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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 6-5-15 SO AS TO AUTHORIZE A MUNICIPALITY, COUNTY, SCHOOL DISTRICT, OTHER LOCAL GOVERNMENT UNIT OR POLITICAL SUBDIVISION, OR A COUNTY TREASURER TO SECURE DEPOSITS MADE BY THEM IN THE FORM OF A LETTER OF CREDIT, AND TO PROVIDE THE REQUIREMENTS FOR THESE LETTERS OF CREDIT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 5, Title 6 of the 1976 Code is amended by adding:
"Section 6-5-15. A governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer, upon the deposit of funds by these entities, shall secure these deposits by deposit insurance, surety bonds, collateral securities, or letter of credit to protect the municipality, county, school district, or other local government unit against loss if insolvency or liquidation of the institution occurs or for any other cause. To the extent that these deposits exceed the amount of insurance coverage provided by the Federal Deposit Insurance Corporation, the governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer, at the time of deposit, shall provide an irrevocable letter of credit issued by the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, or the Federal Home Loan Mortgage Corporation, in which the governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer is named as beneficiary and the letter of credit otherwise meets the criteria established and prescribed by the governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer. The governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer shall exercise prudence in accepting collateral securities or other forms of deposit security."
SECTION 2. This act takes effect upon approval by the Governor.
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