2023 Tennessee Code › Title 9 - PUBLIC FINANCES (§§ 9-1-101 — 9-24-106) › Chapter 4 - STATE FUNDS, STATE BUDGET AND APPROPRIATIONS (§§ 9-4-101 — 9-4-5612) › Part 5 - COLLATERAL POOL FOR PUBLIC DEPOSITS ACT OF 1990 (§§ 9-4-501 — 9-4-523) › Section 9-4-502 - Part definitions

As used in this part, unless the context otherwise requires:
(1)
"Average daily balance" means the sum of the average daily demand deposits, the average daily time deposits, and the average daily savings deposits of public depositors held during the calendar month immediately preceding the current month;
(2)
"Average daily demand deposit" means the total by account of all public funds held on a daily basis in demand deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month. "Demand deposit account" has the meaning as defined by the board of governors of the federal reserve system, Regulation D,
12 CFR 204
, as amended;
(3)
(A)
"Average daily savings deposit" means either:
(i)
The total by account of all public funds held on a daily basis in savings deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month; or
(ii)
The sum of the amount of public funds in savings deposit accounts on the last day of the two (2) calendar months immediately preceding the current month divided by two (2);
(B)
"Savings deposit account" has the meaning as defined by the board of governors of the federal reserve system, Regulation D,
12 CFR 204
, as amended;
(4)
(A)
"Average daily time deposit" means either:
(i)
The total by account of all public funds held on a daily basis in time deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month; or
(ii)
The higher of:
(a)
The actual amount of public funds in time deposit accounts on the last day of the calendar month immediately preceding the current month; or
(b)
The sum of the amount of public funds in time deposit accounts on the last day of the two (2) calendar months immediately preceding the current month divided by two (2);
(B)
"Time deposit account" has the meaning as defined by the board of governors of the federal reserve system, Regulation D,
12 CFR 204
, as amended;
(5)
"Average monthly balance" means the average monthly balance of public deposits held by the depository during any twelve (12) calendar months. The average monthly balance of the previous twelve (12) calendar months must be determined by adding the average daily balance for the calendar month immediately preceding the current month and the average daily balances for the eleven (11) months preceding that month and dividing the total by twelve (12). Notwithstanding this subdivision (5) or any other law to the contrary, the average monthly balance shall not exceed one hundred ten percent (110%) of the average daily balance as such term is defined in subdivision (1);
(6)
"Board" means the collateral pool board created pursuant to §
9-4-506
;
(7)
"Collateral-pledging level," for a qualified public depository, means that level of collateral determined to be required to be pledged by the collateral pool board;
(8)
"Collateral pool" means an arrangement whereby the repayment of public deposits deposited with any qualified public depository is secured through the sum total of eligible collateral pledged by all qualified public depositories, and contingent liability agreements as provided by the collateral pool board;
(9)
"Default" may include, but is not limited to:
(A)
The failure of any qualified public depository to return any public deposit, including earned interest in accordance with the terms of the deposit contract;
(B)
The failure of any qualified public depository to pay any properly payable check, draft or warrant drawn by the public depositor;
(C)
The failure of any qualified public depository to honor any valid request for electronic transfer of funds;
(D)
The failure of any qualified public depository to account for any check, draft, warrant, order, deposit certificate or money entrusted to it;
(E)
The issuance of any order of any court or the taking of any formal action by any supervisory authority, which has the effect of restraining a qualified public depository from making payments of deposit liabilities;
(F)
The appointment of a conservator or receiver for a qualified public depository;
(G)
Failure to provide the required collateral as established by the board; or
(H)
Any other action which the state treasurer determines to place public deposits in jeopardy;
(10)
"Deposit insurance" means the insurance provided by the federal deposit insurance corporation;
(11)
"Depository pledge agreement" means the contract between the state treasurer, a qualified public depository, and a trustee custodian providing for the pledge and deposit of collateral, and other provisions determined by the state treasurer;
(12)
"Eligible collateral" has the meaning set forth in §
9-4-103
;
(13)
"Loss" includes, but is not limited to:
(A)
The principal amount of the public deposit;
(B)
All accrued interest through the date of default;
(C)
Additional interest at the rate the public deposit was earning on the total of subdivisions (13)(A) and (B) through the day of payment by a liquidator or other third party or through the date of sale of eligible collateral by the state treasurer or the state treasurer's agent; and
(D)
Attorney's fees incurred in recovering public deposits;
(14)
"Public deposit" means funds in which the entire beneficial interest is owned by a public depositor or funds held in the name of a public official of a public depositor charged with the duty to receive or administer funds and acting in such official's official capacity;
(15)
"Public deposit security trust fund" or the "fund" means the fund created pursuant to §
9-4-514
;
(16)
"Public depositor" means the state of Tennessee, or any of its agencies, or any Tennessee county, Tennessee incorporated municipality and their political subdivisions, or any utility district organized under the laws of the state or any interstate compact to which the state is a party;
(17)
(A)
"Public depository" means:
(i)
Any savings and loan association, or savings bank (collectively referred to as savings institutions), or any bank chartered by the state of Tennessee;
(ii)
Any national bank or federal savings institution that has its main office located in this state; or
(iii)
Any national or state bank, or any federal or state savings institution that has its main office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits; and which has been appropriately designated to hold public deposits by a public depositor;
(B)
Notwithstanding any other law to the contrary, an automated teller machine or such other similar type receptacle or device shall not be considered a branch for purposes of this subdivision (17);
(C)
A bank or savings institution located outside this state desiring to be designated as a qualified public depository must agree that this chapter shall govern in determining its rights and responsibilities as a qualified public depository, and must agree to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter;
(18)
"Qualified public depository" means any public depository that meets all of the requirements of this part and that has been authorized by the board to secure public deposits through the collateral pool;
(19)
"Required collateral" of a qualified public depository means eligible collateral, excluding accrued interest, having a market value equal to or in excess of the greater of the average daily balance or average monthly balance of public deposits multiplied by the qualified public depository's collateral-pledging level as determined by the board; and
(20)
"Trustee custodian" means a financial institution designated to hold eligible collateral on behalf of the state treasurer and a qualified public depository pursuant to §
9-4-108
.
Acts 1990, ch. 1043, § 1; 1992, ch. 592, §§ 10-12; 1996, ch. 621, §§ 2-6; 1997 , ch. 217, § 16; 2004, ch. 454, § 1.