SB-1088, As Passed House, December 18, 2014

SUBSTITUTE FOR

SENATE BILL NO. 1088

     A bill to amend 1966 PA 331, entitled

"Community college act of 1966,"

by amending section 142 (MCL 389.142), as amended by 2012 PA 153.

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.

     (k) Obligations of this state or any of its political

subdivisions that at the time of purchase are rated as investment

grade by at least 1 standard rating service.

     (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.