S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         3275
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                   February 4, 2015
                                      ___________
       Introduced  by  Sen. SANDERS -- 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 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:
    1    Section 1. Paragraph c of subdivision 1 of section 10 of  the  general
    2  municipal law, as amended by chapter 623 of the laws of 1998, is amended
    3  to read as follows:
    4    c.  "Public  deposits"  shall mean deposits of public funds in a bank,
    5  SAVINGS BANK, SAVINGS AND  LOAN  ASSOCIATION,  CREDIT  UNION,  or  trust
    6  company  which  are  available  for  all uses generally permitted by the
    7  bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, or trust
    8  company to the depositing local  government  for  actually  and  finally
    9  collected funds under the bank's, SAVINGS BANK'S, SAVINGS AND LOAN ASSO-
   10  CIATION'S, CREDIT UNION'S, or trust company's account agreement or poli-
   11  cies.
   12    S  2.  Paragraphs  f,  g  and  h of subdivision 1 of section 10 of the
   13  general municipal law are relettered paragraphs g, h and i and three new
   14  paragraphs f, j and k are added to read as follows:
   15    F. "CREDIT UNION" SHALL MEAN A STATE-CHARTERED CREDIT UNION AS DEFINED
   16  BY  SUBDIVISION  NINE  OF  SECTION  TWO  OF  THE  BANKING   LAW   OR   A
   17  FEDERALLY-CHARTERED  CREDIT UNION AS DEFINED BY THE FEDERAL CREDIT UNION
   18  ACT, LOCATED AND AUTHORIZED TO DO BUSINESS IN NEW YORK.
   19    J. "SAVINGS BANK" SHALL MEAN A SAVINGS BANK AS DEFINED BY  SUBDIVISION
   20  FOUR OF SECTION TWO OF THE BANKING LAW OR ANY FEDERAL SAVINGS BANK.
   21    K.  "SAVINGS AND LOAN ASSOCIATION" SHALL MEAN A SAVINGS AND LOAN ASSO-
   22  CIATION AS DEFINED BY SUBDIVISION EIGHT OF SECTION TWO  OF  THE  BANKING
   23  LAW OR ANY FEDERAL SAVINGS AND LOAN ASSOCIATION.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD08812-01-5
       S. 3275                             2
    1    S  3.  Subdivisions  2, 3 and 4 of section 10 of the general municipal
    2  law, as amended by chapter 623 of the  laws  of  1998,  paragraph  a  of
    3  subdivision  2 as amended by chapter 128 of the laws of 2012, paragraphs
    4  a and b of subdivision 3 as amended by chapter 545 of the laws of  2005,
    5  paragraph  c  of  subdivision 3 as amended by chapter 615 of the laws of
    6  2002, and paragraph c of subdivision 2 and paragraph (e) of  subdivision
    7  4  as further amended by section 104 of part A of chapter 62 of the laws
    8  of 2011, are amended to read as follows:
    9    2. a. (i) The governing board of every local government  shall  desig-
   10  nate  one  or  more banks, SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS,
