Find Laws Find Lawyers Free Legal Forms USA State Laws

NORTH CAROLINA STATUTES AND CODES

§ 159-30. Investment of idle funds.

§ 159‑30.  Investment ofidle funds.

(a)        A local governmentor public authority may deposit at interest or invest all or part of the cashbalance of any fund. The finance officer shall manage investments subject towhatever restrictions and directions the governing board may impose. Thefinance officer shall have the power to purchase, sell, and exchange securitieson behalf of the governing board. The investment program shall be so managedthat investments and deposits can be converted into cash when needed.

(b)        Moneys may bedeposited at interest in any bank, savings and loan association, or trustcompany in this State in the form of certificates of deposit or such otherforms of time deposit as the Commission may approve. Investment deposits,including investment deposits of a mutual fund for local government investmentestablished under subdivision (c)(8) of this section, shall be secured asprovided in G.S. 159‑31(b).

(b1)      In addition todeposits authorized by subsection (b) of this section, the finance officer maydeposit any portion of idle funds in accordance with all of the followingconditions:

(1)        The funds areinitially deposited through a bank or savings and loan association that is anofficial depository and that is selected by the finance officer.

(2)        The selected bank orsavings and loan association arranges for the deposit of funds in certificatesof deposit for the account of the local government or public authority in oneor more federally insured banks or savings and loan associations whereverlocated, provided that no funds shall be deposited in a bank or savings andloan association that at the time holds other deposits from the localgovernment or public authority.

(3)        The full amount ofprincipal and any accrued interest of each certificate of deposit are coveredby federal deposit insurance.

(4)        The selected bank orsavings and loan association acts as custodian for the local government orpublic authority with respect to the certificates of deposit issued for thelocal government's or public authority's account.

(5)        At the same timethat the local government or public authority funds are deposited and thecertificates of deposit are issued, the selected bank or savings and loanassociation receives an amount of deposits from customers of other federallyinsured financial institutions wherever located equal to or greater than theamount of the funds invested by the local government or public authoritythrough the selected bank or savings and loan association.

(c)        Moneys may beinvested in the following classes of securities, and no others:

(1)        Obligations of theUnited States or obligations fully guaranteed both as to principal and interestby the United States.

(2)        Obligations of theFederal Financing Bank, the Federal Farm Credit Bank, the Bank forCooperatives, the Federal Intermediate Credit Bank, the Federal Land Banks, theFederal Home Loan Banks, the Federal Home Loan Mortgage Corporation, FannieMae, the Government National Mortgage Association, the Federal HousingAdministration, the Farmers Home Administration, the United States PostalService.

(3)        Obligations of theState of North Carolina.

(4)        Bonds and notes ofany North Carolina local government or public authority, subject to suchrestrictions as the secretary may impose.

(5)        Savings certificatesissued by any savings and loan association organized under the laws of theState of North Carolina or by any federal savings and loan association havingits principal office in North Carolina; provided that any principal amount ofsuch certificate in excess of the amount insured by the federal government orany agency thereof, or by a mutual deposit guaranty association authorized bythe Commissioner of Banks of the Department of Commerce of the State of NorthCarolina, be fully collateralized.

(6)        Prime qualitycommercial paper bearing the highest rating of at least one nationallyrecognized rating service and not bearing a rating below the highest by anynationally recognized rating service which rates the particular obligation.

(7)        Bills of exchange ortime drafts drawn on and accepted by a commercial bank and eligible for use ascollateral by member banks in borrowing from a federal reserve bank, providedthat the accepting bank or its holding company is either (i) incorporated inthe State of North Carolina or (ii) has outstanding publicly held obligationsbearing the highest rating of at least one nationally recognized rating serviceand not bearing a rating below the highest by any nationally recognized ratingservice which rates the particular obligations.

(8)        Participating sharesin a mutual fund for local government investment; provided that the investmentsof the fund are limited to those qualifying for investment under thissubsection (c) and that said fund is certified by the Local GovernmentCommission. The Local Government Commission shall have the authority to issuerules and regulations concerning the establishment and qualifications of anymutual fund for local government investment.

(9)        A commingledinvestment pool established and administered by the State Treasurer pursuant toG.S. 147‑69.3.

(10)      A commingledinvestment pool established by interlocal agreement by two or more units oflocal government pursuant to G.S. 160A‑460 through G.S. 160A‑464,if the investments of the pool are limited to those qualifying for investmentunder this subsection (c).

(11)      Evidences ofownership of, or fractional undivided interests in, future interest andprincipal payments on either direct obligations of the United States governmentor obligations the principal of and the interest on which are guaranteed by theUnited States, which obligations are held by a bank or trust company organizedand existing under the laws of the United States or any state in the capacityof custodian.

