Senate Bill S8296C

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

                                  8296

                            I N  S E N A T E

                              June 21, 2010
                               ___________

Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the general municipal law, the state finance law and the
  banking law, in relation to  the  establishment  of  a  savings  bank,
  savings  and  loan  association  or  credit  union  municipal  deposit
  program, and limiting deposits of public funds in such institutions to
  one million dollars

  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.
  S 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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD17826-02-0

              

S. 8296                             2

  S 3. Subdivisions 2 and 4 of section 10 of the general municipal  law,
as  amended  by  chapter 623 of the laws of 1998, 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.
  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,

S. 8296                             3

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
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:

S. 8296                             4

  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:
  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 THE MAXIMUM
AMOUNT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) UNDER
THE PROVISIONS OF THE FEDERAL DEPOSIT INSURANCE ACT, OR BY THE  NATIONAL
CREDIT  UNION  SHARE  INSURANCE  FUND  (NCUSIF) OR NATIONAL CREDIT UNION
ADMINISTRATION (NCUA), UNDER THE PROVISIONS OF THE FEDERAL CREDIT  UNION
ACT.
  S  6.  Section  106  of the state finance law, the second undesignated
paragraph as amended by chapter 293 of the laws of 1992,  subdivision  B
and the closing paragraph as amended by chapter 583 of the laws of 1941,
is amended to read as follows:
  S  106.  Deposit  of  moneys by state officers, state institutions and
charitable and benevolent institutions.   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

S. 8296                             5

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.
  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.
  Every [bank or trust company] DEPOSITARY designated by the comptroller
for the deposit of any such moneys:
  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. 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.
  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 THE MAXIMUM
AMOUNT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) UNDER
THE PROVISIONS OF THE FEDERAL DEPOSIT INSURANCE ACT, OR BY THE  NATIONAL
CREDIT  UNION  SHARE  INSURANCE  FUND  (NCUSIF) OR NATIONAL CREDIT UNION
ADMINISTRATION (NCUA), UNDER THE PROVISIONS OF THE FEDERAL CREDIT  UNION
ACT.
  This  section  shall not apply to any funds held by the superintendent
of banks or the superintendent of insurance in a fiduciary capacity.
  S 7. The banking law is amended by adding a new section 454-a to  read
as follows:
  S  454-A.  DEPOSITS  OF  PUBLIC MONEY WITH CREDIT UNIONS; SECURITY.  A
CREDIT UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE  LIMITA-

S. 8296                             6

TIONS PROVIDED IN SECTION ONE HUNDRED SIX OF THE STATE FINANCE LAW. SUCH
CREDIT  UNION SHALL PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY
IN FORM AND AMOUNT TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN
THE  NAME  OF  SUCH DEPOSITOR, WHEN REQUIRED TO BE SECURED BY APPLICABLE
LAW, DECREE OR REGULATION.
  S 8. 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 9. This act shall take effect immediately.

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

                                 8296--A

                            I N  S E N A T E

                              June 21, 2010
                               ___________

Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Rules  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the  general  municipal  law and the banking law, in
  relation to the establishment of a  savings  bank,  savings  and  loan
  association  or  credit  union municipal deposit program, and limiting
  deposits of public funds in such institutions to one million dollars

  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.
  S 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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD17826-03-0
              

S. 8296--A                          2

  S 3. Subdivisions 2 and 4 of section 10 of the general municipal  law,
as  amended  by  chapter 623 of the laws of 1998, 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.
  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,

S. 8296--A                          3

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
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. The banking law is amended by adding a new section 454-a to read
as follows:
  S 454-A. DEPOSITS OF PUBLIC MONEY WITH CREDIT UNIONS; SECURITY.  1.  A
CREDIT UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE  LIMITA-
TIONS  PROVIDED  IN  SUBDIVISION TWO OF THIS SECTION.  SUCH CREDIT UNION

S. 8296--A                          4

SHALL PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN  FORM  AND
AMOUNT TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN THE NAME OF
SUCH DEPOSITOR, WHEN REQUIRED TO BE SECURED BY APPLICABLE LAW, DECREE OR
REGULATION.
  2.  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 THE MAXIMUM
AMOUNT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) UNDER
THE PROVISIONS OF THE FEDERAL DEPOSIT INSURANCE ACT, OR BY THE  NATIONAL
CREDIT  UNION  SHARE  INSURANCE  FUND  (NCUSIF) OR NATIONAL CREDIT UNION
ADMINISTRATION (NCUA), UNDER THE PROVISIONS OF THE FEDERAL CREDIT  UNION
ACT.
  S 6. 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 7. This act shall take effect immediately.

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

                                 8296--B
    Cal. No. 1204

                            I N  S E N A T E

                              June 21, 2010
                               ___________

Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Rules  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee -- ordered to a third reading, amended and ordered
  reprinted, retaining its place in the order of third reading

AN ACT to amend the general  municipal  law  and  the  banking  law,  in
  relation  to  the  establishment  of  a savings bank, savings and loan
  association or credit union municipal deposit  program,  and  limiting
  deposits  of  public  funds  in such institutions to two hundred fifty
  thousand dollars

