Section 505 - State depositoriesThe Board of Finance and Revenue shall have the power, and its duty shall be,
(a) To select and designate, as depositories for the State moneys, banks, banking institutions, trust companies or savings and loan associations, which are subject to national or State supervision, and the accounts of which are insured by a corporation organized under the Laws of the Commonwealth, or by an instrumentality of the Federal Government, and each of which,1. Has made written application to the State Treasurer for a deposit of State moneys, designating the amount of deposit solicited, and accompanying its application by a written statement showing the amount of its capital actually paid in, the amount of its surplus, the number of its stockholders, and whether its stock is well distributed or largely held by a few individuals, and the length of time that said institution has been engaged in business under its charter. Each such statement shall be verified by the oath or affirmation of the president, cashier, or trust officer, as the case may be, and the State Treasurer shall present the same to the board for its consideration within thirty days after the receipt thereof.2. Shall, upon the receipt of notice of its selection as a depository of State moneys, furnish a bond to secure payment of deposits and interests to the Commonwealth of Pennsylvania, with a proper warrant of attorney to confess judgment in favor of the Commonwealth, secured by a surety company or individual sureties to be approved by the board, in the amount of the deposit to be made. If a corporate bond be given, no one surety company shall be approved in an aggregate amount in excess of five times its capital surplus, and reserve, and, whenever individual sureties are presented for approval, they shall qualify in an aggregate over and above their individual liabilities to three times the amount of the deposit. No one person may qualify for more than one-fourth of the total amount of the bond required: Provided, That when any deposit of State moneys is insured with the Federal Deposit Insurance Commissioner or any other corporation hereafter organized by the United States for the purpose of insuring deposits, such depository shall not be required to furnish bond or security to cover the amount of such deposit so insured: And provided further, That, in lieu of the surety bonds of surety companies or of individuals as aforesaid, the deposit of State moneys may be secured by the deposit with the State Treasurer, with the Federal Reserve Bank of Philadelphia or Pittsburgh, or with any bank or bank and trust company organized under the laws of this Commonwealth or any national association located in this Commonwealth which shall be approved by the State Treasurer, subject to such regulations as may be prescribed by the Board of Finance and Revenue or the State Treasurer, or both, as the case may be, of bonds or notes of the United States, or bonds or notes which the United States fully guarantees both as to principal and interest, bonds of the Delaware River Joint Commissions, bonds of the Pennsylvania Turnpike Commission, bonds of the State Public School Building Authority, bonds of The General State Authority, bonds of the State Highway and Bridge Authority, bonds of the Pennsylvania Housing Agency, bonds or tax anticipation notes of this Commonwealth, or of any municipal subdivision, institution district, or school district or county thereof, to be approved by the board, in an amount measured by their actual market value equal to the amount of deposit so secured and two per centum in addition thereto. Said bonds and any additions to and substitutions and exchanges therefor shall be subject to proper assignment, or right to sell, or power of attorney to transfer the same, and said trust deposit of securities shall be maintained, on request, at the amount aforesaid, in case of any depreciation in the value thereof: Provided, That no bonds, or other security, shall be required of State depositories for State deposits to the extent, that such State deposits are insured under the provisions of Section 12B of the Federal Reserve Act, approved the twenty-third day of December, one thousand nine hundred and thirteen, its amendments and supplements. 3. Shall agree to pay interest upon all State deposits, at the rate to be fixed every six months by the Board of Finance and Revenue, having due regard to the then prevailing money market: Provided, That such agreement is not in conflict with law or any regulation of the Comptroller of the Currency, or of the Federal Reserve Board of the United States. The said board may fix different rates of interest for active and inactive depositories, not in conflict with law or any regulation of the Comptroller of the Currency, or of the Federal Reserve Board of the United States, and may adopt and promulgate rules governing the time when interest shall begin to run on deposits of uncollected items. The board shall fix the specific day on which any change in interest rate shall become effective, and shall notify, in writing, every depository of such change and the effective date thereof. Pending action by the board the interest rates heretofore fixed by law shall remain in force. All collections shall be made for the Commonwealth without cost or compensation.(b) To select, as depositories for State funds, private banking institutions located and doing business in this Commonwealth, if such private banking institutions shall file a statement, in writing, with the board and the Department of Banking, agreeing that they will subject themselves to the same supervision in all respects, including an examination by the bank examiners of the Department of Banking at any time as banks, banking institutions, or trust companies, which are depositories of State funds, and, if and after, compliance with the conditions required of any other depository.(c) To designate at least eight banks or trust companies in any part of the Commonwealth, to be known as active depositories, in which shall be deposited a sufficient amount of the daily receipts of the State Treasury to transact the current business of the Commonwealth.(d) To see that no bank, banking institution, trust company or savings and loan association, except those designated as active depositories, shall receive a deposit of State moneys in excess of twenty-five per centum of its paid-in capital and surplus, or have, at any one time, an aggregate of deposits in excess of five hundred thousand dollars: Provided, however, That, in the case of any particular depository, these limitations may be waived, by the Board of Finance and Revenue, so as to permit the State Treasurer to deposit State moneys not in excess of one million dollars in any bank, banking institution, trust company or savings and loan association, designated as an inactive depository.(e) To see that the combined deposits in the active depositories shall not exceed, at any time, such total sum as it shall, by resolution, have prescribed.(f) In case it is of the opinion that the credit of any depository is impaired, the safety of the State deposits imperiled, or, for any other cause whatsoever, to require the State Treasurer to reduce, change, or wholly withdraw, within thirty days, any deposit or deposits held by any such depository of State moneys.(g) Whenever it is considering applications for State deposits, to invite the Secretary of Banking to sit with and advise the board. The secretary shall, however, not vote on any question coming before the board.1929, April 9, P.L. 343, art. V, § 505. Amended 1931, June 1, P.L. 318, § 1; 1935, May 22, P.L. 230, § 1; 1935, June 7, P.L. 283, § 2; 1937, June 25, P.L. 2075, § 1; 1939, June 6, P.L. 261, § 3; 1951, June 28, P.L. 601, § 1; 1959, Aug. 11, P.L. 660, No. 213, § 1; 1967, Dec. 14, P.L. 810, § 1; 1970, July 22, P.L. 561, No. 194, § 1; 1971, Dec. 1, P.L. 581, No. 151, § 1; 1980, July 11, P.L. 554, No. 115, § 2, effective in 60 days; 2010, July 6, P.L. 279, No. 46, § 2, retroactive effective 7/1/2010.