§ 7-402 — Deposit of public money and trust funds.

Connecticut § 7-402

• Jurisdiction: Connecticut
• Title 7: Municipalities
• Ch. 112: Municipal Finance

Text

(a) Any public official of any municipality may deposit any public funds received, held or controlled by such public official and belonging to such municipality, or otherwise held by such public official as such public official or as a custodian or trustee on behalf of such municipality, (1) in any qualified public depository, or (2) in an amount not exceeding the Federal Deposit Insurance Corporation insurance limit, in any out-of-state bank which is not a qualified public depository, designated by such public official; provided such deposit shall only be made in such public official's name as such public official, custodian or trustee or in the name of the municipality to which the money belongs. The interest or other pecuniary consideration such depository allows for or upon such deposit of public funds shall belong to and accrue to the benefit of such municipality. In no case shall the deposit by such public official in any one such depository exceed in the aggregate at any one time seventy-five per cent of the total capital of such depository, as determined in accordance with applicable federal regulations and regulations adopted by the Banking Commissioner under section 36a-332. Any qualified public depository receiving deposits of public funds pursuant to this section is required to disclose such information relating to public deposits as the Banking Commissioner may require by regulations which the commissioner shall adopt in accordance with the provisions of chapter 54. The regulations shall include, but not be limited to, disclosure of the most current quarterly statement of condition and statement of income. Nothing in this section shall affect additional restrictions on the deposit of public funds imposed by the provisions of the charter of any municipal corporation. (b) Any person, other than a public official, who receives, has control of, or is the custodian or trustee of, public funds promptly following the receipt or other acceptance of such public funds shall request the authority specified in this subsection to designate one or more depositories permitted under subsection (a) of this section as a depository for the whole or any part of such funds. The authority shall be (1) the board of selectmen, if the funds belong to a town that does not have a charter, special act or home rule ordinance relating to its government, (2) the first selectman, mayor or other chief executive officer described in a charter, special act or home rule ordinance relating to the government of a city, consolidated town and city, consolidated town and borough or a town having a charter, special act or home rule ordinance relating to its government, if the funds belong to such an entity, (3) the regional board of education, if the funds belong to a regional school district, (4) the warden, if the funds belong to a borough or (5) the chairman of the executive committee or other chief executive officer, if the funds belong to a district, metropolitan district or other municipal corporation. Such authority, upon the receipt of such request, may, in writing, designate one or more depositories and may, within the limitations of this section, specify the public fund or funds and the maximum amount thereof which may be deposited in each of such depositories. The instrument designating such depository or depositories shall be filed in the office of the town clerk in the case of a town and with the clerk of any other municipality. Such authority may, at any time, in writing, revoke such designation and may designate one or more other depositories. Prior to the designation by such authority of a depository, the person making such request may, within the limitations of this section, deposit public funds in any depository permitted under subsection (a) of this section. All deposits of public funds shall be in the name of the municipality or in the official name of the fund, person or trustee. The interest or pecuniary consideration such depository allows for or upon such deposit of public funds shall belong to and accrue to the benefit of the municipality or to the corpus of the fund held in trust. (c) If the laws of this state have, in all other respects, been complied with, any person acting on behalf of, or as custodian or trustee for, any municipality, who deposits public funds in any depository shall, because of failure, insolvency, receivership, forced closing or restricted operation of such depository, or a bank and credit union holiday or banking emergency proclaimed under the provisions of the laws of the United States or of this state, be relieved of personal responsibility for public funds so deposited and the surety or sureties upon the bond of such person shall be likewise relieved to the same extent as such person. The provisions of this section shall not be construed to relieve any such person or such person's surety or sureties from the obligation to account for the whole or such part of public funds so deposited as and when the same may be obtained by such person from such depository. See Secs. 3-24 and 4-33 re deposit of funds by State Treasurer and by other public officials, respectively.

