language to be deleted (2) new language
CHAPTER 151-S.F.No. 2063 An act relating to local government; clarifying certain collateralization requirements; amending Minnesota Statutes 2002, section 118A.03, subdivision 1; Minnesota Statutes 2003 Supplement, section 118A.03, subdivision 3. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 2002, section 118A.03, subdivision 1, is amended to read: Subdivision 1. [FOR DEPOSITS BEYOND INSURANCE.] To the extent that funds
deposited are in excess ofon deposit at the close of the financial institution's banking day exceed available federal deposit insurance, the government entity shall require the financial institution to furnish collateral security or a corporate surety bond executed by a company authorized to do business in the state. For the purposes of this section, "banking day" has the meaning given in Federal Reserve Board Regulation CC, Code of Federal Regulations, title 12, section 229.2(f), and incorporates a financial institution's cutoff hour established under section 336.4-108. Sec. 2. Minnesota Statutes 2003 Supplement, section 118A.03, subdivision 3, is amended to read: Subd. 3. [AMOUNT.] The total amount of the collateral computed at its market value shall be at least ten percent more than the amount on deposit plus accrued interest at the close of the businessfinancial institution's banking day, except that where the collateral is irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of collateral shall be at least equal to the amount on deposit plus accrued interest at the close of the businessfinancial institution's banking day. The financial institution may furnish both a surety bond and collateral aggregating the required amount. Sec. 3. [EFFECTIVE DATE.] Sections 1 and 2 are effective retroactively from the beginning of a government entity's fiscal year 2003 and apply to each fiscal year thereafter. Presented to the governor March 30, 2004 Signed by the governor April 2, 2004, 12:40 p.m.