AN ACT Relating to termination of fund restrictions; adding a new chapter to Title 43 RCW; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature recognizes that funds are established by law for the purpose of carrying on a specific activity to meet objectives which are determined to be in the public interest. The legislature finds, however, that continued restriction of these reserved or dedicated funds may no longer be efficient, appropriate, or necessary for the achievement of current legislative objectives. The legislature finds that unless it can be demonstrated that the public interest is best served by the continued existence of a particular restriction or set of restrictions on the use of a reserved or dedicated fund, they should be terminated or modified. The legislature further finds that periodic evaluations of fund restrictions are needed to determine if their continued existence best serves the public interest.

It is the intent of the legislature to establish a mechanism for scheduling periodic evaluations of fund restrictions together with a system for their termination, continuation, or modification. By this mechanism, the legislature intends to ensure that thorough periodic evaluations are made and that those fund restrictions which do not continue to serve the best interests of the public are terminated or modified.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Dedicated fund" means a state fund, or an account within a state fund, that is by statute dedicated or restricted for a specific purpose.

(2) "State fund" means a fund of moneys, including cash, checks, bills, notes, drafts, stocks, and bonds, collected or disbursed under statute for state purposes, whether for operating purposes, capital purposes, or trust purposes, whether or not subject to legislative appropriation, including funds outside the state treasury.

(3) "Fund restriction" means the statutory restriction as to the purposes for which moneys in a dedicated fund may be spent.

NEW SECTION. Sec. 3. The legislative budget committee shall review all fund restrictions for termination by the processes provided in this chapter. The review shall be completed and a report prepared on or before June 30th of the year prior to the date established for termination. Upon completion of its report, the legislative budget committee shall transmit copies of the report to the state treasurer and the office of financial management. The state treasurer and the office of financial management shall then conduct their own review of the fund restrictions scheduled for termination and shall each prepare a report containing their evaluations and recommendations on or before September 30th of the year prior to the date established for termination. Upon completion of their reports, the state treasurer and the office of financial management shall each transmit copies of their reports to the legislative budget committee. The legislative budget committee shall prepare a final report that includes the reports of the state treasurer, the office of financial management, and the legislative budget committee. The legislative budget committee, the state treasurer, and the office of financial management, upon request, shall make available to each other all working papers, studies, and other documents that relate to reports required under this section. The legislative budget committee shall transmit the final report to all members of the legislature, to the governor, and to the state library.

NEW SECTION. Sec. 4. In reviewing a fund restriction, the legislative budget committee shall develop information needed by the legislature to determine if the fund restriction should be terminated as scheduled, modified, or reestablished without modification. The legislative budget committee shall consider, but not be limited to, the following factors in the review:

(1) Legislative objectives that might provide justification for the fund restriction;

(2) Evidence that the existence of the fund restriction has contributed to the achievement of any objective identified pursuant to subsection (1) of this section;

(3) The extent to which continuation of the fund restriction beyond its scheduled termination date might contribute to the achievement of any objective identified pursuant to subsection (1) of this section; and

(4) Fiscal and program impacts of the fund restriction, including past impacts and expected future impacts if it is not terminated as scheduled.

NEW SECTION. Sec. 5. (1) Following receipt of a final report from the legislative budget committee under section 3 of this act, the ways and means committees of the house of representatives and the senate shall jointly hold a public hearing to consider the final report and any related information. The committees shall also receive testimony from the governor, or the governor's designee, and other interested parties, including the general public.

(2) Following the joint hearing, the committees may separately hold additional meetings or hearings to help make a decision as to whether a continuation, modification, or termination of a fund restriction would best serve the public interest. If a committee determines that a fund restriction should be continued or modified, it shall include the determination in a bill. Fund restrictions applicable to no more than one dedicated fund shall be continued or modified in any one bill.

NEW SECTION. Sec. 6. The select joint committee established under RCW 43.131.115 shall be responsible for the development of legislation which provides a schedule for the termination of all fund restrictions in a manner consistent with the terms of this chapter. The termination of fund restrictions shall occur over a period of four years, beginning on June 30, 1987. In the development of this legislation, the select joint committee shall identify fund restrictions which might appropriately be scheduled for termination and arrange for automatic termination of fund restrictions, with all restrictions applicable to at least twenty-five percent of all dedicated funds to be terminated on June 30, 1987; all restrictions applicable to at least thirty-three and one-third percent of the previously unscheduled dedicated funds to be terminated on June 30, 1988; all restrictions applicable to at least fifty percent of the previously unscheduled dedicated funds to be terminated on June 30, 1989; and all restrictions applicable to the remainder of the previously unscheduled dedicated funds to be terminated on June 30, 1990.

Proposed legislation, recommendations, and findings shall be submitted to the legislature as soon as is practicable, but no later than the first day the legislature is in session after January 1, 1986.

NEW SECTION. Sec. 7. By September 30, 1986, the office of financial management shall provide the select joint committee with a report on existing dedicated funds. The report shall include a list of all dedicated funds and a description of each one, including a description of any statutory restrictions applicable to each one. Upon request of the select joint committee, the state treasurer and the office of financial management shall provide any additional information required by the select joint committee to meet its responsibilities under this chapter.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 9. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 10. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.