   11  CREDIT UNIONS or trust companies for the deposit of  public  funds,  the
   12  disposition  of  which is not otherwise provided for by law, received by
   13  the chief fiscal officer or any other officer authorized by law to  make
   14  deposits. Such designation shall be by resolution of the governing board
   15  or,  in  the  case  of  a  city, such other body as may be authorized or
   16  required by law to designate depositaries. Such resolution shall specify
   17  the maximum amount which may be kept on deposit at any time in each such
   18  bank, SAVINGS BANKS, SAVINGS AND LOAN  ASSOCIATIONS,  CREDIT  UNIONS  or
   19  trust  company. Such designations and amounts may be changed at any time
   20  by further resolution.  THE GOVERNING BOARD OF  EVERY  LOCAL  GOVERNMENT
   21  SHALL FORWARD A COPY OF SUCH RESOLUTION TO THE OFFICE OF THE STATE COMP-
   22  TROLLER  WHO  SHALL RETAIN SUCH COPY UNTIL SUCH RESOLUTION IS AMENDED OR
   23  DISSOLVED. A COPY OF SUCH RESOLUTION SHALL  BE  RETAINED  BY  THE  STATE
   24  COMPTROLLER FOR RECORD KEEPING PURPOSES ONLY.
   25    (ii) The governing board of a local government that has designated one
   26  or  more  banks,  SAVINGS  BANKS,  SAVINGS AND LOAN ASSOCIATIONS, CREDIT
   27  UNIONS or trust companies for the deposit of public  funds  pursuant  to
   28  subparagraph (i) of this paragraph may, in its discretion, authorize the
   29  designated  bank,  SAVINGS  BANK,  SAVINGS  AND LOAN ASSOCIATION, CREDIT
   30  UNION or trust company to arrange for the redeposit of the local govern-
   31  ment's funds in one or more banking institutions, as defined in  section
   32  nine-r  of  the  banking  law,  for the account of the local government,
   33  through a deposit placement program that  meets  all  of  the  following
   34  conditions:
   35    (A)  On  or  after  the  date  that  the  local government's funds are
   36  received, the designated bank, SAVINGS BANK, SAVINGS  AND  LOAN  ASSOCI-
   37  ATION,  CREDIT  UNION or trust company (I) arranges for the redeposit of
   38  such funds into deposit accounts in one or more banking institutions and
   39  (II) serves as custodian for the local government with  respect  to  the
   40  funds redeposited into such accounts.
   41    (B)  Local  government  funds  deposited in a designated bank, SAVINGS
   42  BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION  or  trust  company  in
   43  accordance  with  this  subparagraph  and  held  in the designated bank,
   44  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   45  ny in excess of the amount insured  by  the  federal  deposit  insurance
   46  corporation pending redeposit of the funds pursuant to this subparagraph
   47  shall be secured in accordance with subdivision three of this section.
   48    (C)  The  full  amount  of  local  government funds redeposited by the
   49  designated bank, SAVINGS BANK,  SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT
   50  UNION  or  trust  company  into deposit accounts in banking institutions
   51  pursuant to this subparagraph (plus accrued interest, if any)  shall  be
   52  insured by the federal deposit insurance corporation.
   53    (D)  At  the same time that the money of the local government is rede-
   54  posited pursuant to this subparagraph, the selected depository  receives
   55  an  amount  of  deposits  from customers of other financial institutions
   56  pursuant to the deposit placement program that are at least equal to the
       S. 3275                             3
    1  amount of the local government's funds  redeposited  by  the  designated
    2  bank,  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust
    3  company.
    4    b.  Except as otherwise provided by law, all deposits shall be made to
    5  the credit of the local government. The deposit of public funds pursuant
    6  to this subdivision shall release the officer making the deposit and his
    7  or her surety from any liability for loss of such public funds by reason
    8  of the default or insolvency of any such bank, SAVINGS BANK, SAVINGS AND
    9  LOAN ASSOCIATION, CREDIT UNION or trust company.
   10    c. The governing board of a  local  government,  in  which  a  banking
   11  development district has been designated by the superintendent of finan-
   12  cial  services  pursuant to section ninety-six-d of the banking law, may
   13  designate a bank, SAVINGS BANK, SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT
   14  UNION,  trust  company or national bank located in such district for the
   15  deposit of public funds, the  disposition  of  which  is  not  otherwise
   16  provided for by law, received by the chief fiscal officer or other offi-
   17  cer  authorized  by law to make such deposits. Such designation shall be
   18  by resolution of the governing board or, in the case  of  a  city,  such
   19  other  body as may be authorized or required by law to designate deposi-
   20  tories.  Such resolution shall specify the maximum amount which  may  be
   21  kept  on  deposit  at any time with such bank, SAVINGS BANK, SAVINGS AND
   22  LOAN ASSOCIATION, CREDIT UNION, trust company or national  bank  located
   23  in  such district.   THE GOVERNING BOARD OF EVERY LOCAL GOVERNMENT SHALL
   24  FORWARD A COPY OF SUCH RESOLUTION TO THE OFFICE OF THE STATE COMPTROLLER
   25  WHO  SHALL  RETAIN  SUCH  COPY  UNTIL  SUCH  RESOLUTION  IS  AMENDED  OR
   26  DISSOLVED.  A  COPY  OF  SUCH  RESOLUTION SHALL BE RETAINED BY THE STATE
   27  COMPTROLLER FOR RECORD KEEPING PURPOSES ONLY. Subject  to  an  agreement
   28  between  such governing board and such banking institution, public funds
   29  deposited in such banking institution may earn  a  fixed  interest  rate
   30  which  is at or below such banking institution's posted two year certif-
   31  icate of deposit rate.  In those instances where there is such an agree-
   32  ment, its terms and conditions shall also be  specified  in  the  resol-
   33  ution.    Any  such  designation, amount, or agreement provisions may be
   34  changed at any time by further resolution.
