S-4358.1  _______________________________________________

                         SENATE BILL 6727

          _______________________________________________

State of Washington      55th Legislature     1998 Regular Session

By Senators West, Wood, Hale, Kohl, Winsley, Prince, B. Sheldon, McDonald, Brown, Bauer, Rasmussen and Oke

Read first time 01/29/98.  Referred to Committee on Ways & Means.

Modifying the savings incentive and education savings accounts.

    AN ACT Relating to investments in education; amending RCW 43.79.460 and 28A.305.235; adding a new section to chapter 43.79 RCW; creating a new section; and recodifying RCW 28A.305.235.

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

    Sec. 1.  RCW 43.79.460 and 1997 c 261 s 1 are each amended to read as follows:

    (1) The savings incentive account is created in the custody of the state treasurer.  The account shall consist of all moneys appropriated to the account by the legislature.  The account is subject to the allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures from the account.

    (2) Within the savings incentive account, the state treasurer may create subaccounts to be credited with ((moneys)) incentive savings attributable to individual state agencies, as determined by the office of financial management in consultation with the legislative fiscal committees.  Moneys deposited in the subaccounts may be expended only on the authorization of the agency's executive head or designee and only for the purpose of one-time expenditures to improve the quality, efficiency, and effectiveness of services to customers of the state, such as one-time expenditures for employee training, employee incentives, technology improvements, new work processes, or performance measurement.  Funds may not be expended from the account to establish new programs or services, expand existing programs or services, or incur ongoing costs that would require future expenditures.

    (3) For purposes of this section, "incentive savings" means state general fund appropriations that are unspent as of June 30th of a fiscal year, excluding any amounts included in across-the-board reductions under RCW 43.88.110 and excluding unspent appropriations for:

    (a) Caseload and enrollment in entitlement programs, except to the extent that an agency has clearly demonstrated that efficiencies have been achieved in the administration of the entitlement program.  "Entitlement program," as used in this section, includes programs for which specific sums of money are appropriated for pass-through to third parties or other entities;

    (b) Enrollments in state institutions of higher education((,));

    (c) A specific amount contained in a condition or limitation to an appropriation in the biennial appropriations act, if the agency did not achieve the specific purpose or objective of the condition or limitation((,));

    (d) Debt service on state obligations((,)); and

    (e) State retirement system obligations.

(4) The office of fiscal management, after consulting with the legislative fiscal committees, shall report to the treasurer the amount of savings incentives achieved.  (((4))) By December 1, 1998, and each December 1st thereafter, the office of financial management shall submit a report to the fiscal committees of the legislature on the implementation of this section.  The report shall (a) evaluate the impact of this section on agency reversions and end-of-biennium expenditure patterns, and (b) itemize agency expenditures from the savings recovery account.

    Sec. 2.  RCW 28A.305.235 and 1997 c 261 s 2 are each amended to read as follows:

    The education savings account is created in ((the custody of)) the state ((treasurer)) treasury.  The account shall consist of all moneys appropriated to the account by the legislature.  ((The account is subject to the allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures from the account.

    Expenditures from the)) Five percent of legislative appropriations to the education savings account shall be deposited in the distinguished professorship trust fund under RCW 28B.10.868 and five percent shall be deposited in the graduate fellowship trust fund under RCW 28B.10.882.  The remaining moneys in the education savings account may be ((authorized solely by the state board of education and)) appropriated solely for (1) common school construction projects that are eligible for funding from the common school construction account, and (2) technology improvements in the common schools.

NEW SECTION. Sec. 3.  RCW 28A.305.235, as amended by this act, is recodified as a section in chapter 43.79 RCW.

NEW SECTION. Sec. 4.  On the effective date of this act, the state treasurer shall transfer five percent of the unappropriated balance of the education savings account to the distinguished professorship trust fund under RCW 28B.10.868 and five percent of the unappropriated balance of the education savings account to the graduate fellowship trust fund under RCW 28B.10.882.

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