NY Gen Mun L § 11 (2021)
2021 New York Laws GMU - General Municipal Article 2 - General Municipal Finances 11 - Temporary Investments.

§  11.  Temporary  investments.  1.  For purposes of this section, the terms "local government", "bank" and "trust company" shall have the same meanings as in section ten of this article.   2. a. The governing board of any local government or, if the governing board so delegates, the chief fiscal officer  or  other  officer  having custody  of  the  moneys  may temporarily invest moneys not required for immediate  expenditure,  except  moneys  the  investment  of  which   is otherwise  provided  for  by  law,  either:  (1) in special time deposit accounts in, or certificates of deposit  issued  by,  a  bank  or  trust company  located  and authorized to do business in this state; or (2) in accordance with all of the following conditions:  (i) the moneys are invested through a bank or  trust  company  located and authorized to do business in this state;  (ii)  the bank or trust company arranges for the deposit of the moneys in certificates of deposit in  one  or  more  banking  institutions,  as defined  in  section  nine-r  of the banking law, for the account of the local government;  (iii) the full amount of principal and accrued interest of  each  such certificate  of deposit must be insured by the federal deposit insurance corporation;  (iv) the bank or  trust  company  acts  as  custodian  for  the  local government  with  respect to such certificates of deposit issued for the local government's account; and  (v) at the same time that the local government's moneys are  deposited and  the certificates of deposit are issued for the account of the local government, the bank or trust company receives  an  amount  of  deposits from  customers of other financial institutions equal to or greater than the amount of the moneys invested by the local  government  through  the bank or trust company.   b.   For   any  investment  made  pursuant  to  paragraph  a  of  this subdivision, such time deposit account or certificate of  deposit  shall be  payable  within  such  time  as the proceeds shall be needed to meet expenditures for which such moneys were obtained  and  provided  further that  such  time deposit account or certificate of deposit be secured in the same manner as is provided for securing deposits of public funds  by subdivision three of section ten of this article.   * 3.  a.  Investments pursuant to this section may also be made in the following:  (1) obligations of the United States  of  America  or  in  obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America or  in obligations of the state of New York, or with the approval of the state comptroller in obligations issued pursuant  to  section  24.00  or 25.00  of  the local finance law by any municipality, school district or district corporation other than the  municipality,  school  district  or district  corporation  investing such moneys pursuant to this paragraph. In addition, moneys in any reserve fund established pursuant to  section six-c,  six-d, six-e, six-f, six-g, six-h, six-j, six-k, six-l, six-m or six-n  of  this  article  may  be  invested  in   obligations   of   the municipality,  school  district,  fire  district or district corporation which has established the reserve fund, or in  the  case  of  a  capital reserve  fund  established  for  a  town or county improvement district, obligations of the town or  county  issued  for  the  purposes  of  such district.  (2)  notwithstanding  any other provision of general, special or local law, any city having a population of one million or more and any  county may also make investments in the following:  (i)  general  obligation  bonds and notes of any state other than this state, provided that such bonds and notes receive the highest rating  of at   least  one  independent  rating  agency  designated  by  the  state comptroller;  (ii)  obligations  of  any corporation organized under the laws of any state in the United States maturing within  two  hundred  seventy  days, provided  that  such  obligations  receive  the  highest  rating  of two independent rating services designated by the state comptroller and that the issuer of such obligations has maintained such  ratings  on  similar obligations during the preceding six months, provided, however, that the issuer of such obligations need not have received such rating during the prior six month period if such issuer has received the highest rating of two  independent rating services designated by the state comptroller and is the successor or wholly  owned  subsidiary  of  an  issuer  that  has maintained  such ratings on similar obligations during the preceding six month period or if the issuer is the product of a merger of two or  more issuers, one of which has maintained such ratings on similar obligations during  the  preceding six month period, provided, however, that no more than  two  hundred  fifty  million  dollars  may  be  invested  in  such obligations of any one corporation; or  (iii)  bankers'  acceptances  maturing within two hundred seventy days which are eligible for purchase in the open market  by  federal  reserve banks  and  which have been accepted by a bank or trust company which is organized under the laws of the United States or of  any  state  