HF 1117

as introduced - 87th Legislature (2011 - 2012) Posted on 03/14/2011 11:07am

A bill for an act
relating to state government; changing bond requirements for state depositories;
amending Minnesota Statutes 2010, section 9.031, subdivisions 2, 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 9.031, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Bond deleted text end new text begin Deposits exceeding applicable deposit insurance coverage new text end .

deleted text begin Except
as provided in subdivision 3, a depository shall furnish and file with the commissioner of
management and budget a corporate surety bond to secure state funds deposited with it. deleted text end
new text begin To the extent that state funds on deposit at the close of a depository's banking day exceed
applicable deposit insurance coverage, the state shall require the depository to furnish and
file with the commissioner of management and budget a corporate security bond to secure
state funds deposited with it, or to deposit with the commissioner collateral security as
provided in subdivision 3. new text end The Executive Council shall approve the bond deleted text begin .
deleted text end

deleted text begin The Executive Council shall not approve any depository bond until deleted text end new text begin when the council
is new text end fully satisfied that the bond is in proper form, the securities sufficient, the depository
prosperous and financially sound, and the capital stock claimed by it fully paid up and not
impaired. Each depository bond shall provide that during the time the bond is in force the
depository will pay all the state funds deposited with it to the commissioner of management
and budget, free of exchange, at any place in the state designated by the commissioner
of management and budget. If the deposit is a time deposit it shall be paid, together
with interest, only when due. At any time the Executive Council or the commissioner of
management and budget may require a new or additional bond from any depository.

Sec. 2.

Minnesota Statutes 2010, section 9.031, subdivision 5, is amended to read:

Subd. 5.

Maximum deposit.

The Executive Council shall prescribe the maximum
amount that may be deposited in each depository. In no case shall the amount of the
deposit new text begin in excess of applicable deposit insurance coverage new text end exceed:

(1) the penalty on the bonds;

(2) 90 percent of the market value of the bonds; or

(3) the penalty on the bonds plus 90 percent of the market value of the collateral, if
both are furnished.