§ 11 — Temporary investments

§ 11. Temporary investments. 1. For purposes of this section, the\nterms "local government", "bank" and "trust company" shall have the same\nmeanings as in section ten of this article.\n 2. a. The governing board of any local government or, if the governing\nboard so delegates, the chief fiscal officer or other officer having\ncustody of the moneys may temporarily invest moneys not required for\nimmediate expenditure, except moneys the investment of which is\notherwise provided for by law, either: (1) in special time deposit\naccounts in, or certificates of deposit issued by, a bank or trust\ncompany located and authorized to do business in this state; or (2) in\naccordance with all of the following conditions:\n (i) the moneys are invested through a bank or trust company located\nand authorized to do business in this state;\n (ii) the bank or trust company arranges for the deposit of the moneys\nin certificates of deposit in one or more banking institutions, as\ndefined in section nine-r of the banking law, for the account of the\nlocal government;\n (iii) the full amount of principal and accrued interest of each such\ncertificate of deposit must be insured by the federal deposit insurance\ncorporation;\n (iv) the bank or trust company acts as custodian for the local\ngovernment with respect to such certificates of deposit issued for the\nlocal government's account; and\n (v) at the same time that the local government's moneys are deposited\nand the certificates of deposit are issued for the account of the local\ngovernment, the bank or trust company receives an amount of deposits\nfrom customers of other financial institutions equal to or greater than\nthe amount of the moneys invested by the local government through the\nbank or trust company.\n b. For any investment made pursuant to paragraph a of this\nsubdivision, such time deposit account or certificate of deposit shall\nbe payable within such time as the proceeds shall be needed to meet\nexpenditures for which such moneys were obtained and provided further\nthat such time deposit account or certificate of deposit be secured in\nthe same manner as is provided for securing deposits of public funds by\nsubdivision three of section ten of this article.\n * 3. a. Investments pursuant to this section may also be made in the\nfollowing:\n (1) obligations of the United States of America or in obligations\nguaranteed by agencies of the United States of America where the payment\nof principal and interest are guaranteed by the United States of America\nor in obligations of the state of New York, or with the approval of the\nstate comptroller in obligations issued pursuant to section 24.00 or\n25.00 of the local finance law by any municipality, school district or\ndistrict corporation other than the municipality, school district or\ndistrict corporation investing such moneys pursuant to this paragraph.\nIn addition, moneys in any reserve fund established pursuant to section\nsix-c, six-d, six-e, six-f, six-g, six-h, six-j, six-k, six-l, six-m or\nsix-n of this article may be invested in obligations of the\nmunicipality, school district, fire district or district corporation\nwhich has established the reserve fund, or in the case of a capital\nreserve fund established for a town or county improvement district,\nobligations of the town or county issued for the purposes of such\ndistrict.\n (2) notwithstanding any other provision of general, special or local\nlaw, any city having a population of one million or more and any county\nmay also make investments in the following:\n (i) general obligation bonds and notes of any state other than this\nstate, provided that such bonds and notes receive the highest rating of\nat least one independent rating agency designated by the state\ncomptroller;\n (ii) obligations of any corporation organized under the laws of any\nstate in the United States maturing within two hundred seventy days,\nprovided that such obligations receive the highest rating of two\nindependent rating services designated by the state comptroller and that\nthe issuer of such obligations has maintained such ratings on similar\nobligations during the preceding six months, provided, however, that the\nissuer of such obligations need not have received such rating during the\nprior six month period if such issuer has received the highest rating of\ntwo independent rating services designated by the state comptroller and\nis the successor or wholly owned subsidiary of an issuer that has\nmaintained such ratings on similar obligations during the preceding six\nmonth period or if the issuer is the product of a merger of two or more\nissuers, one of which has maintained such ratings on similar obligations\nduring the preceding six month period, provided, however, that no more\nthan two hundred fifty million dollars may be invested in such\nobligations of any one corporation; or\n (iii) bankers' acceptances maturing within two hundred seventy days\nwhich are eligible for purchase in the open market by federal reserve\nbanks and which have been accepted by a bank or trust company which is\norganized under the laws of the United States or of any state thereof\nand which is a member of the federal