AGLO 1976 No. 38.
Case Date | June 14, 1976 |
Court | Washington |
Washington Attorney General Opinions
1976.
AGLO 1976 No. 38.
June 14,
1976[Orig. Op. Page 1]PRIVATEOFFICES AND
OFFICERS -- STATE -- TREASURER -- PUBLIC FUNDS -- BANKS -- LIMITATION UPON
PUBLIC FUNDS.(1) The limitation in RCW
39.58.130 upon public deposits with a particular bank or trust company applies
to all funds, in the aggregate, deposited by a county treasurer rather than
separately to the funds of each municipality served by such treasurer.(2) The protections of chapter 39.58 RCW extend to all
public funds on deposit with qualified depositaries irrespective of the
limitations of RCW 39.58.130 and without regard to the reasons attributable to
the violation of the statutory restriction.Honorable
Robert S. O'BrienState TreasurerLegislative
BuildingOlympia, Washington 98504Cite as:
AGLO 1976 No. 38Dear Sir:
By letter previously acknowledged you have requested an opinion
of this office on the following two questions involving chapter 39.58 RCW
(commonly known as the public deposit protection act):
1. "Does the limitation on deposit of public funds by a treasurer
to the total of capital, surplus and undivided profits of a bank or trust
company refer to each fund which is maintained by a [county] treasurer for a
municipal corporation or other jurisdiction, or must all such funds be
aggregated for purposes of applying the limitation?"
2. "Where public funds on deposit by a single treasurer exceed
the limitations of RCW 39.58.130, to what portion of such funds do the
protections of chapter 39.58 RCW extend?"
We answer these questions in the manner set forth in the
following analysis.
ANALYSIS
Chapter 193, Laws of 1969, 1st Ex. Sess., now codified in part as
chapter 39.58 RCW, substantially revised the law relating to the deposit and
investment of public funds. By this act a comprehensive system was established
for the protection of funds deposited by the state, municipal corporations or
other political subdivisions with certain banking institutions within the
state, defined by RCW 39.58.010(2) as "qualified public
depositaries."(fn1)
[Orig. Op. Page 2]
Prior to the enactment of this new law the deposit of public
funds was generally conditioned upon the furnishing of a surety bond by the
depositary in an amount equal to the funds placed on deposit or, in the
alternative, the segregation as collateral of defined securities with a market
value equal to or exceeding the amounts deposited.(fn2) Earlier statutes also
limited deposits by a public treasurer with a given depositary to a percentage
of the paid-in capital and surplus of the depositary,(fn3) although such
limitations had been removed from the statutes some years before the passage of
chapter 193, supra.(fn4)
The public deposit protection scheme of the 1969 legislation
eliminated the bonding and full collateralization provisions of prior statutes.
Instead, each depositary of public funds (qualified public depositary) is now
required to segregate collateral only to the extent of that depositary's
"maximum liability," defined by RCW 39.58.010(6) as ". . . a sum equal to five
percent of all public deposits held by . . ." the depositary. The aggregate of
the assets thus segregated by all such qualified public depositaries within the
state, in turn, constitutes the fund from which a public depositor will be
compensated (pursuant to procedures described in our response to your second
question) for any loss of deposits by reason of a failure of the
depositary.(fn5) Along with this change, however, the 1969 law reinstated the
earlier concept of a specific limitation upon the amounts which a public
treasurer may deposit with any one depositary. Thus, RCW 39.58.130 provides
that:
[Orig. Op. Page 3]
"A treasurer as defined in RCW 39.58.010 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 chapter, 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: Provided, That in no
case shall the deposit or deposits of public funds by any such treasurer in any
one bank or trust company exceed at any one time in the aggregate the total of
the capital, surplus, and undivided profits of such bank or trust company."
(Emphasis supplied.)
Question (1):
Your first question involves this last quoted statute and
asks:
"Does the limitation on deposit of public funds by a treasurer to
the total of capital, surplus and undivided profits of a bank or trust company
refer to each fund which is maintained by a [county] treasurer for a municipal
corporation or other jurisdiction, or must all such funds be aggregated for
purposes of applying the limitation?"
Before addressing this question directly some preliminary
comments on this section and related definitions in chapter 39.58 RCW are
warranted. The proviso in RCW 39.58.130 qualifies language which ostensibly
refers to "investment deposits." Closer examination of the statute, however,
reveals that the sentence immediately preceding the proviso deals with the
general authority given to a public treasurer for the investment or
deposit of public funds. Under recognized rules of
construction the operation of a proviso is to be confined to the language which
immediately precedes it and not to other portions of the statutory section in
which the proviso is contained unless there is clear indication that such was
the legislative intent. Bayha v. Public Utility District No.
1, 2 Wn.2d 85, 97 P.2d 614 (1939). Thus, the limitation contained
in RCW 39.58.130 extends to the deposit of public funds
generally and not simply to investment
deposits.
Next, we note that the term "deposit of public funds" is not
specifically defined by statute. However, consideration of this phrase along
with the term "public funds on deposit"
[Orig. Op. Page 4]
elsewhere in chapter 39.58 RCW(fn6) demonstrates that they are
both used interchangeably with the term "public deposit" which, itself,
is defined in RCW 39.58.010(1) to include:
". . . moneys of the state or of any county, city or town, or
other political subdivision of the state or any commission, committee, board or
officer thereof or any court of the state deposited in any qualified public
depositary, including moneys held as trustee, agent, or bailee by the state,
any county, city or town, or other political...
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