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CHAPTER 4-6A

INSURANCE OF PUBLIC DEPOSITS

4-6A-1      Definition of terms.
4-6A-2      Public deposit protection commission established--Function.
4-6A-3      Segregation of collateral by public depository--Value--Deposit and designation--Letters of credit and surety bonds.
4-6A-4      Valuation of collateral--Substitution of securities.
4-6A-5      Income from collateral.
4-6A-6      Information required of depository--Disqualification on failure to provide information.
4-6A-7      Reports of public deposits and segregated collateral--False statement as perjury.
4-6A-8      Treasurer not liable for loss from authorized deposits.
4-6A-9      Public deposits protected by chapter.
4-6A-10      Payment to public officers after loss determined--Procedures.
4-6A-11      Ascertainment of public deposits and insurance when depository restrained or taken in possession--Certification to public depositors.
4-6A-12      Depositors' statements of deposits to commission.
4-6A-13      Losses in depositories--Assessment against public depositories.
4-6A-14      Payment of assessments by depositories--Liquidation of collateral on failure to pay.
4-6A-15      Reimbursement of public depositors from proceeds of assessments.
4-6A-16      Actions for protection or settlement of claims.
4-6A-17      Fixing date of loss.
4-6A-18      Repealed.
4-6A-19      Subrogation of commission to depositors' claims--Apportionment of amounts recovered--Refund of assessments--Expenses of liquidation.
4-6A-20      Rules of commission.
4-6A-21      Citation of chapter.


     4-6A-1.   Definition of terms. Terms as used in this chapter mean:
             (1)      "Commission," the South Dakota Public Deposit Protection Commission created under § 4-6A-2;
             (2)      "Deposit insurance," insurance provided by the Federal Deposit Insurance Corporation or the National Credit Union Administration;
             (3)      "Eligible collateral," collateral which is eligible as security for public deposits pursuant to §§ 51A-10-9, 51A-4-25, and 51A-4-26 and also includes certificates of deposit that are owned by the qualified public depository and that are fully insured by deposit insurance, and that portion of loans which are unconditionally guaranteed by a United States government agency including Government National Mortgage Association (GNMA), the Veterans' Administration (VA), the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA), the Export-Import Bank (EXIMBANK), the Overseas Private Investment Corporation (OPIC), the Commodity Credit Corporation (CCC), and the Small Business Administration (SBA). Further, in lieu of pledging eligible securities, a qualified public depository may furnish to a public depositor irrevocable standby letters of credit issued by Federal Home Loan Banks to the public depositor accompanied by a written evidence of that bank's public debt rating which may not be less than "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation, or a qualified public depository may furnish to a public depositor a corporate surety bond of a corporation authorized to do business in South Dakota;
             (4)      "Loss," issuance of an order of supervisory authority restraining a qualified public depository from making payments of deposit liabilities or the appointment of a receiver for a qualified public depository;
             (5)      "Maximum liability," a sum equal to one hundred percent of the public deposit accounts which exceed deposit insurance, which are held by the qualified public depository;
             (6)      "Public deposit," all general, special, and other funds held or administered by this state or any political subdivision thereof, including counties, municipalities, townships, and school districts, or by any officer, commission, board, bureau, or agency of the state or political subdivision or any tribal government funds, and which public deposit is insured, in whole or in part, by deposit insurance. Deposits placed in banks by the Value Added Finance Authority created pursuant to chapter 1-16E are not public deposits;
             (7)      "Qualified public depository," a state bank, national bank, federal savings and loan association, or a federally chartered credit union located in this state which receives or holds public deposits; and segregates eligible collateral for public deposits as described in § 4-6A-3;
             (8)      "Treasurer," the state treasurer, a county treasurer, a treasurer of any other municipal corporation, or the custodian of any public funds.

Source: SL 1974, ch 39, § 2; SL 1982, ch 45, § 1; SL 1986, ch 44, § 1; SL 1986, ch 45, § 2; SL 1986, ch 400, § 16; SL 1987, ch 45, § 1; SL 1991, ch 39; SL 1997, ch 273, § 4; SL 2002, ch 221, § 3; SL 2015, ch 38, § 1.


     4-6A-2.   Public deposit protection commission established--Function. The South Dakota Public Deposit Protection Commission shall be the state treasurer and the director of the Division of Banking, and shall supervise insuring of all public funds.

