AN ACT Relating to state investments in countries with apartheid policies; amending RCW 28B.20.130, 28B.30.150, 28B.35.120, 28B.40.120, 28B.50.090, and 43.84.080; adding new sections to chapter 43.33A RCW; creating a new section; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature hereby finds and declares that:

(1) The country of South Africa is the only political system on this planet which constitutionally enshrines a political system whereby a small minority of the population has the power and authority to separate, discriminate against, and deny fundamental political, social, and economic rights to, eighty-three percent of its population solely on the basis of race.

(2) The policy of apartheid restricts the freedom of speech and the freedom of movement of black and colored persons in South Africa, and relegates eighty-three percent of that nation's population to thirteen percent of that nation's land area.

(3) This system of apartheid is contrary to the basic religious and political assumptions underlying our nation, which hold that all people are created equal with the inalienable right to life, liberty, and the pursuit of happiness. The present struggle by blacks and other members of the majority population echoes the call of our Declaration of Independence which recognized the right of an oppressed people to alter or abolish any form of government which becomes destructive to securing these rights.

(4) The United States of America has rejected the separate and unequal treatment of its citizens on the basis of race as ethically immoral and politically indefensible.

(5) Residents of this state of all races, creeds, and religions regard the policies and practices of apartheid in South Africa, as they do repressive policies and practices in other countries, as repugnant to the principles of individual liberty, social justice, and political and social enfranchisement, which are fundamental to free societies everywhere. The opposition to apartheid reflects the deep and long-standing opposition of the American people to inequality and injustice wherever it may be found.

(6) There has been continued unrest and mounting protests against the policy of apartheid in South Africa, which the South African government has responded to with force.

(7) The rapidly deteriorating political climate in South Africa has and will continue to have an adverse impact on South Africa's economic climate and on American corporations doing business in South Africa or with the government of South Africa. Investment and trade restrictions imposed by national governments, as well as divestment actions of state and local governmental entities and private investment managers, are likely to exercise negative effects on the value of corporate holdings in South Africa and on the overall value of securities issued by corporations and financial institutions doing business in South Africa or with the government of South Africa.

(8) The continued financial participation in South Africa by business firms and financial institutions encourages that nation to continue its systematic violation of human rights under the apartheid system. The state can effectively motivate the South African government to abolish its policy of apartheid by motivating business firms and financial institutions to end their operations in South Africa until the apartheid system is in fact abolished.

(9) The legislature can effectively motivate business firms and financial institutions to end their operations in South Africa by requiring state agencies, including the state investment board, the state treasurer, and public institutions of higher education, to initiate and support shareholder resolutions that would require business firms and financial institutions doing business in South Africa to cease such operations.

NEW SECTION. Sec. 2. A new section is added to chapter 43.33A RCW to read as follows:

The definitions in this section apply throughout sections 2 through 4 of this act and RCW 28B.20.130, 28B.30.150, 28B.35.120, 28B.40.120, 28B.50.090, 43.84.080.

(1) "Invest" or "investment" means the purchase of any stocks, bonds, securities, or other evidence of indebtedness or ownership of a business firm.

(2) "Business firm" means any organization, association, corporation, partnership, venture, or other entity, its subsidiary, or affiliate which exists for profit making purposes or to otherwise secure economic advantage.

(3) "Financial institution" means any bank holding company, savings and loan association, or credit union licensed by the state or an agency of the United States, or any insurance company, brokerage firm, securities firm, investment company, mortgage banking company, finance company, or consumer credit company licensed to do business in this state, or any affiliate or subsidiary thereof.

(4) "Business operations" means the maintenance of equipment, facilities, personnel, or any other apparatus of business or commerce, including the ownership or possession of real or personal property located in a country having an apartheid policy. In determining whether an activity constitutes business operations under this definition, reference may be made to the most recent listing of companies compiled by the Investor Responsibility Research Center, Inc., or other such lists compiled by similar organizations.

(5) "Business arrangements" means projects, ventures, undertakings, contractual relations, or other efforts requiring ongoing or periodic performance by either or both parties.

(6) "Apartheid" means an official policy authorizing the denial of equal voting rights or political, educational, or economic rights on the basis of race. This definition includes only the policies of South Africa and Namibia.

