2023 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, 2026
* 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, 2026
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.