AB 510

Under current law, the governing board of a public depositor must designate

one or more public depositories in which the treasurer must deposit all public moneys

received by the treasurer and must specify whether these public moneys are to be

maintained in time deposits, demand deposits, or savings deposits and whether

security is required of the public depository to secure the repayment of deposits

exceeding deposit insurance. A treasurer must deposit public moneys immediately

upon receipt in the designated public depository or public depositories. These

requirements apply to the state, local governments, and certain other depositors. A

"treasurer" is not limited to an elected official but includes any public official or

employee whose duties require that he or she receive and account for public moneys.

A "public depository" includes a federal or state credit union, federal or state savings

and loan association, state bank, savings and trust company, federal or state savings

bank, or national bank in this state that receives or holds any public deposits. A

treasurer who deposits public moneys in a public depository in compliance with the

foregoing requirements is relieved of liability for any loss of public moneys that

results from the failure of the public depository to repay the full amount of its

deposits.

Under this bill, a public depositor may direct its treasurer to deposit public

moneys in a selected public depository and, directly or through an authorized agent,

instruct the public depository to arrange for the redeposit of the moneys through a

deposit placement program that meets all of the following conditions: 1) on or after

the date that it receives the public moneys, the selected public depository arranges

for the redeposit of the moneys into savings deposit accounts in one or more federal

or state savings and loan associations, state banks, federal or state savings banks,

savings and trust companies, or national banks insured by the federal deposit

insurance corporation (FDIC) or federal or state credit unions insured by the

national credit union administration (NCUA); and 2) the full amount of the public

depositor's moneys redeposited with these financial institutions, plus any accrued

interest, are insured by the FDIC OR NCUA. A treasurer who deposits public

moneys in a selected public depository as part of such a deposit placement program

is relieved of liability for loss.