COMMITTEE SUBSTITUTE
FOR
H. B. 3313
(By Delegates Cann, Varner, Klempa, Craig and Manchin)
(Originating in the Committee on Finance)
[March 26, 2009]
A BILL to amend and reenact §18-9-6 of the Code of West Virginia,
1931, as amended, relating to allowing depositories and banks
to meet the security requirement necessary to be a depository
for boards of education by providing a letter of credit from
a federal home loan bank.
Be it enacted by the Legislature of West Virginia:
That §18-9-6 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 9. SCHOOL FINANCES.
§18-9-6. Transfer of moneys; appointment of treasurer; bonding of
treasurer; approval of bank accounts; authority to
invest; security for funds invested.
The sheriff of each county shall remit to the board of
education all moneys in his or her possession held on behalf of the
county board of education, whether or not deposited in a bank or
depository, unless the sheriff has been designated treasurer of the board of education as provided in this section. The transfer of
funds shall be made as of the balances on hand on June 30 of the
year in which the board of education appoints a treasurer other
than the sheriff, and shall be completed no later than August 1 of
that year. The transfer shall be adjudged complete and final upon
the approval of the sheriff's official settlement for the fiscal
year ending on June 30 of the year in which the board of education
appoints a treasurer other than the sheriff, and any minor
adjustment made necessary by the actually known figures shall also
be made at that time. All balances in all county school funds at
the end of each month after June 30 of the year in which the board
of education appoints a treasurer other than the sheriff shall be
transferred by the sheriff to the county board of education not
later than the tenth day of the following month.
On or before the first Monday in May each county board of
education shall upon recommendation of the county superintendent
appoint a treasurer for the board. The treasurer is the fiscal
officer of the board, or an employee commonly designated as the
person in charge of the financial affairs of the county board, or
the county sheriff:
Provided, That once a board of education has
appointed a treasurer other than the sheriff, the sheriff may not
be named treasurer of the board in a subsequent year. Upon
appointment this person shall be titled and referred to as
treasurer of the board of education. For the faithful performance
of this duty, the treasurer shall execute a bond, to be approved by
the board of education, in the penalty to be fixed by the board of education, not to exceed the amount of school funds which it is
estimated the treasurer will handle within any period of two
months. The premium on the bond shall be paid by the board of
education.
The board of education may open a bank account, or accounts,
as required to adequately and properly transact the business of the
district in a depository, or banks, within the county. The
depositories, or banks, shall provide bond to cover the maximum
amount to be deposited at any one time. However, the county board
of education may, in lieu of such bond, accept as security for
money deposited
letters of credit from a federal home loan bank,
securities of the United States, or of a state, county, district or
municipal corporation, or federal agency securities:
Provided,
That 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 county board of education; (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
county board of education; (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 county board of education with respect to
such certificates of deposit issued for the county's account; and (5) at the same time that the county board of education'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 county
board of education through the selected depository. One hundred
ten percent of the face or par value of the securities may not be
less than the sum hereinbefore specified as the amount to be named
in the bond in lieu of which the securities are accepted, or the
county board of education may accept 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, the acceptance of securities as partial security and
the extent thereof shall be set forth. The hypothecation of 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 securities shall be delivered to
or deposited for the account of the county board of education, and
withdrawal or substitution thereof may be permitted from time to
time upon approval by the county board of education by order of
record, but the collateral security shall be released only by order
of record of the county board of education 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 the hypothecated securities is delivered to the county board of
education, 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 board of education may permit the deposit
under proper receipt of such securities with one or more banking
institutions within 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 for handling
and protecting the same.
On and after July 1, 1973, all levies and any other school
moneys received by the sheriff and paid to the treasurer of the
county board of education shall be deposited in these accounts, and
all proper payments from such funds shall be made by the designated
depository or bank upon order or draft presented for payment and
signed by the duly authorized signatories of the board of
education:
Provided, That in determining the depository for board
of education funds a board member who has a pecuniary interest in
a bank within the county shall not participate in the determination
of the depository for such funds.
If it is considered that sufficient funds are on hand in any
account at any one time which may be more than are normally
required for the payment of incurred expenses, the funds in the
amount so considered available may be invested by the treasurer of
the county board with the West Virginia
Municipal Bond Commission
Investment Management Board or the West Virginia Board of Treasury Investments, or in guaranteed certificates of deposit issued by the
depository or bank, or other guaranteed investments such as
treasury bills, treasury notes or certificates of deposit issued by
either the United States government or a banking institution in
which federal or state guarantees are applicable. Interest earned
in such investments is to be credited to the fund from which the
moneys were originally available.