Arizona Senate passes bill by Sen. Bolick regulating special bank deposits

Passed bill authored by State Sen. Shawnna Bolick seeks to regulate special deposits within banks, defining their purposes and limiting creditor claims, while clarifying bank liabilities and account agreement obligations, according to the Arizona State Senate.

It passed both chambers as of April 15, clearing the House by a vote of 52-0 and the Senate by a vote of 29-0.

The bill, introduced as SB1206 on Jan. 21, during the first regular session of the 57th Legislature, was formally listed with the short title: ‘special deposits; banks; requirements; definitions’.

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill establishes regulations for special deposits within banks, defining them as deposits made under an account agreement for the benefit of at least two beneficiaries and subject to a contingency. The bill clarifies that banks do not have a fiduciary duty with respect to special deposits but must adhere to the account agreements and are liable for damages arising from noncompliance. It restricts creditor processes against these deposits, with exceptions when a bank is obligated to pay a beneficiary. The bill also outlines permissible purposes for special deposits, including objectives like governmental or charitable goals, and duties such as holding funds in escrow. A special deposit automatically terminates five years after funding, unless the account agreement states otherwise, and any remaining balance, if a beneficiary cannot be identified, should be returned to the depositor.

In the House, 21 Democrats and 31 Republicans voted in favor, with no opposition.

Meanwhile, in the Senate, 12 Democrats and 17 Republicans voted in favor, also with no opposing votes.

Bolick introduced the bill in the Arizona Senate on Jan. 21 during the first regular session of the 57th Legislature.

Bolick graduated from Syracuse University’s Maxwell School of Citizenship and Public Affairs in 1997 with a BA.

Shawnna Bolick is currently serving in the Arizona State Senate, representing the state’s 2nd Senate District. She replaced previous state senator Steve Kaiser in 2023.

The bill was signed into law by Gov. Katie Hobbs on April 18.

In Arizona, the legislative process begins when a bill is introduced in either the House of Representatives or the Senate. It is then assigned to one or more committees for discussion and possible amendment. If approved by committee, the bill proceeds to floor debate and voting in both chambers. If both chambers pass the bill, it is sent to the governor, who may sign it into law, veto it, or allow it to become law without a signature. The Arizona Legislature convenes annually in regular session starting the second Monday in January. Lawmakers introduce hundreds of bills each session, though only a portion make it into law. You can learn more about the legislative process on the Arizona State Legislature website.