5693-S AAS 4/25/99 S2738

5693-S AAS 4/25/99 S2738.2

SSB 5693 - S AMD - 377

By Senators Wojahn, McDonald, Thibaudeau and Deccio

ADOPTED 4/25/99

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. LEGISLATIVE INTENT. The legislature recognizes that the main and most enduring support for persons with developmental disabilities, along with public resources, is their immediate and extended families. The legislature recognizes that these families are searching for ways to provide for the long-term continuing care of their disabled family member when the family can no longer provide that care. It is the intent of the legislature to encourage and assist families to engage in long-range financial planning and to contribute to the lifetime care of their disabled family member. To further these objectives, this chapter is enacted to finance long-term care for persons with developmental disabilities through an endowment funded jointly by the investment of public funds and dedicated family contributions.

The establishment of this endowment is not intended to diminish the state's responsibility for funding services currently available to future endowment participants, subject to available funding, nor is it the intent of the legislature, by the creation of this public/private endowment, to impose additional, unintended financial liabilities on the public.

NEW SECTION. Sec. 2. DEVELOPMENTAL DISABILITIES ENDOWMENT TRUST FUND. (1) The developmental disabilities endowment trust fund is created in the custody of the state treasurer. Expenditures from the fund may be used only for the purposes of the developmental disabilities endowment established under this chapter. Only the developmental disabilities endowment governing board or the board's designee may authorize expenditures from the fund. The fund shall retain its interest earnings in accordance with RCW 43.79A.040.

(2) The developmental disabilities endowment governing board shall deposit in the fund all money received for the program, including state appropriations and private matching contributions. With the exception of investment and operating costs associated with the investment of money by the state treasurer and the investment board paid under RCW 43.08.190, 43.79A.040, 43.33A.160, and 43.84.160, the fund shall be credited with all investment income earned by the fund. Disbursements from the fund are exempt from appropriations and the allotment provisions of chapter 43.88 RCW. However, money used for program administration is subject to the allotment and budgetary controls of chapter 43.88 RCW, and an appropriation is required for these expenditures.

NEW SECTION. Sec. 3. INVESTMENT OF FUNDS. (1) The state investment board has the full power to invest, reinvest, manage, contract, sell, or exchange investment money in the developmental disabilities endowment trust fund. All investment and operating costs associated with the investment of money shall be paid under RCW 43.08.190, 49.79A.040, 43.33A.160, and 43.84.160. With the exception of these expenses, the earnings from the investment of the money shall be retained by the fund.

(2) All investments made by the state investment board shall be made with the exercise of that degree of judgment and care under RCW 43.33A.140 and the investment policy established by the state investment board.

(3) As deemed appropriate by the investment board, money in the fund may be commingled for investment with other funds subject to investment by the board.

(4) The authority to establish all policies relating to the fund, other than the investment policies as set forth in subsections (1) through (3) of this section, resides with the developmental disabilities endowment governing board acting in accordance with the principles set forth in section 5 of this act. With the exception of expenses of the state treasurer and the investment board set forth in subsection (1) of this section, disbursements from the fund shall be made only on the authorization of the developmental disabilities endowment governing board or the board's designee, and money in the fund may be spent only for the purposes of the developmental disabilities endowment program as specified in this chapter.

(5) The investment board shall routinely consult and communicate with the developmental disabilities endowment governing board on the investment policy, earnings of the trust, and related needs of the program.

NEW SECTION. Sec. 4. DEVELOPMENTAL DISABILITIES ENDOWMENT GOVERNING BOARD. The developmental disabilities endowment governing board is established to design and administer the developmental disabilities endowment. To the extent funds are appropriated for this purpose, the director of the department of community, trade, and economic development shall provide staff and administrative support to the governing board.

(1) The governing board shall consist of seven members as follows: (a) Three of the members, who shall be appointed by the governor, shall be persons who have demonstrated expertise and leadership in areas such as finance, actuarial science, management, business, or public policy.

(b) Three members of the board, who shall be appointed by the governor, shall be persons who have demonstrated expertise and leadership in areas such as business, developmental disabilities service design, management, or public policy, and shall be family members of persons with developmental disabilities.

(c) The seventh member of the board, who shall serve as chair of the board, shall be appointed by the remaining six members of the board.

(2) Members of the board shall serve terms of four years and may be appointed for successive terms of four years at the discretion of the appointing authority. However, the governor may stagger the terms of the initial six members of the board so that approximately one-fourth of the members' terms expire each year.

(3) Members of the board shall be compensated for their service under RCW 43.03.240 and shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

(4) The board shall meet periodically as specified by the call of the chair, or a majority of the board.

