wa-law.org > bill > 2025-26 > HB 2556 > Original Bill
The legislature finds that Washington state needs to drastically increase our public financing capacity without raising taxes on working families or financial debt obligations of the state.
The legislature finds that the infrastructure needs of our state far outstrip our ability to finance them under our current public financing model, which relies heavily on bonding. This reliance on bonding diverts much needed and hard-earned tax revenues of our taxpayers from critical programs that benefit them and the state.
The legislature finds that public financing for public benefit is a much better strategy than private financing for public benefit and that most of the developed world uses public banks to finance public initiatives. Publicly owned banking is a much more efficient model for public financing and is proven and used around the world. The United States is more an anomaly than the norm in depending on private banking and investments to finance public initiatives.
The legislature further finds that there exists one public financing model in the United States, which is the Bank of North Dakota. The Bank of North Dakota is the only public depository banking model in the United States that is owned by the people of the state and has existed for over 100 years, overcoming tremendous opposition efforts by the banking industry and financiers to squash it. It regularly reports record annual profits for the people of the state of North Dakota, who are very proud of their public institution because it benefits their economy and supports economic development, supports local community banks, provides access to capital for small businesses and farmers, aids the state in times of disasters, can lower borrowing costs, streamlines government, creates profits for the people, and is generally recognized as a tremendous asset for the state.
The legislature finds that our state has many revolving loan accounts that do good work, but they are limited in the sense that they can only lend as much money as is in the account and can only lend more money after the accounts have been repaid. Examples of these accounts are the public works assistance account, accounts for the community economic revitalization board, the transportation infrastructure bank (which is not a depository bank), and more. These accounts would be able to lend well beyond their current appropriated capacity when powered by a publicly owned depository bank where the deposits allow leveraging of the bank's core capital capacity.
The legislature finds that, based on a 2023 report, Moody's calculates that Washington state has the fifth highest level of debt service as a percentage of general fund revenues amongst all states.
Chapter 415, Laws of 2025, last year's capital budget bond bill, proposes issuing $5 billion of bonds this biennium to finance our capital budget. To do a general calculation of the total cost of $5 billion in bonds over 20 years, the bond's face value, $5 billion, would need to be multiplied by the total interest accrued over the term of the bonds, 20 years, which depends on the interest rate of the bond. The 20-year treasury bond issued on January 31, 2025, had a rate of 4.625 percent.
The legislature finds that bond costs including fees can double the costs of financing or more, depending on the interest rates at the time of issuance. For example, if a $5 billion bond had a five percent annual interest rate maturing in 20 years, the total cost of the $5 billion bond to the state's general fund would be $10 billion. The interest per year would be $5 billion multiplied by five percent, which equals $250 million. The total cost would be $5 billion, the bond principal, plus $5 billion, the total interest, which equals $10 billion. Similarly, the total cost of the same $5 billion bonds over 30 years is: $5 billion, the principal, plus $7.5 billion, the interest, equals $12.5 billion.
The legislature finds that creating a state-owned depository bank and, for example, keeping $500 million in reserves in the publicly owned bank would safely leverage out to provide the same $5 billion in financing capacity necessary to fund the capital budget without the need for a 2025-style capital budget bond bill. A state-owned depository bank would help meet our infrastructure financing needs without raising taxes or increasing debt obligation of the state's general fund, allowing the general fund to be fully used for the benefit of the people rather than providing profits for Wall Street investors.
The legislature finds that fractional reserve banking is standard banking practice in the United States and around the world. It is a banking system where banks keep a portion of deposits on reserve and lend the rest. This system allows banks to create loans and expand the economy. While the United States has no specific reserve requirement, a 10 percent reserve is standard banking practice and considered safe under standard banking regulations and practices and given other forms of access to liquidity. In other words, $1 billion held in reserves in a publicly owned depository bank and leveraged with our tax revenue as deposits would provide $10 billion in loan capacity and would generate profits for the people of the state through interest rate of return on the $10 billion as loans. This would amount to a tenfold increase in the infrastructure financing capacity of the original $1 billion, stimulate our economy, and create jobs, while simultaneously lowering borrowing costs and still making a profit for the people of the state.
