Z‑0540.1   _____________________________________________

HOUSE BILL 1623

           _____________________________________________

State of Washington      57th Legislature     2001 Regular Session

By Representatives Kenney, Cox, Skinner, Benson, Gombosky, Rockefeller, Edwards and Mulliken

Read first time 01/31/2001.  Referred to Committee on Higher Education.

_1      AN ACT Relating to investments of surplus funds by four-year

_2  institutions of higher education; and amending RCW 43.250.010,

_3  43.250.020, and 43.250.040.

_4  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

_5      Sec. 1.  RCW 43.250.010 and 1996 c 268 s 1 are each amended to read

_6  as follows:

_7      The purpose of this chapter is to enable political

_8  subdivisions, community and technical college districts, ((and))

_9  the state board for community and technical colleges as

10  established in chapter 28B.50 RCW, and public four-year

11  institutions of higher education to participate with the state in

12  providing maximum opportunities for the investment of surplus

13  public funds consistent with the safety and protection of such

14  funds.  The legislature finds and declares that the public interest

15  is found in providing maximum prudent investment of surplus funds,

16  thereby reducing the need for additional taxation. The legislature

17  also recognizes that not all political subdivisions are able to

18  maximize the return on their temporary surplus funds.  The

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_1  legislature therefore provides in this chapter a mechanism whereby

_2  political subdivisions, community and technical colleges, ((and))

_3  the state board for community and technical colleges, and public

_4  four-year institutions of higher education may, at their option,

_5  utilize the resources of the state treasurer's office to maximize

_6  the potential of surplus funds while ensuring the safety of public

_7  funds.

_8      Sec. 2.  RCW 43.250.020 and 1996 c 268 s 2 are each amended to read

_9  as follows:

10      Unless the context clearly requires otherwise, the definitions

11  in this section shall apply throughout this chapter.

12      (1) "Public funds investment account" or "investment pool"

13  means the aggregate of all funds as defined in subsection (5) of

14  this section that are placed in the custody of the state treasurer

15  for investment and reinvestment.

16      (2) "Political subdivision" means any county, city, town,

17  municipal corporation, political subdivision, or special purpose

18  taxing district in the state.

19      (3) "Local government official" means any officer or employee

20  of a political subdivision who has been designated by statute or

21  by local charter, ordinance, or resolution as the officer having

22  the authority to invest the funds of the political subdivision.

23  However, the county treasurer shall be deemed the only local

24  government official for all political subdivisions for which the

25  county treasurer has exclusive statutory authority to invest the

26  funds thereof.

27      (4) "Financial officer" means the board-appointed treasurer of

28  a community or technical college district ((or)), the state board

29  for community and technical colleges, or a public four-year

30  institution of higher education.

31      (5) "Funds" means:

32      (a) Public funds under the control of or in the custody of any

33  local government official or local funds, as defined by the office

34  of financial management publication "Policies, Regulations and

35  Procedures," under the control of or in the custody of a financial

36  officer by virtue of the official's authority that are not

37  immediately required to meet current demands;

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_1      (b) State funds deposited in the investment pool by the state

_2  treasurer that are the proceeds of bonds, notes, or other

_3  evidences of indebtedness authorized by the state finance

_4  committee under chapter 39.42 RCW or payments pursuant to

_5  financing contracts under chapter 39.94 RCW, when the investments

_6  are made in order to comply with the Internal Revenue Code of

_7  1986, as amended.

_8      Sec. 3.  RCW 43.250.040 and 1996 c 268 s 3 are each amended to read

_9  as follows:

10      If authorized by statute, local ordinance, or resolution, a

11  local government official or financial officer or his or her

12  designee may place funds into the public funds investment account

13  for investment and reinvestment by the state treasurer in those

14  securities and investments set forth in RCW 43.84.080 and chapter

15  39.58 RCW.  The state treasurer shall invest the funds in such

16  manner as to effectively maximize the yield to the investment

17  pool.  In investing and reinvesting moneys in the public funds

18  investment account and in acquiring, retaining, managing, and

19  disposing of investments of the investment pool, there shall be

20  exercised the judgment and care under the circumstances then

21  prevailing which persons of prudence, discretion, and intelligence

22  exercise in the management of their own affairs, not in regard to

23  speculation but in regard to the permanent disposition of the

24  funds considering the probable income as well as the probable

25  safety of the capital.

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