   35    D. NOTWITHSTANDING ANY PROVISION OF LAW  TO  THE  CONTRARY,  NO  BANK,
   36  SAVINGS  BANK,  SAVINGS  AND  LOAN  ASSOCIATION OR CREDIT UNION SHALL BE
   37  DESIGNATED FOR DEPOSITS OF FUNDS PURSUANT  TO  THE  PROVISIONS  OF  THIS
   38  SECTION  OR SECTION ELEVEN OF THIS ARTICLE UNLESS THE TAXES DESCRIBED IN
   39  SUBDIVISION ONE OF SECTION TWO HUNDRED FIFTY-THREE OF THE  TAX  LAW  ARE
   40  PAID  ON  LOANS SECURED BY MORTGAGES THAT ARE PROVIDED BY ANY SUCH BANK,
   41  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT  UNION.  ANY  FUNDS
   42  DEPOSITED  IN  ANY SUCH BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION
   43  OR CREDIT UNION SHALL BE WITHDRAWN IN ACCORDANCE WITH THE TERMS  OF  ANY
   44  DEPOSIT AGREEMENT IF SUCH TAXES WERE NOT PAID AT THE TIME ANY SUCH MORT-
   45  GAGES WERE RECORDED.
   46    3.  All  public  deposits  in  excess  of the amount insured under the
   47  provisions of the Federal Deposit Insurance Act OR BY THE NATIONAL CRED-
   48  IT UNION ADMINISTRATION UNDER THE FEDERAL CREDIT UNION  ACT  as  now  or
   49  hereafter amended shall be secured in accordance with this subdivision:
   50    a. The officers making a deposit may accept a pledge of eligible secu-
   51  rities  having  in  the  aggregate  a market value at least equal to the
   52  aggregate amount of public deposits from such officers, or a pledge of a
   53  pro rata portion of a pool of eligible securities having in  the  aggre-
   54  gate  a  market  value  at least equal to the aggregate amount of public
   55  deposits from all such officers within the state at such  bank,  SAVINGS
   56  BANK,  SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT  UNION or trust company,
       S. 3275                             4
    1  together with a security agreement from the bank, SAVINGS BANK,  SAVINGS
    2  AND LOAN ASSOCIATION, CREDIT UNION or trust company. The security agree-
    3  ment and custodial agreement referred to below may be the same agreement
    4  including  when  the  bank,  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
    5  CREDIT UNION or trust company holding  the  public  deposits  holds  the
    6  collateral  for  the public body.   The security agreement shall provide
    7  that such eligible securities or pro rata portion of a pool of  eligible
    8  securities  are  being  pledged by the bank or trust company as security
    9  for the public deposits, together with agreed upon interest, if any, and
   10  any costs or expenses arising out of the collection of such deposit upon
   11  a default. It shall also provide for  the  conditions  under  which  the
   12  securities or pro rata portion of a pool of eligible securities held may
   13  be  sold,  presented for payment, substituted or released and the events
   14  of default which will enable the local government to exercise its rights
   15  against the pledged  securities.    Such  agreement  shall  include  all
   16  provisions  deemed  necessary and sufficient to secure in a satisfactory
   17  manner the local government's interest in the collateral. The  custodial
   18  agreement  shall provide that the pledged securities or pro rata portion
   19  of a pool of eligible securities will be held  by  the  custodial  bank,
   20  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   21  ny  as  agent  of,  and custodian for, the local government, and will be
   22  kept separate and apart from the general assets of the  custodial  bank,
   23  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   24  ny and it shall also provide for the manner in which the custodial bank,
   25  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   26  ny shall confirm the receipt, substitution or release of the collateral.
