** RE: A PROVED INVESTMENTS FOR TREASURERS OF CITIES. COUNTIES AND SCHOOL DISTRICTS **
THE ATTORNEY GENERAL HAS ASKED THAT I RESPOND TO YOUR REQUEST FOR AN OPINION IN WHICH YOU ASK WHETHER THE TREASURERS OF CITIES, COUNTIES AND SCHOOL DISTRICTS MAY INVEST FUNDS IN (A) CERTIFICATES OF DEPOSIT ISSUED BY BANKS WHOSE PRINCIPAL OFFICES ARE LOCATED OUTSIDE THE STATE OF OKLAHOMA; AND (B) REPURCHASE AGREEMENTS, COLLATERALIZED BY UNITED STATES GOVERNMENT SECURITIES, WITH PERSONS IN STATE OR OUT OF STATE. BECAUSE YOUR QUESTION MAY BE ANSWERED WITH REFERENCE TO PRIOR OPINIONS OF THE ATTORNEY GENERAL AND SEVERAL UNDERLYING STATUTES, THE ISSUANCE OF ANOTHER FORMAL OPINION IS NOT REQUIRED.
A. CERTIFICATES OF DEPOSIT.
62 O.S. 348.1 OF IS THE GENERAL STATUTE WHICH AUTHORIZES THE TREASURERS OF CITIES, COUNTIES AND SCHOOL DISTRICTS TO INVEST FUNDS UNDER THEIR CONTROL. SEE OKLAHOMA A.G. OPINION 89-064. PURSUANT TO 62 O.S. 348.1, THE TREASURERS OF THESE ENTITIES MAY INVEST IN CERTIFICATES OF DEPOSIT, SO LONG AS THE CERTIFICATES ARE "SECURED BY ACCEPTABLE COLLATERAL AS IN THE DEPOSIT OF OTHER PUBLIC MONIES." THAT IS, THE CERTIFICATES OF DEPOSIT MUST BE COLLATERALIZED IN ACCORDANCE WITH SECURITY PROVISIONS OF THE SECURITY FOR PUBLIC DEPOSITS ACT, 62 O.S. 72.1 (1990) ET SEQ. ("DEPOSITS ACT").
ESSENTIALLY, THE SECURITY PROVISIONS OF THE DEPOSITS ACT REQUIRE THAT COLLATERAL SECURITIES BE DEPOSITED TO SECURE THE DEPOSITS OF THE STATE - OR IN THIS CASE THE STATE'S INVESTMENT CERTIFICATES. THE SECURITIES USED FOR COLLATERAL ARE TO BE PLACED IN A RESTRICTED ACCOUNT IN EITHER A FEDERAL RESERVE BANK WHICH SERVES OKLAHOMA, OR AN IN-STATE FINANCIAL INSTITUTION THAT IS NOT OWNED OR CONTROLLED BY THE DEPOSITOR INSTITUTION. SIGNIFICANTLY, THE IN-STATE/OUT-OF-STATE DISTINCTION IN THE DEPOSITS ACT DOES NOT RELATE TO WHAT BANKS ARE PERMITTED TO DEPOSIT COLLATERAL, BUT ONLY WHAT INSTITUTIONS ARE PERMITTED TO HOLD THE COLLATERAL. THUS, THE ACT DOES NOT ADDRESS THE LOCATION OF THE BANK OR FINANCIAL ENTITY THAT ISSUES THE CERTIFICATE OF DEPOSIT.
GIVEN THE ABSENCE OF ANY LANGUAGE IN 62 O.S. 348.1 OR THE DEPOSITS ACT RESTRICTING THE LOCATION OF THE ISSUER OF CERTIFICATES OF DEPOSIT, IT IS APPROPRIATE TO CONCLUDE THAT TREASURERS OF CITIES, COUNTIES AND SCHOOL DISTRICTS MAY INVEST IN CERTIFICATES OF DEPOSIT WITHOUT CONSIDERATION OF WHETHER THE PRINCIPAL OFFICES OF THE BANK THAT ISSUED THE CERTIFICATES ARE LOCATED WITHIN OR OUTSIDE OF THE STATE.
B. REPURCHASE AGREEMENTS
62 O.S. 348.1 DOES NOT IN ITSELF PERMIT THE TREASURERS OF COUNTIES, CITIES AND SCHOOL BOARDS TO INVEST IN REPURCHASE AGREEMENTS. HOWEVER, THE PROVISION DOES REFERENCE ANOTHER, RELATED STATUTE, 62 O.S. 348.3 (1990). UNDER 62 O.S. 348.3 THE TREASURERS OF CITIES WITH A POPULATION OF NOT LESS THAN 300,000 OR COUNTIES WITH A POPULATION OF NOT LESS THAN 400,000 ARE PERMITTED TO INVEST IN REPURCHASE AGREEMENTS. TREASURERS OF ENTITIES WHICH DO NOT MEET THESE RESTRICTIONS MAY NOT ENGAGE IN REPURCHASE AGREEMENT TRANSACTIONS. NOR ARE TREASURERS OF SCHOOL DISTRICTS AUTHORIZED TO INVEST IN REPURCHASE AGREEMENTS. SEE ALSO 70 O.S. 5-115 (1990) (SPECIFICALLY ADDRESSING SCHOOL DISTRICTS; DOES NOT INCLUDE REPURCHASE AGREEMENTS IN LIST OF