For example, if a revolving loan account of $1 billion lends all $1 billion at five percent interest, the account makes $50 million in interest. However, that same $1 billion held in any commercial depository bank charging five percent interest can leverage those same funds up to 10 times and makes profits for shareholders of $500 million. A publicly owned depository bank can charge whatever lower interest rate it chooses, for example two percent, or it can charge zero percent for some smaller loans financing the most emergent needs and supported by the legislature, and still make money for the people. $1 billion multiplied by two percent and 10, the leverage, equals a $200 million profit for the people, and the low interest loans it makes to the state and local governments go back into Washington's local economies, fund needed programs in our state, and create jobs rather than profits for large banks, bond brokers, and investment firms.
The legislature finds that the state and political subdivisions already hold billions of dollars in reserves and accounts, which can be held in the publicly owned depository bank and can be used either as equity capital or general deposits in a depository account.
The legislature finds that, through a state publicly owned bank, the state could borrow from itself at rates the state decides, and repay the state, thereby growing the state's capacity to finance more infrastructure while also making profits for the people of the state, not for Wall Street investors. A state-owned bank would allow the state to keep tax revenues in the state and working for the state instead of exporting tax revenues as an engine for profits to Wall Street investors.
The legislature finds that banks use deposits to leverage the capital that owners have used to create the bank, known as equity capital. A fundamental standard banking practice is that banks can use their deposits to leverage the lending capacity of their equity capital up to tenfold, which is accepted throughout the banking industry as safe and standard banking practice.
The legislature finds that by creating a bank, which is owned by the people of the state of Washington, and using it as the depository for taxes paid by the people of the state instead of using Wall Street banks, the state of Washington could recapture the power of our tax dollars for the benefit of the state and drastically increase our public financing capacity by an order of magnitude and at lower costs without raising taxes or increasing state debt.
The legislature intends to create a depository bank, owned and operated for the beneficial interests of the people of the state of Washington. The state shall, and political subdivisions may, use this publicly owned bank as the primary depository institution for tax revenue and other funds currently held at large financial institutions. The state and political subdivisions are not prohibited from holding some deposits in local community banks, credit unions, or other financial institutions when it serves the best interests of the people.
The legislature intends for the state treasurer to transfer as much of the state's general fund and concentration account into the publicly owned depository bank as is deemed necessary and prudent by the board to facilitate the growth of the bank with the goal of eventually transferring all state moneys currently held in deposit at large Wall Street banks.
The legislature further intends for this public depository bank to follow best banking and prudent management practices with appropriate levels of transparency, accountability, integrity, and oversight by the appropriate financial industry regulatory institutions. The legislature further intends for the board to ensure the long-term financial success of the bank as a foundational facility for future generations of Washingtonians to address the needs of their time, which are impossible to predict now other than to recognize the state will need resources to achieve the state's goals, which this bank will provide.
The legislature further intends for this public depository bank to provide adequate financing capacity and access to capital for local governments in the state to finance infrastructure, support educational, housing, transportation, health care, and economic development, and other unmet infrastructure and banking and lending needs of local governments, the state, and the people, and, to the greatest extent possible, reduce costs of borrowed money to taxpayers and residents of the state. The legislature further intends for the best interests of the people to be the paramount duty of the publicly owned depository bank.
This act may be known and cited as the public banking for public benefit act.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Board" means the operating board of the public bank established in section 4 of this act.
"Bonds" means any bonds, notes, debentures, interim certificates, conditional sales or lease financing agreements, lines of credit, forward purchase agreements, investment agreements, and other banking or financial arrangements, guaranties, or other obligations issued by or entered into by the public bank, which does not create state debt. Such bonds may be issued on either a tax-exempt or taxable basis.
"Borrower" means one or more local or tribal governments.
"Financial assistance" means the infusion of capital to a borrower for use in the planning, acquisition, construction, repair, replacement, rehabilitation, development, and expansion of infrastructure and economic development projects.
