HOUSE BILL REPORT
SB 6833
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As Reported by House Committee On:
Ways & Means
Title: An act relating to management of funds and accounts by the state treasurer.
Brief Description: Addressing the management of funds and accounts by the state treasurer.
Sponsors: Senator Tom; by request of State Treasurer.
Brief History:
Committee Activity:
Ways & Means: 3/9/10 [DPA].
Brief Summary of Bill (As Amended by House) |
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HOUSE COMMITTEE ON WAYS & MEANS |
Majority Report: Do pass as amended. Signed by 14 members: Representatives Linville, Chair; Ericks, Vice Chair; Sullivan, Vice Chair; Cody, Conway, Darneille, Haigh, Hunt, Hunter, Kagi, Kenney, Kessler, Pettigrew and Seaquist.
Minority Report: Do not pass. Signed by 8 members: Representatives Alexander, Ranking Minority Member; Bailey, Assistant Ranking Minority Member; Dammeier, Assistant Ranking Minority Member; Chandler, Hinkle, Priest, Ross and Schmick.
Staff: Dave Johnson (786-7154).
Background:
The Office of the State Treasurer (OST) is responsible for managing the cash flow of state accounts and for short-term investment of the state's operating cash.
There are two types of accounts managed by the OST: treasury accounts and custodial accounts. This distinction arises from the constitutional requirement for an appropriation in law before moneys in the treasury may be expended. The Legislature may exclude some public accounts from this appropriation requirement by designating those accounts as "in the custody of" the State Treasurer (Treasurer). Moneys in these custodial accounts, also referred to as non-appropriated accounts, typically do not require an appropriation before they may be expended. Instead, the Legislature in statute designates an appropriate agency official who may authorize expenditure from a custodial account. Custodial accounts are located within the Treasurer's Trust Fund and may be managed and invested in the same manner as moneys in the treasury, but there is no express statutory authorization for comingling of treasury and custodial accounts for cash management purposes.
There are 536 treasury accounts in the treasury and 273 custodial accounts. In addition to treasury accounts and custodial accounts, agencies may also maintain accounts at private financial institutions. These are known as "local" accounts. Agencies may establish new local accounts only when authorized to do so by the Office of Financial Management (OFM) for grounds of economy and efficiency that could not be achieved by placing the moneys in the state treasury.
The OST manages and invests moneys in both treasury accounts and custodial accounts. Authorized forms of investment for treasury and custodial accounts are specified in statute. (Some state accounts, including the state pension funds, industrial insurance funds, and the Budget Stabilization Account, are invested by the State Investment Board.)
The OST is required to report, monthly, on the state of the State General Fund and every other account under his or her control.
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Summary of Amended Bill:
If an agency has independent authority over moneys that are not required to be held in the treasury or the Treasurer's Trust Fund, the agency may reach an agreement with the OST to deposit these moneys in the treasury or Treasurer's Trust Fund and receive a proportionate share of earnings. In such cases, the agency and the OST may negotiate a different cost allocation rate for the Treasurer's Service Account, although this rate may not be less than the OST's actual costs.
For cash management and cash balance purposes, moneys in the Treasurer's Trust Fund may be comingled with moneys in the treasury.
The OST must provide a biennial report on treasury or custodial accounts that the Treasurer believes to be obsolete. This report must describe the criteria used to determine whether the accounts were deemed obsolete.
Before June 1, 2010, the OFM must provide the Treasurer with a list of accounts held locally by any agency. Before October 31, 2010, the OST, working with the OFM, must review locally held accounts, other than those held by institutions of higher education, and determine whether it would be financially advantageous to the state to instead hold these accounts in the treasury or in the custody of the Treasurer. The Treasurer is encouraged to propose executive request legislation to effect these changes.
In addition to the existing requirements for monthly reporting on individual accounts, the OST is directed to post the monthly report on the OST website and to include a graph displaying month-end balances for the State General Fund, total funds in the treasury and Treasurer's Trust Fund, and total funds managed by the Treasurer.
Amended Bill Compared to Original Bill:
The OST is directed to post the monthly report on the OST website and to include a graph displaying month-end balances for the State General Fund, total funds in the treasury and Treasurer's Trust Fund, and total funds managed by the state Treasurer.
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Appropriation: None.
Fiscal Note: Available.
Effective Date of Amended Bill: The bill takes effect 90 days after adjournment of the session in which the bill is passed.
Staff Summary of Public Testimony:
None.
Persons Testifying: None.
Persons Signed In To Testify But Not Testifying: None.