reserve system and whose short-term\nobligations meet the criteria outlined in clause (ii) of this\nsubparagraph. Provided, however, that no more than two hundred fifty\nmillion dollars may be invested in such bankers' acceptances of any one\nbank or trust company; or\n (iv) obligations of, or instruments issued by or fully guaranteed as\nto principal and interest by, any agency or instrumentality of the\nUnited States acting pursuant to a grant of authority from the congress\nof the United States, including but not limited to, any federal home\nloan bank or banks, the Tennessee valley authority, the federal national\nmortgage association, the federal home loan mortgage corporation and the\nUnited States postal service, provided, however, that no more than two\nhundred fifty million dollars may be invested in such obligations of any\none agency.\n (v) no-load money market mutual funds registered under the Securities\nAct of 1933, as amended, and operated in accordance with Rule 2a-7 of\nthe Investment Company Act of 1940, as amended, provided that such funds\nare limited to investments in obligations issued or guaranteed by the\nUnited States of America or in obligations of agencies or\ninstrumentalities of the United States of America where the payment of\nprincipal and interest are guaranteed by the United States of America\n(including contracts for the sale and repurchase of any such\nobligations), and are rated in the highest rating category by at least\none nationally recognized statistical rating organization, provided,\nhowever, that no more than two hundred fifty million dollars may be\ninvested in such funds.\n b. All investments made pursuant to this subdivision shall be subject\nto the following conditions:\n (1) Such obligations shall be payable or redeemable at the option of\nthe owner within such times as the proceeds will be needed to meet\nexpenditures for purposes for which the moneys were provided and, in the\ncase of obligations purchased with the proceeds of bonds or notes, shall\nbe payable or redeemable in any event, at the option of the owner,\nwithin two years of the date of purchase. Obligations that are purchased\npursuant to a repurchase agreement shall be deemed to be payable or\nredeemable for purposes of this paragraph on the date on which the\npurchased obligations are scheduled to be repurchased by the seller\nthereof. Any obligation that provides for the adjustment of its interest\nrate on set dates shall be deemed to be payable or redeemable for\npurposes of this paragraph on the date on which the principal amount can\nbe recovered through demand by the holder thereof.\n (2) Such obligations, unless registered or inscribed in the name of\nthe local government, shall be purchased through, delivered to and held\nin the custody of a bank or trust company or, with respect to the city\nof New York and counties, a reputable dealer in such obligations as\nshall be designated by the state comptroller, in this state. Such\nobligations shall be purchased, sold or presented for redemption or\npayment by such bank or trust company or dealer in obligations only in\naccordance with prior written authorization from the officer authorized\nto make the investment. All such transactions shall be confirmed in\nwriting to the local government by the bank or trust company. All\nobligations held in the custody of a bank or trust company pursuant to\nthis paragraph shall be held by such bank or trust company pursuant to a\nwritten custodial agreement as set forth in paragraph a of subdivision\nthree of section ten of this article.\n * NB Effective until July 1, 2026\n * 3. Investments pursuant to this section may also be made in\nobligations of the United States of America or in obligations guaranteed\nby agencies of the United States of America where the payment of\nprincipal and interest are guaranteed by the United States of America or\nin obligations of the state of New York,. In addition, moneys in any\nreserve fund established pursuant to section six-c, six-d, six-e, six-f,\nsix-g, six-h, six-j, six-k, six-l, six-m or six-n of this article may be\ninvested in obligations of the municipality, school district, fire\ndistrict or district corporation which has established the reserve fund,\nor in the case of a capital reserve fund established for a town or\ncounty improvement district, obligations of the town or county issued\nfor the purposes of such district.\n All investments made pursuant to this subdivision shall be subject to\nthe following conditions:\n a. Such obligations shall be payable or redeemable at the option of\nthe owner within such times as the proceeds will be needed to meet\nexpenditures for purposes for which the moneys were provided and, in the\ncase of obligations purchased with the proceeds of bonds or notes, shall\nbe payable or redeemable in any event, at the option of the owner,\nwithin two years of the date of purchase. Obligations that are purchased\npursuant to a repurchase agreement shall be deemed to be payable or\nredeemable for purposes of this paragraph on the date on which the\npurchased obligations are scheduled to be repurchased by the seller\nthereof. Any obligation that provides for the adjustment of its interest\nrate on set dates shall be deemed to be payable or redeemable for\npurposes of this paragraph on the date on which the principal amount can\nbe recovered through demand by the holder thereof.