"Financing agreements" means, and includes without limitation, a contractual arrangement with a borrower whereby the public bank obtains rights from a borrower in exchange for the granting of financial assistance to the borrower.
"Financing document" means an instrument executed by the public bank and one or more borrowers pertaining to the issuance of or security for bonds, or the application of the proceeds of bonds or other funds of, or payable to, the public bank. A "financing document" may include, but need not be limited to, a lease, installment sale agreement, conditional sale agreement, mortgage, loan agreement, trust agreement or indenture, security agreement, letter or line of credit, reimbursement agreement, insurance policy, guaranty agreement, or currency or interest rate swap agreement. A "financing document" also may be an agreement between the public bank and an eligible banking organization which has agreed to make a loan to a borrower.
"Infrastructure project" means undertakings for the planning, acquisition, construction, repair, replacement, rehabilitation, or improvement of streets and roads, bridges, water systems, storm and sanitary sewage systems, solid waste handling, pollution control facilities, schools, communications systems, docks and wharves, mass transportation facilities and equipment, public housing, fire suppressing and emergency services equipment and facilities, energy generating, conservation, or transmission facilities, and other public infrastructure deemed eligible by the board.
"Local government" means any Washington city, town, county, special purpose district, authority, instrumentality, or other local municipal or interlocal entity created pursuant to Washington law.
"Member" means the state government, a local government, or a tribal government that has joined the public bank consistent with section 5 of this act.
"Project costs" means costs of:
Acquisition, lease, construction, reconstruction, remodeling, refurbishing, rehabilitation, extension, and enlargement of land, rights to land, buildings, structures, docks, wharves, fixtures, machinery, equipment, excavations, paving, landscaping, utilities, approaches, roadways and parking, handling and storage areas, and similar ancillary facilities, and any other real or personal property included in an infrastructure project;
Architectural, engineering, consulting, accounting, and legal costs related directly to the development, financing, acquisition, lease, construction, reconstruction, remodeling, refurbishing, rehabilitation, extension, and enlargement of an infrastructure project, including costs of studies assessing the feasibility of an infrastructure project;
Finance costs, including the costs of credit enhancement and discounts, if any, the costs of issuing revenue bonds, and the costs incurred in carrying out any financing document;
Start-up costs, working capital, capitalized research and development costs, capitalized interest during construction and during the 18 months after estimated completion of construction, and capitalized debt service or repair and replacement or other appropriate reserves;
The refunding of any outstanding obligations incurred for any of the costs outlined in this subsection; and
Other costs incidental to any of the costs listed in this subsection.
"Public bank" means the Washington state public bank established in section 4 of this act, or any board, body, commission, department, or officer succeeding to the principal functions of the public bank or to whom the powers conferred upon the public bank are given by law.
"State" means the state of Washington and any department, agency, or instrumentality thereof other than the public bank.
"Tribal government" means the governing body of a federally recognized Indian tribe.
The Washington state public bank is established as a public body corporate and politic, with perpetual corporate succession, constituting an instrumentality of the state of Washington exercising essential governmental functions. The public bank is a public body as defined in RCW 39.53.010.
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The public bank is activated when:
An appropriation that is sufficient to capitalize the public bank so that it can issue debt with a competitive rating is provided. This appropriation may be from either state funds or federal funds, or from any combination of both. The state treasurer shall provide sufficient funding to capitalize the public bank; and
Executed articles of activation in a form approved by the state finance committee are filed with the secretary of state.
The public bank is deemed to have been formed as of the date of filing articles of activation under (a)(ii) of this subsection. The articles of activation must be approved by the legislative authority of each of the member local or tribal governments that subsequently becomes a member. Each member local or tribal government must provide to the public bank a contribution of an amount approved by the state finance committee, and the board may subsequently adjust the minimum contribution level for current and new members. Any amendments to the articles of activation must be filed with the secretary of state and become effective on the date of filing.