   27  Such agreement shall provide for the frequency of revaluation of collat-
   28  eral  by the custodial bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,
   29  CREDIT UNION or trust company and the substitution of collateral when  a
   30  change  in  the  rating  of  a security causes ineligibility pursuant to
   31  paragraph [f] G of subdivision one of this section. Such agreement shall
   32  include all provisions deemed necessary and sufficient to  secure  in  a
   33  satisfactory  manner  the local government's interest in the collateral.
   34  Such agreement may also contain such other provisions as  the  governing
   35  board may deem necessary.
   36    b. Whenever eligible securities delivered to a custodial bank, SAVINGS
   37  BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company pursu-
   38  ant  to  this  paragraph  are  transferred  by entries on the books of a
   39  federal reserve bank or other book-entry system operated by a  federally
   40  regulated entity without physical delivery of the evidence of such obli-
   41  gations,  the  records  of the custodial bank, SAVINGS BANK, SAVINGS AND
   42  LOAN ASSOCIATION, CREDIT UNION or  trust  company  shall  show,  at  all
   43  times,  the  interest  of the local government in such securities or pro
   44  rata portion of a pool of eligible securities as set forth in the  secu-
   45  rity agreement.
   46    c.  (i)  In  lieu of or in addition to the deposit of eligible securi-
   47  ties, the officers making a deposit may accept an eligible  surety  bond
   48  payable  to  such  local  government  as security for the payment of one
   49  hundred percent, or an eligible letter of credit payable to  such  local
   50  government  as security for the payment of one hundred forty percent, of
   51  the aggregate amount of public  deposits  from  such  officers  and  the
   52  agreed  upon  interest, if any. The terms and conditions of any eligible
   53  surety bond shall be approved by the governing board.
   54    (ii) In lieu of or in addition to the deposit of eligible  securities,
   55  the  officers making a deposit may, in the case of an irrevocable letter
   56  of credit issued in favor of the local government by a federal home loan
       S. 3275                             5
    1  bank whose commercial paper and other unsecured  short-term  debt  obli-
    2  gations  are  rated  in  the  highest  rating  category  by at least one
    3  nationally  recognized  statistical  rating  organization,  accept  such
    4  letter  of  credit  payable to such local government as security for the
    5  payment of one hundred percent of the aggregate amount of public  depos-
    6  its from such officers and the agreed upon interest, if any.
    7    d.  For  purposes  of  determining  the  market value of securities as
    8  required by this subdivision:
    9    (i) The eligible securities described in subparagraphs (viii), (x) and
   10  (xi) of paragraph [f] G of subdivision one  of  this  section  shall  be
   11  valued at eighty percent of their market value.
   12    (ii)  The  eligible securities described in subparagraph (ix) of para-
   13  graph [f] G of subdivision one of this section shall be valued at seven-
   14  ty percent of their market value.
   15    (iii) Of the eligible securities described in subparagraphs (v),  (vi)
   16  and  (vii)  of paragraph [f] G of subdivision one of this section, those
   17  securities rated in the highest category shall be valued at one  hundred
   18  percent  of  their  market value;   those securities rated in the second
   19  highest rating category shall be  valued  at  ninety  percent  of  their
   20  market  value;    and those securities rated in the third highest rating
   21  category shall be valued at eighty percent of their market value.   When
   22  two  nationally recognized statistical rating organizations rate a secu-
   23  rity in two different categories, the security shall be considered to be
   24  rated in the higher of the two categories.
