HB-5288, As Passed House, March 21, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5288

 

January 26, 2012, Introduced by Reps. Womack, McBroom and Knollenberg and referred to the Committee on Banking and Financial Services.

 

     A bill to amend 1966 PA 331, entitled

 

"Community college act of 1966,"

 

by amending section 142 (MCL 389.142), as amended by 2009 PA 179.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 142. (1) Subject to subsections (3) and (4), the

 

treasurer of a community college district, if authorized by

 

resolution of the board of trustees, may invest debt retirement

 

funds, building and site funds, building and site sinking funds, or

 

general funds of the district, but investment is restricted to the

 

following:

 

     (a) Bonds, bills, or notes of the United States, or of an

 

agency or instrumentality of the United States, or obligations of

 

this state.

 

     (b) Negotiable certificates of deposit, saving accounts, or

 


other interest-earning deposit accounts of a financial institution.

 

     (c) Bankers' acceptances that are issued by a bank that is a

 

member of the federal deposit insurance corporation.

 

     (d) Commercial paper that is supported by an irrevocable

 

letter of credit issued by a bank that is a member of the federal

 

deposit insurance corporation.

 

     (e) Commercial paper of corporations rated prime by at least 1

 

of the standard rating services.

 

     (f) Mutual funds, trusts, or investment pools composed

 

entirely of instruments that are eligible collateral.

 

     (g) Repurchase agreements against eligible collateral, the

 

market value of which must be maintained during the life of the

 

agreements at levels equal to or greater than the amounts advanced.

 

An undivided interest in the instruments pledged for these

 

agreements must be granted to the community college.

 

     (h) Investment pools, as authorized by the surplus funds

 

investment pool act, 1982 PA 367, MCL 129.111 to 129.118, composed

 

entirely of instruments that are legal for direct investment by a

 

community college.

 

     (i) Certificates of deposit issued in accordance with the

 

following conditions:

 

     (i) The funds are initially invested through a financial

 

institution that is not ineligible to be a depository of surplus

 

funds belonging to this state under section 6 of 1855 PA 105, MCL

 

21.146.

 

     (ii) The financial institution arranges for the investment of

 

the funds in certificates of deposit in 1 or more insured

 


depository institutions, as defined in 12 USC 1813, or 1 or more

 

insured credit unions, as defined in 12 USC 1752, for the account

 

of the community college district.

 

     (iii) The full amount of the principal and any accrued interest

 

of each certificate of deposit is insured by an agency of the

 

United States.

 

     (iv) The financial institution acts as custodian for the

 

community college district with respect to each certificate of

 

deposit.

 

     (v) At the same time that the funds of the community college

 

district are deposited and the certificate or certificates of

 

deposit are issued, the financial institution receives an amount of

 

deposits from customers of other insured depository institutions or

 

insured credit unions equal to or greater than the amount of the

 

funds initially invested by the community college district through

 

the financial institution.

 

     (j) Deposit accounts that meet all of the following

 

conditions:

 

     (i) The funds are initially deposited in a financial

 

institution that is not ineligible to be a depository of surplus

 

funds belonging to this state under section 6 of 1855 PA 105, MCL

 

21.146.

 

     (ii) The financial institution arranges for the deposit of the

 

funds in deposit accounts in 1 or more insured depository

 

institutions, as defined in 12 USC 1813, or 1 or more insured

 

credit unions, as defined in 12 USC 1752, for the account of the

 

community college district.

 


     (iii) The full amount of the principal and any accrued interest

 

of each deposit account is insured by an agency of the United

 

States.

 

     (iv) The financial institution acts as custodian for the

 

community college district with respect to each deposit account.

 

     (v) On the same date that the funds of the community college

 

district are deposited under subparagraph (ii), the financial

 

institution receives an amount of deposits from customers of other

 

insured depository institutions or insured credit unions equal to

 

or greater than the amount of the funds initially deposited by the

 

community college district in the financial institution.

 

     (2) The board of trustees, chief executive officer, or

 

treasurer of a community college district shall not commingle money

 

in the funds of the community college district for the purpose of

 

making an investment authorized by this section, and all earnings

 

on an investment shall become a part of the fund for which the

 

investment was made.

 

     (3) The board of trustees, chief executive officer, or

 

treasurer of a community college district shall not invest or

 

deposit any funds of the community college district in any

 

financial institution that is not eligible to be a depository of

 

surplus funds belonging to this state under section 6 of 1855 PA

 

105, MCL 21.146.

 

     (4) The board of trustees, chief executive officer, or

 

treasurer of a community college district shall comply with the

 

divestment from terror act in making investments or depositing

 

funds under this act.

 


     (5) As used in this section:

 

     (a) "Eligible collateral" means any securities that otherwise

 

would qualify for outright purchase under this act.

 

     (b) "Financial institution" means a state or nationally

 

chartered bank or a state or federally chartered savings and loan

 

association, savings bank, or credit union whose deposits are

 

insured by an agency of the United States government and that

 

maintains a principal office or branch office located in this state

 

under the laws of this state or the United States.