The state treasurer shall transfer as much of the state's general fund and concentration account into the public bank as is deemed necessary and prudent by the board to facilitate the growth of the bank with the goal of eventually transferring all state moneys currently held in deposit at large Wall Street banks.
A duplicate of the original articles of activation and amended articles of activation must be filed with the department of financial institutions. The filing of amended articles of activation must include the text of each amendment adopted and the date of its adoption. The public bank must also file the following with the department of financial institutions:
The address of the location of the main office of the public bank;
The names and places of residence of the persons who are directors under this section;
The name and place of residence of the executive director hired by the board in accordance with this section;
Bylaws and regulations adopted and amended by the board under section 5 of this act; and
Any other information the director of the department of financial institutions deems necessary to perform a review of the funds placed with the public bank and the accounts and transactions of the public bank in carrying out the public bank's duties, as provided in this section.
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The operating board of the public bank consists of nine directors. Terms of directors are four years, with half of the initial directors other than the initial chair serving two-year terms as determined by lot, with those positions being filled for four-year terms thereafter.
Five member appointed directors must be selected by a majority of the members of the public bank. Member appointed directors must be elected local or tribal government officials. Three public directors must be appointed by the governor and confirmed by the senate. The public directors must be residents of the state appointed by the governor on the basis of their interest and expertise in finance, accounting, budgeting, economic development, infrastructure planning, design, construction, or project management. The state treasurer shall serve as an ex officio director.
One of the public members shall be appointed by the governor as chair of the board and shall serve as chair at the pleasure of the governor. The initial chair must serve a full four-year term. The public bank may select from its membership such other officers of the public bank as it deems appropriate, including without limitation a secretary and a treasurer.
In the event of a vacancy on the board due to death, resignation, lack of qualification to serve as a director, or otherwise, a successor for the remainder of the unexpired term shall be selected in the same manner as the selection of the director whose position has become vacant. Any independent member of the public bank may be removed by the governor for misfeasance, malfeasance, or willful neglect of duty after notice and a public hearing, unless such notice and hearing are expressly waived in writing by the affected public member.
The state treasurer may designate an employee to act on the treasurer's behalf in all respects with regard to any matter to come before the public bank. The designation must be made in writing in such manner as is specified by the rules of the public bank.
A majority of the directors constitutes a quorum.
The directors of the public bank serve without compensation but are entitled to reimbursement, solely from the funds of the public bank, for expenses incurred in the discharge of their duties under this chapter.
The state finance committee serves as the oversight board of the public bank. In that capacity, the state finance committee must carry out the responsibilities specified in this chapter. In addition, the state finance committee may at its discretion require independent audits of the accounts and transactions of the public bank and the methods, procedures, and operation of the public bank in carrying out its duties.
The public bank is a state agency subject to audit by the state auditor under chapter 43.09 RCW. In addition, the department of financial institutions may, at the discretion of the director of financial institutions, review the funds placed with the public bank and the accounts and transactions of the public bank in carrying out the public bank's duties. Nothing in this subsection establishes that the public bank is an institution or entity otherwise subject to the jurisdiction of the department of financial institutions.
The board has the authority to hire and fire an executive director. The executive director must be funded in the office of the state treasurer budget and shall administer and operate the Washington state public bank.
The public bank's administration and operation must initially be performed by employees of the office of the state treasurer, subject to the terms of one or more agreements between the public bank and the office of the state treasurer concerning responsibilities of the office of the state treasurer's staff and compensation of the office of the state treasurer.
The board must approve the budget of the public bank annually.
The board shall establish an internal audit committee.
The public bank shall prioritize investments that increases the supply of public housing.
The public bank must not be or constitute a bank or trust company within the jurisdiction or under the control of the director of financial institutions, the comptroller of the currency of the United States of America, or the United States department of the treasury.
The public bank must not be or constitute a bank, broker, or dealer in securities within the meaning of, or subject to the provisions of, any securities, securities exchange, or securities dealers' law of the United States of America or this state.
The public bank may not issue bonds in a manner that would create state debt.