   25    4. (a) Notwithstanding any other provision of law to the contrary, the
   26  chief fiscal officer, or other officer authorized by law to make  depos-
   27  its,  may,  subject  to  the  approval  of the governing body of a local
   28  government, by resolution, enter into a contract with a courier  service
   29  for  the  purpose  of  causing  the deposit of public funds with a bank,
   30  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   31  ny as provided in this section.
   32    (b) The entrusting of public funds for deposit pursuant  to  paragraph
   33  (a)  of this subdivision shall release the officer entrusting the public
   34  funds to the courier service and his or her surety  from  any  liability
   35  for  loss  of such public funds by the courier service in the process of
   36  delivering such public funds  to  the  designated  bank,  SAVINGS  BANK,
   37  SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust company.
   38    (c)  The local government authorizing the deposit of public funds by a
   39  courier service pursuant to paragraph  (a)  of  this  subdivision  shall
   40  require  the courier service to obtain a surety bond for the full amount
   41  entrusted to the courier, payable to the local government  and  executed
   42  by  an  insurance  company  authorized to do business in this state, the
   43  claims paying ability of which is rated in the highest  rating  category
   44  by  at least two nationally recognized statistical rating organizations,
   45  to insure against any loss of public  funds  entrusted  to  the  courier
   46  service  for  deposit or failure to deposit the full amount entrusted to
   47  the courier.
   48    (d) A deposit made by a courier on behalf of a local government  shall
   49  be  deemed  to  be  a  deposit made by the chief fiscal officer or other
   50  officer entrusting such funds for purposes of the requirements contained
   51  in this section for securing public deposits.
   52    (e) A bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION,  CREDIT  UNION
   53  or  trust company may, from time to time and as agreed upon with a local
   54  government, reimburse all or part of, but not more than, the actual cost
   55  incurred by  the  local  government  in  transporting  cash,  negotiable
   56  instruments  or  other items for deposit through a courier service.  Any
       S. 3275                             6
    1  such reimbursement agreement shall apply only  to  a  specified  deposit
    2  transaction,  and  may  be subject to such terms, conditions and limita-
    3  tions as the bank, SAVINGS BANK, SAVINGS AND  LOAN  ASSOCIATION,  CREDIT
    4  UNION  or  trust  company  deems necessary to ensure sound banking prac-
    5  tices, including, but not limited to, any terms, conditions  or  limita-
    6  tions  that  may  be required by the department of financial services or
    7  other federal or state authority.
    8    S 4. Subdivision 2 of section 11 of  the  general  municipal  law,  as
    9  amended  by  chapter  128  of  the  laws  of 2012, is amended to read as
   10  follows:
   11    2. a. The governing board of any local government or, if the governing
   12  board so delegates, the chief fiscal officer  or  other  officer  having
   13  custody  of  the  moneys  may temporarily invest moneys not required for
   14  immediate expenditure, except moneys the investment of which  is  other-
   15  wise  provided  for by law, either: (1) in special time INTEREST-BEARING
   16  deposit accounts in, or certificates  of  deposit  issued  by,  a  bank,
   17  SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT UNION or trust compa-
   18  ny  located  and  authorized  to  do  business  in this state; or (2) in
   19  accordance with all of the following conditions:
   20    (i) the moneys are invested through a bank, SAVINGS BANK, SAVINGS  AND
   21  LOAN  ASSOCIATION,  CREDIT UNION or trust company located and authorized
   22  to do business in this state;
   23    (ii) the bank, SAVINGS BANK,  SAVINGS  AND  LOAN  ASSOCIATION,  CREDIT
   24  UNION or trust company arranges for the deposit of the moneys in certif-
   25  icates  of  deposit  in  one or more banking institutions, as defined in
   26  section nine-r of the banking law, for the account of the local  govern-
   27  ment;
   28    (iii)  the  full amount of principal and accrued interest of each such
   29  certificate of deposit must be insured by the federal deposit  insurance
   30  corporation;
   31    (iv)  the  bank,  SAVINGS  BANK,  SAVINGS AND LOAN ASSOCIATION, CREDIT
   32  UNION or trust company acts as custodian for the local  government  with
   33  respect  to  such  certificates  of deposit issued for the local govern-
   34  ment's account; and
   35    (v) at the same time that the local government's moneys are  deposited
   36  and  the certificates of deposit are issued for the account of the local
   37  government, the bank, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
   38  UNION or trust company receives an amount of deposits from customers  of
   39  other  financial institutions equal to or greater than the amount of the
   40  moneys invested by the local government through the bank or trust compa-
   41  ny.
