§38-3  Securities for protection of funds
deposited.  For the protection of funds deposited by the director under
this chapter, the following securities shall be deposited with the director, or
with banks in the continental United States, or with financial institutions
with trust powers authorized to do business in the State, as the director may
select, to be held therein for safekeeping subject to the order of the
director, any other provisions of the laws of the State to the contrary
notwithstanding:



(1)  Bonds, notes, debentures, or other evidences of
indebtedness of the State or of any county of the State, for which the payment
of the interest and principal is a direct obligation of the State or the
county, as the case may be, in an amount at least equal in their par value to
the amount of the deposit with the depository;



(2)  Bonds, notes, debentures, or other evidences of
indebtedness of agencies of the State or of agencies of any county of the
State, for which the payment of the interest and principal is from the revenues
of the issuing agency, in an amount at least equal in their market value, but
not to exceed their par value, to the amount of the deposit with the
depository;



(3)  Bonds, notes, debentures, or other evidences of
indebtedness of any improvement district or frontage improvement of any county
of the State, for which the payment of the interest and principal is from the
assessments made for the improvement, in an amount at least equal in their
market value, but not to exceed their par value, to the amount of the deposit
with the depository;



(4)  Bonds, notes, bills, or certificates of
indebtedness of the United States or of agencies of the United States, for
which the payment of the interest and principal is a direct obligation of the
United States, in an amount at least equal in their market value, but not to
exceed their par value, to the amount of the deposit with the depository;



(5)  Bonds, notes, federal home loan bank letters of
credit, or debentures of agencies of the United States, in an amount at least
equal to ninety-five per cent of their market value, but not to exceed their
par value, to the amount of the deposit with the depository;



(6)  Warrants or warrant notes of the State in an
amount at least equal in their face value to the amount of the deposit with the
depository;



(7)  Bonds, notes, debentures, or other evidences of
indebtedness of any other state of the United States, for which the payment of
the interest and principal is a direct obligation of that state, in an amount at
least equal in their market value, but not to exceed their par value, to the
amount of the deposit with the depository;



(8)  Bonds, notes, debentures, or other evidences of
indebtedness of any city or of any county in the continental United States, for
which the payment of the interest and principal is a direct obligation of the
city or county, as the case may be, in an amount at least equal in their market
value, but not to exceed their par value, to the amount of the deposit with the
depository;



(9)  Certificates of deposit issued through the
Certificate of Deposit Account Registry Service in an amount at least equal in
their market value, but not to exceed their par value, to the amount of the
deposit with the depository; or



(10)  Other assets on the books of the depository that
are eligible to secure advances from the Federal Reserve Banks under
regulations of the Federal Reserve Board, in an amount at least equal in their
market value, but not to exceed their par value, to the amount of the deposit with
the depository; provided that not more than fifty per cent of the deposits held
by a depository may be secured by assets of this class.



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



Securities deposited under this section may be
withdrawn from time to time; provided that the required amount of securities
shall at all times be kept on deposit.  The director at any time may require
additional securities to be deposited under this section.



In the event that the depository shall fail to
pay the deposits, or any part thereof, upon presentation of a check or a
certificate of deposit, then the director shall forthwith convert the
securities deposited under this section into money for and on behalf of the
State; provided that no securities shall be sold except at public auction,
after giving at least ten days' public notice thereof in the State. [L 1970, c
51, pt of §1; am L 1980, c 229, §2; am L 1982, c 30, §1; am L 1984, c 148, §1;
am L 1988, c 78, §4; am L 1997, c 134, §1; am L 1998, c 2, §10; am L 2004, c
204, §1]