(7) "Government" means both the central government of the referenced country and any instrumentality thereof.

(8) "Apartheid-based corporation" means any business firm that is headquartered in a country having an apartheid policy or whose operations are principally conducted in or that is ultimately controlled by a business entity organized under the laws of a country having an apartheid policy.

NEW SECTION. Sec. 3. A new section is added to chapter 43.33A RCW to read as follows:

Beginning July 1, 1987, the state investment board shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

NEW SECTION. Sec. 4. A new section is added to chapter 43.33A RCW to read as follows:

(1) As long as any trust funds or state funds are invested in any business firm or financial institution with business operations in, or business relations with, the government of any country having an apartheid policy, the state investment board shall file a report with the governor and the legislature by January 31st of each year.

(2) The report shall include:

(a) The issuer, by name, of the securities and other evidence of indebtedness or ownership;

(b) The book value of the stock as of the preceding December 31st; and

Sec. 5. Section 28B.20.130, chapter 223, Laws of 1969 ex. sess. as last amended by section 92, chapter 370, Laws of 1985 and RCW 28B.20.130 are each amended to read as follows:

General powers and duties of the board of regents are as follows:

(1) To have full control of the university and its property of various kinds, except as limited by subsection (7) of this section or as otherwise provided by law.

(2) To employ the president of the university, his assistants, members of the faculty, and employees of the institution, who except as otherwise provided by law, shall hold their positions during the pleasure of said board of regents.

(3) Establish entrance requirements for students seeking admission to the university which meet or exceed the standards specified under RCW 28B.80.350(2). Completion of examinations satisfactory to the university may be a prerequisite for entrance by any applicant at the university's discretion. Evidence of completion of public high schools and other educational institutions whose courses of study meet the approval of the university may be acceptable for entrance.

(4) Establish such colleges, schools or departments necessary to carry out the purpose of the university and not otherwise proscribed by law.

(5) With the assistance of the faculty of the university, prescribe the course of study in the various colleges, schools and departments of the institution and publish the necessary catalogues thereof.

(6) Grant to students such certificates or degrees as recommended for such students by the faculty. The board, upon recommendation of the faculty, may also confer honorary degrees upon persons other than graduates of this university in recognition of their learning or devotion to literature, art or science: PROVIDED, That no degree shall ever be conferred in consideration of the payment of money or the giving of property of whatsoever kind.

(7) Accept such gifts, grants, conveyances, bequests and devises, whether real or personal property, or both, in trust or otherwise, for the use or benefit of the university, its colleges, schools, departments, or agencies; and sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof except as limited by the terms of said gifts, grants, conveyances, bequests and devises. The board shall adopt proper rules to govern and protect the receipt and expenditure of the proceeds of all fees, and the proceeds, rents, profits and income of all gifts, grants, conveyances, bequests and devises above-mentioned, and shall make full report of the same in the customary biennial report to the governor and members of the legislature, or more frequently if required by law: PROVIDED, HOWEVER, That nothing herein contained shall be construed to repeal, amend or in any way modify any of the provisions of RCW 28B.20.380. The investment authority of the board of regents is limited as follows: Effective July 1, 1987, the board of regents shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

(8) Except as otherwise provided by law, to enter into such contracts as the regents deem essential to university purposes.

(9) To submit upon request such reports as will be helpful to the governor and to the legislature in providing for the institution.

(10) Subject to the approval of the higher education coordinating board pursuant to RCW 28B.80.340, offer new degree programs, offer off-campus programs, participate in consortia or centers, contract for off-campus educational programs, and purchase or lease major off-campus facilities.

Sec. 6. Section 28B.30.150, chapter 223, Laws of 1969 ex. sess. as last amended by section 93, chapter 370, Laws of 1985 and RCW 28B.30.150 are each amended to read as follows:

The regents of Washington State University, in addition to other duties prescribed by law, shall:

(1) Have full control of the university and its property of various kinds, except as provided by subsection (24) of this section or as otherwise provided by law.

(2) Employ the president of the university, his assistants, members of the faculty, and employees of the university, who, except as otherwise provided by law, shall hold their positions during the pleasure of said board of regents.

