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November 29, 1971
Honorable Robert V. Graham
Olympia, Washington 98504
Cite as: AGLO 1971 No. 130 (not official)
By letter previously acknowledged you have requested the opinion of this office on a question which we paraphrase as follows:
May the proceeds of advance refunding bonds issued pursuant to chapter 39.53 RCW, which are in the custody of a county treasurer, be invested in time certificates of deposit or time savings accounts in a commercial bank under the provisions of §§ 13 and 26 of chapter 193, Laws of 1969, Ex. Sess.?
We answer your question in the negative for the reasons set forth below.
General authority for the investment of municipal funds in bank time deposits is found in RCW 36.29.020, as last amended by § 26, chapter 193, Laws of 1969, Ex. Sess., which provides as follows:
". . . Any municipal corporation may by action of its governing body authorize any of its funds which are not required for immediate expenditure, and which are in the custody of the county treasurer or other municipal corporation treasurer, to be invested by such treasurer . . . or deposit such funds or any portion thereof in investment deposits as defined in section 1 of this 1969 act secured by collateral in accordance with the provisions of this 1969 act: . . .
"Whenever the funds of any municipal corporation which are not required for immediate expenditure are in the custody or control of the county treasurer, and the governing body of such municipal corporation has not taken any action pertaining to the investment of any such funds, the county finance committee shall direct the county treasurer [[Orig. Op. Page 2]] to invest, to the maximum prudent extent, such funds or any portion thereof in securities constituting the direct and general obligations of the United States government or deposit such funds or any portion thereof in investment deposits as defined in section 1 of this 1969 act secured by collateral in accordance with the provisions of this 1969 act . . ." (Emphasis supplied to indicate amendatory language)
The term "investment deposits" is defined by § 1 (8), chapter 193, supra, as meaning,
". . . bank time deposits of public funds available for investment;"
In addition, § 13 of chapter 193 (now RCW 39.58.130) provides as follows:
"A treasurer as defined in section 1 of this 1969 amendatory act is authorized to deposit in investment deposits in a qualified public depositary any public funds available for investment and secured by collateral in accordance with the provisions of this 1969 amendatory act, and receive interest thereon. 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: . . ."
Again turning to the definitions section of the act, we find the term "treasurer" defined as meaning,
". . . the state treasurer, a county treasurer, a city treasurer, a treasurer of any other municipal corporation, and the custodian of any other public funds." (Emphasis supplied)
Without much question, these general statutory provisions would authorize the investment of the bond proceeds in question in bank time deposits if there were no conflicting statutory provisions covering these particular funds. However, there are such conflicting provisions, and they are controlling in our opinion.
We are here dealing, specifically, with the proceeds of "advance refunding bonds" issued by a municipal corporation under the provisions of the "Refunding Bond Act" of 1965 ‑ chapter 138, Laws of 1965, Ex. Sess., now codified as chapter 39.53 RCW. Basically speaking, an advance refunding bond is one issued for the purpose of obtaining funds to redeem a prior bond issue before its maturity and is typically issued to take advantage of [[Orig. Op. Page 3]] intervening interest rate reductions which have occurred following the issuance of the earlier bonds. Once obtained, the proceeds of a refunding bond issue may either be immediately expended ‑ where the prior issue is immediately callable ‑ or they may be held for payment in the future where the earlier bonds being refunded cannot be called immediately without the payment of a penalty.
In recognition of this latter concept, commonly referred to as "advance refunding," the legislature, by § 7, chapter 138, Laws of 1965, Ex. Sess., supra, (now RCW 39.53.060) provided for the investment of the subject bond proceeds, where not immediately expended, as follows:
"Prior to the application of the proceeds derived from the sale of advance refunding bonds to the purposes for which such bonds shall have been issued, such proceeds, together with any other funds the governing body may set aside for the payment of the bonds to be refunded, may be invested and reinvested only in direct obligations of the United States of America maturing or having guaranteed redemption prices at the option of the holder at such time or times as may be required to provide funds sufficient to pay principal, interest and redemption premiums, if any, in accordance with the advance refunding plan. . . ." (Emphasis supplied)
The stated purpose of your letter is to seek the assistance of this office in resolving the evident conflict between this statute and §§ 13 and 26 of chapter 193, Laws of 1969, Ex. Sess., supra. Since the provisions of the later general act contain no specific reference to RCW 39.53.060, or expressly mention the proceeds of refunding bond issues, those general provisions must be regarded as unclear or ambiguous. Hence, our task is to discover legislative intent by ordinary rules of statutory construction. Cory v. Nethery, 19 Wn.2d 326, 142 Pac. 488 (1943).
