"NEW SECTION.  Sec. 1   The legislature finds that local governments need additional revenues to provide public safety resources in order to protect the citizens of Washington from fire and crime. The legislature finds that the current benefit formula and contributions for the law enforcement officers' and firefighters' plan 2 are inadequate to modify that formula in recognition of the shorter working careers for firefighters and police officers. The legislature recognizes that although some officers and firefighters are able to work comfortably beyond twenty-five years, the combat nature of fire suppression and law enforcement generally require earlier retirement ages. In recognition of the physical demands of the professions and the inherent risks faced by law enforcement officers and firefighters, eligibility for retirement in the law enforcement officers' and firefighters' plan 2 system has been set at age fifty-three. However, the benefit formula is designed for careers of thirty-five to forty years, making retirement at age fifty-three an unrealistic option for many.
     Therefore, the legislature declares that it is the purpose of this act to provide local government public safety employers and the law enforcement officers' and firefighters' plan 2 pension plan with additional shared revenues when state general fund revenues increase by at least five percent over the prior year's collections.

NEW SECTION.  Sec. 2   A new section is added to chapter 41.26 RCW to read as follows:
     The local public safety enhancement account is created in the state treasury. Moneys in the account may be spent only after appropriation. All receipts from section 4 of this act must be deposited into the account. Expenditures from the account may be used as follows:
     (1) Following appropriation, fifty percent of the money in the account shall be transferred to the law enforcement officers' and firefighters' retirement system benefits improvement account established in section 3 of this act.
     (2) Following appropriation, the balance shall be distributed by the state treasurer to all jurisdictions with law enforcement officers' and firefighters' plan 2 members on a proportionate share basis based on the number of plan 2 members each jurisdiction has on June 1st of the prior year divided by the total number of plan 2 members in the system. The department of retirement systems shall provide the distribution allocation to the state treasurer. Distributions by the state treasurer shall be made annually beginning on January 1, 2011. Jurisdictions that contract with other eligible jurisdictions for law enforcement services or fire protection services must agree on the distribution of funds between the contracting parties and must inform the department of retirement systems as to how the distribution is to be made. Distributions will continue to be made under the terms of the agreement until the department of retirement systems is notified by the eligible jurisdiction of any agreement revisions. If there is no agreement within six months of the distribution date, the moneys lapse to the state treasury. Moneys distributed from the balance of the public safety enhancement account may be used for the following purposes: (a) Criminal justice, including those where an ancillary benefit to the civil justice occurs, and includes domestic violence programs; (b) information and assistance to parents and families dealing with at-risk or runaway youth; or (c) public safety.

NEW SECTION.  Sec. 3   A new section is added to chapter 41.26 RCW to read as follows:
     (1) The local law enforcement officers' and firefighters' retirement system benefits improvement account (benefits account) is created within the law enforcement officers' and firefighters' retirement system plan 2 fund. All receipts from section 2(1) of this act must be deposited into the account.
     (2) The funds in the benefits account shall not be included by the state actuary in the calculation of the market value of assets of the law enforcement officers' and firefighters' retirement system plan 2 fund until the board directs the state actuary in writing to do so for purposes of funding the expected actuarial present value of fully projected benefits for current and future members adopted pursuant to RCW 41.26.720(1)(b)(ii). The board, in consultation with the state investment board, shall provide the state actuary, in writing, the market value of the amount directed from the benefits account for inclusion in the calculation of the market value of assets of the law enforcement officers' and firefighters' retirement system plan 2 fund. The market value of the amount directed from the benefits account shall be determined as of the date of the direction from the board to include this amount for purposes of funding the expected actuarial present value of fully projected benefits for current and future members adopted pursuant to RCW 41.26.720(1)(b)(ii).
     (3) The law enforcement officers' and firefighters' plan 2 retirement board shall administer the fund in an actuarially sound manner.
     (4) The state investment board has the full power to invest, reinvest, manage, contract, sell, or exchange investment money in the benefits account. The state investment board is authorized to adopt investment policies for the money in the benefits account. All investment and operating costs associated with the investment of money within the benefits account shall be paid pursuant to RCW 43.33A.160 and 43.84.160. With the exception of these expenses, the earnings from the investment of the money shall be retained by the benefits account.
     (5) All investments made by the state investment board shall be made with the exercise of that degree of judgment and care pursuant to RCW 43.33A.140 and the investment policy established by the state investment board.
     (6) When appropriate for investment purposes, the state investment board may commingle money in the fund with other funds.
     (7) The authority to establish all policies relating to the benefits account, other than the investment policies set forth in this section, resides with the law enforcement officers' and firefighters' plan 2 retirement board. Other than investments by and expenses of the state investment board, disbursements from this fund may be made only on the authorization of the law enforcement officers' and firefighters' plan 2 retirement board for purposes of funding the expected actuarial present value of fully projected benefits for current and future members adopted pursuant to RCW 41.26.720(1)(b)(ii).
     (8) The state investment board shall routinely consult with and communicate with the law enforcement officers' and firefighters' plan 2 retirement board on the investment policy, earnings of the trust, and related needs of the benefits account.
     (9) For purposes of this section, the present value of fully projected benefits for current and future members shall be calculated by the state actuary, utilizing the current long-term economic and demographic assumptions adopted by the board for the regular valuation of the plan.

NEW SECTION.  Sec. 4   A new section is added to chapter 41.26 RCW to read as follows:
     (1) By September 30, 2011, if the prior fiscal biennium's general state revenues exceed the previous fiscal biennium's revenues by more than five percent, subject to appropriation by the legislature, the state treasurer shall transfer five million dollars to the local public safety enhancement account.
     (2) By September 30, 2013, if the prior fiscal biennium's general state revenues exceed the previous fiscal biennium's revenues by more than five percent, subject to appropriation by the legislature, the state treasurer shall transfer ten million dollars to the local public safety enhancement account.
     (3) By September 30, 2015, and by September 30 of each odd-numbered year thereafter, if the prior fiscal biennium's general state revenues exceed the previous fiscal biennium's revenues by more than five percent, subject to appropriation by the legislature, the state treasurer shall transfer the lesser of one-third of the increase, or twenty million dollars, to the local public safety enhancement account.
     (4) The appropriated funds that may be transferred pursuant to this section are not a matter of contractual right, and are not part of the systematic method of funding any benefits or liabilities of the law enforcement officers' and firefighters' retirement plan 2 currently in law, or as may be enacted in the future. The legislature retains the right to amend or abolish this section at any time."