WEST VIRGINIA LEGISLATURE
2024 REGULAR SESSION
Enrolled Committee Substitute for Senate Bill 826
By Senator Nelson [Passed March 7, 2024; in effect 90 days from passage]
 Enr CS for SB 826
1 AN ACT to amend and reenact §7-6-2 of the Code of West Virginia, 1931, as amended, relating to
2 creating an exemption from the bond or security requirement of banking institutions
3 holding funds for a county commission in excess of the amount insured by an agency of the
4 federal government by allowing for the redeposit of the funds through a deposit placement
5 program that meets certain conditions.
Be it enacted by the Legislature of West Virginia:
ARTICLE 6. COUNTY DEPOSITORIES.
§7-6-2. Bond of depositories.
1 (a) No designation is binding on any county, nor shall any public money be deposited
2 thereunder in excess of the amount insured by an agency of the federal government, until the
3 banking institution designated executes a bond with good and sufficient sureties, to be accepted
4 and approved by the county commission, payable to the State of West Virginia, in a sum as the
5 county commission shall direct, and which may not be less than the amount of the deposit that
6 exceeds the amount insured by an agency of the federal government in the depository at any one
7 time. The bond shall be executed by at least four resident freeholders as sureties owning in the
8 aggregate unencumbered real estate having an assessed valuation thereon equal to the penalty
9 of the bond, or by a fidelity or indemnity company authorized to do business within the state,
10 satisfactory to, and acceptable by the county commission, and having not less than $600,000
11 capital; and the bond shall be conditioned for the receipt, safekeeping, and payment over of all
12 money which may be deposited in or come under the custody of the banking institution designated
13 a county depository under the provisions hereof, together with the interest thereon at the rate
14 specified by this article; and the bond shall be further conditioned for the faithful performance, by
15 the banking institution so designated, of all the duties imposed by this article upon a depository of
16 public moneys: Provided, That the clerk of the county commission shall keep a record of each
17 surety on all personal bonds given as hereinbefore provided and the clerk shall notify the county
18 commission of every recorded conveyance of real estate made by any surety on said personal
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19 bond.
20 (b) An action shall lie on the bond at the instance of the county commission, or the sheriff,
21 for the recovery of any money deposited in the depository, upon failure or default of the depository
22 to fully and faithfully account for and pay over any and all public moneys deposited by the sheriff
23 and of all interests earned and accrued thereon as required by this article. A bond may not be
24 accepted by the county commission until it has been submitted to the prosecuting attorney, and
25 certified by him or her to be in due and legal form, and conformable to the provisions of this article,
26 which certificate shall be endorsed thereon.
27 (c) The county commission may, in lieu of the bond required pursuant to this section,
28 accept as security for money deposited as aforesaid, interest-bearing securities of the United
29 States, or of a state, county, district or municipal corporation, or of the federal land banks, or
30 endorsed county and district warrants of the county in which the depository is located, or letters of
31 credit of the federal land banks, or federal home loan banks, or any other letters of credit approved
32 by the treasurer; the face value of which securities may not be less than the sum hereinbefore
33 specified as the amount to be named in the bond in lieu of which the securities are accepted; or the
34 county commission may accept the securities as partial security to the extent of their face value for
35 the money so deposited, and require bond for the remainder of the full amount hereinbefore
36 specified, to be named in the bond, and in the bond so required, the acceptance of securities as
37 partial security, and the extent thereof, shall be set forth.
38 (d) A banking institution is not required to provide a bond or security in lieu of bond
39 pursuant to this section if the public deposits accepted are placed in certificates of deposit meeting
40 the following requirements:
41 (1) The funds are invested through a designated state depository selected by the county;
42 (2) The selected depository arranges for the deposit of the funds in certificates of deposit in
43 one or more banks or savings and loan associations wherever located in the United States, for the
44 account of the county;
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45 (3) The full amount of principal and accrued interest of each certificate of deposit is insured
46 by the Federal Deposit Insurance Corporation;
47 (4) The selected depository acts as custodian for the county with respect to such
48 certificates of deposit issued for the county's account; and
49 (5) On the same date the public moneys are redeposited by the public depository, the
50 public depository may, in its sole discretion, choose whether to receive deposits, in any amount,
51 from other banks, savings banks, or savings and loan associations.
52 (e) A banking institution is not required to provide a bond or security in lieu of bond
53 pursuant to this section for deposits with any duly designated state depository that is selected and
54 authorized by the county commission to arrange for the redeposit of the funds through a deposit
55 placement program that meets the following conditions:
56 (1) On or after the date that the county commission funds are received, the selected
57 depository:
58 (A) Arranges for the redeposit of the funds into deposit accounts in one or more federally
59 insured banks or savings and loan associations that are located in the United States; and
60 (B) Serves as custodian for the county commission with respect to the funds deposited into
61 such accounts;
62 (2) The county commission funds deposited in a selected depository in accordance with
63 this subsection and held at the close of business in the selected depository in excess of the
64 amount insured by the Federal Deposit Insurance Corporation shall be secured in accordance
65 with subsection (a) or (c) of this section;
66 (3) The full amount of the funds of the county commission redeposited by the selected
67 depository into deposit accounts in banks or savings and loan associations pursuant to this
68 subsection, plus accrued interest, if any, shall be insured by the Federal Deposit Insurance
69 Corporation; and
70 (4) On the same date that the funds of the county commission are redeposited pursuant to
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71 this subsection, the selected depository receives an amount of deposits from customers of other
72 financial institutions through the direct placement program that are equal to the amount of the
73 county commission’s funds redeposited by the selected depository.
74 (f) The hypothecation of the securities shall be by proper legal transfer as collateral
75 security to protect and indemnify by trust any and all loss in case of any default on the part of the
76 banking institution in its capacity as depository as aforesaid. All the securities shall be delivered to
77 or deposited for the account of the county commission, and withdrawal or substitution thereof may
78 be permitted from time to time upon approval by the county commission by order of record, but the
79 collateral security shall be released only by order of record of the county commission when
80 satisfied that full and faithful accounting and payment of all the moneys has been made under the
81 provisions hereof. In the event actual possession of the hypothecated securities are delivered to
82 the county commission, it shall make ample provision for the safekeeping thereof and the interest
83 thereon when paid shall be turned over to the banking institution, so long as it is not in default as
84 aforesaid. The county commission may permit the deposit under proper receipt of the securities
85 with one or more banking institutions within or without the State of West Virginia and may contract
86 with any institution for safekeeping and exchange of any hypothecated securities and may
87 prescribe the rules for handling and protecting the same.
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Statutes affected:
Introduced Version: 7-6-2
Committee Substitute: 7-6-2
Enrolled Committee Substitute: 7-6-2