State of Washington | 62nd Legislature | 2011 Regular Session |
READ FIRST TIME 04/08/11.
AN ACT Relating to creating the industrial insurance rainy day account; amending RCW 51.16.035 and 51.44.100; reenacting and amending RCW 43.84.092; and adding new sections to chapter 51.44 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 A new section is added to chapter 51.44 RCW
to read as follows:
The legislature finds that stability in industrial insurance
premium rates benefits both employers and workers. Further, the
legislature finds that economic and other events may cause both benefit
costs and premiums collected to change in unanticipated ways.
Therefore, the legislature intends that rather than return surplus
funds to employers and workers in the form of rate holidays, dividends,
and other returns, surpluses should be deposited into a rainy day
account to be used in lieu of a premium rate increase. The legislature
further intends that funds deposited into the rainy day account be held
in trust for the employers and workers who paid them in the form of
industrial insurance premiums and may not be expended for purposes
other than the benefits required by this title and the administration
of those benefits.
Sec. 2 RCW 51.16.035 and 2005 c 410 s 1 are each amended to read
as follows:
(1) The department shall classify all occupations or industries in
accordance with their degree of hazard and fix therefor basic rates of
premium which shall be:
(a) The lowest necessary to maintain actuarial solvency of the
accident and medical aid funds in accordance with recognized insurance
principles; and
(b) Designed to attempt to limit fluctuations in premium rates.
(2)(a)(i) Before proposing premium rates, the director shall
determine whether the combined assets in the accident fund and medical
aid fund are more than ten percent greater than funded liabilities.
(ii) If the director finds that the combined assets in the accident
fund and medical aid fund are more than ten percent greater than funded
liabilities, the director, subject to (a)(iii) of this subsection, must
notify the treasurer of the excess and the treasurer must transfer the
amount of the excess to the industrial insurance rainy day account
created in section 4 of this act. The director must determine and
direct the treasurer whether to transfer the excess from the accident
fund or medical aid fund, or both.
(iii) The director has discretion to transfer to the industrial
insurance rainy day account amounts that are more than thirty percent
greater than funded liabilities. No transfer may be made under this
subsection (2) if the director determines that a transfer would impair
the ability of the department to meet the obligations of this title.
(b) If the director determines to increase average rates for the
accident fund or medical aid fund, the amount of the increase must
first be funded from the industrial insurance rainy day account created
in section 4 of this act. The director must notify the state treasurer
and the state treasurer must transfer the amount required to fund the
rate increase from the accident fund or medical aid fund, or both, as
appropriate. The amount so transferred may not exceed the balance in
the industrial insurance rainy day account that is attributable to the
affected fund.
(c) The director must consult with the workers' compensation
advisory committee in administering this subsection.
(3) The department shall formulate and adopt rules governing the
method of premium calculation and collection and providing for a rating
system consistent with recognized principles of workers' compensation
insurance which shall be designed to stimulate and encourage accident
prevention and to facilitate collection. The department may annually,
or at such other times as it deems necessary to achieve the objectives
under this section, readjust rates in accordance with the rating system
to become effective on such dates as the department may designate.
However, the department may not distribute premium dividends, other
than refunds under the retrospective rating plan pursuant to chapter
51.18 RCW, and may not reduce average rates.
(((3)(a) After the first report is issued by the state auditor
under RCW 51.44.115, the workers' compensation advisory committee shall
review the report and, as the committee deems appropriate, may make
recommendations to the department concerning:))
(i) The level or levels of a contingency reserve that are
appropriate to maintain actuarial solvency of the accident and medical
aid funds, limit premium rate fluctuations, and account for economic
conditions; and
(ii) When surplus funds exist in the trust funds, the circumstances
under which the department should give premium dividends, or similar
measures, or temporarily reduce rates below the rates fixed under
subsection (1) of this section, including any recommendations regarding
notifications that should be given before taking the action.
(b) Following subsequent reports issued by the state auditor under
RCW 51.44.115, the workers' compensation advisory committee may, as it
deems appropriate, update its recommendations to the department on the
matters covered under (a) of this subsection.
(4) In providing a retrospective rating plan under RCW 51.18.010,
the department may consider each individual retrospective rating group
as a single employing entity for purposes of dividends or premium
discounts.
NEW SECTION. Sec. 3 A new section is added to chapter 51.44 RCW
to read as follows:
The decisions of the director under RCW 51.16.035 regarding
transfers to and from the industrial insurance rainy day account
created in section 4 of this act do not constitute "agency action" or
"rules" under RCW 34.05.010 and are not reviewable by any court or
tribunal, but must be announced as part of the rule-making process for
setting premium rates and must be part of the department's rule-making
file under chapter 34.05 RCW.
