| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Capital Budget Committee | |
HJR 4215
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
Brief Description: Eliminating prohibitions on the investment of certain state moneys.
Sponsors: Representatives Kenney, Sells, Buri, Hunt and Wood; by request of Washington State University.
Brief Summary of Bill |
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Hearing Date: 2/8/07
Staff: Susan Howson (786-7142).
Background:
In 1889, the federal government granted certain lands to Washington State to be held in trust for
what are now the state's public baccalaureate institutions. Proceeds from the sale of timber,
minerals, and permanent rights-of-way on these lands, are deposited into "permanent" funds
which are managed and invested by the Washington State Investment Board (SIB). The income
from these permanent funds is appropriated by the Legislature for the construction and minor
works maintenance of university facilities.
There are four permanent funds. Income derived from the "agricultural permanent fund" and the
"scientific permanent fund" supports construction and facility improvements at Washington State
University. The "state university permanent fund" benefits the University of Washington, and
the "normal school permanent fund" benefits Central Washington University, Eastern
Washington University, Western Washington University, and the Evergreen State College. The
State Constitution prohibits university permanent funds from being invested "in the stock of any
company, association or corporation" (Article XII, Section 9). The SIB currently invests these
funds in fixed income vehicles.
The State Constitution was amended by voters in 1966 to allow the K-12 common school
permanent fund to be invested as authorized by law. It was further amended in 1985 and 2000 to
allow moneys of the public pension or retirement funds, industrial insurance trust fund, or funds
held in trust for the benefit of persons with disabilities, to be invested as authorized by law.
Summary of Bill:
At the next general election, the Secretary of State will submit to voters a proposed amendment
to the State Constitution that would allow the permanent funds of the public baccalaureate
institutions to be invested as authorized by law. This includes the authority to invest the
permanent funds in stocks or bonds issued by any association, company, or corporation if
authorized by law. The Secretary of State will publish a notice of this constitutional amendment
at least four times during the four weeks preceding the election in every legal newspaper in the
state.
Appropriation: None.
Fiscal Note: Not requested.