1493-S.E AMS WM S3134.1

1493-S.E AMS WM S3134.1

ESHB 1493 - S COMM AMD TO TED COMM AMD (S-2789.4/93)

By Committee on Ways & Means

ADOPTED 4/16/93

On page 15, after line 23 of the amendment, strike all material through "accordingly." on page 18, line 13, and insert the following:

"V. WASHINGTON STATE LINKED DEPOSIT PROGRAM

NEW SECTION. Sec. 28. The legislature finds that minority and women's business enterprises have been historically excluded from access to capital in the marketplace. The lack of capital has been a major barrier to the development and expansion of business by various minority groups and women. There has been a significant amount of attention on the capital needs of minority and women's business enterprises. It is the intent of the legislature to remedy the problem of a lack of access to capital by minority and women's business enterprises, and other small businesses by authorizing the state treasurer to operate a program that links state deposits to business loans by financial institutions to minority and women's business enterprises.

NEW SECTION. Sec. 29. A new section is added to chapter 43.86A RCW to read as follows:

(1) The state treasurer shall establish a linked deposit program for investment of deposits in qualified public depositaries. As a condition of participating in the program, qualified public depositaries must make qualifying loans as provided in this section. Each time certificate of deposit purchased by the state treasurer shall be equal to the amount of the qualifying loan made by the qualified public depositary. The state treasurer is authorized to set interest rates on certificates and on qualifying loans consistent with the intent of sections 28 through 32, chapter . . ., Laws of 1993 (sections 28 through 32 of this act) and sound financial practices.

(2) Qualifying loans made under this section are those that:

(a) Are loans that have terms that do not exceed five years;

(b) Are made to a minority or women's business enterprise that has received state certification under chapter 39.19 RCW;

(c) Are made to minority or women's business enterprises that are considered a small business as defined in RCW 43.31.025;

(d) Are made where the interest rate on the loan to the minority or women's business enterprise does not exceed the interest rate on the corresponding time certificate of deposit by two hundred fifty basis points;

(e) Are made where the points or fees charged at loan closing do not exceed one percent of the loan amount; and

(f) Are consistent with other criteria set by the state treasurer.

(3) In setting interest rates of time certificate of deposits, the state treasurer shall offer rates so that a two hundred basis point preference will be given to the qualified public depositary.

NEW SECTION. Sec. 30. A new section is added to chapter 43.63A RCW to read as follows:

(1) The department shall provide technical assistance and loan packaging services that enable minority and women-owned business enterprises to obtain financing under the linked deposit program created under section 29 of this act.

(2) The department shall, in consultation with the state treasurer, monitor the performance of loans made to minority and women-owned business enterprises under section 29 of this act.

Sec. 31. RCW 43.85.230 and 1984 c 177 s 20 are each amended to read as follows:

The state treasurer may deposit moneys not required to meet current demands upon a term deposit basis not to exceed ((~~one year~~)) five years at such interest rates and upon such conditions as to withdrawals of such moneys as may be agreed upon between the state treasurer and any qualified public depositary.

Sec. 32. RCW 43.86A.030 and 1982 c 74 s 1 are each amended to read as follows:

(1) Funds held in public depositaries not as demand deposits as provided in RCW 43.86A.020 and 43.86A.030, shall be available for a time certificate of deposit investment program according to the following formula: The state treasurer shall apportion to all participating depositaries an amount equal to five percent of the three year average mean of general state revenues as certified in accordance with Article VIII, section 1(b) of the state Constitution, or fifty percent of the total surplus treasury investment availability, whichever is less. Within thirty days after certification, those funds determined to be available according to this formula for the time certificate of deposit investment program shall be deposited in qualified public depositaries. These deposits shall be allocated among the participating depositaries on a basis to be determined by the state treasurer.

(2) The state treasurer may use up to fifty million dollars per year of all funds available under this section for the purposes of section 29 of this act. The amounts made available to these public depositaries shall be equal to the amounts of outstanding loans made under section 29 of this act.

(3) The formula so devised shall be a matter of public record giving consideration to, but not limited to deposits, assets, loans, capital structure, investments or some combination of these factors((~~: PROVIDED, That~~)). However, if in the judgment of the state treasurer the amount of allocation for certificates of deposit as determined by this section will impair the cash flow needs of the state treasury, the state treasurer may adjust the amount of the allocation accordingly.

NEW SECTION. Sec. 33. A new section is added to chapter 43.86A RCW to read as follows:

The state and those acting as its agents are not liable in any manner for payment of the principal or interest on qualifying loans made under section 29 of this act. Any delay in payments or defaults on the part of the borrower does not in any manner affect the deposit agreement between the qualified public depositary and the state treasurer.

NEW SECTION. Sec. 34. A new section is added to chapter 43.131 RCW to read as follows:

The linked deposit program shall be terminated on June 30, 1996, as provided in section 35 of this act.

NEW SECTION. Sec. 35. A new section is added to chapter 43.131 RCW to read as follows:

The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 1997:

(1) Section 29 of this act;

(2) Section 30 of this act; and

(3) Section 33 of this act.

NEW SECTION. Sec. 36. If specific funding for the purposes of sections 28 through 35 of this act, referencing sections 28 through 35 of this act by bill and section numbers, is not provided by June 30, 1993, in the omnibus appropriations act, sections 28 through 35 of this act are null and void."

Renumber the remaining part headings and sections consecutively and correct internal references accordingly.

EFFECT: Creates the linked deposit program in the State Treasurer. Establishes rates for certificates and qualifying loans to businesses. Directs DCD to provide technical assistance and loan packaging services to businesses through its existing programs. DCD and State Treasurer to monitor loans made through the program. Establishes a sunset date of June 30, 1996. Repeals program in June 1997.

ESHB 1493 - S COMM AMD TO TED COMM AMD (S-2789.4/93)

By Committee on Ways & Means

On page 19, beginning on line 6 of the title amendment, after "43.168.100," strike the remainder of the title amendment and insert "43.85.230, and 43.86A.030; adding a new section to chapter 43.210 RCW; adding a new section to chapter 43.31 RCW; adding a new section to chapter 39.19 RCW; adding a new section to chapter 43.168 RCW; adding new sections to chapter 43.86A RCW; adding a new section to chapter 43.63A RCW; adding new sections to chapter 43.131 RCW; adding a new chapter to Title 43 RCW; creating new sections; providing an effective date; and declaring an emergency."