AN ACT Relating to funding of the dependent
care program; amending RCW 41.04.615 and 41.04.260; providing an effective
date; and declaring an emergency.
BE
IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1.
RCW 41.04.615 and 1987 c 475 s 4 are each amended to read as follows:
(1) A plan document describing the salary
reduction plan shall be adopted and administered by the committee. The
committee shall represent the state in all matters concerning the
administration of the plan. The state through the committee, may engage the
services of a professional consultant or administrator on a contractual basis
to serve as an agent to assist the committee in carrying out the purposes of
RCW 41.04.600 through 41.04.645.
(2) The committee shall formulate and establish
policies and procedures for the administration of the salary reduction plan
that are consistent with existing state law, the internal revenue code, and the
regulations adopted by the internal revenue service as they may apply to the
benefits offered to participants under the plan.
(3) The funds held by the state for the
dependent care program shall be deposited in the salary reduction account in
the state treasury. Any interest in excess of the amount used to defray the
cost of administering the salary reduction plan shall become a part of the
general fund ((as shall)). Unclaimed moneys remaining in the
salary reduction account at the end of a plan year after all timely
submitted claims for that plan year have been processed shall become a part of
the dependent care administrative account. The committee may assess each
participant a fee for administering the salary reduction plan. In addition to
moneys for initial costs, moneys ((shall)) may be appropriated
from the general fund or dependent care administrative account for any
expense relating to the administration of the salary reduction plan. ((The
appropriation may be funded from an amount equivalent to actually realized
savings experienced due to reductions in employer contributions required under
the social security act, from other similar savings, from interest earned from
the salary reduction account credited to the general fund, from any unclaimed
moneys in the salary reduction account at the end of the plan year, and from
fees charged to the participants.))
(4) The dependent care administrative
account is created in the state treasury. The committee may periodically bill
agencies for employer savings experienced as the result of dependent care
program participation by employees. All receipts from the following shall be
deposited in the account: (a) Charges to agencies for all or a portion of the
estimated savings due to reductions in employer contributions under the social
security act; (b) charges for other similar savings; (c) unclaimed moneys in
the salary reduction account at the end of the plan year after all timely
submitted claims for that plan year have been processed; and (d) fees charged
to participants. Moneys in the account may be spent only after appropriation.
Expenditures from the account may be used only for any expense related to the
administration of the salary reduction plan.
(5) Every action taken by the committee
in administering RCW 41.04.600 through 41.04.645 shall be presumed to be a fair
and reasonable exercise of the authority vested in or the duties imposed upon
it. The committee shall be presumed to have exercised reasonable care,
diligence, and prudence and to have acted impartially as to all persons
interested unless the contrary be proved by clear and convincing affirmative
evidence.
Sec. 2.
RCW 41.04.260 and 1991 sp.s. c 13 s 101 are each amended to read as follows:
(1) There is hereby created a committee for
deferred compensation to be composed of five members appointed by the governor,
one of whom shall be a representative of an employee association or union
certified as an exclusive representative of at least one bargaining unit of
classified employees, one who shall be a representative of either a credit
union, savings and loan association, mutual savings bank or bank, one who
possesses expertise in the area of insurance or investment of public funds, one
who shall be the state attorney general or his designee, and one additional
member selected by the governor. The committee shall serve without
compensation but shall receive travel expenses as provided for in RCW 43.03.050
and 43.03.060 as now existing or hereafter amended.
(2) The deferred compensation principal account
is hereby created in the state treasury. Any deficiency in the deferred
compensation administrative account caused by an excess of administrative
expenses disbursed from that account over earnings of investments of balances
credited to that account shall be eliminated by transferring moneys to that
account from the deferred compensation principal account.
The amount of compensation deferred by
employees under agreements entered into under the authority contained in RCW
41.04.250 shall be paid into the deferred compensation principal account and
shall be sufficient to cover costs of administration and staffing in addition
to such other amounts as determined by this committee. The deferred
compensation principal account shall be used to carry out the purposes of RCW
41.04.250. All eligible state employees shall be given the opportunity to
participate in agreements entered into by the committee under RCW 41.04.250.
State agencies shall cooperate with the committee in providing employees with
the opportunity to participate. Any county, municipality, or other subdivision
of the state may elect to participate in any agreements entered into by the
committee under RCW 41.04.250, including the making of payments therefrom to
the employees participating in a deferred compensation plan upon their
separation from state or other qualifying service. Accordingly, the deferred
compensation principal account shall be considered to be a public pension or
retirement fund within the meaning of Article XXIX, section 1 of the state
Constitution, for the purpose of determining eligible investments and deposits
of the moneys therein. All moneys in the deferred compensation principal
account, all property and rights purchased therewith, and all income
attributable thereto, shall remain (until made available to the participating
employee or other beneficiary) solely the money, property, and rights of the
state and participating counties, municipalities and subdivisions (without
being restricted to the provision of benefits under the plan) subject only to
the claims of the state's and participating jurisdictions' general creditors.
Participating jurisdictions shall each retain property rights separately.
(3) The state investment board, at the request
of the deferred compensation committee, is authorized to invest moneys in the
deferred compensation principal account in accordance with RCW 43.84.150.
Except as provided in RCW 43.33A.160, one hundred percent of all earnings from
these investments shall accrue directly to the deferred compensation principal
account.
(4) The deferred compensation administrative
account is hereby created in the state treasury. All expenses of the committee
pertaining to the deferred compensation plan including staffing and
administrative expenses shall be paid out of the deferred compensation
administrative account. Any excess of earnings of investments of balances
credited to this account over administrative expenses disbursed from this
account shall be transferred to the deferred compensation principal account.
Any deficiency in the deferred compensation administrative account caused by an
excess of administrative expenses disbursed from this account over earnings of
investments of balances credited to this account shall be transferred to this
account from the deferred compensation principal account.
(5) In addition to the duties specified in this
section and RCW 41.04.250, the deferred compensation committee shall administer
the salary reduction plan established in RCW 41.04.600 through 41.04.645.
(6) The deferred compensation committee shall
keep or cause to be kept full and adequate accounts and records of the assets,
obligations, transactions, and affairs of any deferred compensation plans
created under RCW 41.04.250 through 41.04.260.
The deferred compensation committee shall file
an annual report of the financial condition, transactions, and affairs of the
deferred compensation plans under the committee's jurisdiction. A copy of the
annual report shall be filed with the speaker of the house of representatives,
the president of the senate, the governor, and the state auditor.
(7) Members of the deferred compensation
committee shall be deemed to stand in a fiduciary relationship to the employees
participating in the deferred compensation plans created under RCW 41.04.250
through 41.04.260 and shall discharge the duties of their respective positions
in good faith and with that diligence, care, and skill which ordinary prudent
persons would exercise under similar circumstances in like positions.
(8) The committee may adopt rules necessary to
carry out the purposes of RCW 41.04.250 and 41.04.260.
NEW SECTION. Sec. 3.
This act is necessary for the immediate preservation of the public peace,
health, or safety, or support of the state government and its existing public
institutions, and shall take effect July 1, 1993.
