SECTIONS 16520-16533 - California Statutes

GOVERNMENT CODE

SECTION 16520-16533

16520. Security shall not be required for that portion of any
deposit that is insured under any law of the United States.

16521. To be eligible to receive and retain demand or time
deposits, a bank shall deposit with the Treasurer as security for
such deposits, securities specified in Section 16522, and approved by
the Treasurer, in an amount in value at least 10 percent in excess
of the amount deposited with the bank. Uncollected funds shall be
excluded from the amount deposited in a demand account with a bank
when determining the security requirements for such deposits.

16522. The following securities may be received as security for
demand and time deposits:
(a) Bonds, notes, or other obligations of the United States, or
those for which the faith and credit of the United States are pledged
for the payment of principal and interest, including the guaranteed
portions of small business administration loans, so long as those
loans are obligations for which the faith and credit of the United
States are pledged for the payment of principal and interest.
(b) Notes or bonds or any obligations of a local public agency (as
defined in the United States Housing Act of 1949) or any obligations
of a public housing agency (as defined in the United States Housing
Act of 1937) for which the faith and credit of the United States are
pledged for the payment of principal and interest.
(c) Bonds of this state or of any county, city, town, metropolitan
water district, municipal utility district, municipal water
district, bridge and highway district, flood control district, school
district, water district, water conservation district or irrigation
district within this state, and, in addition, revenue or tax
anticipation notes, and revenue bonds payable solely out of the
revenues from a revenue-producing property owned, controlled or
operated by this state, or such local agency or district, or by a
department, board, agency, or authority thereof.
(d) Registered warrants of this state.
(e) Bonds, consolidated bonds, collateral trust debentures,
consolidated debentures, or other obligations issued by the United
States Postal Service, federal land banks or federal intermediate
credit banks established under the Federal Farm Loan Act, as amended,
debentures and consolidated debentures issued by the Central Bank
for Cooperatives and banks for cooperatives established under the
Farm Credit Act of 1933, as amended, consolidated obligations of the
Federal Home Loan Banks established under the Federal Home Loan Bank
Act, bonds, debentures and other obligations of the Federal National
Mortgage Association and of the Government National Mortgage
Association established under the National Housing Act as amended, in
the bonds of any federal home loan bank established under said act,
bonds, debentures, and other obligations of the Federal Home Loan
Mortgage Corporation established under the Emergency Home Finance Act
of 1970, and in bonds, notes, and other obligations issued by the
Tennessee Valley Authority under the Tennessee Valley Authority Act,
as amended.
(f) Bonds and notes of the California Housing Finance Agency
issued pursuant to Chapter 7 (commencing with Section 41700) of Part
3 of Division 31 of the Health and Safety Code.
(g) Promissory notes secured by first mortgages and first trust
deeds upon residential real property located in California, provided
that:
(1) Notwithstanding Section 16521, the promissory notes shall at
all times be in an amount in value at least 50 percent in excess of
the amount deposited with the bank;
(2) The Treasurer issues regulations, establishes procedures for
determining the value of the promissory notes and develops standards
necessary to protect the security of the deposits so collateralized;
(3) The depository may exercise, enforce, or waive any right or
power granted to it by promissory note, mortgage, or deed of trust;
and
(4) The following may not be used as security for deposits:
(i) Any promissory note on which any payment is more than 90 days
past due,
(ii) Any promissory note secured by a mortgage or deed of trust as
to which there is a lien prior to the mortgage or deed of trust, or
(iii) Any promissory note secured by a mortgage or deed of trust
as to which a notice of default has been recorded pursuant to Section
2924 of the Civil Code or an action has been commenced pursuant to
Section 725a of the Code of Civil Procedure.
(h) Bonds issued by the State of Israel.
(i) Obligations issued, assumed, or guaranteed by the
International Bank for Reconstruction and Development, the
Inter-American Development Bank, the Asian Development Bank, the
African Development Bank, the International Finance Corporation, or
the Government Development Bank of Puerto Rico.
(j) Any municipal securities, as defined by Section 3(a)(29) of
the Securities Exchange Act of June 6, 1934, (15 U.S.C. 78, as
amended), which are issued by this state or any local agency thereof.
(k) Letters of credit issued by the Federal Home Loan Bank of San
Francisco, which shall be in the form and shall contain provisions as
the Treasurer may prescribe, and shall include the following terms:
(1) The Treasurer shall be the beneficiary of the letter of
credit.
(2) The letter of credit shall be clean and irrevocable, and shall
provide that the Treasurer may draw upon it up to the total amount
in the event of the failure of the bank or if the bank refuses to
permit the withdrawal of funds by the Treasurer or any other
authorized state officer or employee.

