S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10672
 
                           I N  A S S E M B L Y
 
                               May 10, 2018
                                ___________
 
 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.
   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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD01510-01-7

 A. 10672                            2
 
 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.
   (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.

 A. 10672                            3
 
   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
 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

 A. 10672                            4
 
 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
 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

 A. 10672                            5
 
 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.
   (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

 A. 10672                            6
 
 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-
 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

 A. 10672                            7
 
 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
 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

 A. 10672                            8

 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]
 A of this section or other security as prescribed under subdivision  [B]
 B  of  this  section, 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.

 A. 10672                            9
 
   (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.