(a) The State Treasurer is authorized to enter into contracts with the state depositories for the deposit of state funds in time deposits, open account, having maturities of 91 days, six months, or one year; provided that any such contract for a time deposit, open account, having a maturity of 91 days shall provide for early withdrawal of funds upon written notice delivered at least 14 days (or the minimum period of time as is prescribed by applicable banking regulation then in effect) prior to the date of withdrawal.
(b) The State Treasurer shall apportion the time deposits, open account, among state depositories, giving preference to banks that are located in Alabama and giving due consideration to the activities of the various banking accounts maintained therein, the reasonable value of the banking services rendered or to be rendered the state by depositary banks, and giving first priority to the value and importance of such deposits to the economy of the communities and the various areas of the state to be affected thereby, as indicated by the loan to deposit ratio.
(c) The rate of interest to be paid on each time deposit, open account, of 91 days, six months, and one year maturity shall correspond to the rate borne by United States Treasury obligations of comparable maturity and shall be calculated as the average auction rate for United States Treasury Bills with maturities of 91 days and 26 weeks, respectively, as established at the four most recent auctions held immediately prior to the execution of the contract for such time deposit, open account, or where the maturity of the time deposit, open account, is one year, the weekly average one-year constant maturity yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week immediately preceding the execution of the contract.
(d) The interest shall be payable in accordance with Section 41-14-34.
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