S.F. No. 1737 (First Engrossment) authorizes school districts, towns, counties, and cities to deposit money in the official depository under an arrangement that allows the depository bank to redeposit the funds into accounts at other banks that would serve as subcustodians of the funds.

Section 2.  A school district may deposit money into its official depository, under an arrangement authorized by the school district’s treasurer, in which the depository redeposits the money into accounts at other banks or savings and loans associations and serves as the custodian for the school district for those accounts.  An entity serving as a subcustodian must have at least five years of experience serving in that capacity.  The amount of the redeposited funds must be covered by FDIC insurance.  On the same day that the money is redeposited, the official depository must receive an amount of deposits from other financial institutions that is equal to the amount of money redeposited.

Section 3.  A town treasurer may deposit money into its official depository under the same arrangement and requirements as a school district, as described in Section 2.

Section 4. A county treasurer may deposit money into its official depository under the same arrangement and requirements as a school district, as described in Section 2.

Section 5.  A city treasurer of any statutory city or of any city of the fourth class may deposit money into its official depository under the same arrangement and requirements as a school district, as described in Section 2.

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