5270-S AMH FII H2915.1

SSB 5270 - H COMM AMD ADOPTED 4-14-97

By Committee on Financial Institutions & Insurance

    Strike everything after the enacting clause and insert the following:

    "NEW SECTION. Sec. 1.  A new section is added to chapter 43.33A RCW to read as follows:

    (1) The board is authorized to create corporations under Title 23B RCW, limited liability companies under chapter 25.15 RCW, and limited partnerships under chapter 25.10 RCW, of which it may or may not be the general partner, for the purposes of transferring, acquiring, holding, overseeing, operating, or disposing of real estate or other not readily marketable assets.  The liability of each entity created by the board is limited to the assets or properties of that entity.  No creditor or other person has any right of action against the board, its members or employees, or the state of Washington on account of any debts, obligations, or liabilities of the entity.  Entities created under this section may be authorized by the board to make any investment in real estate or other not readily marketable assets that the board may make.

    (2) Directors, officers, and other principals of entities created under this section must be board members, board staff, or principals or employees of an advisor or manager engaged by contract by the board or the entity to manage real estate or other investment assets of the entity.  Directors of entities created under this section must be appointed by the board.  Officers and other principals of entities created under this section are appointed by the directors.

    (3) A public corporation, limited liability company, or limited partnership created under this section has the same immunity or exemption from taxation as that of the state.  The entity shall pay an amount equal to the amounts that would be paid for taxes otherwise levied upon real property and personal property to the public official charged with the collection of such real property and personal property taxes as if the property were in private ownership.  The proceeds of such payments must be allocated as though the property were in private ownership.

NEW SECTION. Sec. 2.  A new section is added to chapter 43.33A RCW to read as follows:

    Rent and other income from real estate or other not readily marketable assets acquired and being held for investment by the board or by an entity created under section 1 of this act by the board, and being managed by an external advisor or other property manager under contract, shall not be deemed income or state funds for the purposes of chapter 39.58 RCW and this title, until distributions are made to the board of such income from the advisor or manager.  Bank and other accounts established by the advisor or property manager for the purpose of the management of such investment assets shall not be deemed accounts established by the state for the purpose of chapter 39.58 RCW and this title.

NEW SECTION. Sec. 3.  A new section is added to chapter 43.33A RCW to read as follows:

    For the purposes of sections 1 and 2 of this act, an asset is "not readily marketable" when it is not publicly traded on a daily basis or on an organized exchange.  Such assets may include, but are not limited to, real estate or other physical assets, and equity interests in, or the indebtedness of, operating companies, whether the asset is held directly or through an interest in an investing entity."

    Correct the title.

EFFECT:  The entities created by the board can invest in real estate or other not readily marketable assets only.

                            --- END ---