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 held by banks. 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, for the benefit of at least two beneficiaries, 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 delineates the responsibilities 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 a beneficiary may elect to be paid available funds if the total funds are insufficient to cover the payment obligation. The act clarifies that neither depositors nor beneficiaries have 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.

Furthermore, the bill stipulates that unless otherwise stated in the account agreement, a special deposit will terminate five years after it is funded. If a bank is unable to identify or locate a beneficiary at the time of termination, it must pay the remaining balance to the depositor(s) as beneficiaries, after which the bank has no further obligations. The act emphasizes the need for uniformity in its application across jurisdictions and includes a severability clause to maintain the enforceability of remaining provisions if any part is found invalid. It 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.