(3) Establish entrance requirements for students seeking admission to the university which meet or exceed the standards specified under RCW 28B.80.350(2). Completion of examinations satisfactory to the university may be a prerequisite for entrance by any applicant, at the university's discretion. Evidence of completion of public high schools and other educational institutions whose courses of study meet the approval of the university may be acceptable for entrance.

(4) Establish such colleges, schools or departments necessary to carry out the purpose of the university and not otherwise proscribed by law.

(5) Subject to the approval of the higher education coordinating board pursuant to RCW 28B.80.340, offer new degree programs, offer off-campus programs, participate in consortia or centers, contract for off-campus educational programs, and purchase or lease major off-campus facilities.

(6) With the assistance of the faculty of the university, prescribe the courses of instruction in the various colleges, schools and departments of the institution and publish the necessary catalogues thereof.

(7) Collect such information as the board deems desirable as to the schemes of technical instruction adopted in other parts of the United States and foreign countries.

(8) Provide for holding agricultural institutes including farm marketing forums.

(9) Provide that instruction given in the university, as far as practicable, be conveyed by means of laboratory work and provide in connection with the university one or more physical, chemical, and biological laboratories, and suitably furnish and equip the same.

(10) Provide training in military tactics for those students electing to participate therein.

(11) Establish a department of elementary science and in connection therewith provide instruction in elementary mathematics, including elementary trigonometry, elementary mechanics, elementary and mechanical drawing and land surveying.

(12) Establish a department of agriculture and in connection therewith provide instruction in physics with special application of its principles to agriculture, chemistry with special application of its principles to agriculture, morphology and physiology of plants with special reference to common grown crops and fungus enemies, morphology and physiology of the lower forms of animal life, with special reference to insect pests, morphology and physiology of the higher forms of animal life and in particular of the horse, cow, sheep and swine, agriculture with special reference to the breeding and feeding of livestock and the best mode of cultivation of farm produce, and mining and metallurgy, appointing demonstrators in each of these subjects to superintend the equipment of a laboratory and to give practical instruction therein.

(13) Establish agricultural experiment stations in connection with the department of agriculture, including at least one in the western portion of the state, and appoint the officers and prescribe regulations for their management.

(14) Grant to students such certificates or degrees, as recommended for such students by the faculty.

(15) Confer honorary degrees upon persons other than graduates of the university in recognition of their learning or devotion to literature, art or science when recommended thereto by the faculty: PROVIDED, That no degree shall ever be conferred in consideration of the payment of money or the giving of property of whatsoever kind.

(16) Adopt plans and specifications for university buildings and facilities or improvements thereto and employ skilled architects and engineers to prepare such plans and specifications and supervise the construction of buildings or facilities which the board is authorized to erect, and fix the compensation for such services. The board shall enter into contracts with one or more contractors for such suitable buildings, facilities or improvements as the available funds will warrant, upon the most advantageous terms offered at a public competitive letting, pursuant to public notice under regulations established by the board. The board shall require of all persons with whom they contract for construction and improvements a good and sufficient bond for the faithful performance of the work and full protection against all liens.

(17) Except as otherwise provided by law, direct the disposition of all money appropriated to or belonging to the state university.

(18) Receive and expend the money appropriated under the act of congress approved May 8, 1914, entitled "An Act to provide for cooperative agricultural extension work between the agricultural colleges in the several States receiving the benefits of the Act of Congress approved July 2, 1862, and Acts supplemental thereto and the United States Department of Agriculture" and organize and conduct agricultural extension work in connection with the state university in accordance with the terms and conditions expressed in the acts of congress.

(19) Except as otherwise provided by law, to enter into such contracts as the regents deem essential to university purposes.

(20) Acquire by lease, gift, or otherwise, lands necessary to further the work of the university or for experimental or demonstrational purposes.

(21) Establish and maintain at least one agricultural experiment station in an irrigation district to conduct investigational work upon the principles and practices of irrigational agriculture including the utilization of water and its relation to soil types, crops, climatic conditions, ditch and drain construction, fertility investigations, plant disease, insect pests, marketing, farm management, utilization of fruit byproducts and general development of agriculture under irrigation conditions.

(22) Supervise and control the agricultural experiment station at Puyallup.

