Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. SB 1170
       
       
       
       
       
       
                                Ì379464GÎ379464                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/14/2017           .                                
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       The Committee on Banking and Insurance (Hutson) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 99 - 213
    4  and insert:
    5         Section 2. Section 280.042, Florida Statutes, is created to
    6  read:
    7         280.042 Conditions for designating credit unions as
    8  qualified public depositories; withdrawal by the Chief Financial
    9  Officer from a collateral agreement and return of deposits;
   10  limit on public deposits.—
   11         (1) The Chief Financial Officer may not designate a credit
   12  union as a qualified public depository as defined under s.
   13  280.02, unless, at the time the credit union submits its
   14  agreement of contingent liability and its collateral agreement:
   15         (a) The credit union submits a signed statement from a
   16  public official indicating that if the credit union is
   17  designated as a qualified public depository, the public official
   18  intends to deposit more than $250,000 of public funds with the
   19  credit union; and
   20         (b) At least four other credit unions have each submitted
   21  an agreement of contingent liability, a collateral agreement,
   22  and a signed statement from a public official indicating that if
   23  the credit union is designated as a qualified public depository,
   24  the public official intends to deposit more than $250,000 of
   25  public funds with the credit union.
   26         (2) The Chief Financial Officer must withdraw from a
   27  collateral agreement previously entered into with a credit union
   28  if fewer than five credit unions are designated as qualified
   29  public depositories during any period of 90 calendar days or
   30  longer.
   31         (3) A credit union that is a party to a collateral
   32  agreement from which the Chief Financial Officer withdraws in
   33  accordance with subsection (2) may no longer be designated as a
   34  qualified public depository. Within 10 business days after the
   35  Chief Financial Officer notifies the credit union that the Chief
   36  Financial Officer has withdrawn from the collateral agreement,
   37  the credit union must return all public deposits that the credit
   38  union holds to the public official who deposited the funds. The
   39  notice provided for in this subsection may be sent to a credit
   40  union by regular mail or by e-mail.
   41         (4) The Chief Financial Officer may limit the amount of
   42  public deposits which any credit union may hold in order to
   43  ensure that no single credit union holds an amount of public
   44  deposits which might adversely affect the integrity of the
   45  public deposits program.
   46         Section 3. Section 280.07, Florida Statutes, is amended to
   47  read:
   48         280.07 Mutual responsibility and contingent liability.—
   49         (1) Any bank, savings bank, or savings association that is
   50  designated as a qualified public depository and that is not
   51  insolvent shall guarantee public depositors against loss caused
   52  by the default or insolvency of other banks, savings banks, or
   53  savings associations designated as qualified public
   54  depositories.
   55         (2) Any credit union that is designated as a qualified
   56  public depository and that is not insolvent shall guarantee
   57  public depositors against loss caused by the default or
   58  insolvency of other credit unions designated as qualified public
   59  depositories.
   60  
   61  Each qualified public depository shall execute a form prescribed
   62  by the Chief Financial Officer for such guarantee which must
   63  shall be approved by the board of directors and shall become an
   64  official record of the institution.
   65         Section 4. Subsections (1) and (3) of section 280.08,
   66  Florida Statutes, are amended to read:
   67         280.08 Procedure for payment of losses.—When the Chief
   68  Financial Officer determines that a default or insolvency has
   69  occurred, he or she shall provide notice as required in s.
   70  280.085 and implement the following procedures:
   71         (1) The Division of Treasury, in cooperation with the
   72  Office of Financial Regulation of the Financial Services
   73  Commission or the receiver of the qualified public depository in
   74  default, shall ascertain the amount of funds of each public
   75  depositor on deposit at such depository and the amount of
   76  deposit or share insurance applicable to such deposits.
   77         (3)(a) The loss to public depositors shall be satisfied,
   78  insofar as possible, first through any applicable deposit or
   79  share insurance and then through demanding payment under letters
   80  of credit or the sale of collateral pledged or deposited by the
   81  defaulting depository. The Chief Financial Officer may assess
   82  qualified public depositories as provided in paragraph (b),
   83  subject to the segregation of contingent liability in s. 280.07,
   84  for the total loss if the demand for payment or sale of
   85  collateral cannot be accomplished within 7 business days.
