Washington State

Office of the Attorney General

Attorney General

Bob Ferguson


Olympia - July 5, 2000- Funds in the Washington Advanced College Tuition Payment Account may be invested in private corporate stocks, the Attorney General’s Office has concluded.

A formal AGO opinion released today concludes that it is constitutionally permissible for the state Investment Board to invest the tuition money in corporate stocks because the money consists of private funds contributed by families to pay for their children’s future college tuition.

The issue is whether the Investment Board, by investing the money in corporate stocks, would violate provisions of the state Constitution that bar the lending of credit by the state or the investment of state funds in private companies. Such unconstitutional lending and investment has been defined as "the use of government funds to benefit private interests under circumstances where the public interest is not being primarily served."

The opinion concludes that investing the families’ contributed money in stocks does not violate the constitutional prohibition because the money does not consist of public funds. The state guarantees tuition credits to participants in the program to assist participants in obtaining a higher education, a recognized governmental function that the Legislature may furnish through the use of state monies without violating constitutional provisions.

Washington courts have never addressed this issue, and the Legislature could foreclose constitutional questions by submitting a constitutional amendment to the people for approval.

However, on balance the Attorney General opinion concludes the program is consistent with the Constitution and that limitations on state investments in corporate stock do not apply to this program.

The opinion was written in response to a request from state Rep. John Koster.

For a copy of this opinion, visit the Attorney General’s webpage.