16523. If it appears to him necessary for the security of the
State, the Treasurer shall require as a condition of eligibility that
a bank furnish an indemnity bond approved by the Treasurer,
conditioned against loss by any depreciation in value that may occur
in securities deposited as security for the safekeeping and prompt
payment of deposits. The sureties shall not be stockholders of the
principal.

16525. In lieu of deposits of securities, any otherwise eligible
bank may deposit with the Treasurer bonds of admitted surety insurers
as security for demand and time deposits.

16526. An admitted surety insurer is not eligible as surety for
demand or time deposits in any one bank in amounts in excess of 10
percent of the capital and surplus of the surety as shown in the
preceding report issued by the United States Treasury Department.

16527. On demand of the Treasurer, the Insurance Commissioner shall
issue a certificate showing the qualifications of any admitted
surety insurer as surety for demand or time deposits.

16528. The bond of an admitted surety insurer shall not be accepted
as security for demand or time deposits unless it has been certified
by the Insurance Commissioner as meeting the requirements of this
chapter and unless it also holds a certificate of authority from the
United States Treasury Department under which it is eligible as
surety on federal bonds.

16529. The form of bonds required under this chapter shall be
prescribed by the Attorney General.

16530. A surety upon any bond to secure demand or time deposits may
terminate the bond as to future liability by giving 10 days' written
notice of termination to the Treasurer. Such notice of termination
shall not affect any liability accruing prior to the expiration of
the 10-day period.
Within 10 days after receipt of such a notice of termination, the
Treasurer shall require other acceptable security or withdraw the
deposits secured by the bond to be terminated.

16531. That portion of any security for deposit that is in excess
of the requirements of this article may be withdrawn or released on
the written consent of the Treasurer.

16531.1. (a) Notwithstanding any other provision of law and without
regard to fiscal year, if the annual State Budget is not enacted by
June 30 of any fiscal year preceding the fiscal year to which the
budget would apply or there is a deficiency in the Medi-Cal budget
during any fiscal year, both of the following shall occur:
(1) The Controller shall annually transfer from the General Fund,
in the form of one or more loans, an amount not to exceed a
cumulative total of one billion dollars ($1,000,000,000) in any
fiscal year, to the Medical Providers Interim Payment Fund, which is
hereby created in the State Treasury. Notwithstanding Section 13340
of the Government Code, the Medical Providers Interim Payment Fund is
hereby continuously appropriated for the purpose of making payments
to Medi-Cal providers, providers of services under Chapter 6
(commencing with Section 120950) of Part 4 of Division 105 of the
Health and Safety Code, and providers of services under Division 4.5
(commencing with Section 4500) of the Welfare and Institutions Code,
on or after July 1 of the fiscal year for which no budget has been
enacted and before September 1 of that year or for the purpose of
making payments to Medi-Cal providers, providers of services under
Chapter 6 (commencing with Section 120950) of Part 4 of Division 105
of the Health and Safety Code, and providers of services under
Division 4.5 (commencing with Section 4500) of the Welfare and
Institutions Code, during the period in which the Medi-Cal program
has a deficiency. Payments shall be made pursuant to this subdivision
if both of the following conditions have been met:
(A) An invoice has been submitted for the services.
(B) Payment for the services is due and payable and the State
Department of Health Services determines that payment would be valid.
(2) For any fiscal year to which this subdivision applies, there
is hereby appropriated the sum of one billion dollars
($1,000,000,000) from the Federal Trust Fund to the Medical Providers
Interim Payment Fund.
(b) Upon the enactment of the annual Budget Act or a deficiency
bill in any fiscal year to which subdivision (a) applies, the
Controller shall transfer all expenditures and unexpended funds in
the Medical Providers Interim Payment Fund to the appropriate Budget
Act item.
(c) The amount of any loan made pursuant to subdivision (a) and
for which moneys were expended from the Medical Providers Interim
Payment Fund shall be repaid by debiting the appropriate Budget Act
item in accordance with the procedure prescribed by the Department of
Finance.

16532. If any bank fails to pay all or any part of such deposits on
demand of the Treasurer, pursuant to the terms and conditions of the
contract relating to the deposit that is to be withdrawn in whole or
in part, the Treasurer shall forthwith recover upon or convert the
security therefor into money and disburse it according to law.

16533. If at any time the security deposited with the Treasurer is
not deemed satisfactory by the Treasurer, he may require such
additional security as is satisfactory to him.