STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5704

May 8, 1980

COLLEGES AND UNIVERSITIES:

Community college funds deposited in banks outside of Michigan

CONSTITUTIONAL LAW:

Const 1963, art 9, Secs. 19 and 20

Community college districts may invest their general fund moneys in certificates of deposit, provided that the certificates of deposit are issued by a bank whose principal office is located in the State of Michigan.

The Honorable Gerrit C. Hasper

House of Representatives

The Capitol

Lansing, MI 48909

Dear Representative Hasper:

You have requested my opinion on two questions which may be phrased as follows:

In the Community College Act of 1966, 1966 PA 331, Sec. 142, MCLA 389.142; MSA 15.615(1142), the legislature has provided:

is manifest that in 1966 PA 331, Sec. 142, supra, the legislature has expressly authorized community college districts to invest their general fund moneys in certificates of deposit. Thus, in answer to your first question, it is my opinion that community college districts may invest their general fund moneys in certificates of deposit.

In response to your second question, it must first be observed that 1966 PA 331, Sec. 142(b), supra, read, prior to its amendment by 1979 PA 78, as follows:

The dominant purpose of amending 1966 PA 331, 142(b), supra, by 1979 PA 78 was to permit community colleges to invest in savings and loan associations and credit unions as well as in banks. 1979 PA 78, which was introduced as House Bill No. 4096, was one in a series of bills, House Bills Nos. 4092-4097, that were designed to implement Proposal C, as approved by the voters at the November 7, 1978 election. Proposal C amended Const 1963, art 9, Sec. 20 to permit depositing public money in savings and loan associations and credit unions as well as in banks.

Since the dominant purpose of amending 1966 PA 311, Sec. 142(b), supra, by 1979 PA 78 was to permit community colleges to invest in savings and loan associations and credit unions as well as in banks, it must be concluded that the phrase 'having its principal office in this state', which was substituted for the phrase 'organized and authorized to operate a bank in this state', was intended to apply to banks, savings and loan associations and credit unions. Winokur v State Board of Dentistry, 366 Mich 261, 266; 114 NW2d 233, 235 (1962). This result is consistent with 1855 PA 105, Sec. 3, as amended by 1979 PA 88, MCLA 21.143; MSA 3.691, which precludes the investment of funds in the state treasury in banks located in states other than Michigan.

In answer to your second question, it is my opinion that community college districts may not invest their general fund moneys in certificates of deposit issued by banks located in states other than Michigan and not having a principal office in Michigan.

Frank J. Kelley