Z‑0304.1      _____________________________________________

SENATE BILL 5159

           _____________________________________________

State of Washington      57th Legislature     2001 Regular Session

By Senators Winsley, Gardner, Kohl‑Welles, Horn, Prentice and Carlson

Read first time 01/12/2001.  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

15  interest is found in providing maximum prudent investment of

16  surplus funds, thereby reducing the need for additional taxation.

17  The legislature also recognizes that not all political

18  subdivisions are able to maximize the return on their temporary

19  surplus funds.  The legislature therefore provides in this chapter

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_1  a mechanism whereby political subdivisions, community and

_2  technical colleges, ((and)) the state board for community and

_3  technical colleges, and public four-year institutions of higher

_4  education may, at their option, utilize the resources of the state

_5  treasurer's office to maximize the potential of surplus funds

_6  while ensuring the safety of public funds.

_7      Sec. 2.  RCW 43.250.020 and 1996 c 268 s 2 are each amended to read

_8  as follows:

_9      Unless the context clearly requires otherwise, the definitions

10  in this section shall apply throughout this chapter.

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

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

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

14  for investment and reinvestment.

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

16  municipal corporation, political subdivision, or special purpose

17  taxing district in the state.

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

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

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

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

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

23  government official for all political subdivisions for which the

24  county treasurer has exclusive statutory authority to invest the

25  funds thereof.

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

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

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

29  institution of higher education.

30      (5) "Funds" means:

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

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

33  of financial management publication "Policies, Regulations and

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

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

36  immediately required to meet current demands;

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

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_1  treasurer that are the proceeds of bonds, notes, or other

_2  evidences of indebtedness authorized by the state finance

_3  committee under chapter 39.42 RCW or payments pursuant to

_4  financing contracts under chapter 39.94 RCW, when the investments

_5  are made in order to comply with the Internal Revenue Code of

_6  1986, as amended.

_7      Sec. 3.  RCW 43.250.040 and 1996 c 268 s 3 are each amended to read

_8  as follows:

_9      If authorized by statute, local ordinance, or resolution, a

10  local government official or financial officer or his or her

11  designee may place funds into the public funds investment account

12  for investment and reinvestment by the state treasurer in those

13  securities and investments set forth in RCW 43.84.080 and chapter

14  39.58 RCW.  The state treasurer shall invest the funds in such

15  manner as to effectively maximize the yield to the investment

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

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

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

19  exercised the judgment and care under the circumstances then

20  prevailing which persons of prudence, discretion, and intelligence

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

22  speculation but in regard to the permanent disposition of the

23  funds considering the probable income as well as the probable

24  safety of the capital.

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