7-3-1317. Deposit security. (1) Unless a bank designated as a depository shall elect to deposit securities with the treasurer as provided in subsection (2), it shall give good and sufficient bonds, with sureties to be approved by the commission, conditioned for the safekeeping and payment of the municipal funds deposited therewith and the interest thereon. Any such bonds of a depository shall be in the aggregate equal to the amount designated by the commission as the maximum of municipal funds which may at any time be kept by such depository. All surety bonds given by a bank in accordance with the provisions of this subsection shall continue in force so long as funds of the municipality deposited therein shall be unpaid. Nothing provided herein shall impair the rights and remedies of the municipality on such bonds under the laws of the state.
     (2) In lieu of the surety bonds specified in subsection (1), any bank designated as a depository of municipal funds may deposit with the treasurer bonds of the class and kind in which, by the provisions of 7-3-1322, the sinking fund of the municipality may be invested. Bonds so deposited shall be in an amount equal to the amount of municipal funds permitted at any time to be deposited with such bank, shall be approved by the commission, and shall be accompanied by proper assignment, to the end that the bank so depositing and assigning such bonds will safely keep and pay over to the treasurer or his order, on demand and free of exchange, all money at any time deposited therein with interest thereon at the rate agreed upon and that in case of default on the part of such bank, the commission shall have power and authority to sell such bonds or so much thereof as may be necessary to realize the full amount of the funds deposited therein. The bank shall be entitled to interest on the securities so deposited with the treasurer, when paid, and to the return of the securities at the termination of such trust so long as the bank is not in default. With the approval of the commission, a bank may at any time substitute other like securities of equal value for those so deposited.
     (3) Bonds and other securities given by banks in accordance with this part shall be entered in a record to be kept for that purpose by the director of finance and deposited with the treasurer for safekeeping. The record of such bonds and securities kept by the director of finance or copies thereof certified by that officer shall be competent and prima facie evidence of the contents and tenor thereof.

     History: En. Secs. 64, 65, 67, Ch. 121, L. 1923; re-en. Secs. 5520.65, 5520.66, 5520.68, R.C.M. 1935; R.C.M. 1947, 11-3505(part), 11-3506, 11-3508.