Download This Version in Microsoft Word format
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
March 17, 2004
S. 668
S. Printed 3/17/04--S.
Read the first time April 29, 2003.
To whom was referred a Bill (S. 668) 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, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking the bill in its entirety and inserting therein the following:
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 6-5-15, SO AS TO AUTHORIZE A BANK OR SAVINGS AND LOAN ASSOCIATION, UPON DEPOSIT OF FUNDS BY A MUNICIPALITY, COUNTY, SCHOOL DISTRICT, OTHER LOCAL GOVERNMENT UNIT OR POLITICAL SUBDIVISION, OR A COUNTY TREASURER, TO SECURE THE DEPOSITS BY DEPOSIT INSURANCE, SURETY BONDS, COLLATERAL SECURITIES, OR LETTERS OF CREDIT TO PROTECT THE LOCAL ENTITY AGAINST LOSS, AND TO PROVIDE THE REQUIREMENTS FOR SECURING DEPOSITS THAT EXCEED THE AMOUNT OF INSURANCE COVERAGE PROVIDED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.
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) As used in this section, 'local entity' means the governing body of a municipality, county, school district, other local government unit or political subdivision, or a county treasurer.
(B) A bank or savings and loan association, upon the deposit of funds by a local entity, must secure these deposits by deposit insurance, surety bonds, collateral securities, or letters of credit to protect the local entity against loss in the event of insolvency or liquidation of the institution or for any other cause.
(C) To the extent that these deposits exceed the amount of insurance coverage provided by the Federal Deposit Insurance Corporation, the bank or savings and loan association at the time of deposit must:
(1) furnish an indemnity bond in a responsible surety company authorized to do business in this State; or
(2) pledge as collateral:
(a) obligations of the United States;
(b) obligations fully guaranteed both as to principal and interest by the United States;
(c) general obligations of this State or any political subdivision of this State; or
(d) obligations of the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, or the Federal Home Loan Mortgage Corporation; or
(3) 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 local entity is named as beneficiary and the letter of credit otherwise meets the criteria established and prescribed by the local entity.
(D) The local entity must exercise prudence in accepting collateral securities or other forms of deposit security."
SECTION 2. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.
JAMES H. RITCHIE, JR. for Committee.
EXPLANATION OF IMPACT:
Enactment of this bill would have no impact on the General Fund of the State or on federal and/or other funds.
LOCAL GOVERNMENT IMPACT:
Each of the local governments responding indicated enactment would result in little or no impact on their locality. The State Department of Education indicated this was already a common practice among school districts.
Approved By:
Don Addy
Office of State Budget
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.
This web page was last updated on Thursday, June 25, 2009 at 10:18 A.M.