§38-3  Securities for protection of fundsdeposited.  For the protection of funds deposited by the director underthis chapter, the following securities shall be deposited with the director, orwith banks in the continental United States, or with financial institutionswith trust powers authorized to do business in the State, as the director mayselect, to be held therein for safekeeping subject to the order of thedirector, any other provisions of the laws of the State to the contrarynotwithstanding:

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

(2)  Bonds, notes, debentures, or other evidences ofindebtedness of agencies of the State or of agencies of any county of theState, for which the payment of the interest and principal is from the revenuesof the issuing agency, in an amount at least equal in their market value, butnot to exceed their par value, to the amount of the deposit with thedepository;

(3)  Bonds, notes, debentures, or other evidences ofindebtedness of any improvement district or frontage improvement of any countyof the State, for which the payment of the interest and principal is from theassessments made for the improvement, in an amount at least equal in theirmarket value, but not to exceed their par value, to the amount of the depositwith the depository;

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

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

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

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

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

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

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

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

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

In the event that the depository shall fail topay the deposits, or any part thereof, upon presentation of a check or acertificate of deposit, then the director shall forthwith convert thesecurities deposited under this section into money for and on behalf of theState; 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, c51, 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, c204, §1]