(1) The following definitions apply throughout this section unless the context clearly requires otherwise.

(a) "Bond" means any agreement which may or may not be represented by a physical instrument, including but not limited to bonds, notes, warrants, or certificates of indebtedness, that evidences an obligation under which the issuer agrees to pay a specified amount of money, with or without interest, at a designated time or times either to registered owners or bearers.

(b) "Local government" means any county, city, town, special purpose district, political subdivision, municipal corporation, or quasi-municipal corporation, including any public corporation, authority, or other instrumentality created by such an entity.

(c) "State" includes any state in the United States, other than the state of Washington.

(2) In addition to any other statutorily authorized investments permissible pursuant to chapters 28B.20, 28B.30, 28B.35, 28B.40, and 28B.50 RCW, institutions of higher education may invest in:

(a) Bonds of the state of Washington and any local government in the state of Washington, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency;

(b) General obligation bonds of a state and general obligation bonds of a local government of a state, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency;

(c) Subject to compliance with RCW 39.56.030, registered warrants of a local government in the same county as the institution of higher education making the investment;

(d) 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; or United States dollar denominated bonds, notes, or other obligations that are issued or guaranteed by supranational institutions, provided that, at the time of investment, the institution has the United States government as its largest shareholder;

(e) 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;

(f) Bankers' acceptances purchased on the secondary market;

(g) Commercial paper purchased in the secondary market, provided that any institution of higher education that invests in such commercial paper must adhere to the investment policies and procedures adopted by the state investment board; and

(h) Corporate notes purchased on the secondary market, provided that any institution of higher education that invests in such notes must adhere to the investment policies and procedures adopted by the state investment board.

(3) Nothing in this section limits the investment authority granted pursuant to chapters 28B.20, 28B.30, 28B.35, 28B.40, and 28B.50 RCW.