AN ACT Relating to the economic and revenue forecast council; amending RCW 82.01.130, 41.06.087, and 43.88.020; reenacting and amending RCW 82.01.120; creating new sections; recodifying RCW 82.01.120, 82.01.125, 82.01.130, and 82.01.135; providing an effective date; and declaring an emergency.

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

Sec. 1. Section 4, chapter 138, Laws of 1984 and RCW 82.01.130 are each amended to read as follows:

(1) The economic and revenue forecast council is hereby created. The council shall consist of two individuals appointed by the governor and four individuals, one of whom is appointed by the chairperson of each of the two largest political caucuses in the senate and house of representatives. The chair of the council shall be selected from among the four caucus appointees. The council may select such other officers as the members deem necessary.

(2) The council shall employ an economic and revenue forecast supervisor to supervise the preparation of all economic and revenue forecasts. As used in this chapter, "supervisor" means the economic and revenue forecast supervisor. Approval by an affirmative vote of at least five members of the council is required for any decisions regarding employment of the supervisor. Employment of the supervisor shall terminate after each term of three years. At the end of the first year of each three-year term the council shall consider extension of the supervisor's term by one year. The council may fix the compensation of the supervisor. The supervisor shall employ staff sufficient to accomplish the purposes of this section.

(3) The economic and revenue forecast council shall oversee the preparation of and approve, by an affirmative vote of at least four members, the official, optimistic, and pessimistic state economic and revenue forecasts prepared under RCW 82.--.--- (RCW 82.01.120 as recodified by section 5 of this act). If the council is unable to approve a forecast before a date required in RCW 82.--.--- (RCW 82.01.120 as recodified by section 5 of this act), the supervisor shall submit the forecast without approval and the forecast shall have the same effect as if approved by the council.

((~~(3)~~)) (4) A council member who does not cast an affirmative vote for approval of the official economic and revenue forecast may request, and the supervisor shall provide, an alternative economic and revenue forecast based on assumptions specified by the member.

((~~(4)~~)) (5) Members of the economic and revenue forecast council shall serve without additional compensation but shall be reimbursed for travel expenses in accordance with RCW 44.04.120 while attending sessions of the council or on official business authorized by the council. Nonlegislative members of the council shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

Sec. 2. Section 1, chapter 138, Laws of 1984 as last amended by section 10, chapter 502, Laws of 1987 and by section 79, chapter 505, Laws of 1987 and RCW 82.01.120 are each reenacted and amended to read as follows:

(1) ((The director shall employ an economic and revenue forecast supervisor to supervise the preparation of all economic and revenue forecasts. As used in this section and RCW 82.01.125 and 82.01.130, "supervisor" means the economic and revenue forecast supervisor. Approval by an affirmative vote of at least five members of the economic and revenue forecast council is required for any decisions regarding employment of the supervisor. Employment of the supervisor shall terminate after each term of three years, unless the supervisor is reappointed by the director and approved by the economic and revenue forecast council for another three years. The supervisor shall employ staff sufficient to accomplish the purposes of this section.

~~(2)~~)) Four times each year the supervisor shall prepare, subject to the approval of the economic and revenue forecast council under RCW 82.--.--- (RCW ((~~82.01.130(2)~~)) 82.01.130 as recodified by section 5 of this act):

(a) An official state economic and revenue forecast;

(b) An unofficial state economic and revenue forecast based on optimistic economic and revenue projections; and

((~~(3)~~)) (2) The supervisor shall submit forecasts prepared under this section, along with any unofficial forecasts provided under RCW 82.--.--- (RCW ((~~82.01.130(3)~~)) 82.01.130 as recodified by section 5 of this act), to the governor and the members of the committees on ways and means and the chairs of the committees on transportation of the senate and house of representatives and the chair of the legislative transportation committee, including one copy to the staff of each of the committees, on or before November 20th, February 20th in the even-numbered years, March 20th in the odd-numbered years, June 20th, and September 20th. All forecasts shall include both estimated receipts and estimated revenues in conformance with generally accepted accounting principles as provided by RCW 43.88.037.

(3) All agencies of state government shall provide to the supervisor immediate access to all information relating to economic and revenue forecasts. Revenue collection information shall be available to the supervisor the first business day following the conclusion of each collection period.

(4) The economic and revenue forecast supervisor and staff shall co-locate and share information, data, and files with the tax research section of the department of revenue but shall not duplicate the duties and functions of one another.

Sec. 3. Section 2, chapter 138, Laws of 1984 and RCW 41.06.087 are each amended to read as follows:

In addition to the exemptions set forth in RCW 41.06.070, this chapter does not apply to the economic and revenue forecast supervisor and staff employed under RCW 82.--.--- (RCW ((~~82.01.120~~)) 82.01.130 as recodified by section 5 of this act).

Sec. 4. Section 1, chapter 36, Laws of 1982 1st ex. sess. as last amended by section 1, chapter 502, Laws of 1987 and RCW 43.88.020 are each amended to read as follows:

(1) "Budget" shall mean a proposed plan of expenditures for a given period or purpose and the proposed means for financing these expenditures.

(2) "Budget document" shall mean a formal, written statement offered by the governor to the legislature, as provided in RCW 43.88.030.

(3) "Director of financial management" shall mean the official appointed by the governor to serve at the governor's pleasure and to whom the governor may delegate necessary authority to carry out the governor's duties as provided in this chapter. The director of financial management shall be head of the office of financial management which shall be in the office of the governor.

(4) "Agency" shall mean and include every state office, officer, each institution, whether educational, correctional or other, and every department, division, board and commission, except as otherwise provided in this chapter.

