through a bank, SAVINGS BANK, SAVINGS  AND
 LOAN  ASSOCIATION,  CREDIT UNION or trust company located and authorized
 to do business in this state;
   (ii) the bank, SAVINGS BANK,  SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT
 UNION or trust company arranges for the deposit of the moneys in certif-
 icates  of  deposit  in  one or more banking institutions, as defined in
 section nine-r of the banking law, for the account of the local  govern-
 ment;
   (iii)  the  full amount of principal and accrued interest of each such
 certificate of deposit must be insured by the federal deposit  insurance
 corporation;
   (iv)  the  bank,  SAVINGS  BANK,  SAVINGS AND LOAN ASSOCIATION, CREDIT
 UNION or trust company acts as custodian for the local  government  with
 respect  to  such  certificates  of deposit issued for the local govern-
 ment's account; and
   (v) at the same time that the local government's moneys are  deposited
 and  the certificates of deposit are issued for the account of the local
 government, the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
 UNION or trust company receives an amount of deposits from customers  of
 other  financial institutions equal to or greater than the amount of the
 moneys invested by the local government through the bank or trust compa-
 ny.
   b. For any investment made pursuant to paragraph a  of  this  subdivi-
 sion,  such  time  INTEREST-BEARING  deposit  account  or certificate of
 deposit shall be payable within such time as the proceeds shall be need-
 ed to meet expenditures for which such moneys were obtained and provided
 further that such time INTEREST-BEARING 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.
   §  5.  Subdivision  1  and  the  opening paragraph of subdivision 2 of
 section 105 of the state finance law, subdivision 1 as amended by  chap-

 A. 439                              7
 
 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  two  new
 subdivisions 7 and 8 are added 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
 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:
   7. 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  SAVINGS  BANK, FEDERAL SAVINGS BANK, CREDIT UNION, FEDERAL
 CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR FEDERAL SAVINGS  AND  LOAN
 ASSOCIATION.
   8.  FOR  PURPOSES  OF THIS SECTION, THE TERMS "CREDIT UNION", "SAVINGS
 BANK" AND "SAVINGS AND LOAN ASSOCIATION" SHALL HAVE THE MEANING PROVIDED
 IN SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
   § 6. Section 106 of the state finance law, as amended by  chapter  155
 of  the  laws  of  2012 and subdivision D as added by chapter 128 of the
 laws of 2012, is amended to read as follows:
   § 106. Deposit of moneys by state  officers,  state  institutions  and
 charitable  and  benevolent institutions. 1. Such moneys received by the
 commissioner of taxation and finance as are now deposited to the  credit

 A. 439                              8
 
 of  the  comptroller  pursuant  to statute, and thereafter paid into the
 state treasury, shall be deposited by him or her 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 comp-
 troller at such rate of interest, if any, as shall be agreed upon by the
 depositary and the comptroller.
   2. 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 or her 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 institu-
 tion supported in whole or in part by the state, shall be  deposited  to
 his,  her, or its credit 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.
   3. Every [bank or trust company] DEPOSITARY designated  by  the  comp-
 troller for the deposit of any such moneys
   [A.] A. Shall give a bond with sufficient sureties for the security of
 such  deposit, to be approved by the comptroller and filed in his or her
 office,
   [B.] B. Or shall, in lieu of such surety bond, with the permission  of
 the  comptroller deposit with the comptroller such outstanding unmatured
 bonds or notes or such certified check or checks  as  are  described  in
 section one hundred five of this article. The comptroller may, in his or
 her discretion, accept and substitute for any surety bond or undertaking
 given,  pursuant to this section, a bond or undertaking in such form and
 with other surety or sureties, or other security  as  required  by  this
 section,  for  such  sums as may be prescribed and approved by the comp-
 troller for the safe keeping and prompt payment of such moneys on  legal
 demand therefor with interest, if any, and the comptroller may thereupon
 execute  and  deliver to the surety or sureties, upon the former bond or
 undertaking, a release of such surety or  sureties  from  any  liability
 accruing  subsequent to the date of such release. Such release shall not
 relieve such surety or sureties from any obligation for losses  incurred
 prior to the date thereof. On the withdrawal of all moneys from any such
 depository  and  a  closing  and  settlement of the account thereof, the
 comptroller may in his or her discretion certify to such settlement  and
 release  to  the  obligor  or  owner or owners entitled thereto, of such
 surety bond, undertaking, certified check or checks, or  other  security
 deposited with him or her.
   [C.]  C.  Notwithstanding  any  other  provisions of this section, the
 comptroller shall not designate for the deposit of moneys by state offi-
 cers, state institutions  and  charitable  and  benevolent  institutions
 supported  in  whole  or  in  part by the state a banking institution to
 which the Community Reinvestment Act of 1977, United States P.L. 95-128,
 applies unless such institution shall have received a record of perform-
 ance no lower than  "satisfactory"  as  determined  under  such  act  in
 accordance with section twenty-eight-b of the banking law.
   [D.] D. In lieu of a security bond as prescribed under [subdivision A]
 PARAGRAPH   A  of  this  [section]  SUBDIVISION  or  other  security  as
 prescribed under [subdivision B] PARAGRAPH B of this [section]  SUBDIVI-

 A. 439                              9
 
 SION,  the  comptroller may authorize a designated bank or trust company
 to arrange for the redeposit of the moneys through a  deposit  placement
 program that meets all of the following conditions:
   (1) The designated bank or trust company arranges for the redeposit of
 the  moneys into deposit accounts with one or more banking institutions,
 as defined in section nine-r of the banking law, for the account of  the
 state,  and serves as custodian for the state with respect to the moneys
 redeposited into such deposit accounts.
   (2) Moneys held by a designated bank or trust company pending redepos-
 it pursuant to paragraph one of this subdivision that are in  excess  of
 the amount insured by the federal deposit insurance corporation shall be
 secured in accordance with [subdivision A or B] PARAGRAPH A OR B of this
 [section] SUBDIVISION.
   (3)  The  full  amount of the moneys redeposited into deposit accounts
 pursuant to paragraph one of this subdivision, plus accrued interest, if
 any, shall be insured by the federal deposit insurance corporation.
   (4) At the same time that the moneys are redeposited pursuant to para-
 graph one of this subdivision, the  designated  bank  or  trust  company
 receives  an amount of deposits from customers of other financial insti-
 tutions pursuant to the deposit placement  program  that  are  at  least
 equal  to the amount of the moneys redeposited by the designated bank or
 trust company.
   4. This section shall not apply to any funds held by  the  superinten-
 dent of financial services in a fiduciary capacity.
   5.  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 SAVINGS BANK, FEDERAL SAVINGS BANK,  CREDIT  UNION,  FEDERAL
 CREDIT  UNION,  SAVINGS AND LOAN ASSOCIATION OR FEDERAL SAVINGS AND LOAN
 ASSOCIATION.
   6. FOR PURPOSES OF THIS SECTION, THE TERMS  "CREDIT  UNION",  "SAVINGS
 BANK" AND "SAVINGS AND LOAN ASSOCIATION" SHALL HAVE THE MEANING PROVIDED
 IN SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
   § 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.
   § 8. This act shall take effect immediately.