SB1111 - 451R - House Bill Summary

House of Representatives

SB 1111

county treasurers; procedures

Sponsors: Senators Mitchell, Arzberger, Guenther: et al.

DP	Committee on Counties & Municipalities
X	Caucus and COW
	As Passed the House

SB 1111 makes changes to the statutes governing treasurers and public monies of subdivisions [county, city, school district]. In addition, the bill expands the list of a treasurer’s eligible investments and allows school districts that have assumed accounting responsibility to be added as an eligible designee in preference of payment of warrants.

History

Current law requires investment interest to be collected and credited by the treasurer in accordance with general fund accounting practices. The law further stipulates that interest of subdivision monies pooled within a public deposit and not maintained by a treasurer for more than 60 days shall be credited to the depositing agency’s general fund. In addition, interest on public deposit monies that are solely maintained by the treasurer shall be distributed on a pro rata basis to subdivision accounts. Finally, all other interest on any public deposits not otherwise lawfully apportioned shall be credited to the state general fund or the general fund of the depositing subdivision. SB 1111 repeals the aforementioned provisions and replaces it with language which separates the agencies that have monies maintained by a treasurer into two groups: agency pool participants and involuntary pool participants. The bill further provides for the treasurer to allocate interest on a pro rata basis to agency pool participants, and for involuntary pool participants’ interest to be deposited into the general fund of the collecting entity [i.e. the county general fund if the monies are maintained by the county treasurer].

Statutes require the treasurer of any subdivision [county, city, school district] to invest and reinvest public monies in eligible investments [securities and deposits] and stipulates the securities and deposits have a maximum maturity of three years. Presently, there are eight eligible investments; SB 1111 adds two more investment possibilities to that list in increases the maximum maturity to five years.

Provisions

· Provides for all warrants drawn on the county treasurer against a school district fund by the school district finance officer to be entitled to preference of payment out of the school fund and further stipulates that warrants not presented for payment within a year are void.

· Defines agency pool participant as a subdivision that has monies maintained by a treasurer and that has authority to draw negotiable instruments on a treasurer or to make other disbursements of subdivision fund.

· Defines collecting entity as the entity from which the treasurer receives general funding for collections performed by the treasurers of a county, city, or district, respectively.

· Defines involuntary pool participant as a subdivision that only receives the principal ratio of collected monies, that are mandated to be distributed on a specific date and for which the interest earned on the monies between the collection time and other statutory requirements reverts to the collecting entity’s general fund.

· Extends the maximum maturity of public monies that can be invested and reinvested in securities and deposits from three years to five years.

· Adds two investment areas to the list of eligible investments in which a treasurer shall invest public monies including:

Ø commercial paper of a specified prime quality issued by corporations operating in the United States and

Ø bonds, debentures and notes issued by corporations operating in the United States and meeting the prescribed ratings.

· Removes the duties that a treasurer:

Ø Collect and credit investment interest and appreciation in accordance with general public fund accounting practices.

Ø Credit interest of subdivision monies not maintained by a treasurer for more than 60 days to the depositing agency’s general fund.

Ø Distribute interest on public deposit monies maintained solely by the treasurer on a pro rata basis to subdivision accounts.

Ø Credit all other interest on public deposits to the state general fund or the subdivision making the deposit.

· Adds requirement for treasurer to allocate pooled income earnings on a pro rata basis to agency pool participants and requires the income earnings of involuntary pool participants be deposited in the collecting entity’s general fund.

· Requires interest earned on city and town taxes collected by county treasurer be paid into the county general fund for use determined by the board of supervisors.

· Eliminates information the treasurer must include on tax payment receipt including the tax amount, interest amount, description of assessed property, and assessed tax year.

· Requires the treasurer to establish procedures for issuance or non-issuance of receipts.

· Lowers the interest rate paid to a purchaser of a wrongfully sold real property tax lien from 12 per cent to 10 per cent.

· Eliminates the statutory requirement that holds county treasurers, recorders, and assessors liable to the county for interest on sales made through the officer’s mistake or misconduct.

· Makes other technical and conforming changes.

SB 1111 passed the Counties and Municipalities Committee unamended.

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45th Legislature