PUBLIC UTILITY DISTRICTS ‑- FUNDS OF ‑- DEPOSIT IN SAVINGS AND LOAN ASSOCIATIONS

PUBLIC UTILITY DISTRICTS ‑- FUNDS OF ‑- DEPOSIT IN SAVINGS AND LOAN ASSOCIATIONS

A public utility district may invest its funds in any state or federal savings and loan association doing business in this state, up to the amount which is insured by the Federal Savings and Loan Insurance Corporation, and such savings and loan association need not post security for such deposit.

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                                                                    July 10, 1952

Honorable Arthur S. Cory
Representative, Twentieth District
Box 329
Chehalis, Washington                                                                                                              Cite as:  AGO 51-53 No. 347

Dear Sir:

            By letter of June 2, 1952, you refer to chapter 6, Laws of 1951 (now codified as RCW 33.04.100), and in view of pre‑existing statutory provisions requiring depositaries to post bond or collateral securities covering deposits of public utility district funds, you request our opinion as follows:

            "Will you kindly give me your opinion as to whether a Public Utility District is permitted to invest any of its funds with insured savings and loan associations in the State of Washington."

            It is our conclusion that a public utility district may invest its funds in any state or federal savings and loan association doing business in this state, up to the amount which is insured by the Federal Savings and Loan Insurance Corporation, and that such savings and loan association need not post security for such deposit.

                                                                     ANALYSIS

             [[Orig. Op. Page 2]]

            RCW 54.24.010 (§ 8, chapter 1, Laws of 1931), provides that all funds of a public utility district shall be deposited "with the county depositaries under the same restrictions, contracts, and security as provided for county depositaries * * *."

            RCW 36.48.010 (§ 1, chapter 51, Laws of 1907), provides for the designation of county depositaries.  RCW 36.48.020 (§ 1, chapter 73, Laws of 1945), requires such depositaries to file a surety bond or, in lieu thereof, to post securities to cover deposits of public funds, except as to deposits insured by the Federal Deposit Insurance Corporation "or by any other corporation, agency, or instrumentality organized and acting under and pursuant to the laws of the United States * * *."

            By RCW 33.04.100 (chapter 6, Laws of 1951), the legislature prescribed that:

            "Any funds of the state, the counties, cities, towns, municipal corporations, taxing districts, political subdivisions, and political entities of every kind, or any funds held in trust by or under the management of any such entity, which are available for investment, may be invested in savings and loan associations organized under either federal or state law, which are doing business in this state:  Provided, That the investment of any one fund in any one savings and loan association shall not exceed the amount which is insured by the Federal Savings and Loan Insurance Corporation.

            "This act shall not apply to the permanent school fund."

            The fundamental safeguard of the statutes with respect to county depositaries is the requirement that funds deposited should be secured either by a surety bond, collateral securities, or insurance by a federal corporation, agency or instrumentality.  The 1951 act retains this safeguard by specifically recognizing the Federal Savings and Loan Insurance Corporation as a qualified insurer.  The 1951 act, we believe, also modifies the pre‑existing statutory provisions with respect to depositaries of the funds of public utility districts (a "taxing district"), in that a savings and loan association need not be a designated county depositary.

             [[Orig. Op. Page 3]]

            We are therefore of the opinion that a public utility district may deposit its funds in a state or federal savings and loan association doing business in this state, up to the amount which is insured by the Federal Savings and Loan Association, and that the association need not post further security for such deposit so insured.

Very truly yours,

SMITH TROY
Attorney General

FRED L. HARLOCKER
Assistant Attorney General