CERTIFICATION OF ENROLLMENT

SUBSTITUTE SENATE BILL 5270

Chapter 359, Laws of 1997

55th Legislature

1997 Regular Session

STATE INVESTMENT BOARD--FORMATION OF CORPORATIONS, LIMITED LIABILITY COMPANIES, AND LIMITED PARTNERSHIPS TO HANDLE INVESTMENTS

EFFECTIVE DATE: 7/27/97

Passed by the Senate April 26, 1997

YEAS 43 NAYS 0

BRAD OWEN

President of the Senate

Passed by the House April 25, 1997

YEAS 97 NAYS 0

CERTIFICATE

I, Mike O=Connell, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5270 as passed by the Senate and the House of Representatives on the dates hereon set forth.

CLYDE BALLARD

Speaker of the

House of Representatives

MIKE O'CONNELL

Secretary

Approved May 14, 1997

FILED

May 14, 1997 - 2:22 p.m.

GARY LOCKE

Governor of the State of Washington

Secretary of State

State of Washington

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SUBSTITUTE SENATE BILL 5270

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AS RECOMMENDED BY CONFERENCE COMMITTEE

Passed Legislature - 1997 Regular Session

State of Washington 55th Legislature 1997 Regular Session

By Senate Committee on Financial Institutions, Insurance & Housing (originally sponsored by Senators Winsley and Snyder; by request of State Investment Board)

Read first time 02/06/97.

AN ACT Relating to the operation of the state investment board; and adding new sections to chapter 43.33A RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

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 investment assets that are not publicly traded on a daily basis or on an organized exchange. 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 that the board may make, including but not limited to the acquisition of: Equity interests in operating companies, the indebtedness of operating companies, and real estate.

(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 investment assets that are not publicly traded on a daily basis or on an organized exchange that are 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.