(a) There is hereby established a Board of Directors of the SAFE Program charged with responsibility and authority to assess and manage the sufficiency of the collateral pool and the SAFE Program to provide adequate protection from losses to public depositors. In exercising its powers and performing its responsibilities, the board of directors shall constitute a body politic under the laws of the state performing the public function of assuring the safety of public deposits.

(b) The State Treasurer shall be a permanent, standing, voting member of the board of directors and shall serve as its chair. The Superintendent of Banks shall be a permanent, standing, non-voting member of the board of directors. The remaining six members shall each possess knowledge, skill, and experience in one or more of the following areas:

(1) Financial analysis.

(2) Trend analysis.

(3) Accounting.

(4) Banking.

(5) Risk management.

(6) Investment management.

The remaining six members shall be comprised of four members each of whom shall be a representative of an active qualified public depository, which is not in the process of withdrawing from the SAFE Program and which is in compliance with all applicable rules, regulations, and reporting requirements of this chapter, one of whom will be selected and approved by the State Treasurer and three of whom shall be selected and approved by the State Treasurer from three or more nominations submitted by the Alabama Bankers Association (or any successor association or entity, or, if no such association or successor association or entity shall then exist, submitted by the Superintendent of Banks); one member who shall be a representative of a municipality within the state and who will be selected and approved by the State Treasurer from one or more nominations submitted to the State Treasurer by the League of Municipalities of Alabama; and one member who shall be a representative of a county within the state and who will be selected and approved by the State Treasurer from one or more nominations submitted to the State Treasurer by the Association of County Commissions of Alabama. The terms of the members of the board of directors other than the State Treasurer and the Superintendent of Banks shall be four years, except that, with respect to the initial appointments, as determined by the State Treasurer, one member will serve one year, one member will serve two years, two members will serve three years, and two members will serve four years. Any person appointed to fill a vacancy on the board may serve only for the remainder of the unexpired term. Any member is eligible for reappointment and shall serve until a successor is selected. The chair shall annually designate a member of the board of directors to serve as vice chair, and a secretary who need not be a member of the board of directors. The secretary shall keep a record of the proceedings of the board of directors and shall be the custodian of all printed materials filed with or by the board. Notwithstanding the existence of vacancies on the board of directors, two thirds of the voting members then serving shall constitute a quorum. The board of directors may not take official action in the absence of a quorum. The board of directors shall meet quarterly and at other times deemed necessary to assess and manage the operations of the SAFE Program. Meetings of the board of directors, including meetings at which administrative fines and penalties are established, shall be subject to the provisions of Section 13A-14-2, as amended, the Sunshine Law, except that sessions at which any information that is confidential under the provisions of subsection (f) below shall not be subject to Section 13A-14-2, and shall not be open to the public.

(c) In adopting, amending or repealing any rule, regulation, standard, or statement of general applicability, the board of directors shall be subject to the applicable requirements of the Alabama Administrative Procedure Act, Chapter 22 of this title.

(d) In connection with the assessment and management of the sufficiency of the collateral pool and the SAFE Program to provide adequate protection from losses to public depositors, the board of directors shall be authorized to exercise the following powers:

(1) Designate financial institutions as qualified public depositories and require such collateral, or increase the collateral-pledging level, of any qualified public depository as may be necessary to administer the provisions of this chapter and to ensure the sufficiency of the collateral pool and the SAFE Program to provide adequate protection from losses to public depositors.

(2) Establish guidelines for accepting, or for reducing the reported value of, collateral as circumstances may require in order to ensure the pledging of sufficient marketable collateral to meet the purposes of this chapter.

(3) Authorize the State Treasurer to issue suspensions, disqualifications, administrative penalties, and cease and desist orders in accordance with Section 41-14A-7 against any qualified public depository that has violated any of the provisions of this chapter or any rules, regulations, or orders of the board of directors or the State Treasurer adopted under this chapter.

