AGO 85-8.
Case Date | May 08, 1985 |
Court | Colorado |
Colorado Attorney General Opinions
1985.
AGO 85-8.
May 8, 1985Department of Law
Attorney General Opinion FORMAL OPINION
of DUANE WOODARD
Attorney General Opinion No. 85-8
AG Alpha No. TR TR AGAOJ
B. J. Thornberry
Deputy Treasurer
Department of the Treasury
140 State Capitol
Denver, Colorado 80203 RE: Federal insurance coverage for
time deposits of state funds in banks and savings and loan associationsDear Ms. Thornberry:
You have requested a legal opinion concerning the practice of the
state treasurer to place time deposits of state moneys in a manner that will
provide maximum federal insurance coverage by the Federal Deposit Insurance
Corporation (FDIC) and the Federal Savings and Loan Insurance Corporation
(FSLIC). Your office has supplied me with information about this practice,
which is described in detail below.
QUESTION PRESENTED AND CONCLUSION
Whether deposits of state moneys with a federally insured
institution under the following account titles are entitled to separate
insurance coverage up to $100,000 for each account, even though the state
treasurer, or his designee, is the custodian for all accounts: Department of
Labor - State Compensation Insurance Fund; Public School Income Fund; Water
Conservation Board Construction Fund; Highway Fund; Department of Local Affairs
- Mineral Leasing Fund; Water and Power Authority Fund; and General Fund.
Yes. It is my opinion that each of these seven accounts is
attributable to a distinct public unit and entitled to separate federal
insurance coverage up to $100,000 even though the state treasurer is the
custodian for all seven public unit accounts.
ANALYSIS
The availability of federal insurance coverage for deposits of
state moneys in Colorado banks and savings and loan associations has been
addressed in previous correspondence from this office, as well as from the
staff of the FDIC and the FSLIC. Rather than repeat the analysis of earlier
opinions in this letter, I will refer you to specific opinions.
You have advised me that the state treasurer serves as custodian
for a large number of cash funds which are established pursuant to the
requirements of state law or as a matter of internal state accounting
procedures. The treasurer identifies cash funds which are available for
investment in time deposits for periods up to one year and places deposits at a
monthly auction. These funds are segregated on the basis of what the treasurer
believes to be separate public units according to prior opinions of this office
and the staff of the FDIC and FSLIC. Time deposits are made in a separate
account for each public unit.
At present the state treasurer has identified seven public units
for which he makes time deposits. These seven accounts are listed above, and
discussed in detail later in this opinion. This practice is designed to
maximize the availability of federal insurance coverage. State funds which are
not protected by federal insurance must be collateralized pursuant to the
requirements of Colorado's Public Deposit Protection Act of 1975, article 10.5
of title 11, Colorado Revised Statutes (C.R.S.) (1984 Supp.)
Federal requirements for maximum insurance coverage for public
unit accounts
Pursuant to federal law, the official custodian of moneys of a
public unit is separately insured by either the FSLIC or the FDIC up to
$100,000 for deposits in a federally insured institution. See 12 U.S.C. secs.
1728(d)(1)(ii), 1813(m)(1), 1821(a)(2)(A)(ii). If the same person is official
custodian for more than one public unit, he is separately insured to the
maximum amount with respect to the aggregate amount of public funds held by him
for each public unit at an insured institution. 12 C.F.R. 564.8(a)(2)(1985) and
330.8(a)(6) (1984)...
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