ENGROSSED
Senate Bill No. 211
(By Senators Helmick, Ross, Minard, Fanning, Sharpe,
Schoonover and Sprouse)
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[Introduced January 26, 1999;
referred to the Committee on Banking and Insurance.]
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A BILL to amend and reenact section five, article six, chapter
five of the code of West Virginia, one thousand nine hundred
thirty-one, as amended; to amend and reenact section two,
article six, chapter seven of said code; and to amend and
reenact section four, article one, chapter twelve of said
code, all relating to the inclusion of letters of credit
issued by federal land banks, or federal loan banks, or such
letters of credit approved by the state treasurer as
permissible collateral security for bonds to be given by
depositories of public funds.
Be it enacted by the Legislature of West Virginia:
That section five, article six, chapter five of the code of
West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that section two, article six, chapter
seven of said code be amended and reenacted; and that section
four, article one, chapter twelve of said code be amended and
reenacted, all to read as follows:
CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,
SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD
OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,
OFFICES, PROGRAMS, ETC.
ARTICLE 6. STATE BUILDING COMMISSION.
§5-6-5. Deposit and disbursement of funds of commission;
security for deposits; audits.
Except as provided in sections five-a and eleven-a of this
article, all moneys of the commission from whatever source
derived shall be paid to the treasurer of the state of West
Virginia who shall not commingle the moneys, but shall deposit
them to a special revenue fund to be known as the "state building
commission fund.". The moneys in the account shall be impressed
with and subject to the lien or liens on the moneys in favor of the bondholders provided in the proceedings for issuance of bonds
pursuant to this article. The moneys in the account shall be
paid out on check of the treasurer on requisition of the chairman
of the commission, or of such other person as the commission may
authorize to make the requisition. All deposits of the moneys
shall, if required by the treasurer or the commission, be secured
by obligations of the United States, of the state of West
Virginia, or of the commission, of a market value equal at all
times to the amount of the deposit,
or letters of credit of the
federal land banks, or federal home loan banks, or other letters
of credit approved by the treasurer, and all banking institutions
are authorized to give such security for the deposits. The
legislative auditor and his or her legally authorized
representatives are hereby authorized and empowered from time to
time to examine the accounts and books of the commission,
including its receipts, disbursements, contracts, leases, sinking
funds, investments and any other matters relating to its
financial standing.
CHAPTER 7. COUNTY COMMISSIONS AND OFFICERS.
ARTICLE 6. COUNTY DEPOSITORIES.
§7-6-2. Bond of depositories.
No such designation shall be binding on
such any county, nor
shall any public money be deposited thereunder, until the banking
institution designated shall execute bond with good and
sufficient sureties, to be accepted and approved by the county
court commission, payable to the state of West Virginia, in
such
a sum as the county
court commission shall direct, and which
shall not be less than the maximum sum that shall be deposited in
the depository at any one time.
Such The bond shall be executed
by at least four resident freeholders as sureties owning in the
aggregate unencumbered real estate having an assessed valuation
thereon equal to the penalty of the bond, or by a fidelity or
indemnity company authorized to do
such business within the
state, satisfactory to, and acceptable by the county
court
commission, and having not less than six hundred thousand dollars
capital; and
such the bond shall be conditioned for the receipt,
safekeeping and payment over of all money which may be deposited
in or come under the custody of the banking institution
designated a county depository under the provisions hereof,
together with the interest thereon at the rate specified by this
article; and
such the bond shall be further conditioned for the faithful performance, by the banking institution so designated,
of all the duties imposed by this article upon a depository of
public moneys:
Provided, however, That the clerk of the county
court commission shall keep a record of each surety on all
personal bonds given as hereinbefore provided for, and the clerk
shall notify the county
court commission of every recorded
conveyance of real estate made by any surety on said personal
bond.
An action shall lie on
such the bond at the instance of the
county
court commission, or the sheriff, for the recovery of any
money deposited in the depository, upon failure or default of the
depository to fully and faithfully account for and pay over any
and all public moneys deposited by the sheriff and of all
interests earned and accrued thereon as required by this article.
