SENATE, No. 2088
STATE OF NEW JERSEY
INTRODUCED MAY 15, 1997
By Senator LIPMAN
An Act concerning the selection of banks as fiscal agents for the State and custodians of State assets and amending P.L.1954, c.22 and P.L.1977, c.281.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.1954, c.22 (C.52:18A-8.1) is amended to read as follows:
1. The State Treasurer is hereby authorized and empowered to enter into agreement from time to time, and on such terms and for such compensation, if any, as the State Treasurer may deem appropriate, with any  one or more of the national banks, the principal or a branch office of which is located in the State of New Jersey, and the banks authorized by this State to carry on a banking business, which he may select, to act as fiscal agent for the State or as custodian for funds, securities, or other assets of the State and as fiscal agent or as such custodian for any pension agency, fund or system maintained in whole or in part by the State; except that the State Treasurer shall not enter into an agreement or continue an existing agreement with any bank pursuant to this section if that bank requires the use of fingerprints as a form of identification in any transaction with that bank.
(cf: P.L.1954, c.22, s.1)
2. Section 1 of P.L.1977, c.281 (C.52:18A-90.4) is amended to read as follows:
1. Notwithstanding the provisions of section 2 of P.L.1970, c.270 (C.52:18A-90.2), the Director of the Division of Investment may, subject to the approval of the State Investment Council and the State Treasurer, establish, maintain and operate a common trust fund to be known as the State of New Jersey Cash Management Fund in which may be deposited the surplus public moneys of the State, its counties, municipalities and school districts and the agencies or authorities created by any of these entities. This fund shall be considered a legal depository for public moneys and shall satisfy the requirements in that regard of section 1 of P.L.1956, c.174 (C.52:18-16.1) and N.J.S.40A:5-14.
The State Treasurer shall be the custodian of the fund and may receive public moneys paid into the fund by any other custodian of public moneys for the purpose of holding and investing said moneys. In that capacity, he may enter into an agreement with a bank or trust company having its place of business within the State and organized under the laws of the United States or of this State, as he may select, for the custodianship of securities held in the fund and for recording the amounts deposited and withdrawn by each participant, the investment transactions entered into, and the balance to each participant's credit each day; except that the State Treasurer shall not enter into an agreement or continue an existing agreement with any bank or trust company pursuant to this section if that bank or trust company requires the use of fingerprints as a form of identification in any transaction with that bank or trust company. The Treasurer may promulgate such rules and regulations pursuant to the Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.), as he deems necessary for the efficient administration of the State of New Jersey Cash Management Fund, including but not limited to, (1) the specification of minimum amounts which may be deposited in the fund and minimum periods of time for which deposits shall be retained in the fund; (2) creation of a reserve for losses; (3) provision for payment of administration expenses from its earnings; and (4) distribution of the earnings in excess of such expenses or allocation of losses to the several participants in a manner which equitably reflects the differing amounts of their respective investments and the differing periods of time for which such amounts were in the custody of the fund.
The Director of the Division of Investment may invest the public moneys constituting the State of New Jersey Cash Management Fund in the same types of investments and subject to the same limitations provided for the investment of funds in the State Treasury. The director shall be responsible for the adequacy of the accounting services provided by the custodian bank and shall maintain such accounting records as may be required for that purpose.
(cf: P.L.1977, c.281, s.1)
3. This act shall take effect immediately.
This bill prohibits the State Treasurer from contracting with a bank or trust company, as applicable, to act as fiscal agent for the State or as custodian for other assets of the State, or as fiscal agent or custodian for any State pension system, if that bank or trust company requires the use of fingerprints for identification in any of its transactions.
Prohibits State Treasurer from selecting certain banks to act as custodian of State funds or fiscal agent of the State, or both.