HOUSE BILL REPORT

SHB 651

BYHouse Committee on Local Government (originally sponsored 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 PASSED HOUSE MARCH 13, 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:

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.

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.