\n b. Such obligations, unless registered or inscribed in the name of the\nlocal government, shall be purchased through, delivered to and held in\nthe custody of a bank or trust company or, with respect to the city of\nNew York and counties, a reputable dealer in such obligations as shall\nbe designated by the state comptroller, in this state. Such obligations\nshall be purchased, sold or presented for redemption or payment by such\nbank or trust company or dealer in obligations only in accordance with\nprior written authorization from the officer authorized to make the\ninvestment. All such transactions shall be confirmed in writing to the\nlocal government by the bank or trust company. All obligations held in\nthe custody of a bank or trust company pursuant to this paragraph shall\nbe held by such bank or trust company pursuant to a written custodial\nagreement as set forth in paragraph a of subdivision three of section\nten of this article.\n * NB Effective July 1, 2026\n 4. Notwithstanding any other provision of law, the governing board of\na local government may authorize the aforementioned officers to turn\nover the physical custody and safekeeping of the evidences of the\ninvestments made pursuant to this section to (a) any bank or trust\ncompany incorporated in this state, or (b) any national bank located in\nthis state, or (c) any private banker duly authorized by the\nsuperintendent of financial services of this state to engage in business\nhere. All such private bankers shall, as private bankers, maintain a\npermanent capital of not less than one million dollars in this state.\nThe said officers may direct such bank, trust company or private banker\nto register and hold any such evidences of investments in its custody,\nin the name of its nominee. Such officers may deposit or authorize such\nbank, trust company or private banker, to deposit, or arrange for the\ndeposit of any such evidences of investments with a federal reserve bank\nor other book-entry transfer system operated by a federally regulated\nentity to be credited to an account as to which the ownership of, and\nother interests in, such evidences of investments may be transferred by\nentries on the books of such federal reserve bank or other book-entry\ntransfer system operated by a federally regulated entity without\nphysical delivery of any such evidences of investments. The records of\nany such bank, trust company or private banker shall show, at all times,\nthe ownership of such evidences of investments, and they shall, when\nheld in the possession of such bank, trust company or private banker be,\nat all times, kept separate from the assets of such bank, trust company\nor private banker. All evidences of investments delivered to a bank,\ntrust company, or private banker pursuant to this subdivision shall be\nheld by such bank, trust company or private banker pursuant to a written\ncustodial agreement as set forth in paragraph a of subdivision three of\nsection ten of this article. When any such evidences of investments are\nso registered in the name of a nominee, such bank, trust company or\nprivate banker shall be absolutely liable for any loss occasioned by the\nacts of such nominee with respect to such evidences of investments.\n 5. A county clerk may invest any money collected on behalf of the\nstate until such time as the money is required to be remitted to the\nstate. The county clerk shall invest the state money only in those\ninvestments authorized by this section and payable within such time as\nthe proceeds shall be required to be remitted to the state. Any interest\nthat accrues on moneys invested pursuant to this subdivision shall be\npayable in equal shares to the state and to the county provided,\nhowever, that any fees or service charges associated with the investment\nshall be paid from such interest.\n 6. Except as may otherwise be provided in a contract with bond or note\nholders, any moneys of a political subdivision authorized to be invested\npursuant to this section may be commingled for investment purposes;\nprovided, however, that any investment of commingled moneys shall be\npayable or redeemable at the option of the owner within such time as the\nproceeds shall be needed to meet expenditures for which such moneys were\nobtained or as otherwise specifically provided in this section. The\nseparate identity of the sources of such funds shall at all times be\nmaintained and income received on moneys commingled for the purpose of\ninvestment shall be credited on a pro rata basis to the fund or account\nfrom which the moneys were invested.\n 7. The chief fiscal officer of each local government shall maintain or\ncause to be maintained a proper record of all books, notes, securities\nor other evidences of indebtedness held by or for such subdivision for\nthe purpose of investment. Such record shall at least identify the\nsecurity, the fund for which held, the place where kept and entries\nshall be made therein showing date of sale or other disposition and the\namount realized therefrom.\n