FINAL BILL REPORT

SHB 1652

PARTIAL VETO

                                  C 281 L 88

BYHouse Committee on Local Government (originally sponsored by Representatives Cooper, Ferguson, Haugen, Beck, Sayan, Holm, Nealey, Zellinsky, D. Sommers, Nutley, Butterfield, Sutherland, Spanel, Peery and Baugher)

Providing for the investment of public funds.

House Committe on Local Government

Senate Committee on Governmental Operations

SYNOPSIS AS ENACTED

BACKGROUND:

The treasurers of local governments and the state are authorized to invest public money in their possession in a variety of investments.

The county treasurer is the treasurer for the county and most special districts.  Some special districts are authorized to appoint their own treasurer, who can act for the special district with the same authority as the county treasurer, including the authority to invest the district's money in the same types of investments.  County treasurers are authorized to invest public moneys in a variety of investments, including federal bonds or notes, savings or time accounts of public depositories and bankers acceptances purchased on the secondary market.

Cities and towns have their own fiscal officers who invest their funds.  Cities and towns are authorized to invest public money in federal bonds and notes, state bonds or warrants, general obligation or utility revenue bonds of their own or another city or town in the state, their own local improvement district bonds, and any other investment authorized for any other taxing district in the state.

Metropolitan municipal corporations (metros) are authorized to have their funds invested in anything in which a mutual savings bank may invest.

The state treasurer is authorized to invest or deposit its funds in public depositories, federal bonds and notes, state and local bonds and warrants, bankers acceptances purchased on the secondary market, negotiable certifies of deposit with commercial or mutual savings banks doing businesses in the state, and commercial paper.

Local governments are authorized to join together and create joint self insurance pools.  A list of potential investments is included in law in which money may be invested that is placed into these joint self insurance pools.

County treasurers are authorized at the request of local governments to combine the funds of different local governments and invest these combined funds.

The county treasurer of the county within which a public transit benefit area (PTBA) is located acts as the treasurer of the PTBA.  However, a PTBA may appoint someone else to act as its treasurer with the approval of the county treasurer.

Work periods for county employees are either each month or each half of a month, with compensation to be paid within five days of the end of each work period.

SUMMARY:

The state, all local governments and local government insurance pools are authorized to invest their money in the following:  bonds of the state or any local government in the state that have one of the three highest credit ratings of a nationally recognized rating agency; general obligation bonds of another state, or local government in another state, that has one of the three highest credit ratings of a nationally recognized rating agency; any investment authorized by law for the treasurer of the state of Washington or any local government in the state, other than metropolitan municipal corporations (metros);  any registered warrants of any government located in the same county as the government making the investment.

The state and local governments can invest moneys that are subject to federal arbitrage provisions in the following:  mutual funds consisting of federal bonds, with average maturities of less than four years, and bonds of any state or local government that have one of the four highest ratings of a nationally recognized rating agency; money market funds consisting of bonds of states and local governments, or other issuers authorized by law for investment by local governments, with one of the two highest credit ratings of a nationally recognized rating agency; money market funds consisting of any securities authorized by law for investment by local governments.

Any mutual fund or money market fund in which such moneys are invested must post a bond with the state risk manager equal to at least 5 percent of the amount invested in the fund by governments in this state.

A county treasurer creating an investment pool in which funds of local governments are combined for investment purposes may deduct amounts from the pool's earnings to reimburse the county for the initial administrative costs in creating the investment pool.

A public transit benefit area authority would no longer have to obtain the approval of the county treasurer to designate someone other than the county treasurer to act as its treasurer.

The amount of time is extended from five days to 15 days after a work period has been completed by which counties must pay their employees.

VOTES ON FINAL PASSAGE:

      House 97   0

      Senate    39     9 (Senate amended)

      House 95   0 (House concurred)

EFFECTIVE:June 9, 1988

Partial Veto Summary:  Language was vetoed that permitted a public transit benefit area authority to designate someone other than the county treasurer to act as the authority's treasurer, and to make the designation without obtaining the approval of the county treasurer.  (See VETO MESSAGE)