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AGLO 1974 No. 23 - February 25, 1974
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Slade Gorton | 1969-1980 | Attorney General of Washington

OFFICES AND OFFICERS ‑- STATE ‑- TREASURER ‑- PUBLIC DEPOSIT PROTECTION COMMISSION ‑- INTEREST ‑- DEPOSITS OF STATE FUNDS

From and after the effective date of chapter 50, Laws of 1974, 1st Ex. Sess., the public deposit protection commission will no longer have any interest-fixing function to perform with respect to investment deposits made by the state treasurer of state funds in his custody.

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                                                                February 25, 1974

Honorable Robert S. O'Brien
State Treasurer
State of Washington
Legislative Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1974 No. 23

Dear Sir:

            This is written in response to your recent request for our opinion as to whether the Public Deposit Protection Commission, notwithstanding the passage of chapter 50, Laws of 1974 3rd Ex. Sess. (House Bill No. 1084) by the legislature, will still be required, after the effective date of this 1974 amendatory act, to set the rate of interest payable upon investment deposits of state funds when made by the State Treasurer.

            In our opinion, this question is answerable in the negative.

                                                                     ANALYSIS

            Section 1, chapter 50, Laws of 1974, 3rd Ex. Sess., which will become effective 90 days after final adjournment of the current legislative session,1/ amends the preexisting provisions of RCW 39.58.120 to read as follows:

            "((The public deposit protection commission shall from time to time fix the rate of interest to be paid by qualified public depositaries upon investment deposits: PROVIDED, That)) Time deposits issued pursuant to this chapter shall bear interest at a rate ((which would)) not ((be)) in excess of ((one hundred percent of the average bill rate at  [[Orig. Op. Page 2]] the last U. S. Treasury 91 day bill market auction or in excess of)) the maximum rate permitted by any applicable governmental regulation."

            However, even though RCW 39.58.120 has been thus amended, another statute, RCW 43.85.190, continues to provide that:

            "It is the purpose of RCW 43.85.190 through 43.85.240 to authorize the state treasurer to make investment deposits of state moneys or funds in his custody in state depositaries at a rate of interest fixed by the public deposit protection commission in accordance with RCW 39.58.120."  (Emphasis supplied.)

            Because of this, you have expressed a concern that the Public Deposit Protection Commission will still have an interest-fixing function to perform after the effective date of chapter 50, supra, insofar as investment deposits of state funds made by your office are involved.  In our judgment, however, this concern is unwarranted.

            In the first place, with the enactment of the Public Deposit Protection Act of 1969 (chapter 193, Laws of 1969 Ex. Sess.) the State Treasurer's office in making investment deposits of state funds need no longer rely upon RCW 43.85.190 through RCW 43.85.240 at all.  Section 13 of that 1969 act, now codified as RCW 39.58.130, expressly authorizes any "treasurer" as defined in RCW 39.58.010 (a definition specifically including the State Treasurer) to deposit in investment deposits in a qualified public depositary any public funds available for investment and secured by collateral in accordance with the provision of that act.  And then, this section goes on to state that:

            ". . .  The authority provided by this section is additional to any authority now or hereafter provided by law for the investment or deposit of public funds by any such treasurer: . . ."

            Since RCW 39.58.120, supra‑-the statute which was amended by § 1, chapter 50,supra‑-is also a part of this same Public Deposit Protection Act, it will  [[Orig. Op. Page 3]] readily be seen that as to investments made by your office in exercise of the "additional" authority granted to it by RCW 39.58.130, supra, the Public Deposit Protection Commission will, after the effective date of chapter 50, have no further mandatory interest-fixing function to perform even if it were then still deemed to have such a function to perform with respect to investment deposits made, instead, under the preexisting provisions of RCW 43.85.190 through RCW 43.85.240.

            Beyond this, however, is further our considered judgment that, in any event, even as to investment deposits made under the authority of RCW 43.85.190 through RCW 43.85.240, the Public Deposit Protection Commission will no longer have any interest-fixing function to perform after the effective date of chapter 50,supra.  As you have pointed out in your request the first of these several code sections (RCW 43.85.190,supra), which continues to contain a reference to the fixing of interest on investment deposits by the Public Deposit Protection Commission ". . . in accordance with RCW 39.58.120," reads this way because it was amended to so provide by § 21 of the Public Deposit Protection Act in 1969.  Before then, this section provided for the interest on deposits of state funds simply to be ". . . agreed to by the state finance committee and the depositary. . .".  Accord, RCW 43.85.230 which was not amended by the Public Deposit Protection Act, and, thus, continues to read as follows:

            "The state treasurer, upon approval by the state finance committee, may deposit moneys not required to meet current demands upon a term deposit basis not to exceed one year at such interest rates and upon such conditions as to withdrawals of such moneys as may be agreed upon between the state finance committee and any qualified depositary bank or banks in the state."

            From this it is readily to be seen that the only purpose of the amendment to RCW 43.85.190 which was contained in the Public Deposit Protection Act (§ 1, chapter 193,supra) was to preclude your office from avoiding the prior interest limitations of that act, as contained  [[Orig. Op. Page 4]] in the original text of § 12 thereof, by utilizing your preexisting statutory authority under RCW 43.85.190 ‑ 43.85.240 instead of that granted by RCW 39.58.120, supra.  With the repeal of those limitations by the enactment of § 1, chapter 50, supra, however, that purpose will have ceased to have any meaningful basis once this 1974 amendatory act becomes effective.

            Accordingly, for both of the above indicated reasons it is our opinion that from and after the effective date of chapter 50, Laws of 1974, 3rd Ex. Sess.,supra, the Public Deposit Protection Commission will no longer have any interest-fixing function to perform with respect to investment deposits made by the State Treasurer of state funds in his custody.

            We trust that the foregoing will be of some assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

PHILIP H. AUSTIN
Deputy Attorney General

                                                         ***   FOOTNOTES   ***

1/See, AGO 1973 No. 8 [[to Arthur C. Brown, State Representative on March 6, 1973]].

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