NEW SECTION. Sec. 4 A new section is added to chapter 51.44 RCW
to read as follows:
The industrial insurance rainy day account is created in the state
treasury as an industrial insurance trust fund. Revenues to the
account consist of transfers made pursuant to RCW 51.16.035(2). Moneys
in the account may be used solely for transfers into the accident fund
or medical aid fund or both in order to avoid premium increases in
those funds under RCW 51.16.035 and retain their status as moneys held
in trust for purposes of the industrial insurance program. The
treasurer must separately account for any transfers to and from the
accident fund and the medical aid fund.
Sec. 5 RCW 51.44.100 and 1990 c 80 s 1 are each amended to read
as follows:
Whenever, in the judgment of the state investment board, there
shall be in the accident fund, medical aid fund, reserve fund,
industrial insurance rainy day account, or the supplemental pension
fund, funds in excess of that amount deemed by the state investment
board to be sufficient to meet the current expenditures properly
payable therefrom, the state investment board may invest and reinvest
such excess funds in the manner prescribed by RCW 43.84.150, and not
otherwise.
The state investment board may give consideration to the investment
of excess funds in federally insured student loans made to persons in
vocational training or retraining or reeducation programs. The state
investment board may make such investments by purchasing from savings
and loan associations, commercial banks, mutual savings banks, credit
unions and other institutions authorized to be lenders under the
federally insured student loan act, organized under federal or state
law and operating in this state loans made by such institutions to
residents of the state of Washington particularly for the purpose of
vocational training or reeducation: PROVIDED, That the state
investment board shall purchase only that portion of any loan which is
guaranteed or insured by the United States of America, or by any agency
or instrumentality of the United States of America: PROVIDED FURTHER,
That the state investment board is authorized to enter into contracts
with such savings and loan associations, commercial banks, mutual
savings banks, credit unions, and other institutions authorized to be
lenders under the federally insured student loan act to service loans
purchased pursuant to this section at an agreed upon contract price.
Sec. 6 RCW 43.84.092 and 2010 1st sp.s. c 30 s 20, 2010 1st sp.s.
c 9 s 7, 2010 c 248 s 6, 2010 c 222 s 5, 2010 c 162 s 6, and 2010 c 145
s 11 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 aeronautics account, the
aircraft search and rescue account, the budget stabilization account,
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 cleanup settlement account, the
Columbia river basin water supply development account, the common
school construction fund, the county arterial preservation account, the
county criminal justice assistance account, the county sales and use
tax equalization account, the deferred compensation administrative
account, the deferred compensation principal account, the department of
licensing services account, the department of retirement systems
expense account, the developmental disabilities community trust
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 education legacy trust
account, the election account, the energy freedom account, the energy
recovery act account, the essential rail assistance account, The
Evergreen State College capital projects account, the federal forest
revolving account, the ferry bond retirement fund, the freight
congestion relief account, the freight mobility investment account, the
freight mobility multimodal account, the grade crossing protective
fund, the public health services account, the health system capacity
account, the high capacity transportation account, the state higher
education construction account, the higher education construction
account, the highway bond retirement fund, the highway infrastructure
account, the highway safety account, the high occupancy toll lanes
operations account, the hospital safety net assessment fund, the
industrial insurance rainy day account, the industrial insurance
premium refund account, the judges' retirement account, the judicial
retirement administrative account, the judicial retirement principal
account, the local leasehold excise tax account, the local real estate
excise tax account, the local sales and use tax account, the marine
resources stewardship trust account, the medical aid account, the
mobile home park relocation fund, the motor vehicle fund, the
motorcycle safety education account, the multiagency permitting team
account, 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 pension funding stabilization 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 public transportation systems account,
the public works assistance account, the Puget Sound capital
construction account, the Puget Sound ferry operations account, the
Puyallup tribal settlement account, the real estate appraiser
commission account, the recreational vehicle account, the regional
mobility grant program account, the resource management cost account,
the rural arterial trust account, the rural Washington loan fund, the
site closure account, the small city pavement and sidewalk account, the
special category C 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 state patrol
highway account, the state route number 520 civil penalties account,
the state route number 520 corridor account, 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 2003
account (nickel account), the transportation equipment fund, the
transportation fund, the transportation improvement account, the
transportation improvement board bond retirement account, the
transportation infrastructure account, the transportation partnership
account, the traumatic brain injury account, the tuition recovery trust
fund, the University of Washington bond retirement fund, the University
of Washington building account, the urban arterial trust account, the
volunteer firefighters' and reserve officers' relief and pension
principal fund, the volunteer firefighters' and reserve officers'
administrative fund, the Washington judicial retirement system account,
the Washington law enforcement officers' and firefighters' system plan
1 retirement account, the Washington law enforcement officers' and
firefighters' system plan 2 retirement account, the Washington public
safety employees' 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.
(b) Any state agency that has independent authority over accounts
or funds not statutorily required to be held in the state treasury that
deposits funds into a fund or account in the state treasury pursuant to
an agreement with the office of the state treasurer shall receive its
proportionate share of earnings based upon each account's or fund's
average daily balance for the period.
(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.