AN ACT Relating to the distribution and payment of investment earnings on property tax receipts; and amending RCW 36.29.020, 84.56.230, and 84.56.280.

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

Sec. 1. 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:

(1) 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 available in its treasury for expenditure but are not required for immediate expenditure((~~, and which are in the custody of the county treasurer or other municipal corporation treasurer,~~)) to be invested by ((~~such~~)) its 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: 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,)) (2) The county finance committee shall direct the county treasurer to invest, to the maximum prudent extent, ((~~such funds or any portion thereof~~)) all moneys in the county treasury not invested pursuant to subsection (1) of this section. The county treasurer may invest such moneys 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: 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.

Sec. 2. Section 84.56.230, chapter 15, Laws of 1961 as amended by section 1, chapter 43, Laws of 1973 1st ex. sess. and RCW 84.56.230 are each amended to read as follows:

((On the first day of each month the county treasurer shall distribute pro rata, according to the rate of levy for each fund, the amount collected as consolidated tax during the preceding month, and shall certify the same to the county auditor: PROVIDED, HOWEVER, That the county treasurer, at his option, may distribute the total amount of such taxes collected according to the ratio that the levy of taxes made for each taxing district in the county bears to such total amount collected. On or before the tenth day of each month the county treasurer shall turn over to the respective city treasurers the cities' pro rata share of all taxes collected for the previous month and take receipts therefor in duplicate, and shall certify to the city comptroller or other accounting officer of each such city the amount of such taxes so collected and turned over, and shall deliver with such certificate one copy of the receipt of the city treasurer therefor.))

(1) Except as provided in RCW 84.56.280, each county treasurer shall distribute to the proper fund of each taxing district located within the county, or shall disburse to the treasurer of each such taxing district that has a treasurer other than the county treasurer, the pro rata amount of consolidated taxes collected during the preceding month for the taxing district. The amounts that are so distributed shall be certified to the auditor and the amounts that are so disbursed shall be certified to the comptroller or other fiscal officer of the taxing district receiving the disbursement. A receipt for the moneys disbursed shall be given to the county treasurer by the taxing district receiving the disbursement.

(2) As an alternative to the distributions or disbursements provided in subsection (1) of this section and at the discretion of the county treasurer, the county treasurer may distribute or disburse the total amount of such taxes collected during the preceding month according to the ratio that the levy of taxes made for each taxing district in the county bears to such total amount collected.

(3) All taxes distributed or disbursed to taxing districts other than the state, cities, and towns shall be distributed or disbursed without interest or other investment earnings if the distributions and disbursements are made on or before the first day of the month following the month in which the taxes were collected. Any distribution or disbursement to such taxing districts made after the first day of the month following the month in which the taxes were collected shall include interest payments on the amount of the taxes that are to be distributed or disbursed at a compounded daily rate for each day after the first day of the month before the date of distribution or disbursement equal to the average daily earned interest yield for the preceding month of the local government investment pool created under chapter 43.250 RCW.

(4) All taxes disbursed as provided in this section to cities and towns shall be disbursed without interest or other investment earnings if the disbursements are made on or before the tenth day of the month following the month in which such taxes were collected. Any disbursement to a city or town made after the tenth day of the month following the month in which such taxes were collected shall include interest payments on the amount of the taxes that are to be disbursed at a compounded daily rate for each day after the tenth of the month before the date of disbursement equal to the average daily earned interest yield for the preceding month of the local government investment pool created under chapter 43.250 RCW.

Sec. 3. Section 84.56.280, chapter 15, Laws of 1961 as amended by section 7, chapter 86, Laws of 1979 ex. sess. and RCW 84.56.280 are each amended to read as follows:

((~~Immediately~~)) Within twenty days after the last day of each month, the county treasurer shall ((~~pay over~~)) disburse without interest to the state treasurer the amount collected by ((~~him~~)) the county treasurer and credited to the various state funds, but every such payment shall be subject to correction for error discovered upon the quarterly settlement next following. The county auditor shall at the same time ascertain and report to the department of revenue in writing the amounts due to the various state funds. If they are not ((~~paid~~)) disbursed to the state treasurer before the twentieth day of the month ((he)) the state treasurer shall make a sight draft on the county treasurer for such amount. On the first Mondays of January, April, July, and October, respectively, of each year, the county treasurer shall make full settlement with the county auditor of ((~~his~~)) the receipts and collections for all purposes from the date of the last settlement up to and including the last day of the preceding month. The county auditor shall, on or before the fifteenth day of the month in which such settlement is made, notify the department of revenue of the result of the quarterly settlement with the county treasurer. Should any county treasurer fail or refuse to honor the draft or make payment of the amount thereon, except for manifest error or other good and sufficient cause, ((he)) the county treasurer shall be guilty of nonfeasance in office and upon conviction thereof shall be punished according to law.