HOUSE BILL No. 4596


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


        A bill to amend 1932 (1st Ex Sess) PA 40, entitled

   "An act to provide for the designation of depositories for public
   moneys; to prescribe the effect thereof on the liability for such
   deposits; to suspend the requirement of surety bonds from deposi-
   tories of public moneys; and to repeal all acts and parts of acts
   inconsistent with the provisions of this act,"

   by amending sections 2 and 4 (MCL 129.12 and 129.14), by adding

   section 6; and to repeal acts and parts of acts.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 2.  (1) The county board of commissioners, or board of

 2    county auditors  ,  in those counties in which there is a board

 3    of county auditors, the township board of a township, the dis-

 4    trict board, or board of education of a school district, or the

 5    legislative body of a city or village shall provide by resolution

 6    for the DESIGNATION AND deposit of public money, including tax

 7    money, coming into the possession of the county treasurer,

 8    township treasurer, school district treasurer, city treasurer or


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 1    tax collector, or village treasurer,  respectively,  in 1 or more

 2     banks, savings and loan associations, or credit unions having

 3     their principal office in this state, to be designated in the

 4     resolution, and  FINANCIAL INSTITUTIONS in the proportion and

 5    manner as may be provided in the resolution.

 6         (2) ASSETS ACCEPTABLE FOR PLEDGING TO SECURE DEPOSITS OF

 7    FUNDS UNDER THIS ACT ARE CONSIDERED ACCEPTABLE TO THE STATE TREA-

 8    SURER UNDER SECTION 3 OF 1855 PA 105, MCL 21.143, TO SECURE

 9    DEPOSITS OF STATE SURPLUS FUNDS.

10         (3)  (2)  All proceedings in connection with the deposit of

11    money shall be conducted and be governed  pursuant to  UNDER sec-

12    tion 4 and applicable law not in conflict with this act.  Upon

13    designation of a  depository or depositories  FINANCIAL INSTITU-

14    TION OR INSTITUTIONS in compliance with this act, the treasurer

15    or tax collector shall deposit all funds coming into the

16    treasurer's possession, including tax money in the treasurer's

17    name as treasurer or tax collector, and in the proportion and

18    manner as may be provided by the resolution.

19         (4)  (3)  As to a deposit or deposits made in a designated

20     bank, savings and loan association, or credit union  FINANCIAL

21    INSTITUTION in accordance with the resolution, neither the trea-

22    surer or tax collector, nor the sureties on their respective

23    bonds, shall be liable for a loss occasioned or sustained by the

24    failure or default of the designated  depository or depositories 

25    FINANCIAL INSTITUTION.  This exemption from liability shall apply

26    even though a requirement of a statute provides for the

27    furnishing of a bond by depositories of public money.  The



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 1    treasurer or tax collector and the sureties on their respective

 2    bonds shall be liable for all money not deposited under this

 3    act.

 4         Sec. 4.  Notwithstanding section 2, additional funds coming

 5    into the possession of a county treasurer, township treasurer,

 6    school district treasurer, city treasurer or tax collector, or

 7    village treasurer shall not be deposited or invested in a  bank,

 8     savings and loan association, or credit union  FINANCIAL

 9    INSTITUTION which is not eligible to be a depository of surplus

10    funds belonging to the state under section  5 or  6 of  Act

11     No. 105 of the Public Acts of 1855, being sections 21.145 and

12     21.146 of the Michigan Compiled Laws  1855 PA 105, MCL 21.146.

13         SEC. 6.  AS USED IN THIS ACT, "FINANCIAL INSTITUTION" MEANS

14    A STATE OR NATIONALLY CHARTERED BANK, SAVINGS AND LOAN ASSOCIA-

15    TION, SAVINGS BANK, OR CREDIT UNION WHOSE DEPOSITS ARE INSURED BY

16    AN AGENCY OF THE UNITED STATES GOVERNMENT AND WHICH MAINTAINS A

17    PRINCIPAL OFFICE OR BRANCH OFFICE LOCATED IN MICHIGAN UNDER THE

18    AUTHORITY OF THE LAWS OF MICHIGAN OR OF THE UNITED STATES.

19         Enacting section 1.  Section 3 of 1932 (1st Ex Sess) PA 40,

20    MCL 129.13, is repealed.

















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