Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
Insurance, Financial Services & Consumer Protection Committee | |
SSB 5039
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: Providing for the state investment board to manage scholarship endowment funds.
Sponsors: Senate Committee on Financial Institutions & Insurance (originally sponsored by Senators Eide, Murray, Marr, Shin, Rockefeller, Weinstein, Rasmussen, Kauffman, Keiser, Jacobsen, Haugen and Kohl-Welles).
Brief Summary of Substitute Bill |
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Hearing Date: 3/20/07
Staff: Jon Hedegard (786-7127).
Background:
Higher Education Coordinating Board (HECB)
The HECB is a state agency governed by a 10-member citizen board. The HECB is charged by
state law with representing the "broad public interest" in higher education and is dedicated to
helping students succeed.
State Treasurer (Treasurer)
The Treasurer manages many funds in this state. The Treasurer may invest only in certain,
lower-risk vehicles. Examples include a variety of government bonds and commercial paper.
The Treasurer is prohibited from investing public funds in a host of vehicles including corporate
stocks or bonds, commodities, and real estate,
Washington State Investment Board (WSIB)
The WSIB manages investments for 16 separate retirement funds for public employees, teachers,
school employees, law enforcement officers, firefighters and judges. It also manages investments
for 21 other public funds that support or benefit industrial insurance, colleges and universities,
developmental disabilities, and wildlife protection. The WSIB may invest in a wide array of
government and corporate bonds, stocks, real estate, and foreign equity.
Under current law, the Treasurer manages the American Indian Scholarship Endowment Fund
and the Foster Care Scholarship Endowment Fund. Moneys received by private donation, state
matching moneys, and funds from other sources may be placed in the endowment funds. The
HECB may award scholarships or grants to qualified applicants.
The American Indian Scholarship Endowment Fund was created in 1993 and has approximately
$565,000. The Foster Care Scholarship Endowment Fund was created in 2005 and is the process
of soliciting funds.
Summary of Bill:
The management of the investments of the American Indian Scholarship Endowment Fund and
the Foster Care Scholarship Endowment Fund is moved from the Treasurer to the WSIB.
The scholarship endowment funds shall remain in the custody of the Treasurer. At the request of
the HECB, the WSIB must release earnings to the Treasurer, who will release those moneys to
the HECB.
The WSIB must invest the scholarship endowment funds using reasonable care and prudence.
The WSIB must follow its established investment policies when investing these funds. The
WSIB may commingle the scholarship endowment funds with other funds under its
management. The WSIB must routinely consult with the HECB on investment policy, earnings
of the scholarship endowment funds, and other matters related to the scholarship endowment
funds.
The HECB has the authority to establish all policies regarding the scholarship endowment funds,
except for the investment policies.
Appropriation: None.
Fiscal Note: Requested on March 19, 2007.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.