The public bank may:
Sue and be sued in its own name, and plead and be impleaded;
Adopt and alter an official seal;
Make and enforce bylaws and regulations for the conduct of its business and for the use of its services and facilities;
Engage such independent consultants, attorneys, and advisers as the public bank deems necessary, useful, or convenient to accomplish its purposes, and, subject to section 6 of this act, contract with federal, state, and local or tribal governmental entities for services;
Make and execute all manner of contracts, agreements, and instruments and financing documents with public and private parties as the public bank deems necessary, useful, or convenient to accomplish its purposes;
Acquire, hold, use, and dispose of real or personal property, or any interest therein, in the name of the public bank, and to sell, assign, lease, encumber, mortgage, or otherwise dispose of the same in such manner as the public bank deems necessary, useful, or convenient to accomplish its purposes;
Acquire, hold, use, and dispose of its income, revenues, funds, and money;
Receive funds or deposits from state, local, or tribal governments, invest those moneys in lawful funds, including without limitation investments in loans made by the public bank to borrowers;
Open and maintain accounts in qualified public depositaries; in the federal reserve bank of San Francisco, in the national cooperative bank, in a federal home loan bank, or in any other federal financing entity, and otherwise provide for the investment of any funds not required for immediate disbursement and provide for the selection of investments. The public bank may participate in and use the federal reserve banks payments systems and account services;
Appear in its own behalf before boards, commissions, departments, or agencies of federal, state, local, or tribal governments;
Procure such insurance of such types, in such amounts, and from such insurers as the public bank deems desirable including, but not limited to, insurance against any loss or damage to its property or other assets, public liability insurance for injuries to persons or property, and directors and officers liability insurance;
Accept gifts or grants from the United States, or from any governmental unit or person, firm, or corporation, carry out the terms or provisions or make agreements with respect to the gifts or grants, and do all things necessary, useful, desirable, or convenient in connection with procuring, accepting, or disposing of the gifts or grants;
Apply for and accept grants, loans, advances, and contributions from any source of money, property, labor, or other things of value, to be held, used, and applied as the public bank deems necessary, useful, or convenient to accomplish its purposes;
Borrow money and issue its bonds consistent with this chapter and provide for and secure their payment, provide for the rights of bond owners and purchasers, and hold and dispose of any of its bonds;
For the purpose of facilitating the financing of infrastructure and economic development activity in the state of Washington by the state or local or tribal governments, develop and conduct a program or programs to make loans to borrowers for project costs of infrastructure and economic development projects. Those loans may be made from the proceeds of bonds issued by the public bank, from funds held by the public bank, and from other assets of the public bank including contributions. The public bank may develop and conduct a program that stimulates and encourages the development of infrastructure and economic development projects by the infusion of financial assistance for state, local, or tribal governments;
Establish guidelines for the engagement by state, local, or tribal governments in programs conducted by the public bank under this chapter. The public bank may prescribe the form of application or procedure required of a borrower for a loan, fix the terms and conditions of the loan or purchase, and enter into financing agreements and other financing documents with borrowers with respect to loans and other forms of financial assistance;
Establish, revise, and collect such member contributions and such fees and charges as the public bank deems necessary, useful, or convenient to accomplish its purposes. Members may make such contributions, and state, local, and tribal governments may pay such fees and charges;
Make such expenditures as are appropriate for paying the administrative costs and expenses of the public bank in carrying out the provisions of this chapter;
Establish such reserves and special funds, including but not limited to debt service and sinking funds, reserve funds, project funds, and such other special funds as the public bank deems necessary, useful, or convenient, and controls on funds to and from them, as the public bank deems necessary, useful, or convenient to accomplish its purposes;
Provide financial assistance and other forms of assistance to state, local, or tribal governments by providing information, advice, guidelines, forms, and procedures for implementing their financing programs;
When authorized by not less than two-thirds of the members of the board, make distributions to members of amounts that the board deems surplus to the needs of the public bank;
Engage outside legal counsel, while receiving counsel on a routine basis from the office of the attorney general;
Adopt rules concerning its exercise of the powers authorized by this chapter; and
Exercise any other power the public bank deems necessary, useful, or convenient to accomplish its purposes and exercise the powers expressly granted in this chapter.
