AN
ACT Relating to the state treasurer negotiating state-wide custody contracts;
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.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
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 and institutions of higher education, 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 custody services for local governments and institutions of higher
education. 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 and institutions of higher
education that a state-wide custody contract has been negotiated.
(3)
Following such notification, each local government or institution of higher
education may, at its option, become a signatory to the state-wide contract.
Each local government or institution of higher education 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 or institution of higher education. 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.