Source: SL 1974, ch 39, § 4; SL 1991, ch 391, § 15.


     4-6A-3.   Segregation of collateral by public depository--Value--Deposit and designation--Letters of credit and surety bonds. Every qualified public depository shall at all times maintain, segregated from its other assets, eligible collateral having a value at least equal to its maximum liability under this chapter. Such collateral shall be segregated by deposit in such manner as the commission approves. The collateral shall be clearly designated as security for the benefit of public depositors under this chapter and shall be pledged as collateral for those public deposit accounts which exceed deposit insurance. Irrevocable standby letters of credit or surety bonds shall be segregated or issued in such manner as the commission approves.

Source: SL 1974, ch 39, § 6; SL 1982, ch 45, § 1A; SL 1986, ch 44, § 2; SL 1986, ch 45, § 3; SL 1987, ch 45, § 2; SL 1997, ch 273, § 3.


     4-6A-4.   Valuation of collateral--Substitution of securities. Securities eligible as collateral shall be valued at face value or market value, whichever is less. A qualified public depository may make substitutions of eligible collateral at any time and shall notify the public deposit protection commission of such change immediately.

Source: SL 1923, ch 281, § 1; SL 1925, ch 281, § 1; SL 1927, ch 196, § 1; SL 1933 (SS), ch 16, § 1; SDC 1939, § 55.2402; SL 1939, ch 208, § 2; SL 1941, ch 302; SDCL, § 4-6-11; SL 1974, ch 39, § 7; SL 1986, ch 44, § 3.


     4-6A-5.   Income from collateral. The income from the securities which have been segregated as collateral shall belong to the qualified public depository without restriction.

Source: SL 1974, ch 39, § 8; SL 1982, ch 45, § 1B; SL 1986, ch 44, § 4.


     4-6A-6.   Information required of depository--Disqualification on failure to provide information. The public deposit protection commission may require any qualified public depository to furnish such information dealing only with public deposits as the commission shall request. Any public depository which refuses or neglects to give any information so requested may no longer be a qualified public depository and is excluded from the right to receive public deposits until such time as the commission shall acknowledge that such depository has furnished the information requested.

Source: SL 1974, ch 39, § 5 (2); SL 1982, ch 45, § 1C; SL 1986, ch 44, § 5; SL 1986, ch 45, § 4; SL 1987, ch 45, § 4.


     4-6A-7.   Reports of public deposits and segregated collateral--False statement as perjury. On each call report date, or more often as determined by the public deposit protection commission, each qualified public depository shall render to the commission a written report, certified under oath, indicating the total amount of public deposits held by it and the amount and nature of the eligible collateral segregated and designated therefor in accordance with this chapter. Any person who makes a false statement in any affidavit required by this section is guilty of perjury, and upon conviction thereof, shall be punished as provided by law.

Source: SL 1974, ch 39, § 11; SL 1982, ch 45, § 1D; SL 1986, ch 44, § 6; SL 1986, ch 45, § 5; SL 1987, ch 45, § 5.


     4-6A-8.   Treasurer not liable for loss from authorized deposits. When deposits are made in accordance with this chapter, a treasurer shall not be liable for any loss thereof resulting from the failure or default of any depository without fault or neglect on his part or on the part of his assistants or clerks.

Source: SL 1909, ch 229, § 2; SL 1911, ch 234, § 2; RC 1919, § 6873; SL 1923, ch 282; SL 1927, ch 200, § 1; SL 1929, ch 233; SDC 1939, § 55.2401; SL 1939, ch 208, § 1; SL 1949, ch 218; SDCL, § 4-6-15; SL 1974, ch 39, § 12.


     4-6A-9.   Public deposits protected by chapter. All public deposits, including accrued interest thereon, in qualified public depositories shall be protected against loss, to the extent provided in this chapter.

Source: SL 1974, ch 39, § 3; SL 1982, ch 45, § 1E; SL 1986, ch 44, § 7; SL 1986, ch 45, § 6; SL 1987, ch 45, § 6.


     4-6A-10.   Payment to public officers after loss determined--Procedures. When the Public Deposit Protection Commission determines that a loss has occurred, the commission shall, as soon as possible, make payment to the proper public officers of all funds subject to such loss, pursuant to the procedures set forth in §§ 4-6A-11 to 4-6A-15, inclusive.

Source: SL 1974, ch 39, § 9.


