AN ACT Relating to the investment of public funds; and amending RCW 35.39.030 and 36.29.020.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 35.39.030, chapter 7, Laws of 1965 as last amended by section 1, chapter 11, Laws of 1975 1st ex. sess. and RCW 35.39.030 are each amended to read as follows:

Every city and town may invest any portion of the moneys in its inactive funds or in other funds in excess of current needs in((:

~~(1) United States bonds;~~

~~(2) United States certificates of indebtedness;~~

~~(3) Bonds or warrants of this state;~~

~~(4) General obligation or utility revenue bonds or warrants of its own or of any other city or town in the state;~~

~~(5) Its own bonds or warrants of a local improvement district which are within the protection of the local improvement guaranty fund law; and~~

~~(6) In~~)) any ((~~other~~)) investments or deposits authorized ((~~by law for any other taxing districts~~)) under Title 39 RCW in which the state treasurer may invest or deposit state moneys.

Sec. 2. Section 36.29.020, chapter 4, Laws of 1963 as last amended by section 7, chapter 177, Laws of 1984 and RCW 36.29.020 are each amended to read as follows:

The county treasurer shall keep all moneys belonging to the state, or to any county, in his or her own possession until disbursed according to law. The county treasurer shall not place the same in the possession of any person to be used for any purpose; nor shall he or she loan or in any manner use or permit any person to use the same; but it shall be lawful for a county treasurer to deposit any such moneys in any regularly designated qualified public depositary. Any municipal corporation may by action of its governing body authorize any of its funds which are not required for immediate expenditure, and which are in the custody of the county treasurer or other municipal corporation treasurer, to be invested or deposited by such treasurer in ((savings or time accounts in designated qualified public depositaries or in certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States; in bankers' acceptances purchased on the secondary market, in federal home loan bank notes and bonds, federal land bank bonds and federal national mortgage association notes, debentures and guaranteed certificates of participation, or the obligations of any other government sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system or deposit such funds or any portion thereof in investment deposits as defined in RCW 39.58.010 secured by collateral in accordance with the provisions of chapter 39.58 RCW)) investments or deposits authorized under Title 39 RCW in which the state treasurer may invest or deposit public moneys: PROVIDED, Five percent of the interest or earnings, with an annual maximum of fifty dollars, on any transactions authorized by each resolution of the governing body shall be paid as an investment service fee to the office of the county treasurer or other municipal corporation treasurer when the interest or earnings become available to the governing body: PROVIDED FURTHER, That if such investment service fee amounts to five dollars or less the county treasurer or other municipal corporation treasurer may waive such fee.

Whenever the funds of any municipal corporation which are not required for immediate expenditure are in the custody or control of the county treasurer, and the governing body of such municipal corporation has not taken any action pertaining to the investment of any such funds, the county finance committee shall direct the county treasurer to invest or deposit, to the maximum prudent extent, such funds or any portion thereof in savings or time accounts in designated qualified public depositaries or in ((certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States, in bankers' acceptances purchased on the secondary market, in federal home loan bank notes and bonds, federal land bank bonds and federal national mortgage association notes, debentures and guaranteed certificates of participation, or the obligations of any other government sponsored corporation whose obligations are !se or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system or deposit such funds or any portion thereof in investment deposits as defined in RCW 39.58.010 secured by collateral in accordance with the provisions of chapter 39.58 RCW)) investments or deposits authorized under Title 39 RCW in which the state treasurer may invest or deposit state moneys: PROVIDED, That the county treasurer shall have the power to select the specific qualified financial institution in which said funds may be invested. The interest or other earnings from such investments or deposits shall be deposited in the current expense fund of the county and may be used for general county purposes. The investment or deposit and disposition of the interest or other earnings therefrom authorized by this paragraph shall not apply to such funds as may be prohibited by the state Constitution from being so invested or deposited.