AN ACT Relating to investment of state funds; and amending RCW 43.250.020, 43.250.030, 43.250.060, 43.250.070, and 43.84.090.

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

Sec. 1. Section 2, chapter 294, Laws of 1986 and RCW 43.250.020 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.

(1) "Public funds investment account" or "investment pool" means the aggregate of all funds ((~~from political subdivisions~~)) as defined in subsection (4) of this section that are placed in the custody of the state treasurer for investment and reinvestment.

(2) "Political subdivision" means any county, city, town, municipal corporation, political subdivision, or special purpose taxing district in the state.

(3) "Local government official" means any officer or employee of a political subdivision who has been designated by statute or by local charter, ordinance, or resolution as the officer having the authority to invest the funds of the political subdivision. However, the county treasurer shall be deemed the only local government official for all political subdivisions for which the county treasurer has exclusive statutory authority to invest the funds thereof.

(4) "Funds" means:

(a) Public funds under the control of or in the custody of any local government official by virtue of the official's authority that are not immediately required to meet current demands;

(b) State funds that are the proceeds of bonds, notes, or other evidences of indebtedness authorized by the state finance committee under chapter 39.42 RCW or payments pursuant to financing contracts under chapter 39.94 RCW, when the investments are made in order to comply with the Internal Revenue Code of 1986, as amended;

(c) Funds of the Washington state housing finance commission established by chapter 43.180 RCW, the Washington health care facilities authority established by chapter 70.37 RCW, and the Washington higher education facilities authority established by chapter 28B.07 RCW. The investment of these funds does not constitute a commingling of funds.

Sec. 2. Section 3, chapter 294, Laws of 1986 and RCW 43.250.030 are each amended to read as follows:

There is created a trust fund in the state treasury to be known as the public funds investment account. All moneys remitted ((~~by local government officials~~)) under this chapter shall be deposited in this account. The earnings on any balances in the public funds investment account shall be credited to the public funds investment account, notwithstanding RCW 43.84.090.

Sec. 3. Section 6, chapter 294, Laws of 1986 and RCW 43.250.060 are each amended to read as follows:

The state treasurer shall by rule prescribe the time periods for investments in the investment pool and the procedure for withdrawal of funds from the investment pool. The state treasurer shall promulgate such other rules as are deemed necessary for the efficient operation of the investment pool. The rules shall also provide for the administrative expenses of the investment pool, including repayment of the initial administrative costs financed out of the appropriation included in ((~~this act~~)) chapter 294, Laws of 1986, to be paid from the pool's earnings and for the interest earnings in excess of the expenses to be credited or paid to ((~~the political subdivisions participating~~)) participants in the pool. The state treasurer may deduct the amounts necessary to reimburse the treasurer's office for the actual expenses the office incurs and to repay any funds appropriated and expended for the initial administrative costs of the pool. Any credits or payments to ((~~political subdivisions~~)) the participants shall be calculated and made in a manner which equitably reflects the differing amounts of the ((~~political subdivisions'~~)) participants' respective deposits in the investment pool fund and the differing periods of time for which the amounts were placed in the investment pool.

Sec. 4. Section 7, chapter 294, Laws of 1986 and RCW 43.250.070 are each amended to read as follows:

The state treasurer shall keep a separate account for each ((~~political subdivision~~)) participant having funds in the investment pool. Each separate account shall record the individual amounts deposited in the investment pool, the date of withdrawals, and the earnings credited or paid ((~~to the political subdivision~~)). The state treasurer shall report monthly the status of the respective account to each ((~~local government official~~)) participant having funds in the pool during the previous month.

Sec. 5. Section 43.84.090, chapter 8, Laws of 1965 as last amended by section 5, chapter 233, Laws of 1985 and RCW 43.84.090 are each amended to read as follows:

Except as otherwise provided by RCW 43.250.030 and 67.40.025, twenty percent of all income received from such investments shall be deposited in the state general fund.