thereof and which is a member of the federal reserve system and whose short-term obligations   meet   the  criteria  outlined  in  clause  (ii)  of  this subparagraph. Provided, however, that no more  than  two  hundred  fifty million  dollars may be invested in such bankers' acceptances of any one bank or trust company; or  (iv) obligations of, or instruments issued by or fully  guaranteed  as to  principal  and  interest  by,  any  agency or instrumentality of the United States acting pursuant to a grant of authority from the  congress of  the  United  States,  including but not limited to, any federal home loan bank or banks, the Tennessee valley authority, the federal national mortgage association, the federal home loan mortgage corporation and the United States postal service, provided, however, that no more  than  two hundred fifty million dollars may be invested in such obligations of any one agency.  (v)  no-load money market mutual funds registered under the Securities Act of 1933, as amended, and operated in accordance with  Rule  2a-7  of the Investment Company Act of 1940, as amended, provided that such funds are  limited  to  investments in obligations issued or guaranteed by the United  States  of  America   or   in   obligations   of   agencies   or instrumentalities  of  the United States of America where the payment of principal and interest are guaranteed by the United  States  of  America (including   contracts   for   the  sale  and  repurchase  of  any  such obligations), and are rated in the highest rating category by  at  least one  nationally  recognized  statistical  rating organization, provided, however, that no more than two hundred  fifty  million  dollars  may  be invested in such funds.   b.  All investments made pursuant to this subdivision shall be subject to the following conditions:  (1) Such obligations shall be payable or redeemable at the  option  of the  owner  within  such  times  as  the proceeds will be needed to meet expenditures for purposes for which the moneys were provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable in any event,  at  the  option  of  the  owner, within two years of the date of purchase. Obligations that are purchased  pursuant  to  a  repurchase  agreement  shall be deemed to be payable or redeemable for purposes of this paragraph  on  the  date  on  which  the purchased  obligations  are  scheduled  to  be repurchased by the seller thereof. Any obligation that provides for the adjustment of its interest rate  on  set  dates  shall  be  deemed  to be payable or redeemable for purposes of this paragraph on the date on which the principal amount can be recovered through demand by the holder thereof.  (2) Such obligations, unless registered or inscribed in  the  name  of the  local government, shall be purchased through, delivered to and held in the custody of a bank or trust company or, with respect to  the  city of  New  York  and  counties,  a reputable dealer in such obligations as shall be designated by  the  state  comptroller,  in  this  state.  Such obligations  shall  be  purchased,  sold  or presented for redemption or payment by such bank or trust company or dealer in obligations  only  in accordance  with prior written authorization from the officer authorized to make the investment. All such  transactions  shall  be  confirmed  in writing  to  the  local  government  by  the  bank or trust company. All obligations held in the custody of a bank or trust company  pursuant  to this paragraph shall be held by such bank or trust company pursuant to a written  custodial  agreement as set forth in paragraph a of subdivision three of section ten of this article.   * NB Effective until July 1, 2023   * 3. Investments  pursuant  to  this  section  may  also  be  made  in obligations of the United States of America or in obligations guaranteed by  agencies  of  the  United  States  of  America  where the payment of principal and interest are guaranteed by the United States of America or in obligations of the state of New York,. In  addition,  moneys  in  any reserve fund established pursuant to section six-c, six-d, six-e, six-f, six-g, six-h, six-j, six-k, six-l, six-m or six-n of this article may be invested  in  obligations  of  the  municipality,  school district, fire district or district corporation which has established the reserve fund, or in the case of a capital reserve  fund  established  for  a  town  or county  improvement  district,  obligations of the town or county issued for the purposes of such district.   All investments made pursuant to this subdivision shall be subject  to the following conditions:   a.  Such  obligations  shall be payable or redeemable at the option of the owner within such times as the  proceeds  will  be  needed  to  meet expenditures for purposes for which the moneys were provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be  payable  or  redeemable  in  any  event, at the option of the owner, within two years of the date of purchase. Obligations that are purchased pursuant to a repurchase agreement shall be  deemed  to  be  payable  or redeemable  for  purposes  of  this  paragraph  on the date on which the purchased obligations are scheduled to  be  repurchased  by  the  seller thereof. Any obligation that provides for the adjustment of its interest rate  on  set  dates  shall  be  deemed  to be payable or redeemable for purposes of this paragraph on the date on which the principal amount can be recovered through demand by the holder thereof.   