S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8357
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               June 4, 2025
                                ___________
 
 Introduced  by  Sen. SANDERS -- (at request of the State Comptroller) --
   read twice and ordered printed, and when printed to  be  committed  to
   the Committee on Rules
 
 AN  ACT  to amend the state finance law, in relation to a deposit place-
   ment program for the Banking Development District Program

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  opening paragraph of subdivision 2 of section 105 of
 the state finance law, as amended by chapter 154 of the laws of 1953, is
 amended to read as follows:
   [Every] EXCEPT AS OTHERWISE PROVIDED  IN  THIS  SECTION,  EVERY  bank,
 trust  company  and  industrial bank designated for the deposit of state
 moneys under the provisions of this section shall, before  deposits  are
 made:
   § 2. Subdivision 3 of section 105 of the state finance law, as amended
 by  chapter  154 of the laws of 1953, is amended and a new subdivision 7
 is added to read as follows:
   3. Notwithstanding any other general or special  law,  AND  EXCEPT  AS
 OTHERWISE  PROVIDED  IN  THIS  SECTION,  no  bonds, notes or other obli-
 gations[, except as above described,] shall be accepted as security  for
 moneys  deposited pursuant to this section or section one hundred six of
 this [chapter] ARTICLE. No general or special law which in substance  or
 in  effect  authorizes or requires the deposit of specified bonds, notes
 or other obligations with any public officer or body of this  state  for
 any  purpose for which the deposit of bonds or other obligations of this
 state may be authorized or required, shall be construed to authorize  or
 require  the  acceptance  of  such  bonds, notes or other obligations as
 security for moneys deposited pursuant to this section  or  section  one
 hundred six of this [chapter] ARTICLE.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11948-01-5
 S. 8357                             2
 
              

   7.  A.  FOR  THE PURPOSES OF THIS SUBDIVISION, THE TERM "PARTICIPATING
 BANK" SHALL MEAN A BANK, TRUST COMPANY, OR NATIONAL BANK, AS  SET  FORTH
 IN SECTION NINETY-SIX-D OF THE BANKING LAW, THAT:
   (1)  IS  APPROVED BY THE DEPARTMENT OF FINANCIAL SERVICES TO ESTABLISH
 AND/OR OPERATE A BRANCH IN A BANKING  DEVELOPMENT  DISTRICT  ESTABLISHED
 PURSUANT TO SECTION NINETY-SIX-D OF THE BANKING LAW;
   (2)  IS  DESIGNATED BY THE COMPTROLLER AS A DEPOSITORY FOR THE BANKING
 DEVELOPMENT DISTRICT PROGRAM AS CREATED BY SECTION NINETY-SIX-D  OF  THE
 BANKING LAW; AND
   (3)  IS A MINORITY DEPOSITORY INSTITUTION OR HAS LESS THAN TEN BILLION
 DOLLARS IN ASSETS.
   B. IN LIEU OF A SECURITY BOND, LETTER OF CREDIT, CHECK, OR OTHER SECU-
 RITY AS PRESCRIBED BY THIS SECTION, A PARTICIPATING  BANK  MAY,  IN  THE
 DISCRETION  OF  THE  COMPTROLLER  AND  THE  COMMISSIONER OF TAXATION AND
 FINANCE, ARRANGE FOR THE REDEPOSIT OF  MONEYS,  IN  WHOLE  OR  IN  PART,
 THROUGH  A  DEPOSIT  PLACEMENT  PROGRAM, THAT MEETS ALL OF THE FOLLOWING
 CONDITIONS:
   (1) THE PARTICIPATING BANK SHALL ARRANGE  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  SERVE AS CUSTODIAN FOR THE STATE WITH RESPECT TO THE MONEYS
 REDEPOSITED INTO SUCH DEPOSIT ACCOUNTS;
   (2) MONEYS HELD BY A PARTICIPATING BANK PENDING REDEPOSIT PURSUANT  TO
 SUBPARAGRAPH  ONE  OF  THIS  PARAGRAPH  THAT ARE IN EXCESS OF THE AMOUNT
 INSURED BY THE FEDERAL DEPOSIT INSURANCE  CORPORATION  OR  THE  NATIONAL
 CREDIT UNION ADMINISTRATION SHALL BE SECURED IN ACCORDANCE WITH SUBDIVI-
 SION TWO OR FOUR OF THIS SECTION;
   (3)  THE  FULL  AMOUNT OF THE MONEYS REDEPOSITED INTO DEPOSIT ACCOUNTS
 PURSUANT TO SUBPARAGRAPH ONE OF THIS PARAGRAPH, PLUS  ACCRUED  INTEREST,
 IF ANY, SHALL BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
 THE NATIONAL CREDIT UNION ADMINISTRATION; AND
   (4)  AT  THE  SAME  TIME  THAT  THE MONEYS ARE REDEPOSITED PURSUANT TO
 SUBPARAGRAPH ONE OF THIS PARAGRAPH, A  PARTICIPATING  BANK  RECEIVES  AN
 AMOUNT OF DEPOSITS FROM CUSTOMERS OF OTHER FINANCIAL INSTITUTIONS PURSU-
 ANT  TO  THE  DEPOSIT  PLACEMENT  PROGRAM THAT ARE AT LEAST EQUAL TO THE
 AMOUNT OF MONEY REDEPOSITED BY A PARTICIPATING BANK.
   C. THE COMPTROLLER MAY PROMULGATE RULES AND REGULATIONS REGARDING  THE
 DEPOSIT PLACEMENT PROGRAM, SET FORTH IN PARAGRAPH B OF THIS SUBDIVISION,
 INCLUDING  CONTRACT  REQUIREMENTS  ESTABLISHING  THE DURATION AND MONEYS
 ALLOWABLE UNDER THE PROGRAM ON A  PER  INSTITUTION  BASIS,  AS  WELL  AS
 REPORTING REQUIREMENTS REGARDING THE IMPACTS OF SUCH RECIPROCAL DEPOSITS
 ON A PARTICIPATING BANK'S LENDING ACTIVITIES AND BUSINESS.
   D. NOTHING IN THIS SUBDIVISION SHALL BE CONSTRUED TO PERMIT THE USE OF
 A DEPOSIT PLACEMENT PROGRAM FOR DEPOSITS OF MONEYS FOR ANY OTHER PURPOSE
 OR  PROGRAM OTHER THAN FOR AMOUNTS EXPRESSLY AUTHORIZED BY THIS SUBDIVI-
 SION AND IN CONNECTION WITH THE BANKING DEVELOPMENT DISTRICT PROGRAM.
   § 3. This act shall take effect immediately.