   42    b. For any investment made pursuant to paragraph a  of  this  subdivi-
   43  sion,  such  time  INTEREST-BEARING  deposit  account  or certificate of
   44  deposit shall be payable within such time as the proceeds shall be need-
   45  ed to meet expenditures for which such moneys were obtained and provided
   46  further that such time INTEREST-BEARING deposit account  or  certificate
   47  of  deposit  be  secured  in the same manner as is provided for securing
   48  deposits of public funds by subdivision three of  section  ten  of  this
   49  article.
   50    S  5.  Subdivision  1  and  the  opening paragraph of subdivision 2 of
   51  section 105 of the state finance law, subdivision 1 as amended by  chap-
   52  ter  204  of the laws of 2002 and the opening paragraph of subdivision 2
   53  as amended by chapter 154 of the laws of 1953, are amended and  two  new
   54  subdivisions 7 and 8 are added to read as follows:
   55    1.  All moneys received by the commissioner of taxation and finance on
   56  account of the state, excepting such moneys as are required by law to be
       S. 3275                             7
    1  deposited to the credit of the comptroller, but including such moneys as
    2  are thereafter paid into the state treasury by the comptroller, shall be
    3  deposited by the commissioner of taxation and finance within three  days
    4  after  the  receipt  thereof, either as a demand deposit or an interest-
    5  bearing [time] deposit (other than a time certificate of deposit), as he
    6  OR SHE and the comptroller may determine, in such banks, trust companies
    7  [and industrial banks], SAVINGS BANKS, SAVINGS AND LOAN ASSOCIATIONS  OR
    8  CREDIT  UNIONS  as  in  his  OR HER opinion and the opinion of the comp-
    9  troller are secure. The moneys so  deposited  shall  be  placed  to  the
   10  account  of  the  commissioner  of taxation and finance. He OR SHE shall
   11  keep a bankbook in which shall be entered his OR HER account of  deposit
   12  in  and  moneys  drawn from the banks [and], trust companies [and indus-
   13  trial banks], SAVINGS BANKS, SAVINGS AND  LOAN  ASSOCIATIONS  OR  CREDIT
   14  UNIONS  in  which deposits are made by him OR HER, which he OR SHE shall
   15  exhibit to the comptroller for his OR HER inspection on the first  Tues-
   16  day of every month and oftener if required. He OR SHE shall not draw any
   17  moneys  from  such banks, trust companies [or industrial banks unless by
   18  checks signed and countersigned], SAVINGS BANKS, SAVINGS AND LOAN  ASSO-
   19  CIATIONS OR CREDIT UNIONS DESIGNATED in the manner prescribed by section
   20  one  hundred  one  OF THIS ARTICLE, unless otherwise provided by law. No
   21  moneys shall be paid by any such  bank,  trust  company  [or  industrial
   22  bank], SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION OR CREDIT UNION out of
   23  any  such  deposit  except upon such checks.  Moneys may be paid through
   24  electronic transfer in  accordance  with  procedures  developed  by  the
   25  commissioner  of taxation and finance and the comptroller and consistent
   26  with the requirements of  this  section  for  recording  payments.  Such
   27  payments  through  electronic transfer shall be considered, for purposes
   28  of this chapter, to be moneys drawn by check.   Every such  bank,  trust
   29  company [or industrial bank], SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION
   30  OR  CREDIT UNION shall transmit to the comptroller monthly statements of
   31  all moneys received and paid by it on account  of  the  commissioner  of
   32  taxation and finance.