In discovering legislative intent, it is necessary to examine the provisions of all relevant statutes on the subject, to read them together as one organic entirety, and to give full effect to each of them if possible. Inconsistencies are not to be presumed. Lindsey v. Superior Court, 33 Wn.2d 94, 204 P.2d 482 (1949). However, when statutes are found to be inconsistent, the question becomes one of determining which statute was intended to repeal or amend the other by implication. See, State v. Becker, 39 Wn.2d 94, 234 P.2d 897 (1951).
[[Orig. Op. Page 4]]
The specific rule to be applied in those cases is that where general and special laws are concurrent the special law applies to the subject matter contemplated by it to the exclusion of the general law, and the subsequent enactment of a statute which treats a phase of the same general subject matter in a more minute way consequently repeals pro tanto the provisions of the general statute with which it conflicts. See, State v. Becker, supra; also, City of Airway Heights v. Schroeder, 53 Wn.2d 625, 335 P.2d 578, 117 A.L.R. 832 (1959), and authorities cited therein. See also, State ex rel. Phillips v. Wn. Liquor Bd., 59 Wn.2d 565, 369 P.2d 844 (1962); State v. Collins, 55 Wn.2d 469, 348 P.2d 214 (1960); and State v. Davis 48 Wn.2d 513, 294 P.2d 934 (1956).
Usually the most critical factor is not which statute was enacted first; but rather, which statute is general and which is special. On the other hand, a legislative intent sufficiently expressed in a subsequent general act can effectively constitute a repeal of the prior special act. See, State v. Ensminger, 77 Wn.2d 535, 463 P.2d 612 (1970). Therefore, it will be important to trace the legislative history of the statutes here in question.
Our search discloses that the first general statutory authority in this state for the investment of municipal funds in bank time deposits was chapter 111, Laws of 1965. Section 2 of that act amended RCW 36.29.020, supra,1/ to read in pertinent part as follows:
". . . Any municipal corporation may by action of its governing body authorize any of its funds which are not required for immediate expenditure, and which are in the custody of the county treasurer or other municipal corporation treasurer, to be invested by such treasurer in savings or time accounts in banks, trust companies and mutual savings banks . . ."
That act was passed by the 1965 regular legislative session. Thus, it was already in existence when the ensuing special session of the legislature enacted chapter 138, Laws of 1965, Ex. Sess., the "Refunding Bond Act," supra ‑ § 7 of which authorized the investment of advance refudning bond proceeds
". . . only in direct obligations of the United States of America maturing or having guaranteed redemption prices at the option of the holder at such time or times as may be required to provide funds sufficient to pay [[Orig. Op. Page 5]] principal, interest and redemption premiums, if any, in accordance with the advance refunding plan. . . ." (Emphasis supplied)
Because of the time sequence involved in the adoption of these two 1965 enactments, the logical conclusion to be drawn is that the legislature, having presumptive knowledge of its previous general legislation on the subject of municipal investments (RCW 36.29.020) intended the later special act (RCW 39.53.060) to constitute an exception to the general law. See, City of Airway Heights v. Schroeder, supra; also, Ropo, Inc. v. Seattle, 67 Wn.2d 574, 409 P.2d 148 (1965). That legislative intention is clearly evidenced by the use of the word "only" in the later special act. The use of this word may not be considered meaningless or superfluous. State v. Lundquist, 60 Wn.2d 397, 374 P.2d 246 (1962). Thus, quite apparently, the net effect of the two 1965 enactments was (a) general authorization for the investment of most municipal funds in bank time deposits ‑ qualified by (b) separate coverage for refunding bond proceeds which could only be invested as provided for in the later special act.
