1183-S AMS CTHF S2529.1

 

 

 

SHB 1183 - S COMM AMD

By Committee on Commerce, Trade, Housing & Financial Institutions

 

                                                   ADOPTED 4/14/99

 

    Strike everything after the enacting clause and insert the following:

 

    "NEW SECTION.  Sec. 1.  Local governments enter into separate, individual contracts with banks for custody services.  The rate and terms which each local government obtains from a given bank sometimes varies widely depending upon the size of the local government's portfolio, and thus fails to provide all of the state's taxpayers with the most advantageous rates and terms for such custody services.  The purpose of this act is to enable local governments, through a state-wide custody contract, to collectively obtain the most advantageous rate and terms from a single financial institution for custodial banking services.  Under such a state-wide custody contract, smaller local governments may receive a higher level of service, while paying lower fees than they might have individually obtained.

 

    NEW SECTION.  Sec. 2.  A new section is added to chapter 43.08 RCW to read as follows:

    (1) The state treasurer is authorized to negotiate a state-wide custody contract for local government custody services.  The term of the contract shall be for a minimum of four years.

    (2) The state treasurer shall, as soon as is practical after negotiations have been successfully completed, notify local governments that a state-wide custody contract has been negotiated.

    (3) Following such notification, each local government may, at its option, become a signatory to the state-wide contract.  Each local government may only become a signatory to the contract by having its authorized local government official or financial officer and the state-wide custodian execute the state-wide contract.  The contract is between the state-wide custodian and the respective local government.  It is the responsibility of the local government official or financial officer to fully understand the terms and conditions of the state-wide custody contract prior to its execution, and to ensure those terms and conditions are observed by the state-wide custodian during the term of the contract.

    (4) The state treasurer may adopt rules to implement this section, including, but not limited to, those rules deemed necessary to provide for an orderly transition in the event of a different state-wide custodian in a new state-wide custody contract.

    (5) Any state-wide custodian who becomes a signatory to the state-wide custody contract may be exempted from the requirements of chapter 39.58 RCW for the purposes of this section, based on rules adopted by the public deposit protection commission.

    (6) For the purposes of this section:

    (a) "Financial institution" means a bank or trust company chartered and supervised under state or federal law;

    (b) "Local government" means any county, city, town, special purpose district, political subdivision, municipal corporation, or quasi-municipal corporation, including any public corporation created by such an entity, which legally possesses and exercises investment authority;

    (c) "State-wide custody contract" means a contract negotiated between the state treasurer and a financial institution that establishes terms and fees for custody services which are optional to any local government for the term of the contract;

    (d) "State-wide custodian" means the financial institution with whom the state treasurer has negotiated a state-wide custody contract;

    (e) "Custody services" means services performed by a financial institution such as the settlement, safekeeping, valuation, and market-value reporting of negotiable instruments owned by the local government;

    (f) "Local government official" means any officer or employee of a local government who has been designated by statute or local charter, ordinance, or resolution as the officer having the authority to invest the funds of the local government.  However, the county treasurer is the only local government official for all political subdivisions for which the county treasurer has statutory or contractual authority to invest the funds thereof;

    (g) "Financial officer" means the board-appointed treasurer of a college, university, community or technical college district, or the state board for community and technical colleges.

 

    NEW SECTION.  Sec. 3.  A new section is added to chapter 39.58 RCW to read as follows:

    A state-wide custodian under section 2 of this act may be exempted from the requirements of this chapter, based on rules adopted by the public deposit protection commission.

 

    NEW SECTION.  Sec. 4.  This act takes effect September 1, 1999."

 

 

 

SHB 1183 - S COMM AMD

By Committee on Commerce, Trade, Housing & Financial Institutions

 

                                                                   

 

    On page 1, line 2 of the title, after "contracts;" strike the remainder of the title and insert "adding a new section to chapter 43.08 RCW; adding a new section to chapter 39.58 RCW; creating a new section; and providing an effective date."

 


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