(5) "Public funds", for purposes of this chapter, shall mean all moneys, including cash, checks, bills, notes, drafts, stocks and bonds, whether held in trust, for operating purposes, or for capital purposes, and collected or disbursed under law, whether or not such funds are otherwise subject to legislative appropriation, including funds maintained outside the state treasury.

(6) "Regulations" shall mean the policies, standards and requirements, stated in writing, designed to carry out the purposes of this chapter, as issued by the governor or the governor's designated agent, and which shall have the force and effect of law.

(7) "Ensuing biennium" shall mean the fiscal biennium beginning on July 1st of the same year in which a regular session of the legislature is held during an odd-numbered year pursuant to Article II, section 12 of the Constitution and which biennium next succeeds the current biennium.

(8) "Dedicated fund" means a fund in the state treasury, or a separate account or fund in the general fund in the state treasury, that by law is dedicated, appropriated or set aside for a limited object or purpose; but "dedicated fund" shall not include a revolving fund or a trust fund.

(9) "Revolving fund" means a fund in the state treasury, established by law, from which is paid the cost of goods or services furnished to or by a state agency, and which is replenished through charges made for such goods or services or through transfers from other accounts or funds.

(10) "Trust fund" means a fund in the state treasury in which designated persons or classes of persons have a vested beneficial interest or equitable ownership, or which was created or established by a gift, grant, contribution, devise, or bequest that limits the use of the fund to designated objects or purposes.

(11) "Administrative expenses" means expenditures for: (a) Salaries, wages, and related costs of personnel and (b) operations and maintenance including but not limited to costs of supplies, materials, services, and equipment.

(12) "Fiscal year" means the year beginning July 1st and ending the following June 30th.

(13) "Lapse" means the termination of authority to expend an appropriation.

(14) "Legislative fiscal committees" means the legislative budget committee, the legislative evaluation and accountability program committee, the ways and means committees of the senate and house of representatives, and, where appropriate, the legislative transportation committee.

(15) "Fiscal period" means the period for which an appropriation is made as specified within the act making the appropriation.

(16) "Primary budget driver" means the primary determinant of a budget level, other than a price variable, which causes or is associated with the major expenditure of an agency or budget unit within an agency, such as a caseload, enrollment, workload, or population statistic.

(17) "Stabilization account" means the budget stabilization account created under RCW 43.88.525 as an account in the general fund of the state treasury.

(18) "State tax revenue limit" means the limitation created by chapter 43.135 RCW.

(19) "General state revenues" means the revenues defined by Article VIII, section 1(c) of the state Constitution.

(20) "Annual growth rate in real personal income" means the estimated percentage growth in personal income for the state during the current fiscal year, expressed in constant value dollars, as published by the office of financial management or its successor agency.

(21) "Estimated revenues" means estimates of revenue in the most recent official economic and revenue forecast prepared under RCW 82.--.--- (RCW 82.01.120 as recodified by section 5 of this act), and prepared by the office of financial management for those funds, accounts, and sources for which the office of the economic and revenue forecast council does not prepare an official forecast.

(22) "Estimated receipts" means the estimated receipt of cash in the most recent official economic and revenue forecast prepared under RCW 82.--.--- (RCW 82.01.120 as recodified by section 5 of this act), and prepared by the office of financial management for those funds, accounts, and sources for which the office of the economic and revenue forecast council does not prepare an official forecast.

(23) "State budgeting, accounting, and reporting system" means a system that gathers, maintains, and communicates fiscal information. The system links fiscal information beginning with development of agency budget requests through adoption of legislative appropriations to tracking actual receipts and expenditures against approved plans.

(24) "Allotment of appropriation" means the agency's statement of proposed expenditures, the director of financial management's review of that statement, and the placement of the approved statement into the state budgeting, accounting, and reporting system.

(25) "Statement of proposed expenditures" means a plan prepared by each agency that breaks each appropriation out into monthly detail representing the best estimate of how the appropriation will be expended.

(26) "Undesignated fund balance (or deficit)" means unreserved and undesignated current assets or other resources available for expenditure over and above any current liabilities which are expected to be incurred by the close of the fiscal period.

NEW SECTION. Sec. 5. (1) RCW 82.01.120, 82.01.125, 82.01.130, and 82.01.135 are recodified as sections in and shall constitute a new chapter in Title 82 RCW.

(2) The code reviser shall correct all statutory references to these sections to reflect this recodification.

NEW SECTION. Sec. 6. All powers, duties, and functions of the director of revenue pertaining to the economic and revenue forecast supervisor are transferred to the economic and revenue forecast council.

NEW SECTION. Sec. 7. All reports, documents, surveys, books, records, files, papers, or written material in the possession of the director of revenue pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the economic and revenue forecast council. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the director of revenue in carrying out the powers, functions, and duties transferred shall be made available to the economic and revenue forecast council. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the economic and revenue forecast council.

Any appropriations made to the director of revenue for carrying out the powers, functions, and duties transferred shall, on the effective date of this act, be transferred and credited to the economic and revenue forecast council.

Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

NEW SECTION. Sec. 8. All employees of the director of revenue engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the economic and revenue forecast council. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the economic and revenue forecast council to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

NEW SECTION. Sec. 9. All rules and all pending business before the director of revenue pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the economic and revenue forecast council. All existing contracts and obligations shall remain in full force and shall be performed by the economic and revenue forecast council.

NEW SECTION. Sec. 10. The transfer of the powers, duties, functions, and personnel of the director of revenue shall not affect the validity of any act performed prior to the effective date of this act.

NEW SECTION. Sec. 11. If apportionments of budgeted funds are required because of the transfers directed by sections 7 through 10 of this act, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

NEW SECTION. Sec. 12. 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 shall take effect July 1, 1990.