The Constitutional Provision as it Presently Exists

The state constitution generally limits the investment of state funds. Article VIII, sections 5 and 7 and article XII, section 9 prohibit the investment of state funds in the stocks and bonds of private companies, associations, or corporations. Previous constitutional amendments have made exceptions to these restrictions to permit the legislature to authorize investment of certain funds in private stocks and bonds. Funds that currently may be invested in private stocks and bonds include public pension and retirement funds, industrial insurance (workers’ compensation) funds, funds held in trust for persons with developmental disabilities, the permanent common school fund, and permanent higher education funds. Permanent higher education funds are funds primarily derived from the sale, lease, or management of lands granted by the United States to the State of Washington at statehood for educational purposes.

The Effect of the Proposed Amendment, if Approved

If the amendment were adopted, it would create a new exception to the constitutional restrictions on investing public funds. The state constitution would no longer prohibit investment of public monies of the University of Washington and Washington State University in private stocks and bonds. The legislature would specify which funds of the universities could be invested and determine how the funds could be invested.