   33    Every bank, trust company [and industrial bank], SAVINGS BANK, SAVINGS
   34  AND LOAN ASSOCIATION OR CREDIT UNION designated for the deposit of state
   35  moneys  under  the provisions of this section shall, before deposits are
   36  made:
   37    7. PUBLIC FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL  SAVINGS  BANK,
   38  CREDIT  UNION,  FEDERAL  CREDIT  UNION,  SAVINGS AND LOAN ASSOCIATION OR
   39  FEDERAL SAVINGS AND LOAN ASSOCIATION, SHALL BE LIMITED  TO  ONE  MILLION
   40  DOLLARS  PER  SAVINGS  BANK, FEDERAL SAVINGS BANK, CREDIT UNION, FEDERAL
   41  CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR FEDERAL SAVINGS  AND  LOAN
   42  ASSOCIATION.
   43    8.  FOR  PURPOSES  OF THIS SECTION, THE TERMS "CREDIT UNION", "SAVINGS
   44  BANK" AND "SAVINGS AND LOAN ASSOCIATION" SHALL HAVE THE MEANING PROVIDED
   45  IN SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
   46    S 6. Section 106 of the state finance law, as amended by  chapter  155
   47  of  the  laws  of  2012 and subdivision D as added by chapter 128 of the
   48  laws of 2012, is amended to read as follows:
   49    S 106. Deposit of moneys by state  officers,  state  institutions  and
   50  charitable  and  benevolent institutions. 1. Such moneys received by the
   51  commissioner of taxation and finance as are now deposited to the  credit
   52  of  the  comptroller  pursuant  to statute, and thereafter paid into the
   53  state treasury, shall be deposited by him or her to the  credit  of  the
   54  comptroller  in such bank [or], trust company, SAVINGS BANK, SAVINGS AND
   55  LOAN ASSOCIATION OR CREDIT UNION, as shall be designated  by  the  comp-
       S. 3275                             8
    1  troller at such rate of interest, if any, as shall be agreed upon by the
    2  depositary and the comptroller.
    3    2.  All  other  moneys  received  by  the commissioner of taxation and
    4  finance except as provided in section one hundred five of  this  article
    5  and  all  moneys  received  by  any  other state officer or other person
    6  receiving moneys belonging to the state, or for which such state officer
    7  or other person may be responsible in his or her official capacity,  and
    8  all moneys received by any state institution, except for moneys received
    9  pursuant to a clinical practice plan established pursuant to subdivision
   10  fourteen  of  section  two  hundred six of the public health law and all
   11  moneys received from the state by any charitable or benevolent  institu-
   12  tion  supported  in whole or in part by the state, shall be deposited to
   13  his, her, or its credit in such bank [or], trust company, SAVINGS  BANK,
   14  SAVINGS  AND LOAN ASSOCIATION OR CREDIT UNION, as shall be designated by
   15  the comptroller at such rate of interest, if any,  as  shall  be  agreed
   16  upon by the depositary and the comptroller.
   17    3.  Every  [bank  or trust company] DEPOSITARY designated by the comp-
   18  troller for the deposit of any such moneys
   19    [A.] A. Shall give a bond with sufficient sureties for the security of
   20  such deposit, to be approved by the comptroller and filed in his or  her
   21  office,
   22    [B.]  B. Or shall, in lieu of such surety bond, with the permission of
   23  the comptroller deposit with the comptroller such outstanding  unmatured
   24  bonds  or  notes  or  such certified check or checks as are described in
   25  section one hundred five of this article. The comptroller may, in his or
   26  her discretion, accept and substitute for any surety bond or undertaking
   27  given, pursuant to this section, a bond or undertaking in such form  and
   28  with  other  surety  or  sureties, or other security as required by this
   29  section, for such sums as may be prescribed and approved  by  the  comp-
   30  troller  for the safe keeping and prompt payment of such moneys on legal
   31  demand therefor with interest, if any, and the comptroller may thereupon
   32  execute and deliver to the surety or sureties, upon the former  bond  or
   33  undertaking,  a  release  of  such surety or sureties from any liability
   34  accruing subsequent to the date of such release. Such release shall  not
   35  relieve  such surety or sureties from any obligation for losses incurred
   36  prior to the date thereof. On the withdrawal of all moneys from any such
   37  depository and a closing and settlement  of  the  account  thereof,  the
   38  comptroller  may in his or her discretion certify to such settlement and
   39  release to the obligor or owner or  owners  entitled  thereto,  of  such
   40  surety  bond,  undertaking, certified check or checks, or other security
   41  deposited with him or her.
