FINAL BILL REPORT

                 SHB 1183

                         C 293 L 99

                     Synopsis as Enacted

Brief Description:  Negotiating state‑wide custody contracts.

Sponsors:  By House Committee on State Government (Originally sponsored by Representatives H. Sommers, Huff, Romero, McMorris, McIntire and Esser; by request of State Treasurer).

House Committee on State Government

Senate Committee on Commerce, Trade, Housing & Financial Institutions

Background:

Local governments are authorized to invest their moneys in a variety of investments. All local governments may deposit their money into savings accounts, time accounts, or money market deposit accounts of designated public depositories.  A public depository is a financial institution designated by the Washington Public Depository Commission that accepts public deposits of moneys and is required to segregate a certain amount of securities apart from its other assets as security for the public moneys on deposit.  The Washington Public Depository Commission is the same as the State Finance Committee, which is composed of the State Treasurer, Lieutenant Governor, and Governor.

In addition, local governments are allowed to invest their moneys in a variety of securities, including federal securities or other obligations of federal agencies, bankers acceptances purchased on the secondary market, federal home loan bank securities, and federal land bank securities.

The State Treasurer acts as the treasurer for public moneys provided to institutions of higher education.  However, each four-year institution of higher education has direct control over other moneys provided to the institution, such as grants, bequests, and tuition fees, and may invest these moneys.

Summary:

Commencing on September 1, 1999, the State Treasurer may negotiate a statewide custody contract to provide custodial banking services on investments made by local governments and institutions of higher education. Custodial banking services are services for the settlement, safekeeping, valuation, and market-value reporting of negotiable instruments owned by a local government or institution of higher education.  The contract must last for a period of at least four years.  If a new statewide custodian is designated, the State Treasurer is authorized to adopt rules to ensure the orderly transition from the prior custodian to the new custodian.

Any local government or institution of higher education may, at its option, become a signatory to the statewide contract for custody services, which is a contract between the participating local governments or institution of higher education and the statewide custodian, and utilize the custodial banking services of the statewide custodian.

Votes on Final Passage:

House970

Senate490(Senate amended)

House970(House concurred)

Effective:September 1, 1999