ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 4692
(By Delegates White and Kominar)
[Passed March 7, 2008; in effect ninety days from passage.]
AN ACT to amend and reenact §12-1-4 and §12-1-5 of the Code of West
Virginia, 1931, as amended, all relating to giving
depositories of state moneys authority to place deposits of
those moneys in certificates of deposit which meet certain
requirements in lieu of providing a bond or security; and
permitting depositories of state moneys to insure such
deposits in excess of the amount insured by an agency of the
federal government with a deposit guaranty bond issued by a
bankers surety company.
Be it enacted by the Legislature of West Virginia:
That §12-1-4 and §12-1-5 of the Code of West Virginia, 1931,
as amended, be amended and reenacted, all to read as follows:
ARTICLE 1. STATE DEPOSITORIES.
§12-1-4. Bonds to be given by depositories.
(a) Before allowing any money to be deposited with any
eligible depository in excess of the amount insured by an agency of the federal government or insured by a deposit guaranty bond issued
by a valid bankers surety company acceptable to the treasurer, 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 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 institution for safekeeping and exchange of any
collateral securities and may prescribe the rules for handling and
protecting the collateral securities.
(b) A banking institution is not required to provide a bond or
security in lieu of bond if the deposits accepted are placed in
certificates of deposit meeting the following requirements: (1)
The funds are invested through a designated state depository
selected by the treasurer; (2) the selected depository arranges for
the deposit of the funds in certificates of deposit in one or more
banks or savings and loan associations wherever located in the
United States, for the account of the state; (3) the full amount of
principal and accrued interest of each certificate of deposit is
insured by the Federal Deposit Insurance Corporation; (4) the
selected depository acts as custodian for the state with respect to
such certificates of deposit issued for the state's account; and
(5) at the same time that the state's funds are deposited and the certificates of deposit are issued, the selected depository
receives an amount of deposits from customers of other financial
institutions wherever located in the United States equal to or
greater than the amount of the funds invested by the state through
the selected depository.
§12-1-5. Limitation on amount of deposits.
The amount of state funds on deposit in any depository in
excess of either the amount insured by an agency of the federal
government or the amount insured by a deposit guaranty bond issued
by a valid bankers surety company acceptable to the treasurer shall
not exceed ninety percent of the value of collateral pledged on the
collaterally secured bond given by the depository. The value of
the collateral shall be determined by the treasurer.