(23) Establish and maintain at Wenatchee an agricultural experiment substation for the purpose of conducting investigational work upon the principles and practices of orchard culture, spraying, fertilization, pollenization, new fruit varieties, fruit diseases and pests, byproducts, marketing, management and general horticultural problems.

(24) Accept such gifts, grants, conveyances, devises and bequests, whether real or personal property, in trust or otherwise, for the use or benefit of the university, its colleges, schools or departments; and sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof except as limited by the terms of said gifts, grants, conveyances, bequests and devises; adopt proper rules to govern and protect the receipt and expenditure of the proceeds of all fees, and the proceeds, rents, profits and income of all gifts, grants, conveyances, bequests and devises, and make full report thereof in a biennial report to the governor and members of the legislature. The investment authority of the board of regents is limited as follows: Effective July 1, 1987, the board of regents shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

(25) Construct when the board so determines a new foundry and a mining, physical, technological building and fabrication shop at the university, or add to the present foundry and other buildings, in order that both instruction and research be expanded to include permanent molding and die casting with a section for new fabricating techniques, especially for light metals, including magnesium and aluminum; purchase equipment for the shops and laboratories in mechanical, electrical, and civil engineering; establish a pilot plant for the extraction of alumina from native clays and other possible light metal research; purchase equipment for a research laboratory for technological research generally; and purchase equipment for research in electronics, instrumentation, energy sources, plastics, food technology, mechanics of materials, hydraulics and similar fields.

(26) Make and transmit to the governor and members of the legislature upon request such reports as will be helpful in providing for the institution.

Sec. 7. Section 48, chapter 169, Laws of 1977 ex. sess. as amended by section 94, chapter 370, Laws of 1985 and RCW 28B.35.120 are each amended to read as follows:

In addition to any other powers and duties prescribed by law, each board of trustees of the respective regional universities:

(1) Shall have full control of the regional university and its property of various kinds, except as limited by subsection (10) of this section or as otherwise provided by law.

(2) Shall employ the president of the regional university, his assistants, members of the faculty, and other employees of the institution, who, except as otherwise provided by law, shall hold their positions, until discharged therefrom by the board for good and lawful reason.

(3) With the assistance of the faculty of the regional university, shall prescribe the course of study in the various schools and departments thereof and publish such catalogues thereof as the board deems necessary: PROVIDED, That the state board of education shall determine the requisites for and give program approval of all courses leading to teacher certification by such board.

(4) Establish such divisions, schools or departments necessary to carry out the purposes of the regional university and not otherwise proscribed by law.

(5) Except as otherwise provided by law, may establish and erect such new facilities as determined by the board to be necessary for the regional university.

(6) May acquire real and other property as provided in RCW 28B.10.020, as now or hereafter amended.

(7) Except as otherwise provided by law, may purchase all supplies and purchase or lease equipment and other personal property needed for the operation or maintenance of the regional university.

(8) May establish, lease, operate, equip and maintain self-supporting facilities in the manner provided in RCW 28B.10.300 through 28B.10.330, as now or hereafter amended.

(9) Except as otherwise provided by law, to enter into such contracts as the trustees deem essential to regional university purposes.

(10) May receive such gifts, grants, conveyances, devises and bequests of real or personal property from whatsoever source, as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the regional university programs; sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof except as limited by the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof. The investment authority of the board of trustees is limited as follows: Effective July 1, 1987, the board of trustees shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

(11) Subject to the approval of the higher education coordinating board pursuant to RCW 28B.80.340, offer new degree programs, offer off-campus programs, participate in consortia or centers, contract for off-campus educational programs, and purchase or lease major off-campus facilities.

(12) May promulgate such rules and regulations, and perform all other acts not forbidden by law, as the board of trustees may in its discretion deem necessary or appropriate to the administration of the regional university.

Sec. 8. Section 28B.40.120, chapter 223, Laws of 1969 ex. sess. as last amended by section 95, chapter 370, Laws of 1985 and RCW 28B.40.120 are each amended to read as follows:

In addition to any other powers and duties prescribed by law, the board of trustees of The Evergreen State College:

(1) Shall have full control of the state college and its property of various kinds, except as provided by subsection (10) of this section or as otherwise provided by law.

