HOUSE BILL REPORT

HB 1852

BYRepresentatives Sayan and H. Sommers 

Modifying membership of the deferred compensation committee.

House Committe on State Government

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (7)

      Signed by Representatives H. Sommers, Chair; Anderson, Vice Chair; Chandler, Hankins, O'Brien, Peery and Taylor.

House Staff:Ken Conte (786-7135)

AS REPORTED BY COMMITTEE ON STATE GOVERNMENT FEBRUARY 4, 1988

BACKGROUND:

The Committee for Deferred Compensation is responsible for developing and administering the State Deferred Compensation Program and salary reductions for dependent care.  Under the Deferred Compensation Program, the Committee invests a portion of an employee's salary which has been voluntarily deferred by the employee.  The Committee has a fiduciary relationship to the employees who participate in the program.

The Committee consists of five members appointed by the Governor. The membership of the Committee is to include:

            oone representative of an employee association or union certified as an exclusive representative of at least one bargaining unit of classified employees,

            oone representative of a credit union, savings and loan association, mutual savings bank, or bank,

            oa person with expertise in the area of insurance or the investment of public funds,

            othe State Attorney General or designee, and

            oone additional member selected by the Governor.

Members of the Committee are not compensated but they do receive travel expenses.  There is no specified term of office.

SUMMARY:

SUBSTITUTE BILL:  The membership of the Committee for Deferred Compensation is increased from five to seven and the composition of the committee is altered.  The membership of the Committee is to include:

            othree persons who are either state employees or representatives of employee associations or unions certified as an exclusive representative of at least one bargaining unit of classified employees, and

            ofour persons with expertise in the functions or programs of the committee, such as investment, banking or insurance.

Members are to serve staggered, three-year terms and are subject to removal by the Governor for misconduct, misfeasance, malfeasance, or incompetency.

Members who are not state employees are to be compensated $50 a day during which the member attends a meeting, and all members are to receive travel expenses.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The original bill provides for the Committee to have two representatives of employee associations and two state employees who participate in programs administered by the Committee, where the substitute bill provides for three members who are either state employees or representatives of employee associations.

The final three members under the original bill are one person with expertise in investments, and two persons with expertise in programs offered by the Committee.  The substitute bill provides that the final four members of the Committee be persons with expertise in the programs of the committee, such as investment, banking, or insurance.

The Committee selects the chair in the original bill; the substitute bill leaves that authority with the Governor.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    George Masten, Chair, Deferred Compensation Committee; and Gary Moore, Washington Federation of State Employees.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The Deferred Compensation Committee supports the legislation, and agrees that there should be greater structure in forming the Committee while giving the Governor more flexibility in appointments.  Representatives of financial institutions are reluctant to serve on the Committee because of potential conflict of interest.  In the same way, the Attorney General serves on the Committee, yet also legally represents the Committee.  There should be more members representing employees.

House Committee - Testimony Against:      None Presented.