Bonds issued under this chapter must be issued in the name of the public bank. The bonds are not obligations of the state of Washington, may not create state debt, and are obligations only of the public bank payable from the special fund or funds created by the public bank for their payment. Such funds are not public moneys or funds of the state of Washington and at all times must be kept segregated and set apart from other funds.
Bonds issued under this chapter must contain a recital on their face to the effect that payment of the principal of, interest on, and prepayment premium, if any, on the bonds, is a valid claim only as against the special fund or funds relating thereto, that neither the faith and credit nor the taxing power of the state or any municipal corporation, subdivision, or agency of the state, other than the public bank as set forth in this chapter, is pledged to the payment of the principal of, interest on, and prepayment premium, if any, on the bonds. Contracts entered into by the public bank must be entered into in the name of the public bank and not in the name of the state of Washington. The obligations of the public bank under the contracts must be obligations only of the public bank and are not in any way obligations of the state of Washington.
The public bank's bonds must bear such date or dates, mature at such time or times, be in such denominations, be in such form, be registered or registrable in such manner, be made transferable, exchangeable, and interchangeable, be payable in such medium of payment, at such place or places, be subject to such terms of redemption, bear such fixed or variable rate or rates of interest, be payable at such time or times, and be sold in such manner and at such price or prices, as the public bank determines. The bonds must be executed by the chair, by either its duly elected secretary or its treasurer, and by the trustee or paying agent if the public bank determines to use a trustee or paying agent for the bonds. Execution of the bonds may be by manual or facsimile signature. The bonds of the public bank may be negotiable instruments under Title 62A RCW.
The bonds of the public bank are subject to such terms, conditions, covenants, and protective provisions as are found necessary or desirable by the public bank including, but not limited to, pledges of the public bank's assets, setting aside of reserves, limitations on additional forms of indebtedness, and the mortgaging of all or any part of the public bank's real or personal property, then owned or thereafter acquired, and other provisions the public bank finds are necessary or desirable for the security of bond owners.
Any bonds issued under this chapter may be secured by a financing document between the public bank and the purchasers or owners of such bonds or between the public bank and a corporate trustee appointed by the public bank, which may be any trust company or bank having the powers of a trust company within or without the state. The financing document may pledge or assign, in whole or in part, the revenues and funds held or to be received by the public bank, any present or future contract or other rights to receive the same, and the proceeds thereof. The financing document must contain such provisions for protecting and enforcing the rights, security, and remedies of bond owners as may be reasonable and proper including, without limiting the generality of the foregoing, provisions defining defaults and providing for remedies in the event of default which may include the acceleration of maturities, restrictions on the individual rights of action by bond owners, and covenants setting forth duties of and limitations on the public bank in conduct of its programs and the management of its property. In addition to other security provided in this chapter or otherwise by law, bonds issued by the public bank may be secured, in whole or in part, by a pledge of the assets of the public bank, including contributions of the members, or by financial guaranties, insurance or letters of credit issued to the public bank or a trustee or any other person, by any bank, trust company, insurance or surety company, or other financial institution, within or without the state. The public bank may pledge or assign, in whole or in part, the revenues and funds held or to be received by the public bank, any present or future contract or other rights to receive the same, and the proceeds thereof, as security for such guaranties or insurance or for the reimbursement by the public bank to any issuer of such letter of credit of any payments made under such letter of credit. No individual member is liable to the public bank, to the public bank's trustee, or to any other person in amounts exceeding the member's contribution unless authorized by a majority of the members of the public bank.
The public bank may enter into financing documents with borrowers regarding bonds issued by the public bank that may provide for the payment by each borrower of amounts sufficient, together with other revenues available to the public bank, if any, to:
Pay the borrower's share of the fees established by the public bank;
Pay the principal of, premium, if any, and interest on outstanding bonds of the public bank issued in respect of such borrower as the same shall become due and payable; and
Create and maintain reserves required or provided for by the public bank in connection with the issuance of such bonds. The payments are not subject to supervision or regulation by any department, committee, board, body, bureau, or agency of the state other than the public bank.
