Michigan Laws 129.114 – Contract between financial institution and local unit; required provisions
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Before surplus funds are placed in an investment pool, the financial institution and the local unit shall enter into a written contract which shall include, at a minimum, the following provisions:
(a) The minimum amount of money which may be deposited in the investment pool.
Terms Used In Michigan Laws 129.114
- Contract: A legal written agreement that becomes binding when signed.
- Financial institution: means a state or nationally chartered bank or a state or federally chartered savings and loan association, savings bank, or credit union whose deposits are insured by an agency of the United States government and which maintains a principal office or branch office located in this state under the laws of this state or the United States and which is eligible to be a depository of surplus funds belonging to the state under section 6 of 1855 PA 105, MCL 21. See Michigan Laws 129.112
- Local unit: means a county, city, village, township, school district, authority, or any other political subdivision organized under the laws of this state. See Michigan Laws 129.112
- Participant: means a local unit which has entered into a contract with a financial institution and has placed funds in an investment pool managed by that financial institution. See Michigan Laws 129.112
- Surplus funds: means money which belongs to or is under the control of the local unit and is available for investment, not being required by law or agreement with bondholders to be segregated and invested in a specified manner. See Michigan Laws 129.112
(b) The procedure for the deposit and withdrawal of the money.
(c) The amount of the fee for managing the investment pool, if a management fee is to be charged of the participant by the financial institution.
(d) The terms for distribution of earnings in excess of any management fee, and for the allocation of losses, to 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 custody of the investment pool.