READ FIRST TIME 03/08/05.   

     AN ACT Relating to the linked deposit program; amending RCW 43.86A.030, 43.86A.060, 39.19.240, and 43.63A.690; adding a new section to chapter 43.86A RCW; creating a new section; and repealing RCW 43.131.381 and 43.131.382.

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

NEW SECTION.  Sec. 1   The legislature intends that funds provided under the linked deposit program shall be used to create jobs and economic opportunity as well as to remedy the problem of a lack of access to capital by minority and women's business enterprises.

Sec. 2   RCW 43.86A.030 and 1993 c 512 s 33 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)) one hundred million dollars per year of all funds available under this section for the purposes of RCW 43.86A.060. The amounts made available to these public depositaries shall be equal to the amounts of outstanding loans made under RCW 43.86A.060.
     (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. 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.

Sec. 3   RCW 43.86A.060 and 2002 c 305 s 1 are each amended 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. The state treasurer may purchase a certificate of deposit that is equal to the amount of the qualifying loan made by the qualified public depositary or may purchase a certificate of deposit that is equal to the aggregate amount of two or more qualifying loans made by one or more qualified public depositaries.
     (2) Qualifying loans made under this section are those:
     (a) Having terms that do not exceed ten years;
     (b) Where an individual loan does not exceed one million dollars;
     (c) That are made to a minority or women's business enterprise that has received state certification under chapter 39.19 RCW;
     (((c))) (d) Where the interest rate on the loan to the minority or women's business enterprise does not exceed an interest rate that is two hundred basis points below the interest rate the qualified public depositary would charge for a loan for a similar purpose and a similar term, except that, if the preference given by the state treasurer to the qualified public depositary under subsection (3) of this section is less than two hundred basis points, the qualified public depositary may reduce the preference given on the loan by an amount that corresponds to the reduction in preference below two hundred basis points given to the qualified public depositary; and
     (((d))) (e) Where the points or fees charged at loan closing do not exceed one percent of the loan amount.
     (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, except that the treasurer shall lower the amount of the preference to ensure that the effective interest rate on the time certificate of deposit is not less than two percent.
     (4) Upon notification by the state treasurer that a minority or women's business enterprise is no longer certified under chapter 39.19 RCW, the qualified public depositary shall reduce the amount of qualifying loans by the outstanding balance of the loan made under this section to the minority or women's business enterprise.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.86A RCW to read as follows:
     Public depositories participating in the linked deposit program are encouraged to increase the funds available to certified minority and women's business enterprises by taking full advantage of the linked deposit program loans to qualify for the community reinvestment act community programs under federal law (12 U.S.C. Sec. 2901 et seq.).

Sec. 5   RCW 39.19.240 and 2002 c 305 s 2 are each amended to read as follows:
     (1) The office shall, in consultation with the state treasurer and the department of community, trade, and economic development, compile information on minority and women's business enterprises that have received financial assistance through a qualified public depositary under the provisions of RCW 43.86A.060. The information shall include, but is not limited to:
     (a) Name of the qualified public depositary;
     (b) Geographic location of the minority or women's business enterprise;
     (c) Name of the minority or women's business enterprise;
     (d) Date of last certification by the office and certification number;
     (e) Type of business;
     (f) Amount and term of the loan to the minority or women's business enterprise; and
     (g) Other information the office deems necessary for the implementation of this section.
     (2) The office shall notify the state treasurer of minority or women's business enterprises that are no longer certified under the provisions of this chapter. The written notification shall contain information regarding the reason for the decertification and information on financing provided to the minority or women's business enterprise under RCW 43.86A.060.
     (3) The office shall, in consultation with the state treasurer and the department of community, trade, and economic development, monitor the performance of loans made to minority and women-owned business enterprises under RCW 43.86A.060.

Sec. 6   RCW 43.63A.690 and 2002 c 305 s 3 are each amended 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 RCW 43.86A.060.
     (2) ((The department shall, in consultation with the state treasurer and office of minority and women's business enterprises, monitor the performance of loans made to minority and women-owned business enterprises under RCW 43.86A.060.
     (3))) The department, in consultation with the office of minority and women's business enterprises, shall develop indicators to measure the performance of the linked deposit program in the areas of job creation or retention and providing access to capital to minority or women's business enterprises.

NEW SECTION.  Sec. 7   The following acts or parts of acts are each repealed:
     (1) RCW 43.131.381 (Linked deposit program -- Termination) and 2002 c 305 s 4, 2001 c 316 s 1, 1994 c 126 s 2, & 1993 c 512 s 35; and
     (2) RCW 43.131.382 (Linked deposit program -- Repeal) and 2002 c 305 s 5, 2001 c 316 s 2, 1994 c 126 s 3, & 1993 c 512 s 36.