Any security interest created in the unexpended bond proceeds and in the special funds created by the public bank must be immediately valid and binding against such moneys and any securities in which such moneys may be invested without public bank or trustee possession thereof, and the security interest is prior to any party having any competing claim in such moneys or securities, without filing or recording pursuant to chapter 62A.9A RCW and regardless of whether the party has notice of the security interest.
When issuing bonds, the public bank may provide for the future issuance of additional bonds or parity debt on a parity with outstanding bonds, and the terms and conditions of their issuance. The public bank may refund or advance refund any bond of the public bank in accordance with chapter 39.53 RCW or issue bonds with a subordinate lien against the fund or funds securing outstanding bonds. Bonds issued for refunding purposes may be combined with bonds issued for the financing or refinancing of new projects. Pending the application of the proceeds of the refunding bonds to the redemption of the bonds to be redeemed, the public bank may enter into an agreement or agreements with a corporate trustee regarding the interim investment of the proceeds and the application of the proceeds and the earnings on the proceeds to the payment of the principal of and interest on, and the redemption of, the bonds to be redeemed.
All money received by or on behalf of the public bank with respect to this issuance of its bonds are trust funds to be held and applied solely as provided in this chapter. The public bank, instead of receiving and applying the moneys itself, may enter into a trust agreement or indenture with one or more banks, including the national cooperative bank, or trust companies having the power and bank to conduct trust business in the state to:
Perform all or any part of the obligations of the public bank with respect to: (i) Bonds issued by it; (ii) the receipt, investment, and application of the proceeds of the bonds and money paid by a participant or available from other sources for the payment of the bonds; (iii) the enforcement of the obligations of a borrower in connection with the financing or refinancing of any project; and (iv) other matters relating to the exercise of the public bank's powers under this chapter;
Receive, hold, preserve, and enforce any security interest or evidence of security interest granted by a participant for purposes of securing the payment of the bonds; and
Act on behalf of the public bank or the owners of bonds of the public bank for purposes of assuring or enforcing the payment of the bonds, when due.
The public bank may purchase its bonds with any of its funds available for the purchase. The public bank may hold, pledge, cancel, or resell the bonds subject to and in accordance with agreements with bond owners.
The chair of the state finance committee or the chair's designee must be notified in advance of the issuance of bonds by the public bank in order to promote the orderly offering of obligations in the financial markets.
Neither the members of the public bank, nor its directors or agents, nor employees of the office of the state treasurer, nor any person executing the bonds, is personally liable on the bonds or subject to any personal liability or accountability by reason of the issuance of the bonds.
The public bank may, out of any fund available therefor, purchase its bonds in the open market.
Any owner of bonds of the public bank issued under this chapter, and the trustee under any trust agreement or indenture, may, either at law or in equity, by suit, action, mandamus, or other proceeding, protect and enforce any of their respective rights, and may become the purchaser at any foreclosure sale if the person is the highest bidder, except to the extent the rights given are restricted by the public bank in any bond resolution or trust agreement or indenture authorizing the issuance of the bonds.
The public bank may charge for its costs and services in review or consideration of a proposed loan to a state, local, or tribal government, whether or not the loan is made.
To the extent permitted under its contracts with the owners of bonds of the public bank, the public bank may consent to modification of the rate of interest, time and payment of installment of principal or interest, security, or any other term of a bond or note, loan to a state, local, or tribal government, contract, or agreement of any kind to which the public bank authority is a party.
The bonds of the public bank are securities in which all public officers and bodies of this state and all counties, cities, municipal corporations, and political subdivisions, all banks, eligible banking organizations, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, insurance companies and associations, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys, or other funds belonging to them or within their control.