NEW SECTION. Sec. 5. ENDOWMENT PRINCIPLES. The design, implementation, and administration of the developmental disabilities endowment shall be governed by the following principles:

(1) The design and operation of the endowment should reward families who set aside resources for their child's future care and provide incentives for continued caregiving by the family.

(2) The endowment should encourage financial planning and reward caregiving by a broad range of families, not just those who have substantial financial resources.

(3) Families should not feel compelled to contribute to the endowment in order to meet the needs of continuing care for their child.

(4) All families should have equal access to developmental disabilities services not funded through the endowment regardless of whether they contribute to the endowment.

(5) Services funded through the endowment should be stable, ongoing, of reasonable quality, and respectful of individual and family preferences.

(6) Endowment resources should be expended economically in order to benefit as many families as possible.

(7) Endowment resources should be managed prudently so that families can be confident that their agreement with the endowment on behalf of their child will be honored.

(8) The private financial contribution on behalf of each person receiving services from the endowment shall be at least equal to the state's contribution to the endowment.

(9) In order to be matched with funding from the state's contribution to the endowment, the private contribution on behalf of a beneficiary must be sufficient to support the beneficiary's approved service plan for a significant portion of the beneficiary's anticipated remaining lifetime.

(10) The rate that state appropriations to the endowment are used to match private contributions shall be such that each legislative appropriation to the developmental disabilities endowment trust fund, including principal and investment income, is not depleted in a period of less than five years.

(11) Private contributions made on behalf of a particular individual, and the associated state match, shall only be used for services provided upon that person's behalf.

NEW SECTION. Sec. 6. PROPOSED OPERATING PLAN. To the extent funds are appropriated for this purpose, the developmental disabilities endowment governing board shall contract with an appropriate organization for the development of a proposed operating plan for the developmental disabilities endowment program. The proposed operating plan shall be consistent with the endowment principles specified in section 5 of this act. The plan shall address at least the following elements:

(1) The recommended types of services to be available through the endowment program and their projected average costs per beneficiary;

(2) An assessment of the number of people likely to apply for participation in the endowment under alternative rates of matching funds, minimum service year requirements, and contribution timing approaches;

(3) An actuarial analysis of the number of disabled beneficiaries who are likely to be supported under alternative levels of public contribution to the endowment, and the length of time the beneficiaries are likely to be served, under alternative rates of matching funds, minimum service year requirements, and contribution timing approaches;

(4) Recommended eligibility criteria for participation in the endowment program;

(5) Recommended policies regarding withdrawal of private contributions from the endowment in cases of movement out of state, death of the beneficiary, or other circumstances;

(6) Recommended matching rate of public and private contributions and, for each beneficiary, the maximum annual and lifetime amount of private contributions eligible for public matching funds;

(7) The recommended minimum years of service on behalf of a beneficiary that must be supported by private contributions in order for the contributions to qualify for public matching funds from the endowment;

(8) The recommended schedule according to which lump sum or periodic private contributions should be made to the endowment in order to qualify for public matching funds;

(9) A recommended program for educating families about the endowment, and about planning for their child's long-term future; and

(10) Recommended criteria and procedure for selecting an organization or organizations to administer the developmental disabilities endowment program, and projected administrative costs.

NEW SECTION. Sec. 7. PROGRAM IMPLEMENTATION AND ADMINISTRATION. Based on the proposed operating plan under section 6 of this act, and to the extent funds are appropriated for this purpose, the developmental disabilities endowment governing board shall implement and administer, or contract for the administration of, the developmental disabilities endowment program under the principles specified in section 5 of this act. By October 1, 2000, and prior to implementation, the final program design shall be submitted to the appropriate committees of the legislature.

The secretary of the department of social and health services shall seek to maximize federal reimbursement and matching funds for expenditures made under the endowment program, and shall seek waivers from federal requirements as necessary for the receipt of federal funds.

The governing board may receive gifts, grants, and endowments from public or private sources as may be made from time to time, in trust or otherwise, for the use and benefit of the purposes of the endowment program and may expend the gifts, grants, and endowments according to their terms.

Sec. 8. RCW 43.79A.040 and 1998 c 268 s 1 are each amended to read as follows:

(1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

(2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

(3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

(b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the game farm alternative account, the grain inspection revolving fund, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility grant account, the self-insurance revolving fund, the sulfur dioxide abatement account, and the children's trust fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.

(5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION. Sec. 9. CAPTIONS NOT LAW. Captions used in this chapter are not any part of the law.

NEW SECTION. Sec. 10. Sections 1 through 7 and 9 of this act are each added to chapter 43.330 RCW."

SSB 5693 - S AMD - 377

By Senators Wojahn, McDonald, Thibaudeau and Deccio

ADOPTED 4/25/99

On page 1, line 2 of the title, after "services;" strike the remainder of the title and insert "amending RCW 43.79A.040; and adding new sections to chapter 43.330 RCW."