Senate Bill S6929

2009-2010 Legislative Session

Expands the definition of banking entities authorized for the deposit of temporary investments funds

download bill text pdf

Archive: Last Bill Status - In Senate Committee Local Government Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 25, 2010	referred to local government

2009-S6929 (ACTIVE) - Details

See Assembly Version of this Bill:: A9099
Current Committee:: Senate Local Government
Law Section:: General Municipal Law
Laws Affected:: Amd §11, Gen Muni L

2009-S6929 (ACTIVE) - Summary

Expands the definition of banking entities authorized for the deposit of temporary investments funds.

2009-S6929 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6929

 TITLE OF BILL :
An act to amend the general municipal law, in relation to expanding
the definition of banking entities authorized for the deposit of
temporary investments funds


 PURPOSE OR GENERAL IDEA OF BILL :
To provide alternative options for obtaining FDIC insurance coverage
for local government deposits placed in bank accounts, thereby
reducing the cost of collerateralizing such funds.

 SUMMARY OF SPECIFIC PROVISIONS :
Amends Section 11(2) of the General Municipal Law to allow local
government deposits to be invested through local banks in FDIC-insured
accounts through a reciprocal deposit-taking program which provides
deposit insurance coverage in excess of $250,000.

Specifically, the bill allows investments which meet all of the
following conditions: moneys are invested through a bank located in
this state; the bank arranges for the deposit of funds in other
banking institutions, as defined in section 9-r of the Banking Law,
for the account of the local government; the full amount of the
principal and accrued interest are insured by the FDIC; the local bank
acts as custodian for the local government; and the local bank

receives an equal or greater amount of funds "from other depository
institutions.

 JUSTIFICATION :
This bill provides an alternative option for ensuring the security of
public deposits. Currently, local governments are authorized to
temporarily invest moneys in special time deposit accounts or
certificates of deposit issued by a bank or trust company located in
this state. When the amount deposited exceeds FDIC insurance coverage,
the, bank must either secure the deposits by pledging certain eligible
securities which have an aggregate market value that is at least equal
to the aggregate amount of the public deposits, or by offering an
eligible surety bond or letter of credit by a Federal Home Loan Bank.
While these requirements help ensure the security of the deposits,
they also result in increased costs.

Over the past couple of years, several states have modified their laws
and policies to allow an alternative arrangement for securing public
deposits. Under this scenario, the local bank arranges for the deposit
of the public funds in other FDIC-insured banks which issue
certificates of deposit for the account of the local government. As a
result, the full amount of principal and accrued interest for each CD
are eligible for FDIC insurance.

This bill would allow a similar option for public deposits made by
local governments in New York State.  In order to ensure that the
total amount of the local government's investment remains available
for lending within the local community, the bill would require that
the depository bank must receive deposits from other insured
institutions which are equivalent to the total amount of the local
government's investment.

 LEGISLATIVE HISTORY :
New bill.

 FISCAL IMPLICATIONS :
None to the State. Local governments are expected to benefit from the
reduced costs involved in collateralizing deposits.

 EFFECTIVE DATE :
Immediately.

2009-S6929 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6929

                            I N  S E N A T E

                            February 25, 2010
                               ___________

Introduced  by  Sen.  FOLEY  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Local Government

AN ACT to amend the general municipal law, in relation to expanding  the
  definition of banking entities authorized for the deposit of temporary
  investments funds

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. 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. 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 deposit accounts
in, or certificates of deposit  issued  by,  a  bank  or  trust  company
located  and authorized to do business in this state[, provided however,
that]; OR (2) IN ACCORDANCE WITH ALL OF THE FOLLOWING CONDITIONS:
  (I) THE MONEYS ARE INVESTED THROUGH A BANK OR  TRUST  COMPANY  LOCATED
AND AUTHORIZED TO DO BUSINESS IN THIS STATE;
  (II)  THE BANK OR TRUST COMPANY ARRANGES FOR THE DEPOSIT OF THE MONEYS
IN CERTIFICATES OF DEPOSIT IN  ONE  OR  MORE  BANKING  INSTITUTIONS,  AS
DEFINED IN SECTION NINE-R OF THE BANKING LAW, OR TRUST COMPANIES INSURED
UNDER  THE FEDERAL DEPOSIT INSURANCE ACT, WHEREVER LOCATED IN THE UNITED
STATES, FOR THE ACCOUNT OF THE LOCAL GOVERNMENT;
  (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 OR TRUST COMPANY ACTS AS CUSTODIAN FOR THE LOCAL GOVERN-
MENT WITH RESPECT TO SUCH CERTIFICATES OF DEPOSIT ISSUED FOR  THE  LOCAL
GOVERNMENT'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  OR  TRUST COMPANY RECEIVES AN AMOUNT OF DEPOSITS

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

                                                           LBD14631-01-9

S. 6929                             2

FROM CUSTOMERS OF OTHER INSURED DEPOSITORY INSTITUTIONS WHEREVER LOCATED
IN THE UNITED STATES EQUAL TO OR GREATER THAN THE AMOUNT OF  THE  MONEYS
INVESTED BY THE LOCAL GOVERNMENT THROUGH THE BANK OR TRUST COMPANY.
  B.  FOR  ANY  INVESTMENT MADE PURSUANT TO PARAGRAPH A OF THIS SUBDIVI-
SION, such time deposit account or certificate of deposit shall be paya-
ble within such time as the proceeds shall be needed  to  meet  expendi-
tures 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  subdivi-
sion three of section ten of this article.
  S 2. This act shall take effect immediately.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Find your Senator and share your views on important issues.

Do you support this bill?

Senate Bill S6929

Sponsored By

Archive: Last Bill Status - In Senate Committee Local Government Committee

Actions

2009-S6929 (ACTIVE) - Details

2009-S6929 (ACTIVE) - Summary

2009-S6929 (ACTIVE) - Sponsor Memo

2009-S6929 (ACTIVE) - Bill Text download pdf

Comments

Do you support this bill?

Get Status Alerts for 2009-S6929

Senate Bill S6929

Share this bill

Sponsored By

Brian X. Foley

Archive: Last Bill Status - In Senate Committee Local Government Committee

Actions

2009-S6929 (ACTIVE) - Details

2009-S6929 (ACTIVE) - Summary

2009-S6929 (ACTIVE) - Sponsor Memo

2009-S6929 (ACTIVE) - Bill Text download pdf

Comments