PRIOR PRINTER'S NO. 4023 PRINTER'S NO. 4114
No. 2800 Session of 2000
INTRODUCED BY BOYES, TRELLO, GORDNER, MUNDY AND L. I. COHEN,
OCTOBER 3, 2000
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
OCTOBER 11, 2000
AN ACT
1 Amending the act of August 6, 1971 (P.L.281, No.72), entitled
2 "An act standardizing the procedures for pledges of assets to
3 secure deposits of public funds with banking institutions
4 pursuant to other laws; establishing a standard rule for the
5 types, amounts and valuations of assets eligible to be used
6 as collateral for deposits of public funds; permitting assets
7 to be pledged against deposits on a pooled basis; and
8 authorizing the appointment of custodians to act as pledgees
9 of assets," further providing for amounts required to be
10 pledged and for eligible assets and valuation.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 4 of the act of August 6, 1971 (P.L.281,
14 No.72), entitled "An act standardizing the procedures for
15 pledges of assets to secure deposits of public funds with
16 banking institutions pursuant to other laws; establishing a
17 standard rule for the types, amounts and valuations of assets
18 eligible to be used as collateral for deposits of public funds;
19 permitting assets to be pledged against deposits on a pooled
20 basis; and authorizing the appointment of custodians to act as
1 pledgees of assets," is amended to read:
2 Section 4. Amounts Required to be Pledged; Eligible Assets
3 and Valuation.--Unless the public body shall have instructed the
4 depository in writing that the assets securing its deposits may
5 not be pooled the amount of assets required to secure public
6 deposits, the types of assets which may be used as security and
7 the valuation as collateral of assets pledged shall be either:
8 (1) the same as those applicable to United States Treasury
9 tax and loan accounts under the provisions of United States
10 Treasury Circular No. 92 as in effect on the effective date of
11 this act, except that the valuation of obligations of the
12 Commonwealth and public bodies of the Commonwealth shall be at
13 the face value thereof[.]; or
14 (2) an irrevocable letter of credit issued by a Federal Home
15 Loan Bank in an amount equal to or greater than the total amount
16 of public deposits being secured provided that the Federal Home
17 Loan Bank issuing the irrevocable letter of credit maintains a
18 rating of at least the second highest rating level from one
19 nationally recognized rating agency. If the line of credit to
20 the United States Treasury as set forth in the Federal Home Loan
21 Bank Act (47 Stat. 733; 12 U.S.C. § 1431(i)) is revoked by <--
22 Congress OR REDUCED, then irrevocable letters of credit issued <--
23 by a Federal Home Loan Bank shall continue to be eligible to
24 secure public deposits only if the Federal Home Loan Bank
25 issuing the irrevocable letter of credit has the highest rating
26 level from one nationally recognized rating agency.
27 Section 2. This act shall take effect in 60 days.
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