     4-6A-11.   Ascertainment of public deposits and insurance when depository restrained or taken in possession--Certification to public depositors. For the purposes of determining the sums to be paid pursuant to § 4-6A-10, the Public Deposit Protection Commission shall, within twenty days after issuance of a restraining order or the taking of possession of any qualified public depository, ascertain the amount of public funds on deposit therein as disclosed by its record and the accounts thereof insured by deposit insurance and certify such insured accounts to each such public depositor.

Source: SL 1974, ch 39, § 9 (1); SL 1982, ch 45, § 1F; SL 1986, ch 44, § 8; SL 1986, ch 45, § 7; SL 1987, ch 45, § 7.


     4-6A-12.   Depositors' statements of deposits to commission. Within ten days after receipt of certification pursuant to § 4-6A-11, each public depositor shall furnish to the Public Deposit Protection Commission verified statements of its deposits in the depository as disclosed by its records.

Source: SL 1974, ch 39, § 9 (2).


     4-6A-13.   Losses in depositories--Assessment against public depositories. If a loss occurs in a qualified public depository, upon receipt of statements furnished pursuant to § 4-6A-12, the Public Deposit Protection Commission shall ascertain and fix the amount of such public deposit accounts net after deduction of deposit insurance and assess the same against that qualified public depository.

Source: SL 1974, ch 39, § 9 (3); SL 1982, ch 45, § 1G; SL 1986, ch 44, § 9; SL 1986, ch 45, § 8; SL 1987, ch 45, § 8.


     4-6A-14.   Payment of assessments by depositories--Liquidation of collateral on failure to pay. Assessments made by the Public Deposit Protection Commission pursuant to § 4-6A-13 shall be payable on the second business day following demand, and in case of the failure of any qualified public depository so to pay, the commission shall forthwith take possession of the securities segregated as collateral by such depository pursuant to this chapter and liquidate the same for the purpose of paying such assessment.

Source: SL 1974, ch 39, § 9 (4).


     4-6A-15.   Reimbursement of public depositors from proceeds of assessments. Upon receipt of assessment payments under § 4-6A-14, the Public Deposit Protection Commission shall reimburse the public depositors of the qualified public depository in which the loss occurred to the extent of the depository's net deposit liability to them.

Source: SL 1974, ch 39, § 9 (5); SL 1986, ch 44, § 10.


     4-6A-16.   Actions for protection or settlement of claims. The Public Deposit Protection Commission shall have the power to take such action as the commission deems best for the protection, collection, compromise, or settlement of any claim arising in case of loss.

Source: SL 1974, ch 39, § 5 (3).


     4-6A-17.   Fixing date of loss. The Public Deposit Protection Commission may fix the official date on which any loss is considered to have occurred for purposes of this chapter taking into consideration the orders, rules, and regulations of supervisory authority as they affect the failure or inability of a qualified public depository to repay public deposits in full.

Source: SL 1974, ch 39, § 5 (4); SL 1982, ch 45, § 1H; SL 1986, ch 44, § 11; SL 1986, ch 45, § 9; SL 1987, ch 45, § 9.


     4-6A-18.   Repealed by SL 1986, ch 44, § 12.


     4-6A-19.   Subrogation of commission to depositors' claims--Apportionment of amounts recovered--Refund of assessments--Expenses of liquidation. Upon payment to any public depositor, the public deposit protection commission is subrogated to all of such depositor's right, title and interest against the qualified public depository in which the loss occurred. If the commission incurs expense in enforcing any such claim, the amount shall be paid as a liquidation expense of the depository in which the loss occurred.

Source: SL 1974, ch 39, § 10; SL 1986, ch 44, § 19.


     4-6A-20.   Rules of commission. The Public Deposit Protection Commission may make and enforce rules necessary and proper to the full and complete performance of the commission's functions under this chapter, including the authority to provide by rule for a sum less than one hundred percent if the depositor of public funds contracts with a qualified public depository for a lesser amount, and including the authority to provide by rule for a sum less than one hundred percent if the qualified public depository is subject to seasonal variances in public deposits.

Source: SL 1974, ch 39, § 5 (1); SL 1991, ch 40; SL 2002, ch 221, § 4.


     4-6A-21.   Citation of chapter. This chapter may be cited as the Public Deposit Insurance Act.

Source: SL 1974, ch 39, § 1.


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