   42    [C.] C. Notwithstanding any other  provisions  of  this  section,  the
   43  comptroller shall not designate for the deposit of moneys by state offi-
   44  cers,  state  institutions  and  charitable  and benevolent institutions
   45  supported in whole or in part by the  state  a  banking  institution  to
   46  which the Community Reinvestment Act of 1977, United States P.L. 95-128,
   47  applies unless such institution shall have received a record of perform-
   48  ance  no  lower  than  "satisfactory"  as  determined  under such act in
   49  accordance with section twenty-eight-b of the banking law.
   50    [D.] D. In lieu of a security bond as prescribed under subdivision [A]
   51  A of this section or other security as prescribed under subdivision  [B]
   52  B  of  this  section, the comptroller may authorize a designated bank or
   53  trust company to arrange for the  redeposit  of  the  moneys  through  a
   54  deposit placement program that meets all of the following conditions:
   55    (1) The designated bank or trust company arranges for the redeposit of
   56  the  moneys into deposit accounts with one or more banking institutions,
       S. 3275                             9
    1  as defined in section nine-r of the banking law, for the account of  the
    2  state,  and serves as custodian for the state with respect to the moneys
    3  redeposited into such deposit accounts.
    4    (2) Moneys held by a designated bank or trust company pending redepos-
    5  it  pursuant  to paragraph one of this subdivision that are in excess of
    6  the amount insured by the federal deposit insurance corporation shall be
    7  secured in accordance with subdivision [A or B] A OR B of this section.
    8    (3) The full amount of the moneys redeposited  into  deposit  accounts
    9  pursuant to paragraph one of this subdivision, plus accrued interest, if
   10  any, shall be insured by the federal deposit insurance corporation.
   11    (4) At the same time that the moneys are redeposited pursuant to para-
   12  graph  one  of  this  subdivision,  the designated bank or trust company
   13  receives an amount of deposits from customers of other financial  insti-
   14  tutions  pursuant  to  the  deposit  placement program that are at least
   15  equal to the amount of the moneys redeposited by the designated bank  or
   16  trust company.
   17    4.  This  section shall not apply to any funds held by the superinten-
   18  dent of financial services in a fiduciary capacity.
   19    5. PUBLIC FUNDS DEPOSITED INTO A SAVINGS BANK, FEDERAL  SAVINGS  BANK,
   20  CREDIT  UNION,  FEDERAL  CREDIT  UNION,  SAVINGS AND LOAN ASSOCIATION OR
   21  FEDERAL SAVINGS AND LOAN ASSOCIATION, SHALL BE LIMITED  TO  ONE  MILLION
   22  DOLLARS  PER  SAVINGS  BANK, FEDERAL SAVINGS BANK, CREDIT UNION, FEDERAL
   23  CREDIT UNION, SAVINGS AND LOAN ASSOCIATION OR FEDERAL SAVINGS  AND  LOAN
   24  ASSOCIATION.
   25    6.  FOR  PURPOSES  OF THIS SECTION, THE TERMS "CREDIT UNION", "SAVINGS
   26  BANK" AND "SAVINGS AND LOAN ASSOCIATION" SHALL HAVE THE MEANING PROVIDED
   27  IN SUBDIVISION ONE OF SECTION TEN OF THE GENERAL MUNICIPAL LAW.
   28    S 7. Severability. If any clause, sentence, paragraph, section or part
   29  of this act shall be adjudged by any court of competent jurisdiction  to
   30  be  invalid,  such  judgment shall not affect, impair or invalidate such
   31  clause, sentence, paragraph, section or part thereof  directly  involved
   32  in the controversy in which such judgment shall have been rendered.
   33    S 8. This act shall take effect immediately.