Legislative History

(1949 Rev., S. 832; 1955, S. 370d; 1957, P.A. 240; 1959, P.A. 152, S. 16; 1967, P.A. 517, S. 14; P.A. 73-609, S. 3, 4; P.A. 75-77; 75-256, S. 3, 5; P.A. 78-121, S. 4, 113; P.A. 80-183, S. 1, 3; P.A. 81-193, S. 12, 16; P.A. 82-239, S. 3, 7; P.A. 83-438, S. 2, 8; P.A. 87-9, S. 2, 3; P.A. 91-245, S. 10; P.A. 94-190, S. 5; P.A. 95-282, S. 3, 11; P.A. 96-244, S. 38, 63; P.A. 00-6, S. 3; P.A. 03-84, S. 7.) History: 1959 act deleted references to county funds; 1967 act increased deposit limit to 75% of bank's assets; P.A. 73-609 deleted provision allowing investment in building or savings and loan association to the extent insured by Federal insurance corporation and placed $75,000 limit in its stead and added provision regarding payments made to building or savings and loan associations by official acting in fiduciary capacity; P.A. 75-77 increased investment limit in building or savings and loan associations to $100,000; P.A. 75-256 included mutual savings banks in same category as national or state bank and trust companies, removing provision making them subject to limitations imposed by Sec. 36-104, and included general loss reserve in listing of bank assets; P.A. 78-121 deleted reference “building or” with regard to “building or savings and loan associations”, deleted reference to share accounts and included “deposit accounts”, effective January 1, 1979; P.A. 80-183 allowed investments in federal savings and loan associations, required that investments in savings and loan associations which exceed amount insured by Federal Savings and Loan Insurance Corporation be fully collateralized and included federal and other savings and loan associations in 75% limit; P.A. 81-193 replaced references to a mutual savings bank, national or state bank and trust company, savings and loan association or federal savings and loan association with “any qualified public depository, as defined in section 36-382” and deleted the limitation of $100,000 on deposits except for a deposit in a savings bank; P.A. 82-239 removed the obsolete reference to the town deposit fund; P.A. 83-438 eliminated the $100,000 maximum on public funds which may be deposited in a savings bank, added disclosure requirements for all qualified public depositories accepting public deposits and precluded any depository whose ratio of net worth to assets falls below 3% from accepting additional public deposits; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 91-245 substituted total capital as determined in accordance with applicable regulations for capital, general loss reserve, surplus and undivided profits, deleted prohibition on acceptance of additional public deposits by depositories whose ratio of net worth to assets falls below 3%, and made a technical change; P.A. 94-190 authorized municipal funds to be deposited in “any bank authorized pursuant to section 3-24 to receive state funds”; P.A. 95-282 divided the section into Subsecs., amended Subsec. (a) to limit deposits to the Federal Deposit Insurance Corporation limit in out-of-state banks that are not qualified public depositories and made technical change and added Subsec. (b) re designation of depositories and Subsec. (c) re liability of persons depositing funds, effective July 6, 1995, provided “any designation of a depository of public funds of the state or any municipality or regional school district, and any prescription of the method of supervision of the investment and reinvestment of trust funds of a municipality, made in accordance with the applicable provisions of sections 4-33, 7-401, 7-402, 7-403, subsection (c) of section 10-52 or subsection (d) of section 10-56 in effect on or before July 6, 1995, shall remain in effect until rescinded or otherwise modified in accordance with the provisions of public act 95-282” (Revisor's note: (1) The reference to “section 10-52” appears to be a clerical error since Subsec. (c) of Sec. 10-51 was amended by Sec. 5 of P.A. 95-282; and (2) the Revisors changed the reference in Subsec. (c) from “any person acting in behalf of,” to “any person acting on behalf of,” for consistency with statutory usage); P.A. 96-244 revised effective date section of P.A. 95-282 but without affecting this section; P.A. 00-6 replaced “bank holiday” with “bank and credit union holiday” and made technical changes for the purposes of gender neutrality in Subsec. (c); P.A. 03-84 amended Subsec. (a) by changing “Commissioner of Banking” to “Banking Commissioner” and making technical changes, effective June 3, 2003.