Such A bond shall not be accepted by the county
court commission
until it shall have been submitted to the prosecuting attorney,
and certified by him
or her to be in due and legal form, and
conformable to the provisions of this article, which certificate
shall be indorsed thereon:
Provided, however, That the county
court commission may, in lieu of the bond provided for hereinbefore, accept as security for money deposited as
aforesaid, interest-bearing securities of the United States, or
of a state, county, district or municipal corporation, or of the
federal land banks, or indorsed county and district warrants of
the county in which the depository is located,
or letters of
credit of the federal land banks, or federal home loan banks, or
such other letters of credit approved by the treasurer; the face
value of which securities shall not be less than the sum
hereinbefore specified as the amount to be named in the bond in
lieu of which
such the securities are accepted; or the county
court commission may accept
such the securities as partial
security to the extent of their face value for the money so
deposited, and require bond for the remainder of the full amount
hereinbefore specified, to be named in the bond, and in the bond
so required,
such the acceptance of securities as partial
security, and the extent thereof, shall be set forth. The
hypothecation of
such the securities shall be by proper legal
transfer as collateral security to protect and indemnify by trust
any and all loss in case of any default on the part of the
banking institution in its capacity as depository as aforesaid. All
such the securities shall be delivered to or deposited for
the account of the county
court commission, and withdrawal or
substitution thereof may be permitted from time to time upon
approval by the county
court commission by order or record, but
such the collateral security shall be released only by order of
record of the county
court commission when satisfied that full
and faithful accounting and payment of all the moneys has been
made under the provisions hereof. In the event actual possession
of
such the hypothecated securities are delivered to the county
court commission, it shall make ample provision for the
safekeeping thereof, and the interest thereon when paid shall be
turned over to the banking institution, so long as it is not in
default as aforesaid. The county
court commission may permit the
deposit under proper receipt of
such the securities with one or
more banking institutions within or without the state of West
Virginia and may contract with any
such institution for
safekeeping and exchange of any
such hypothecated securities, and
may prescribe the rules
and regulations for handling and
protecting the same.
CHAPTER 12. PUBLIC MONEYS AND SECURITIES.
ARTICLE 1. STATE DEPOSITORIES.
§12-1-4. Bonds to be given by depositories.
Before allowing any money to be deposited with any eligible
depository in excess of the amount insured by an agency of the
federal government, the state treasurer shall require the
depository to give a collaterally secured bond, in the amount of
not less than ten thousand dollars, payable to the state of West
Virginia, conditioned upon the prompt payment, whenever lawfully
required, of any state money, or part thereof, that may be
deposited with that depository, or of any accrued interest on
deposits. The bond shall be a continuous bond but may be
increased or decreased in amount or replaced by a new bond with
the approval of the state treasurer. The collateral security for
the bond shall consist of bonds of the United States,
or bonds or
letters of credit of the federal land banks, of the federal home
loan banks, or bonds of the state of West Virginia or of any
county, district or municipality of this state, or other bonds,
letters of credit, or securities approved by the treasurer. All
bonds so secured are here designated as collaterally secured
bonds. Withdrawal or substitution of any collateral pledged as
security for the performance of the conditions of
such the bond may be permitted with the approval in writing of the treasurer.
All depository bonds shall be recorded by the treasurer in a book
kept in his or her office for the purpose, and a copy of the
record, certified by the treasurer, shall be prima facie evidence
of the execution and contents of the bond in any suit or legal
proceeding. All collateral securities shall be delivered to or
deposited for the account of the treasurer of the state of West
Virginia, and in the event said securities are delivered to the
treasurer, he or she shall furnish a receipt therefor to the
owner thereof. The treasurer and his or her bondsmen shall be
liable to any person for any loss by reason of the embezzlement
or misapplication of the securities by the treasurer or any of
his or her employees, and for the loss thereof due to his or her
negligence or the negligence of his or her employees; and the
securities shall be delivered to the owner thereof when liability
under the bond which they are pledged to secure has terminated.
The treasurer may permit the deposit under proper receipt of the
securities with one or more banking institutions within or
outside the state of West Virginia and may contract with any
such
institution for safekeeping and exchange of any
such collateral securities, and may prescribe the rules
and regulations for
handling and protecting the collateral securities.
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(NOTE: The purpose of this bill is to provide for the
expansion of the types of collateral security to be given by
depositories of public funds.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.)