BILL REQ. #:  H-2108.1 

Read first time 03/04/2003.   Referred to Committee on Appropriations.

     AN ACT Relating to implementing Initiative Measure No. 790; amending RCW 44.44.040; reenacting and amending RCW 43.84.092; adding new sections to chapter 41.26 RCW; adding a new section to chapter 41.45 RCW; creating a new section; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The law enforcement officers' and firefighters' plan 2 retirement board established in RCW 41.26.715 has the following duties and powers in addition to any other duties or powers authorized or required by law. The board:
     (1) Shall employ staff as necessary to implement the purposes of chapter 2, Laws of 2003. Staff must be state employees under Title 41 RCW;
     (2) Shall adopt an annual budget as provided in RCW 41.26.720. Expenses of the board are paid from the expense fund created in section 4 of this act;
     (3) May make, execute, and deliver contracts, conveyances, and other instruments necessary to exercise and discharge its powers and duties;
     (4) May contract for all or part of the services necessary for the management and operation of the board with other state or nonstate entities authorized to do business in the state; and
     (5) May contract with actuaries, auditors, and other consultants as necessary to carry out its responsibilities.

Sec. 2   RCW 44.44.040 and 1987 c 25 s 3 are each amended to read as follows:
     The office of the state actuary shall have the following powers and duties:
     (1) Perform all actuarial services for the department of retirement systems, including all studies required by law. Reimbursement for such services shall be made to the state actuary pursuant to the provisions of RCW 39.34.130 as now or hereafter amended.
     (2) Advise the legislature and the governor regarding pension benefit provisions, and funding policies and investment policies of the state investment board.
     (3) Consult with the legislature and the governor concerning determination of actuarial assumptions used by the department of retirement systems.
     (4) Prepare a report, to be known as the actuarial fiscal note, on each pension bill introduced in the legislature which briefly explains the financial impact of the bill. The actuarial fiscal note shall include: (a) The statutorily required contribution for the biennium and the following twenty-five years; (b) the biennial cost of the increased benefits if these exceed the required contribution; and (c) any change in the present value of the unfunded accrued benefits. An actuarial fiscal note shall also be prepared for all amendments which are offered in committee or on the floor of the house of representatives or the senate to any pension bill. However, a majority of the members present may suspend the requirement for an actuarial fiscal note for amendments offered on the floor of the house of representatives or the senate.
     (5) Provide such actuarial services to the legislature as may be requested from time to time.
     (6) Provide staff and assistance to the committee established under RCW ((46.44.050)) 44.44.050.
     (7) Provide actuarial assistance to the law enforcement officers' and fire fighters' plan 2 retirement board as provided in chapter 2, Laws of 2003. Reimbursement for services shall be made to the state actuary under RCW 39.34.130 and 41.26.720(5).

NEW SECTION.  Sec. 3   A new section is added to chapter 41.45 RCW to read as follows:
     (1) Not later than September 30, 2004, and every even-numbered year thereafter, the law enforcement officers' and fire fighters' plan 2 retirement board shall adopt contribution rates for the law enforcement officers' and fire fighters' retirement system plan 2 as provided in chapter 2, Laws of 2003.
     (2) The law enforcement officers' and fire fighters' plan 2 retirement board shall immediately notify the directors of the office of financial management and department of retirement systems of the state, employer, and employee rates adopted. The rates shall be effective for the ensuing biennial period subject to any legislative modifications.

NEW SECTION.  Sec. 4   (1) A law enforcement officers' and fire fighters' retirement system plan 2 expense fund is created in the state treasury. Money in the expense fund may be spent only for the purposes of defraying the administrative expenses of the law enforcement officers' and fire fighters' plan 2 retirement board. Administrative expenses include, but are not limited to, the salaries and expenses of the law enforcement officers' and fire fighters' plan 2 retirement board personnel including lease payments, travel, and goods and services necessary for the operation of the board, audits, and other general costs of conducting the business of the board.
     (2) The board shall allocate from the law enforcement officers' and fire fighters' retirement system plan 2 fund to the expense fund sufficient assets to defray the obligations of the fund including the costs of board administration and reimbursement of the department of retirement systems and the office of the state actuary. The board shall notify the state treasurer of the allocation determination.
     (3) Upon receipt of the notification to allocate money from the law enforcement officers' and fire fighters' retirement system plan 2 fund to the expense fund, the state treasurer shall transfer the amount determined by the law enforcement officers' and fire fighters' plan 2 board necessary to cover the expenses of the law enforcement officers' and fire fighters' plan 2 retirement board.
     (4) Money from the expense fund used for administrative expenses is subject to the allotment of all expenditures pursuant to chapter 43.88 RCW, and an appropriation is required for all expenditures.

NEW SECTION.  Sec. 5   All expenses of the department and the office of the state actuary related to the implementation of chapter 2, Laws of 2003 shall be reimbursed from the law enforcement officers' and fire fighters' retirement system expense fund as provided for under RCW 39.34.130.

Sec. 6   RCW 43.84.092 and 2002 c 242 s 2, 2002 c 114 s 24, and 2002 c 56 s 402 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury 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) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the law enforcement officers' and fire fighters' retirement system plan 2 expense fund, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the Puyallup tribal settlement account, the regional transportation investment district account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (b) 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 aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 7   Sections 1, 4, and 5 of this act are each added to chapter 41.26 RCW and codified under the subchapter heading "plan 2 management."

NEW SECTION.  Sec. 8   In the event a final judicial decision renders Initiative Measure No. 790 unenforceable, in whole or in part, making this act or parts of this act unnecessary, unreasonable, or impossible to implement, the director of the department of retirement systems shall adopt rules as necessary to implement chapters 41.26 and 41.45 RCW as they existed on November 1, 2002. The director shall prepare and submit corrective legislation to the legislature.

NEW SECTION.  Sec. 9   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 takes effect immediately.