(12)      Repurchase agreementswith respect to either direct obligations of the United States or obligationsthe principal of and the interest on which are guaranteed by the United Statesif entered into with a broker or dealer, as defined by the Securities ExchangeAct of 1934, which is a dealer recognized as a primary dealer by a FederalReserve Bank, or any commercial bank, trust company or national bankingassociation, the deposits of which are insured by the Federal Deposit InsuranceCorporation or any successor thereof if:

a.         Such obligationsthat are subject to such repurchase agreement are delivered (in physical or inbook entry form) to the local government or public authority, or any financialinstitution serving either as trustee for the local government or publicauthority or as fiscal agent for the local government or public authority orare supported by a safekeeping receipt issued by a depository satisfactory tothe local government or public authority, provided that such repurchaseagreement must provide that the value of the underlying obligations shall bemaintained at a current market value, calculated at least daily, of not lessthan one hundred percent (100%) of the repurchase price, and, provided further,that the financial institution serving either as trustee or as fiscal agent forthe local government or public authority holding the obligations subject to therepurchase agreement hereunder or the depository issuing the safekeepingreceipt shall not be the provider of the repurchase agreement;

b.         A valid andperfected first security interest in the obligations which are the subject ofsuch repurchase agreement has been granted to the local government or publicauthority or its assignee or book entry procedures, conforming, to the extentpracticable, with federal regulations and satisfactory to the local governmentor public authority have been established for the benefit of the localgovernment or public authority or its assignee;

c.         Such securities arefree and clear of any adverse third party claims; and

d.         Such repurchaseagreement is in a form satisfactory to the local government or publicauthority.

(13)      In connection withfunds held by or on behalf of a local government or public authority, whichfunds are subject to the arbitrage and rebate provisions of the InternalRevenue Code of 1986, as amended, participating shares in tax‑exemptmutual funds, to the extent such participation, in whole or in part, is notsubject to such rebate provisions, and taxable mutual funds, to the extent suchfund provides services in connection with the calculation of arbitrage rebaterequirements under federal income tax law; provided, the investments of anysuch fund are limited to those bearing one of the two highest ratings of atleast one nationally recognized rating service and not bearing a rating belowone of the two highest ratings by any nationally recognized rating servicewhich rates the particular fund.

(d)        Investmentsecurities may be bought, sold, and traded by private negotiation, and localgovernments and public authorities may pay all incidental costs thereof and allreasonable costs of administering the investment and deposit program.Securities and deposit certificates shall be in the custody of the financeofficer who shall be responsible for their safekeeping and for keeping accurateinvestment accounts and records.

(e)        Interest earned ondeposits and investments shall be credited to the fund whose cash is depositedor invested. Cash of several funds may be combined for deposit or investment ifnot otherwise prohibited by law; and when such joint deposits or investmentsare made, interest earned shall be prorated and credited to the various fundson the basis of the amounts thereof invested, figured according to an averageperiodic balance or some other sound accounting principle. Interest earned onthe deposit or investment of bond funds shall be deemed a part of the bondproceeds.

(f)         Registeredsecurities acquired for investment may be released from registration andtransferred by signature of the finance officer.

(g)        A local government,public authority, an entity eligible to participate in the Local GovernmentEmployee's Retirement System, or a local school administrative unit may makecontributions to the Local Government Other Post‑Employment Benefits Fundestablished in G.S. 147‑69.4.

(h)        A unit of localgovernment employing local law enforcement officers may make contributions tothe Local Government Law Enforcement Special Separation Allowance Fundestablished in G.S. 147‑69.5. (1957, c. 864, s. 1; 1967, c. 798, ss. 1, 2; 1969, c.862; 1971, c. 780, s. 1; 1973, c. 474, ss. 24, 25; 1975, c. 481; 1977, c. 575;1979, c. 717, s. 2; 1981, c. 445, ss. 1‑3; 1983, c. 158, ss. 1, 2; 1987,c. 672, s. 1; 1989, c. 76, s. 31; c. 751, s. 7(46); 1991 (Reg. Sess., 1992), c.959, s. 77; c. 1007, s. 40; 1993, c. 553, s. 55; 2001‑193, s. 16; 2001‑487,s. 14(o); 2005‑394, s. 2; 2007‑384, ss. 4, 9.)

North Carolina Forms by Issue

North Carolina Gun Forms
North Carolina Real Estate Forms
North Carolina Tax Forms

North Carolina Law

North Carolina State Laws
    > North Carolina Child Support
    > North Carolina Gun Laws
    > North Carolina Statute
North Carolina Tax
    > North Carolina State Tax
North Carolina Labor Laws
    > North Carolina Unemployment
North Carolina Agencies
    > North Carolina Department of Corrections
    > North Carolina DMV
    > North Carolina Employment Security Commission
    > North Carolina Real Estate
    > North Carolina Secretary of State

North Carolina Court Map

Tips