It was against this background that the legislature next acted by its adoption of chapter 193, Laws of 1969, Ex. Sess., supra, further dealing with the authority to invest public funds (both state and municipal) in bank time deposits. The question to be here resolved thus narrows down to whether, by this later general act, the legislature altered the investment status of refunding bond proceeds from that established by the 1965 legislature. It is our best judgment that it did not.
As we noted briefly in a preceding part of this opinion, the provisions of a general act may impliedly repeal those of a special act under certain conditions, but the legislative intention to do so must be clear. See, State v. Becker, supra. Thus, if chapter 193, Laws of 1969, Ex. Sess., supra, had contained a phrase such as "notwithstanding any other law to the contrary" or "all other inconsistent acts or parts of acts are repealed," we would have no difficulty in finding an implied repeal.2/ However, no such expressions appear in the 1969 act, and, consequently, the general provisions of chapter 193, supra, do not clearly evidence a legislative intention to repeal or modify the very specific language of RCW 39.53.060, supra, in our opinion.
We have not overlooked the language in § 13 of chapter 193, supra, declaring, in effect, that the investment authority of the 1969 act constitutes "additional" authority. That language would materially affect our conclusion if RCW 39.53.060, supra, [[Orig. Op. Page 6]] merely constituted a limited investment authority; i.e., if it simply authorized a less broad class of investments than does the 1969 act. See, for an opinion of this office reconciling a statutory "conflict" of that nature, AGO 1969 No. 17 [[to Duane Berentson, State Representative on September 23, 1969]], wherein we concluded that a certain earlier statute, RCW 41.16.040 dealing with the investment of firemen's pension funds, was effectively supplemented by a later statute, RCW 35.39.040, dealing with investments of municipal funds in general. However, unlike RCW 39.53.060, supra, there was no statement of any legislative intent in RCW 41.14.040 that its provisions were intended to be exclusive, or that its authority extended to investments only in a particular class of obligations. The limiting phrase ". . . and not otherwise" was actually contained in the broader and more general statute, RCW 35.39.040, as amended.
In other words ‑ here, in the case of RCW 39.53.060, we have a statute containing not merely a narrower authorization but, instead, an express limitation; this 1965 statute expressly limits the investment of the bond proceeds in question to certain government obligations ‑ and it further limits those investments to obligations with certain described redemption features keyed to the over-all concept of advance refunding as above explained. If the legislature had desired to eliminate that restriction, in enacting chapter 193, Laws of 1969, Ex. Sess., supra, it presumably would have said so. However, while the 1969 act expressly broadens the scope of investments which may be purchased, its language regarding the kinds of public funds that may be so invested is no broader in its scope than chapter 111, Laws of 1965.
In summary, therefore, it is our opinion that investment of the proceeds of advance refunding bonds issued under chapter 138, Laws of 1965, Ex. Sess., is governed by the provisions of that special statute, and specifically by § 7 (RCW 39.53.060) to the exclusion of the general investment provisions found in chapter 193, Laws of 1969, Ex. Sess. (RCW 36.29.020 as amended and RCW 39.58.130, supra), and will remain so in the absence of amendatory language to the contrary.3/
We trust the foregoing will be of assistance to you.
Very truly yours,
FOR THE ATTORNEY GENERAL
Robert F. Hauth
Assistant Attorney General
*** FOOTNOTES ***
1/Later amended by § 26, chapter 193, Laws of 1969, Ex. Sess., supra, as above indicated.
2/See for an example of such a statutory provision and its legal effect, our opinion to the chairman of the Employees' Retirement Board, May 8, 1970, a copy of which is enclosed.
3/In considering any amendments to chapter 39.58 RCW, however, the legislature should be aware of the currently pending litigation in which the constitutionality of certain sections of that act is being challenged. Cf., State ex rel. Graham, State Auditor, v. City of Olympia, et al., Supreme Court No. 41975.