   86         (b) The Chief Financial Officer shall provide coverage of
   87  any remaining loss by assessment against the other qualified
   88  public depositories. The Chief Financial Officer shall determine
   89  such assessment for each qualified public depository by
   90  multiplying the total amount of any remaining loss to all public
   91  depositors by a percentage which represents the average monthly
   92  balance of public deposits held by each qualified public
   93  depository during the previous 12 months divided by the total
   94  average monthly balances of public deposits held by all
   95  qualified public depositories, excluding the defaulting
   96  depository, during the same period. The assessment calculation
   97  must shall be computed to six decimal places.
   98         Section 5. Section 280.09, Florida Statutes, is amended to
   99  read:
  100         280.09 Public Deposits Trust Fund.—
  101         (1) In order to facilitate the administration of this
  102  chapter, there is created the Public Deposits Trust Fund,
  103  hereafter in this section designated as “the fund.” The proceeds
  104  from the sale of securities or draw on letters of credit held as
  105  collateral or from any assessment pursuant to s. 280.08 must
  106  shall be deposited into the fund. The Chief Financial Officer
  107  must segregate and separately account for any collateral
  108  proceeds, assessments, or administrative penalties attributable
  109  to a credit union from any collateral proceeds, assessments, or
  110  administrative penalties attributable to any bank, savings bank,
  111  or savings association. Any administrative penalty collected
  112  pursuant to this chapter shall be deposited into the Treasury
  113  Administrative and Investment Trust Fund.
  114         (2) The Chief Financial Officer is authorized to pay any
  115  losses to public depositors from the fund, subject to the
  116  limitations provided in subsection (1), and there are hereby
  117  appropriated from the fund such sums as may be necessary from
  118  time to time to pay the losses. The term “losses,” for purposes
  119  of this chapter, shall also include losses of interest or other
  120  accumulations to the public depositor as a result of penalties
  121  for early withdrawal required by Depository Institution
  122  Deregulatory Commission Regulations or applicable successor
  123  federal laws or regulations because of suspension or
  124  disqualification of a qualified public depository by the Chief
  125  Financial Officer pursuant to s. 280.05 or because of withdrawal
  126  from the public deposits program pursuant to s. 280.11. In that
  127  event, the Chief Financial Officer is authorized to assess
  128  against the suspended, disqualified, or withdrawing public
  129  depository, in addition to any amount authorized by any other
  130  provision of this chapter, an administrative penalty equal to
  131  the amount of the early withdrawal penalty and to pay that
  132  amount over to the public depositor as reimbursement for such
  133  loss. Any money in the fund estimated not to be needed for
  134  immediate cash requirements shall be invested pursuant to s.
  135  17.61.
  136         Section 6. Paragraph (a) of subsection (3) of section
  137  280.03, Florida Statutes, is amended to read:
  138         280.03 Public deposits to be secured; prohibitions;
  139  exemptions.—
  140         (3) The following are exempt from the requirements of, and
  141  protection under, this chapter:
  142         (a) Public deposits deposited in a bank, credit union, or
  143  savings association by a trust department or trust company which
  144  are fully secured under trust business laws.
  145         Section 7. Subsection (11) of section 280.05, Florida
  146  Statutes, is amended to read:
  147         280.05 Powers and duties of the Chief Financial Officer.—In
  148  fulfilling the requirements of this act, the Chief Financial
  149  Officer has the power to take the following actions he or she
  150  deems necessary to protect the integrity of the public deposits
  151  program:
  152         (11) Sell securities for the purpose of paying losses to
  153  public depositors not covered by deposit or share insurance.
  154         Section 8. Subsection (1) of section 280.052, Florida
  155  Statutes, is amended to read:
  156         280.052 Order of suspension or disqualification;
  157  procedure.—
  158         (1) The suspension or disqualification of a bank, credit
  159  union, or savings association as a qualified public depository
  160  must be by order of the Chief Financial Officer and must be
  161  mailed to the qualified public depository by registered or
  162  certified mail.
  163         Section 9. Paragraph (c) of subsection (1) and paragraph
  164  (c) of subsection (2) of section 280.053, Florida Statutes, are
  165  amended to read:
  166         280.053 Period of suspension or disqualification;
  167  obligations during period; reinstatement.—
  168         (1)
  169         (c) Upon expiration of the suspension period, the bank,
  170  credit union, or savings association may, by order of the Chief
  171  Financial Officer, be reinstated as a qualified public
  172  depository, unless the cause of the suspension has not been
  173  corrected or the bank, credit union, or savings association is
  174  otherwise not in compliance with this chapter or any rule
  175  adopted pursuant to this chapter.
