The proposed bill introduces CHAPTER 35, titled "THE RHODE ISLAND SPECIAL DEPOSITS ACT," to Title 19 of the General Laws, establishing a legal framework for special deposits in financial institutions. It defines essential terms such as "account agreement," "bank," "beneficiary," and "special deposit," and sets forth the criteria for a deposit to qualify as a special deposit, which must be a deposit of funds in a bank under an account agreement, benefit at least two beneficiaries (one or more of which may be a depositor), be denominated in a medium of exchange authorized by a government, serve a permissible purpose stated in the account agreement, and be subject to a contingency.

The bill outlines the obligations of banks regarding payments to beneficiaries, stating that unless the account agreement provides otherwise, the bank is obligated to pay a beneficiary if there are sufficient collected funds in the special deposit. It also specifies that creditor processes with respect to a special deposit are generally not enforceable against the bank holding the special deposit, except under certain conditions.

Additionally, the bill clarifies that neither depositors nor beneficiaries hold a property interest in the special deposit itself, but rather in the right to receive payment if the bank is obligated to pay a beneficiary. It states that banks do not have a fiduciary duty concerning these deposits and details their liability for noncompliance with the account agreement, limiting liability to damages proximately caused by noncompliance and excluding consequential, special, or punitive damages.

The act stipulates that unless otherwise specified in the account agreement, a special deposit will terminate five years after being funded. If the bank cannot identify or locate a beneficiary entitled to payment at termination, it must pay the remaining balance to the depositor or depositors as beneficiaries.

The bill emphasizes the need for uniformity in the law's application across jurisdictions and includes a severability clause to maintain the enforceability of remaining provisions if any are found invalid. The act will apply to special deposits made under agreements executed on or after its effective date, as well as certain prior deposits if all parties agree to amend the agreement accordingly. The act is set to take effect upon passage.