Minnesota Session Laws - 2004, Regular Session

                            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 of on 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 business financial 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 business financial 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.