(2) Shall employ the president of the state college, his assistants, members of the faculty, and other employees of the institution, who, except as otherwise provided by law, shall hold their positions, until discharged therefrom by the board for good and lawful reason.

(3) With the assistance of the faculty of the state college, shall prescribe the course of study in the various schools and departments thereof and publish such catalogues thereof as the board deems necessary: PROVIDED, That the state board of education shall determine the requisites for and give program approval of all courses leading to teacher certification by such board.

(4) Establish such divisions, schools or departments necessary to carry out the purposes of the college and not otherwise proscribed by law.

(5) Except as otherwise provided by law, may establish and erect such new facilities as determined by the board to be necessary for the college.

(6) May acquire real and other property as provided in RCW 28B.10.020, as now or hereafter amended.

(7) Except as otherwise provided by law, may purchase all supplies and purchase or lease equipment and other personal property needed for the operation or maintenance of the college.

(8) May establish, lease, operate, equip and maintain self-supporting facilities in the manner provided in RCW 28B.10.300 through 28B.10.330, as now or hereafter amended.

(9) Except as otherwise provided by law, to enter into such contracts as the trustees deem essential to college purposes.

(10) May receive such gifts, grants, conveyances, devises and bequests of real or personal property from whatsoever source, as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the college programs; sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof except as limited by the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof. The investment authority of the board of trustees is limited as follows: Effective July 1, 1987, the board of trustees shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

Sec. 9. Section 28B.50.090, chapter 223, Laws of 1969 ex. sess. as last amended by section 1, chapter 50, Laws of 1982 and RCW 28B.50.090 are each amended to read as follows:

The college board shall have general supervision and control over the state system of community colleges except as provided by subsection (14) of this section. In addition to the other powers and duties imposed upon the college board by this chapter, the college board shall be charged with the following powers, duties and responsibilities:

(1) Review the budgets prepared by the community college boards of trustees, prepare a single budget for the support of the state system of community colleges and adult education, and submit this budget to the governor as provided in RCW 43.88.090; the coordinating council shall assist with the preparation of the community college budget that has to do with vocational education programs;

(2) Establish guidelines for the disbursement of funds; and receive and disburse such funds for adult education and maintenance and operation and capital support of the community college districts in conformance with the state and district budgets, and in conformance with chapter 43.88 RCW;

(3) Ensure, through the full use of its authority:

(a) that each community college district shall offer thoroughly comprehensive educational, training and service programs to meet the needs of both the communities and students served by combining, with equal emphasis, high standards of excellence in academic transfer courses; realistic and practical courses in occupational education, both graded and ungraded; and community services of an educational, cultural, and recreational nature; and adult education: PROVIDED, That notwithstanding any other provisions of this chapter, a community college shall not be required to offer a program of vocational-technical training, when such a program as approved by the coordinating council for occupational education is already operating in the district;

(b) that each community college district shall maintain an open-door policy, to the end that no student will be denied admission because of the location of his residence or because of his educational background or ability; that, insofar as is practical in the judgment of the college board, curriculum offerings will be provided to meet the educational and training needs of the community generally and the students thereof; and that all students, regardless of their differing courses of study, will be considered, known and recognized equally as members of the student body: PROVIDED, That the administrative officers of a community college may deny admission to a prospective student or attendance to an enrolled student if, in their judgment, he would not be competent to profit from the curriculum offerings of the community college, or would, by his presence or conduct, create a disruptive atmosphere within the community college not consistent with the purposes of the institution;

(4) Prepare a comprehensive master plan for the development of community college education and training in the state; and assist the office of financial management in the preparation of enrollment projections to support plans for providing adequate community college facilities in all areas of the state;

(5) Define and administer criteria and guidelines for the establishment of new community colleges or campuses within the existing districts;

(6) Establish criteria and procedures for modifying district boundary lines consistent with the purposes set forth in RCW 28B.50.020 as now or hereafter amended and in accordance therewith make such changes as it deems advisable;

(7) Establish minimum standards to govern the operation of the community colleges with respect to:

(a) qualifications and credentials of instructional and key administrative personnel, except as otherwise provided in the state plan for vocational education,