b. Such obligations, unless registered or inscribed in the name of the local government, shall be purchased through, delivered to and  held  in the  custody  of a bank or trust company or, with respect to the city of New York and counties, a reputable dealer in such obligations  as  shall be  designated by the state comptroller, in this state. Such obligations shall be purchased, sold or presented for redemption or payment by  such bank  or  trust company or dealer in obligations only in accordance with prior written authorization from the  officer  authorized  to  make  the investment.  All  such transactions shall be confirmed in writing to the  local government by the bank or trust company. All obligations  held  in the  custody of a bank or trust company pursuant to this paragraph shall be held by such bank or trust company pursuant to  a  written  custodial agreement  as  set  forth in paragraph a of subdivision three of section ten of this article.   * NB Effective July 1, 2023   4. Notwithstanding any other provision of law, the governing board  of a  local  government  may  authorize the aforementioned officers to turn over the physical custody  and  safekeeping  of  the  evidences  of  the investments  made  pursuant  to  this  section  to (a) any bank or trust company incorporated in this state, or (b) any national bank located  in this   state,   or  (c)  any  private  banker  duly  authorized  by  the superintendent of financial services of this state to engage in business here. All such private bankers shall, as  private  bankers,  maintain  a permanent  capital  of  not less than one million dollars in this state. The said officers may direct such bank, trust company or private  banker to  register  and hold any such evidences of investments in its custody, in the name of its nominee. Such officers may deposit or authorize  such bank,  trust  company  or private banker, to deposit, or arrange for the deposit of any such evidences of investments with a federal reserve bank or other book-entry transfer system operated by  a  federally  regulated entity  to  be  credited to an account as to which the ownership of, and other interests in, such evidences of investments may be transferred  by entries  on  the  books of such federal reserve bank or other book-entry transfer  system  operated  by  a  federally  regulated  entity  without physical  delivery  of any such evidences of investments. The records of any such bank, trust company or private banker shall show, at all times, the ownership of such evidences of investments,  and  they  shall,  when held in the possession of such bank, trust company or private banker be, at  all times, kept separate from the assets of such bank, trust company or private banker. All evidences of investments  delivered  to  a  bank, trust  company,  or private banker pursuant to this subdivision shall be held by such bank, trust company or private banker pursuant to a written custodial agreement as set forth in paragraph a of subdivision three  of section  ten of this article. When any such evidences of investments are so registered in the name of a nominee,  such  bank,  trust  company  or private banker shall be absolutely liable for any loss occasioned by the acts of such nominee with respect to such evidences of investments.   5.  A  county  clerk  may  invest any money collected on behalf of the state until such time as the money is required to  be  remitted  to  the state.    The  county  clerk  shall invest the state money only in those investments authorized by this section and payable within such  time  as the proceeds shall be required to be remitted to the state. Any interest that  accrues  on  moneys invested pursuant to this subdivision shall be payable in equal shares  to  the  state  and  to  the  county  provided, however, that any fees or service charges associated with the investment shall be paid from such interest.   6. Except as may otherwise be provided in a contract with bond or note holders, any moneys of a political subdivision authorized to be invested pursuant  to  this  section  may  be commingled for investment purposes; provided, however, that any investment of  commingled  moneys  shall  be payable or redeemable at the option of the owner within such time as the proceeds shall be needed to meet expenditures for which such moneys were obtained  or  as  otherwise  specifically  provided in this section. The separate identity of the sources of such funds shall  at  all  times  be maintained  and  income received on moneys commingled for the purpose of investment shall be credited on a pro rata basis to the fund or  account from which the moneys were invested.    7. The chief fiscal officer of each local government shall maintain or cause  to  be maintained a proper record of all books, notes, securities or other evidences of indebtedness held by or for such  subdivision  for the  purpose  of  investment.  Such  record  shall at least identify the security,  the  fund  for  which  held, the place where kept and entries shall be made therein showing date of sale or other disposition and  the amount realized therefrom.