Ala. Admin. Code r. 892-X-1-.02

Current through Register Vol. 42, No. 11, August 30, 2024

Section 892-X-1-.02 - Definitions

For the purpose of these general instructions, in addition to the other terms as defined in the SAFE Act, the following terms are defined and shall have such meanings given thereto below whether or not such terms appear as capitalized in these general instructions:

(1) "Eligible Collateral" means the types of securities or investment instruments described in Section 41-14-35, Code of Alabama 1975, as amended, designated as eligible collateral for public deposits.

(2) "Collateral Pledging Level" or "Collateral Pledging Requirement" means the percentage of collateral required to be pledged by a QPD as determined in accordance with the SAFE rules.

(3) "Covered Public Entity" means the various governmental units of the state, counties, municipalities, and other public corporations or officials subject to the provisions of the SAFE Program.

(4) "Letters of Credit or "LOC" means irrevocable, unconditional letters of credit issued by a Federal Home Loan Bank to the Treasurer in order to secure the public deposits of any QPD, to the extent permitted in accordance with the provisions of this Chapter.

(5) "Loss Payment Fund" means the funds that shall be dispersed as necessary to pay losses to public depositors and for other purposes.

(6) "Minimum Collateral" means the minimum collateral necessary to collateralize public deposits and to remain active in the SAFE Program.

(7) "Nominating authority" means either the Alabama Bankers Association, the League of Municipalities, or the Association of County Commissions which are authorized under the SAFE law to submit nominations to fill a vacancy on the SAFE Board of Directors

(8) "Public Deposits" means funds of any covered public entity or covered public official deposited in a bank or financial institution, such as time deposit accounts, demand deposit accounts, and certificates of deposit. Funds not defined as public deposits include, but are not limited to, bonds, notes, money market mutual funds, repurchase agreements, and similar instruments.

(9) "Qualified Public Depository" or "QPD" means any bank or financial institution that meets all the requirements of the SAFE Program and has been designated by the Treasurer to receive and hold Public Deposits.

(10) "Recurrence" means an additional occurrence of an infraction within a period of one year from the date of the QPD's or Custodian's written response to the initial infraction.

(11) "Required Collateral" means that Eligible Collateral which is required to be pledged by a QPD (or, in the case of Federal Home Loan Bank Letters of Credit, issued to the Treasurer, as beneficiary) in order to satisfy the QPD's Collateral-Pledging Requirement.

(12) "SAFE Board of Directors" or "SAFE Board" means the Board of Directors of the SAFE program. The Treasurer shall serve as Chairman of the eight-member board responsible for managing the sufficiency of the SAFE Program. Other members include the Superintendent of Banks, a representative of the Association of County Commissions, a representative of the League of Municipalities, and four representatives of the financial industry.

(13) "SAFE Program" means the Security for Alabama Funds Enhancement Program encompassed in Title 41, Chapter 14A, Code of Ala. 1975, as amended, to provide a uniform program for public fund deposits in the state with Qualifying Public Depositories.

(14) "Treasurer" means the State Treasurer of the State of Alabama, or the designee of the State Treasurer.

(15) "Treasurer Designated Custodian" means any bank or financial institution that meets all the requirements of the SAFE Program that has been designated by the Treasurer, and serves as a repository for Pledged Collateral, the proceeds of a draw upon a LOC or the proceeds from the sale of Pledged Collateral.

Ala. Admin. Code r. 892-X-1-.02

New Rule: Filed March 28, 2001; effective May 2, 2001. Amended: Filed January 23, 2004; effective February 27, 2004. Amended: Filed December 20, 2004; effective January 24, 2005. Amended: Filed August 20, 2008; effective September 24, 2008.

Author: Daria S. Story, Alabama State Treasurer, Office of State Treasurer

Statutory Authority:Code of Ala. 1975, §§ 41-14A-1, et seq., 41-14-35, as amended.