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

  Section  1.  Paragraph d 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:
  d. "Bank" shall mean a bank  as  defined  by  the  banking  law  or  a
national  banking  association  located and authorized to do business in
New York; A CREDIT UNION AS DEFINED BY THE  BANKING  LAW  OR  A  FEDERAL
CREDIT UNION LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK WHICH HAS
ITS  PRINCIPAL OFFICE IN A LOCATION DESCRIBED IN PARAGRAPH (A) OF SUBDI-
VISION THIRTY-SEVEN OF SECTION FOUR HUNDRED FIFTY-FOUR  OF  THE  BANKING
LAW,  OR  A  BRANCH  OFFICE  IN A LOCATION DESCRIBED IN PARAGRAPH (B) OF
SUBDIVISION THIRTY-SEVEN OF SECTION FOUR HUNDRED FIFTY-FOUR OF THE BANK-
ING LAW; OR A SAVINGS BANK AS DEFINED BY THE BANKING LAW, A SAVINGS  AND
LOAN  ASSOCIATION  AS  DEFINED  BY  THE BANKING LAW OR A FEDERAL SAVINGS
ASSOCIATION LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK WHICH  HAS
ITS  PRINCIPAL OFFICE IN A LOCATION DESCRIBED IN PARAGRAPH (A) OF SUBDI-
VISION TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF THE BANKING LAW, OR  A
BRANCH  OFFICE  IN  A LOCATION DESCRIBED IN PARAGRAPH (B) OF SUBDIVISION
TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF THE BANKING LAW.
  S 2. Section 454 of the banking law is amended by adding a new  subdi-
vision 37 to read as follows:
  37.  (A)  TO  ACCEPT  DEPOSITS  FOR  CREDIT  TO A LOCAL GOVERNMENT, AS
DEFINED IN PARAGRAPH A OF SUBDIVISION ONE OF SECTION TEN OF THE  GENERAL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD17826-07-0

S. 8296--B                          2

MUNICIPAL LAW, AT ITS PRINCIPAL OFFICE WHERE SUCH CREDIT UNION MAINTAINS
ITS PRINCIPAL OFFICE WITHIN THE JURISDICTION OF SUCH LOCAL GOVERNMENT.
  (B) TO ACCEPT DEPOSITS FOR CREDIT TO A LOCAL GOVERNMENT, AS DEFINED IN
PARAGRAPH  A  OF SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL
LAW, AT ITS BRANCH OFFICE WHERE SUCH CREDIT  UNION  MAINTAINS  A  BRANCH
OFFICE WITHIN THE JURISDICTION OF SUCH LOCAL GOVERNMENT.
  S  3. The banking law is amended by adding a new section 454-a to read
as follows:
  S 454-A. DEPOSITS OF PUBLIC MONEY WITH CREDIT UNIONS; SECURITY.  1.  A
CREDIT  UNION MAY ACCEPT DEPOSITS OF PUBLIC MONEY SUBJECT TO THE LIMITA-
TIONS PROVIDED IN SUBDIVISION TWO OF THIS SECTION.   SUCH  CREDIT  UNION
SHALL  PLEDGE  ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN FORM AND
AMOUNT TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN THE NAME OF
SUCH DEPOSITOR, WHEN REQUIRED TO BE SECURED BY APPLICABLE LAW, DECREE OR
REGULATION.
  2. 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  TWO  HUNDRED
FIFTY THOUSAND DOLLARS.
  S  4.  Subdivision  2 of section 237 of the banking law, as amended by
chapter 360 of the laws of 1984, is amended to read as follows:
  2. [No savings bank shall accept any deposit for credit to any munici-
pal corporation.] (A) A  SAVINGS  BANK  WHICH  MAINTAINS  ITS  PRINCIPAL
OFFICE  WITHIN A LOCAL GOVERNMENT, AS DEFINED IN PARAGRAPH A OF SUBDIVI-
SION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW, MAY ACCEPT  DEPOS-
ITS AT SUCH PRINCIPAL OFFICE FOR CREDIT TO SUCH LOCAL GOVERNMENT.
  (B)  A  SAVINGS  BANK  WHICH  MAINTAINS A BRANCH OFFICE WITHIN A LOCAL
GOVERNMENT, AS DEFINED IN PARAGRAPH A OF SUBDIVISION ONE OF SECTION  TEN
OF  THE GENERAL MUNICIPAL LAW, MAY ACCEPT DEPOSITS AT SUCH BRANCH OFFICE
FOR CREDIT TO SUCH LOCAL GOVERNMENT.
  S 5. Section 234 of the banking law is amended by adding a new  subdi-
vision 26 to read as follows:
  26. PURSUANT TO SUBDIVISION TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF
THIS ARTICLE, TO PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN
FORM  AND  AMOUNT  TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN
THE NAME OF SUCH DEPOSITOR, WHEN REQUIRED TO BE  SECURED  BY  APPLICABLE
LAW,  DECREE  OR  REGULATION  AND  TO  EXERCISE  THE POWERS CONTAINED IN
SECTION NINETY-SIX-B OF THIS CHAPTER.
  S 6. Section 383 of the banking law is amended by adding a new  subdi-
vision 17 to read as follows:
  17. PURSUANT TO SUBDIVISION TWO OF SECTION TWO HUNDRED THIRTY-SEVEN OF
THIS CHAPTER, TO PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN
FORM  AND  AMOUNT  TO THE DEPOSITOR, FOR THE REPAYMENT OF MONIES HELD IN
THE NAME OF SUCH DEPOSITOR, WHEN REQUIRED TO BE  SECURED  BY  APPLICABLE
LAW,  DECREE  OR  REGULATION  AND  TO  EXERCISE  THE POWERS CONTAINED IN
SECTION NINETY-SIX-B OF THIS CHAPTER.
  S 7. This act shall take effect on the ninetieth day  after  it  shall
have become a law.