This section provides a complete, additional, and alternative method for accomplishing the purposes of this chapter and is supplemental and additional to powers conferred by other laws. The issuance of bonds and refunding bonds under this chapter need not comply with the requirements of any other law applicable to the issuance of bonds. Insofar as the provisions of this chapter are inconsistent with the provisions of any general or special law, or parts thereof, the provisions of this chapter are controlling.
Employees of the office of the state treasurer shall primarily administer and operate the Washington state public bank, as provided by section 4(9) of this act. The public bank may consult with other state agencies at its discretion and without the approval of the office of the state treasurer.
Any local government in the state of Washington may invest in:
Bonds of the state of Washington and any local government in the state of Washington;
General obligation bonds of a state and general obligation bonds of a local government of a state, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency;
Subject to compliance with RCW 39.56.030, registered warrants of a local government in the same county as the government making the investment;
Certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States; or United States dollar denominated bonds, notes, or other obligations that are issued or guaranteed by supranational institutions, provided that, at the time of investment, the institution has the United States government as its largest shareholder;
Federal home loan bank notes and bonds, federal land bank bonds and federal national mortgage association notes, debentures and guaranteed certificates of participation, or the obligations of any other government sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system;
Bankers' acceptances purchased on the secondary market;
Commercial paper purchased in the secondary market, provided that any local government of the state of Washington that invests in such commercial paper must adhere to the investment policies and procedures adopted by the state investment board;
Corporate notes purchased on the secondary market, provided that any local government of the state of Washington that invests in such notes must adhere to the investment policies and procedures adopted by the state investment board; and
A public bank as defined in section 3 of this act and bonds issued by such public bank.
The following financial, commercial, and proprietary information is exempt from disclosure under this chapter:
The following information relating to insurance and financial institutions is exempt from disclosure under this chapter:
No officer, director, administrative agency, board, or commission of the state, other than the attorney general, shall employ, appoint or retain in employment any attorney for any administrative body, department, commission, agency, or tribunal or any other person to act as attorney in any legal or quasi legal capacity in the exercise of any of the powers or performance of any of the duties specified by law to be performed by the attorney general, except where it is provided by law to be the duty of the judge of any court or the prosecuting attorney of any county to employ or appoint such persons: PROVIDED, That RCW 43.10.040, and 43.10.065 through 43.10.080 shall not apply to the administration of the commission on judicial conduct, the state law library, the law school of the state university, the administration of the state bar act by the Washington State Bar Association, the representation of an estate administered by the director of the department of revenue or the director's designee pursuant to chapter 11.28 RCW, or the state public bank to the extent provided in section 5(22) of this act.
The authority granted by chapter 1.08 RCW, RCW 44.28.065, and 47.01.061 shall not be affected hereby.
Wherever there is in any fund or in cash balances in the state treasury more than sufficient to meet the current expenditures properly payable therefrom, the state treasurer may invest or reinvest such portion of such funds or balances as the state treasurer deems expedient in the following:
Certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States or United States dollar denominated bonds, notes, or other obligations that are issued or guaranteed by supranational institutions, provided that, at the time of investment, the institution has the United States government as its largest shareholder;
In state, county, municipal, or school district bonds, notes, or in warrants of taxing districts of the state. Such bonds and warrants shall be only those found to be within the limit of indebtedness prescribed by law for the taxing district issuing them and to be general obligations. The state treasurer may purchase such bonds or warrants directly from the taxing district or in the open market at such prices and upon such terms as it may determine, and may sell them at such times as it deems advisable;
In federal home loan bank notes and bonds, federal land bank bonds and federal national mortgage association notes, debentures and guaranteed certificates of participation, or the obligations of any other government sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system;
Bankers' acceptances purchased on the secondary market;
Commercial paper purchased on the secondary market, provided that the state treasurer adheres to the investment policies and procedures adopted by the state investment board;
General obligation bonds of any state and general obligation bonds of local governments of other states, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency;
Corporate notes purchased on the secondary market, provided that the state treasurer adheres to the investment policies and procedures adopted by the state investment board; and
Contributions to a public bank as defined in section 3 of this act.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
This act, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effect the purposes thereof.