READ FIRST TIME 02/02/07.   

     AN ACT Relating to the investment of scholarship endowment funds; amending RCW 28B.108.060 and 28B.116.060; and adding a new section to chapter 28B.76 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 28B.76 RCW to read as follows:
     (1) The investment of funds from all scholarship endowment programs administered by the higher education coordinating board shall be managed by the state investment board.
     (2) The state investment board has the full power to invest, reinvest, manage, contract, sell, or exchange investment money in scholarship endowment funds. All investment and operating costs associated with the investment of a scholarship endowment fund shall be paid pursuant to RCW 43.33A.160 and 43.84.160. With the exception of these expenses, the earnings from the investments of the fund belong to the fund.
     (3) Funds from all scholarship endowment programs administered by the board shall be in the custody of the state treasurer.
     (4) All investments made by the state investment board shall be made with the exercise of that degree of judgment and care pursuant to RCW 43.33A.140 and the investment policies established by the state investment board.
     (5) As deemed appropriate by the state investment board, money in a scholarship endowment fund may be commingled for investment with other funds subject to investment by the state investment board.
     (6) The authority to establish all policies relating to scholarship endowment funds, other than the investment policies in subsections (2) through (5) of this section, resides with the higher education coordinating board.
     (7) The higher education coordinating board may request and accept moneys from the state investment board. With the exception of expenses of the state investment board in subsection (2) of this section, disbursements from the fund shall be made only on the authorization of the higher education coordinating board, and money in the fund may be spent only for the purposes of the endowment programs as specified in the authorizing chapter of each program.
     (8) The state investment board shall routinely consult and communicate with the higher education coordinating board on the investment policy, earnings of the scholarship endowment funds, and related needs of the programs.

Sec. 2   RCW 28B.108.060 and 1993 c 372 s 1 are each amended to read as follows:
     The American Indian scholarship endowment fund is ((established)) created in the custody of the state treasurer. The investment of the endowment fund shall be ((administered)) managed by the state ((treasurer)) investment board.
     (1) Moneys received from the higher education coordinating board, private donations, state matching moneys, and funds received from any other source may be deposited into the endowment fund. Private moneys received as a gift subject to conditions may be deposited into the fund.
     (2) At the request of the higher education coordinating board, the ((treasurer)) state investment board shall release earnings from the endowment fund to the state treasurer. The state treasurer shall then release those funds at the request of the higher education coordinating board for scholarships. No appropriation is required for expenditures from the endowment fund.
     (3) When notified by the higher education coordinating board ((or by court order)) that a condition attached to a gift of private moneys in the fund has failed, the ((treasurer)) state investment board shall release those moneys to the higher education coordinating board. The higher education coordinating board shall then release the moneys to the donors according to the terms of the conditional gift.
     (4) The principal of the endowment fund shall not be invaded. The release of moneys under subsection (3) of this section shall not constitute an invasion of corpus.
     (5) The earnings on the fund shall be used solely for the purposes set forth in RCW 28B.108.040, except when the terms of a conditional gift of private moneys in the fund require that a portion of earnings on such moneys be reinvested in the fund.

Sec. 3   RCW 28B.116.060 and 2005 c 215 s 7 are each amended to read as follows:
     The foster care scholarship endowment fund is created in the custody of the state treasurer. The investment of the endowment fund shall be managed by the state investment board.
     (1) Moneys received from the higher education coordinating board, private donations, state matching moneys, and funds received from any other source may be deposited into the foster care scholarship endowment fund. Private moneys received as a gift subject to conditions may be deposited into the endowment fund if the conditions do not violate state or federal law.
     (2) At the request of the higher education coordinating board, the state investment board shall release earnings from the endowment fund to the state treasurer. The state treasurer shall then release those funds at the request of the higher education coordinating board for scholarships. No appropriation is required for expenditures from the endowment fund.
     (3) The higher education coordinating board may disburse grants to eligible students from the foster care scholarship endowment fund. No appropriation is required for expenditures from the endowment fund.
     (((3))) (4) When notified by court order that a condition attached to a gift of private moneys from the foster care scholarship endowment fund has failed, the higher education coordinating board shall release those moneys to the donors according to the terms of the conditional gift.
     (((4))) (5) The principal of the foster care scholarship endowment fund shall not be invaded. For the purposes of this section, only the first twenty-five thousand dollars deposited into the foster care scholarship endowment fund shall be considered the principal. The release of moneys under subsection (((3))) (4) of this section shall not constitute an invasion of the corpus.
     (((5))) (6) The foster care scholarship endowment fund shall be used solely for the purposes in this chapter, except when the conditional gift of private moneys in the endowment fund require a portion of the earnings on such moneys be reinvested in the endowment fund.