BILL REQ. #:  S-0968.1 

Read first time 01/27/2003.   Referred to Committee on Ways & Means.

     AN ACT Relating to procedures for rehiring retirees of the public employees' retirement system plan 1; amending RCW 41.40.037 and 43.09.050; adding a new section to chapter 41.04 RCW; adding new sections to chapter 43.09 RCW; and providing expiration dates.

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

Sec. 1   RCW 41.40.037 and 2001 2nd sp.s. c 10 s 4 are each amended to read as follows:
     (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every eight hours worked during that month. This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.
     (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred sixty hours per month. Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.
     (2)(a) A retiree from plan 1 who has satisfied the break in employment requirement of subsection (1) of this section and who enters employment with an employer may continue to receive pension payments while engaged in such service for up to ((one thousand five)) eight hundred sixty-seven hours of service in a calendar year without a reduction of pension.
     (b)(i) A retiree from plan 1 who has been separated for at least ninety days may:
     (A) Enter employment with their former employer and continue to receive pension payments while engaged in such service for up to one thousand five hundred hours of service in a calendar year without a reduction of pension;
     (B) Enter employment with an employer and continue to receive pension payments while engaged in such service for up to one thousand five hundred hours of service in a calendar year without a reduction of pension; and
     (ii) When a plan 1 member renders service beyond eight hundred sixty-seven hours, the department shall collect from the employer the applicable employer retirement contributions for the entire duration of the member's employment during that calendar year.
     (((b))) (c) A retiree from plan 2 or plan 3 who has satisfied the break in employment requirement of subsection (1) of this section may work up to eight hundred sixty-seven hours in a calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030, without suspension of his or her benefit.
     (3) If the retiree opts to reestablish membership under RCW 41.40.023(12), he or she terminates his or her retirement status and becomes a member. Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit. Such a member shall have the right to again retire if eligible in accordance with RCW 41.40.180. However, if the right to retire is exercised to become effective before the member has rendered two uninterrupted years of service, the retirement formula and survivor options the member had at the time of the member's previous retirement shall be reinstated.
     (4) The department shall collect and provide the state actuary with information relevant to the use of this section for the joint committee on pension policy.
     (5) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to be employed for more than five months in a calendar year without a reduction of his or her pension.

NEW SECTION.  Sec. 2   A new section is added to chapter 41.04 RCW to read as follows:
     (1) Employers shall establish specific human resource policies regarding the hiring of retirees under RCW 41.40.037(2)(b) and publish those policies in their human resource manual and attach a document containing those policies to each job announcement. Among those policies shall be the requirement that final approval for hiring a retiree under RCW 41.40.037(2)(b)(i) must come from the highest public officer of the employer.
     (2) Employers shall keep recruitment and interviewing records of each human resource transaction in which a retiree was hired under RCW 41.40.037(2)(b). These records may be subject to audit under chapter 43.09 RCW.

Sec. 3   RCW 43.09.050 and 1992 c 118 s 6 are each amended to read as follows:
     The auditor shall:
     (1) Except as otherwise specifically provided by law, audit the accounts of all collectors of the revenue and other holders of public money required by law to pay the same into the treasury;
     (2) In his or her discretion, inspect the books of any person charged with the receipt, safekeeping, and disbursement of public moneys;
     (3) Investigate improper governmental activity under chapter 42.40 RCW;
     (4) Audit human resource practices under RCW 41.40.037(2)(b);
     (5) Inform the attorney general in writing of the necessity for the attorney general to direct prosecutions in the name of the state for all official delinquencies in relation to the assessment, collection, and payment of the revenue, against all persons who, by any means, become possessed of public money or property, and fail to pay over or deliver the same, and against all debtors of the state;
     (((5))) (6) Give information in writing to the legislature, whenever required, upon any subject relating to the financial affairs of the state, or touching any duties of his or her office;
     (((6))) (7) Report to the director of financial management in writing the names of all persons who have received any moneys belonging to the state, and have not accounted therefor;
     (((7))) (8) Authenticate with his or her official seal papers issued from his or her office;
     (((8))) (9) Make his or her official report annually on or before the 31st of December.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.09 RCW to read as follows:
     (1) The state auditor has the power to examine the human resource practices related to RCW 41.40.037(2)(b) of every local government and its officers and employees.
     (2) This section expires December 31, 2007.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.09 RCW to read as follows:
     (1) The examination of the human resource practices of all local governments shall be made at the reasonable and periodic intervals as the state auditor determines. "Local governments" for purposes of this act include but are not limited to all counties, cities, and other political subdivisions, municipal corporations, and quasi-municipal corporations, however denominated.
     The state auditor shall establish a schedule to govern the auditing of local governments that includes: A designation of the various classifications of local governments; a designation of the frequency for auditing each type of local government; and a description of events that cause a more frequent audit to be conducted.
     On every examination, inquiry shall be made as to: The human resource practices of the local government; whether the Constitution and laws of the state, the ordinances and orders of the local government, and the requirements of the state auditor have been properly complied with; and the methods and accuracy of the accounts and reports.
     A report of each examination must be made and filed in the office of the state auditor, and one copy must be transmitted to the local government. A copy of any report containing findings of noncompliance with state law must be transmitted to the attorney general. If any report discloses malfeasance, misfeasance, or nonfeasance in office on the part of any public officer or employee, within thirty days from the receipt of a copy of the report, the attorney general shall institute, in the proper county, legal action that is proper and necessary to give effect to the findings of the examination.
     It is unlawful for any local government, or the responsible officer, to make a settlement or compromise of any claim arising out of malfeasance, misfeasance, or nonfeasance, or any action commenced therefor, or for any court to enter upon any compromise or settlement of the action, without the written approval and consent of the attorney general and the state auditor.
     (2) This section expires December 31, 2007.

NEW SECTION.  Sec. 6   Section 3 of this act expires December 31, 2007.