HOUSE BILL REPORT

HB 651

BYRepresentatives Zellinsky, Chandler, Haugen, Cooper, Hine, Bumgarner, Nealey, L. Smith and P. King 

Revising the authorized investment of public funds.

House Committe on Local Government

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (13)

     Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Beck, Bumgarner, Ferguson, Hine, Madsen, Nealey, Nelson, Nutley, Rayburn, L. Smith and Zellinsky.

House Staff:Steve Lundin (786-7127)

AS REPORTED BY COMMITTEE ON LOCAL GOVERNMENT FEBRUARY 20, 1987

BACKGROUND:

County treasurers and the state treasurer are authorized to deposit or invest public funds in their possession in a variety of investments including: (1) deposits with qualified public depositories, i.e. designated financial institutions; (2) various federal, or federal corporation, notes, certificates or bonds; and (3) bankers acceptances purchased on the secondary market. The state treasurer additionally may invest such funds in: (1) state, county, municipal, or school district bonds, or in warrants of any taxing district in the state; (2) negotiable certificates of deposit of any national or state commercial bank, mutual savings bank, or savings and loan association; and (3) commercial paper.

Last year legislation was enacted allowing county treasurers to pool moneys of different local governments and invest these moneys.

SUMMARY:

SUBSTITUTE BILL:  County treasurers and the state treasurer may invest public funds in their possession in guaranteed interest contracts, deferred adjustment contracts, or annuities, guaranteed under the Washington Insurance Guaranty Association Act or the Washington Life and Disability Insurance Guaranty Association Act.

The county treasurer is authorized to deduct amounts from investment earnings on pooled moneys to pay for the initial administrative costs creating the pool.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Language was added concerning the start-up costs of county treasurers' investment pools.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Brad VenHuizen, Emerald Equities and Insurance; Basil Badley, American Insurance Association; Sharon Shrader, Kitsap County Treasurer; Doug Lasher, Clark County Treasurer; and Fred Saeger, Washington Association of County Officials.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     It provides additional investment alternatives.  The more competition for public dollars the greater the return to entities.  This is the same language that the state has for financing the start-up costs of the state treasurer's investment pool.

House Committee - Testimony Against: None Presented.