(4) Take such actions as the board of directors shall consider to be necessary, appropriate, or desirable in order to assess and manage the sufficiency of the collateral pool and the SAFE Program to provide adequate protection from losses to public depositors, including, without limitation:

a. Establish procedures for the verification of the reports of any qualified public depository relating to public deposits it holds when necessary to ensure the availability of adequate funds to pay any potential losses to public depositors.

b. Establish criteria, based on the overall financial condition of the participants and applicants, as may be necessary, to ensure the sufficiency of the collateral pool and the SAFE Program to provide adequate protection from losses to public depositors.

c. Establish collateral-pledging levels based on qualitative and quantitative standards.

d. Establish rules and procedures for the State Treasurer to monitor and confirm, as often as deemed necessary by the State Treasurer, the pledged collateral held by custodians.

e. Set requirements for the filing by qualified public depositories, custodians, the State Treasurer, the board's agents and contractors, and other persons of such documents, reports, records, or other information deemed necessary by the board of directors to monitor the sufficiency of the collateral pool and the SAFE Program to provide adequate protection from losses to public depositors, including, without limitation:

1. Require reports of each qualified public depository to reflect the net average monthly balance of the public deposits held by the qualified public depository and to reflect the collateral pledged by qualified public depositories under this chapter, which reports shall not be required more frequently than monthly except in the case of any qualified public depository that is then subject to default or insolvency or is the subject of an order of suspension or disqualification or a cease and desist order issued by the State Treasurer.

2. Require the submission of copies of quarterly or annual financial and regulatory reports of qualified public depositories.

f. Direct the State Treasurer to maintain perpetual inventory of pledged collateral.

g. Perform, or direct the State Treasurer to perform, financial analysis of any qualified public depository as needed.

h. Establish a minimum amount of required collateral as the board of directors deems necessary to provide for the contingent liability pool.

(5) Empower the State Treasurer to sell pledged securities, or move pledged securities to an account established in the Loss Payment Fund's name, for the purpose of paying losses to public depositors not covered by deposit insurance or to perfect the Loss Payment Fund's interest in the pledged securities.

(6) Empower the State Treasurer to transfer funds directly from any custodian to public depositors or the receiver in order to facilitate prompt payment of claims.

(7) Adopt and implement, and monitor compliance with, such standards, rules, regulations, guidelines, and orders as the board of directors shall consider to be appropriate or desirable for the purposes of maintaining the sufficiency of the collateral pool to provide adequate protection from losses to public depositors.

(8) Delegate to the State Treasurer all of the responsibility for the day-to-day administration of the SAFE Program and of the standards, rules, regulations, guidelines, and orders adopted by the board of directors, as deemed appropriate or desirable by the board of directors.

(9) Establish the conditions under which entities resulting from mergers, consolidations, sales of assets and similar transactions involving qualified public depositories will succeed qualified public depositories and assume the former institution's contingent liability agreement under Section 41-14A-8, and to prescribe requirements for notification by qualified public depositories to the board of mergers, consolidations, sales of assets, changes of address, changes of name, and similar matters.

(10) Establish the conditions under which qualified public depositories will be required to involuntarily withdraw from participation in the program and for the conditions under which collateral pledged by withdrawing qualified public depositories will be released.

(11) Authorize the filing of any information or forms required under this chapter to be by electronic data transmission. Such filings of information or forms shall have the same force and effect as a signed writing.

(e) The board of directors shall adopt rules or regulations empowering the State Treasurer to impose requirements on qualified public depositories to ensure that applicable accounts maintained by covered public entities and covered public officials are adequately identified as public deposits covered by this chapter and that each qualified public depository can identify on its records the name, address, and federal employer identification number of the covered public entities and covered public officials maintaining public deposits in such qualified public depository. The State Treasurer may require that each qualified public depository shall provide an annual statement to each public depositor then maintaining public deposits with the qualified public depository summarizing the balances of public deposits held by the qualified public depository for the public depositor. The balances reflected in any such annual statement provided by a qualified public depository shall be deemed correct unless the public depositor notifies the qualified public depository to the contrary within 60 days of receipt of the statement.

(f) Any information contained in a report of a financial institution provided to the board of directors or the State Treasurer under this chapter shall, if made confidential by any law of the United States or of this state and if the board is notified by the financial institution of such confidentiality, be considered confidential and exempt from the provisions of Section 36-12-40, and not subject to dissemination to anyone other than the board of directors and the State Treasurer under the provisions of this chapter.

(g) Members of the board of directors shall serve without compensation, but shall be reimbursed for each day's official duties of the board of directors at the same per diem and travel rate as is paid employees of the state.

(h) Neither the board of directors nor the State Treasurer shall have the authority to assess, charge, or collect any of the costs associated with the implementation, administration, or enforcement of the SAFE Program against any covered public entities, covered public officials, or qualified public depositories, provided, however, that this subsection shall not limit or restrict the authority of the board or the State Treasurer, as applicable, to impose administrative penalties or order restitution pursuant to Section 41-14A-7 or to make assessments against qualified public depositories for losses in accordance with Section 41-14A-9.