(b) internal budgeting, accounting, auditing, and financial procedures as necessary to supplement the general requirements prescribed pursuant to chapter 43.88 RCW,

(c) the content of the curriculums and other educational and training programs, and the requirement for degrees and certificates awarded by the colleges,

(d) standard admission policies,

(e) eligibility of courses to receive state fund support;

(8) Establish and administer criteria and procedures for all capital construction including the establishment, installation, and expansion of facilities within the various community college districts;

(9) Encourage innovation in the development of new educational and training programs and instructional methods; coordinate research efforts to this end; and disseminate the findings thereof;

(10) Exercise any other powers, duties and responsibilities necessary to carry out the purposes of this chapter;

(11) Authorize the various community colleges to offer programs and courses in other districts when it determines that such action is consistent with the purposes set forth in RCW 28B.50.020 as now or hereafter amended;

(12) Notwithstanding any other law or statute regarding the sale of state property, sell or exchange and convey any or all interest in any community college real and personal property, except such property as is received by a community college district in accordance with RCW 28B.50.140(8), when it determines that such property is surplus or that such a sale or exchange is in the best interests of the community college system;

(13) In order that the treasurer for the state board for community college education appointed in accordance with RCW 28B.50.085 may make vendor payments, the state treasurer will honor warrants drawn by the state board providing for an initial advance on July 1, 1982, of the current biennium and on July 1 of each succeeding biennium from the state general fund in an amount equal to twenty-four percent of the average monthly allotment for such budgeted biennium expenditures for the state board for community college education as certified by the office of financial management; and at the conclusion of such initial month and for each succeeding month of any biennium, the state treasurer will reimburse expenditures incurred and reported monthly by the state board treasurer in accordance with chapter 43.88 RCW: PROVIDED, That the reimbursement to the state board for actual expenditures incurred in the final month of each biennium shall be less the initial advance made in such biennium;

(14) Notwithstanding the provisions of subsection (12) of this section, may receive such gifts, grants, conveyances, devises, and bequests of real or personal property from private sources as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the community college programs and may sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof according to the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof. The investment authority of the college board is limited as follows: Effective July 1, 1987, the college board shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

The college board shall have the power of eminent domain.

Sec. 10. Section 43.84.080, chapter 8, Laws of 1965 as last amended by section 1, chapter 148, Laws of 1982 and RCW 43.84.080 are each amended to read as follows:

(1) Except as limited by subsection (2) of this section, wherever there is in any fund or in cash balances in the state treasury more than sufficient to meet the current expenditures properly payable therefrom, the state treasurer may invest or reinvest such portion of such funds or balances as the state treasurer deems expedient in the following defined securities or classes of investments:

((~~(1)~~)) (a) Certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States;

((~~(2)~~)) (b) In state, county, municipal, or school district bonds, or in warrants of taxing districts of the state. Such bonds and warrants shall be only those found to be within the limit of indebtedness prescribed by law for the taxing district issuing them and to be general obligations. The state treasurer may purchase such bonds or warrants directly from the taxing district or in the open market at such prices and upon such terms as it may determine, and may sell them at such times as it deems advisable;

((~~(3)~~)) (c) In motor vehicle fund warrants when authorized by agreement between the state treasurer and the department of transportation requiring repayment of invested funds from any moneys in the motor vehicle fund available for state highway construction;

((~~(4)~~)) (d) In federal home loan bank notes and bonds, federal land bank bonds and federal national mortgage association notes, debentures and guaranteed certificates of participation, or the obligations of any other government sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system;

((~~(5)~~)) (e) Bankers' acceptances purchased on the secondary market;

((~~(6)~~)) (f) Negotiable certificates of deposit of any national or state commercial or mutual savings bank or savings and loan association doing business in the United States: PROVIDED, That the treasurer shall adhere to the investment policies and procedures adopted by the state investment board;

((~~(7)~~)) (g) Commercial paper: PROVIDED, That the treasurer shall adhere to the investment policies and procedures adopted by the state investment board.

(2) Effective July 1, 1987, the state treasurer shall actively initiate and support shareholder resolutions that would require the business firm or financial institution to cease its business operations in any country having an apartheid policy and to cease its business arrangements with the government of such a country.

NEW SECTION. Sec. 11. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1987.