  176         (2)
  177         (c) Upon expiration of the disqualification period, the
  178  bank, credit union, or savings association may reapply for
  179  qualification as a qualified public depository. If a
  180  disqualified bank, credit union, or savings association is
  181  purchased or otherwise acquired by new owners, it may reapply to
  182  the Chief Financial Officer to be a qualified public depository
  183  prior to the expiration date of the disqualification period.
  184  Redesignation as a qualified public depository may occur only
  185  after the Chief Financial Officer has determined that all
  186  requirements for holding public deposits under the law have been
  187  met.
  188         Section 10. Section 280.055, Florida Statutes, is amended
  189  to read:
  190         280.055 Cease and desist order; corrective order;
  191  administrative penalty.—
  192         (1) The Chief Financial Officer may issue a cease and
  193  desist order and a corrective order upon determining that:
  194         (a) A qualified public depository has requested and
  195  obtained a release of pledged collateral without approval of the
  196  Chief Financial Officer;
  197         (b) A bank, credit union, savings association, or other
  198  financial institution is holding public deposits without a
  199  certificate of qualification issued by the Chief Financial
  200  Officer;
  201         (c) A qualified public depository pledges, deposits, or
  202  arranges for the issuance of unacceptable collateral;
  203         (d) A custodian has released pledged collateral without
  204  approval of the Chief Financial Officer;
  205         (e) A qualified public depository or a custodian has not
  206  furnished to the Chief Financial Officer, when the Chief
  207  Financial Officer requested, a power of attorney or bond power
  208  or bond assignment form required by the bond agent or bond
  209  trustee for each issue of registered certificated securities
  210  pledged and registered in the name, or nominee name, of the
  211  qualified public depository or custodian; or
  212         (f) A qualified public depository; a bank, credit union,
  213  savings association, or other financial institution; or a
  214  custodian has committed any other violation of this chapter or
  215  any rule adopted pursuant to this chapter that the Chief
  216  Financial Officer determines may be remedied by a cease and
  217  desist order or corrective order.
  218         (2) Any qualified public depository or other bank, credit
  219  union, savings association, or financial institution or
  220  custodian that violates a cease and desist order or corrective
  221  order of the Chief Financial Officer is subject to an
  222  administrative penalty not exceeding $1,000 for each violation
  223  of the order. Each day the violation of the order continues
  224  constitutes a separate violation.
  225  
  226  ================= T I T L E  A M E N D M E N T ================
  227  And the title is amended as follows:
  228         Delete lines 6 - 12
  229  and insert:
  230         Security for Public Deposits Act; creating s. 280.042,
  231         F.S.; specifying conditions that must be met before
  232         the Chief Financial Officer may designate a credit
  233         union as a qualified public depository; requiring the
  234         Chief Financial Officer to withdraw from a collateral
  235         agreement with a credit union under certain
  236         circumstances; providing construction and notice and
  237         public deposit return requirements after such
  238         withdrawal; authorizing the Chief Financial Officer to
  239         limit, for a certain purpose, the amount of public
  240         deposits a credit union may hold; amending s. 280.07,
  241         F.S.; specifying the mutual responsibility and
  242         contingent liability of certain credit unions
  243         designated as qualified public depositories;
  244         conforming a provision to changes made by the act;
  245         amending s. 280.08, F.S.; conforming provisions to
  246         changes made by the act; providing that certain
  247         assessments by the Chief Financial Officer upon
  248         qualified public depositories are subject to certain
  249         segregation of contingent liability provisions;
  250         amending s. 280.09, F.S.; requiring the Chief
  251         Financial Officer, in administering the Public
  252         Deposits Trust Fund, to segregate and separately
  253         account for certain proceeds, assessments, or
  254         penalties attributable to a credit union from those
  255         attributable to a bank, savings bank, or savings
  256         association; providing that payment of losses is
  257         subject to such limitations; amending ss. 280.03,
  258         280.05, 280.052, 280.053, 280.055, 280.085, 280.10,
  259         280.13, and 280.17,