HOUSE BILL No. 4595


     April 9, 1997, Introduced by Reps. Varga and Kaza and referred to the Committee on Commerce.


        A bill to amend 1909 PA 99, entitled

   "An act authorizing the county board of commissioners or the
   board of auditors in those counties having a board of county
   auditors, to designate a depository or depositories of public
   moneys received by county treasurers; prescribing the duties of
   certain officers; and prescribing penalties,"

   by amending sections 1, 2, 3, 4, 6, 6a, and 10 (MCL 129.31,

   129.32, 129.33, 129.34, 129.36, 129.36a, and 129.40).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 1.  (1) The county treasurer shall deposit daily money,

 2    drafts, or checks on hand received by the treasurer as treasurer

 3    in a  bank, savings and loan association, or credit union 

 4    FINANCIAL INSTITUTION designated by the county board of commis-

 5    sioners or, if the county has a board of auditors, by the board

 6    of county auditors as provided in this act.

 7         (2) If an authorized  depository  FINANCIAL INSTITUTION is

 8    not located in the county seat, deposits shall be made as soon as


   01887'97 n *                                             SAT
                                                  2

 1    practicable after the funds are received by the county

 2    treasurer.

 3         (3) This act shall not prevent the county treasurer from

 4    keeping on hand in the treasurer's office a reasonable sum neces-

 5    sary in conducting the affairs of the office.

 6         (4) The money deposited in an authorized  depository 

 7    FINANCIAL INSTITUTION shall bear interest at the rate approved by

 8    the county board of commissioners or the board of county

 9    auditors.

10         (5) ASSETS ACCEPTABLE FOR PLEDGING TO SECURE DEPOSITS OF

11    COUNTY FUNDS ARE CONSIDERED ACCEPTABLE TO THE STATE TREASURER

12    UNDER SECTION 3 OF 1855 PA 105, MCL 21.143, TO SECURE DEPOSITS OF

13    STATE SURPLUS FUNDS.

14         Sec. 2.  (1) The county clerk or, if the county has a board

15    of auditors, the county board of auditors before October 1 in

16    each year that a general election occurs, shall send notices to

17    each  bank, savings and loan association, and credit union 

18    FINANCIAL INSTITUTION in the county soliciting sealed bids for

19    the deposit of public funds received by the treasurer of the

20    county.  The designation of a  depository  FINANCIAL INSTITUTION

21    shall be for a period of 2 years.

22         (2) The bids shall be delivered by the clerk unopened to the

23    county board of commissioners at its annual meeting, or to the

24    county board of auditors at its next meeting after the receipt of

25    the proposals by the clerk.  The proposals shall be opened and

26    read.  The board for any reason may reject bids and order the

27    disposition of the bids and funds as specified in this act.  If 1



   01887'97 n *
                                   3

 1    or more of the bids is satisfactory, the board may contract with

 2    the  depository  FINANCIAL INSTITUTION tendering the satisfactory

 3    bid or bids for the safe keeping of public funds received by the

 4    county treasurer and agreeing to give good security for the safe

 5    keeping and reimbursement of the funds when called for.

 6         (3) The county board of commissioners or board of county

 7    auditors shall fix and determine the amount and kind of bond and

 8    the class and character of the surety executing the bond.  These

 9    funds held by a  depository  FINANCIAL INSTITUTION or

10     depositories  INSTITUTIONS are subject to being drawn on account

11    current by the county through its proper officer.

12         (4) If a satisfactory bid is not received from a  depository

13     of  FINANCIAL INSTITUTION IN the county, the county board of com-

14    missioners or the county board of auditors, by resolution, shall

15    instruct the county clerk to request bids or to advertise for

16    bids, or both, from  banks, savings and loan associations, and

17     credit unions  FINANCIAL INSTITUTIONS outside of the county but

18    within the state.  The resolution may specify the manner of

19    requesting bids or of advertising, or both.  The resolution shall

20    specify the date, which shall precede the following December 31,

21    at which time the bids shall be returnable and on that day the

22    county board of commissioners or the county board of auditors

23    shall hold a special meeting to open and consider the bids.

24    Otherwise this act shall apply to all bids received and other

25    matters pertaining to the bids.

26         Sec. 3.  (1) Before a deposit is made with a  bank, savings

27     and loan association, or credit union  FINANCIAL INSTITUTION, the



   01887'97 n *
                                   4

 1     depository  INSTITUTION shall execute and deliver to the county

 2    board of commissioners or the board of county auditors a bond in

 3    an amount at least equal to the maximum amount to be deposited in

 4    the  depository  FINANCIAL INSTITUTION, and with the sureties

 5    approved by the board and the prosecuting attorney of the

 6    county.

 7         (2) The bonds shall be made to the county and shall be con-

 8    ditioned for the safe keeping and repayment of the money or a

 9    part of the money on demand and the payment of interest, and

10    shall contain other conditions required by the county board of

11    commissioners or the board of county auditors not inconsistent

12    with this act.  Security in any form other than a bond shall not

13    be taken.

14         Sec. 4.  The interest money paid by a  depository  FINANCIAL

15    institution on the deposits of a county shall be credited to and

16    form a part of the general fund of the county.

17         Sec. 6.  (1) If the county board of commissioners or the

18    board of county auditors considers it unsafe to continue the

19    deposits with a  depository  FINANCIAL INSTITUTION, or considers

20    the security insufficient, it may direct the county treasurer to

21    withdraw the deposits from the  depository  FINANCIAL

22    INSTITUTION.  The treasurer shall withdraw the deposits from the

23     depository  FINANCIAL INSTITUTION as directed.

24         (2) If a  depository  FINANCIAL INSTITUTION suspends payment

25    of its deposits while it holds deposits of public money as a

26    depository under this act, the county treasurer and the

27    treasurer's sureties shall not be liable for the amount of a loss



   01887'97 n *
                                   5

 1    sustained by this suspension without the negligence of the county

 2    treasurer.

 3         Sec. 6a.  Notwithstanding section 1, additional county funds

 4    shall not be deposited in a  bank, savings and loan association,

 5     or credit union  FINANCIAL INSTITUTION which is not eligible to

 6    be a depository of surplus funds belonging to this state under

 7    section  5 or  6 of  Act No. 105 of the Public Acts of 1855,

 8     being sections 21.146 of the Michigan Compiled Laws  1855 PA 105,

 9    MCL 21.146.

10         Sec. 10.  Wherever the word bank or banks occurs in this

11     act it shall be construed to mean any institution doing a banking

12     business whether incorporated or not.  AS USED IN THIS ACT,

13    "FINANCIAL INSTITUTION" MEANS A STATE OR NATIONALLY CHARTERED

14    BANK, SAVINGS AND LOAN ASSOCIATION, SAVINGS BANK, OR CREDIT UNION

15    WHOSE DEPOSITS ARE INSURED BY AN AGENCY OF THE UNITED STATES GOV-

16    ERNMENT AND WHICH MAINTAINS A PRINCIPAL OFFICE OR BRANCH OFFICE

17    LOCATED IN MICHIGAN UNDER THE AUTHORITY OF THE LAWS OF MICHIGAN

18    OR OF THE UNITED STATES.





















   01887'97 n *          Final page.                        SAT