HOUSE BILL REPORT
ESSB 5293
As Passed House - Amended:
April 20, 2023
Title: An act relating to accounts.
Brief Description: Concerning accounts.
Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Rolfes, Robinson, Kuderer, Nobles and Van De Wege; by request of Office of Financial Management).
Brief History:
Committee Activity:
Appropriations: 4/18/23, 4/19/23 [DPA].
Floor Activity:
Passed House: 4/20/23, 98-0.
Brief Summary of Engrossed Substitute Bill
(As Amended by House)
  • Creates the Opioid Abatement Settlement Account, the State Hazard Mitigation Revolving Loan Account, and the GOV Central Service Account, and establishes allowable uses for these accounts.
  • Modifies the Personnel Service Fund, Higher Education Personnel Service Fund, and the Office of Financial Management Central Service Account.
  • Revises the dedicated uses of Community Reinvestment Account and Foundational Public Health Services Account.
  • Allows transfers between the Public Employees' and Retirees' Insurance Account and the School Employees' Insurance Account for short-term cash management and cash balance purposes. 
  • Allows school districts to balance a borrowing fund with an interfund loan for school fiscal year 2024.
  • Changes the date the for the State Treasurer to transfer moneys from the Climate Investment Account into other accounts.
  • Reenacts the Electric Vehicle Incentive Account.
HOUSE COMMITTEE ON APPROPRIATIONS
Majority Report: Do pass as amended.Signed by 30 members:Representatives Ormsby, Chair; Bergquist, Vice Chair; Gregerson, Vice Chair; Macri, Vice Chair; Stokesbary, Ranking Minority Member; Chambers, Assistant Ranking Minority Member; Corry, Assistant Ranking Minority Member; Berg, Chandler, Chopp, Connors, Couture, Davis, Dye, Fitzgibbon, Hansen, Lekanoff, Pollet, Riccelli, Rude, Ryu, Sandlin, Schmick, Senn, Simmons, Slatter, Springer, Steele, Stonier and Tharinger.
Staff: Dave Johnson (786-7154).
Background:

In addition to the State General Fund, which may be expended for any lawful purpose, the state maintains several hundred accounts that are dedicated to particular statutory purposes.  These accounts generally fall into one of three categories:  (1) accounts located in the State Treasury, which require appropriation by the Legislature; (2) accounts held in the custody of the State Treasurer, which may or may not require legislative appropriation; and (3) accounts located in state agencies and institutions of higher education, known as local accounts.
 
When an agency regularly provides services supporting other agencies, those activities are sometimes funded using a dedicated account.  In those instances, the providing agency typically collects fees and charges from the agencies being supported.  Those moneys are then deposited into the dedicated account and used to fund those services.  These accounts are sometimes colloquially referred to as revolving or central services accounts.
 
Washington has both resolved and pending opioid related litigation against a number of entities.  One of the resolved cases relates to opioid distributors McKesson, Cardinal Health, and AmerisourceBergen Drug.  Aside from legal expenses, funds received by the state must be used for activities consistent with the list of opioid remediation uses contained in the settlement.  On December 8, 2022, the Office of Financial Management administratively created the State Opioid Settlement Account to facilitate initial receipt of the state share of certain opioid settlement funds.
 
The federal Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act became law on January 1, 2021.  This Act authorizes the Federal Emergency Management Agency to provide capitalization grants for eligible entities to make funding decisions and award loans directly to local communities.  The federal Infrastructure Investment and Jobs Act provided funding for the Safeguarding Tomorrow Revolving Loan Fund program by appropriating $500 million in total over a five-year timeframe.  Eligible entities are states, eligible federally recognized tribes, Puerto Rico, and the District of Columbia.
 
Activities of the Office of the Governor, including the Office of Equity, are primarily supported with appropriations from the State General Fund.
 
The Personnel Service Fund is a central service account supporting human-resources related activities provided by the Office of Financial Management to state agencies excluding higher education.  The Personnel Service Fund charge may not exceed 1.5 percent of salaries and wages in the classified service for each entity subject to the charge.  Agencies must be billed at least monthly.
 
The Higher Education Personnel Service Fund is a central service account supporting human-resources related activities provided by the Office of Financial Management to institutions of higher education.
 
The Office of Financial Management Central Service Account is a central service account supporting costs required for the operation and maintenance of statewide budgeting, accounting, forecasting, and related activities provided by the Office of Financial Management.
 
The Higher Education Personnel Service Fund charge may not exceed 0.5 percent of salaries and wages in the classified service for each entity subject to the charge.  Prior to the enactment of the Personnel Services Reform Act (PSRA) in 2002, employees and higher education institutions could elect to bargain under the Public Employees' Collective Bargaining, chapter 41.56 RCW.  If they did so, those employees were then excluded as classified employees for the purpose of calculating fees charged to higher education institutions.  When employees were excluded from the calculation under this provision, charges were recalculated beginning six months after the triggering action.  Since the enactment of the PSRA, higher education classified employees have bargained under the provisions of the State Collective Bargaining chapter, 41.80 RCW.  At the end of the six-month period, the Director of the Office of Financial Management must make across-the-board reductions in allotments of the Higher Education Personnel Service Fund unless additional funds are provided by the Legislature.
 
The Community Reinvestment Account was created by the 2022 Supplemental Operating Budget.  The purposes of the Community Reinvestment Account include:  (1) economic development, which includes addressing wealth disparities to promote asset building; (2) civil and criminal legal assistance to provide postconviction relief and case assistance; (3) community-based violence intervention and prevention services; and (4) reentry services to facilitate successful transitions for persons formerly incarcerated in an adult correctional facility or juvenile residential facility in Washington.  The distribution of the grants must be done in collaboration with the Governor's Office of Indian Affairs and "by and for community organizations."
 
The Electric Vehicle Incentive Account was created by the 2022 Supplemental Operating Budget.  The purposes of the Electric Vehicle Incentive Account include programs and incentives that promote the purchase or conversion to alternative fuel vehicles.
 
The Foundational Public Health Services Account was created in 2019.  The purposes of the account include foundational public health services with specific portions dedicated to tobacco, vapor product, nicotine control and prevention; substance abuse prevention; public health professionals training; and the Washington State Liquor and Cannabis Board enforcement of vapor product sales to minors.
 
The Public Employees' and Retirees' Insurance Account and the School Employees' Insurance Account are each used by the Health Care Authority to administer health benefits to certain categories of public employees.
 
Interfund loans within a school district budget are generally permissible except when used to balance the budget of the borrowing fund.
 
Beginning July 1, 2024, and annually thereafter, the State Treasurer is required to distribute moneys in the Climate Investment Account into the Climate Commitment Account and the Natural Climate Solutions Account.

Summary of Amended Bill:

 New Accounts.
The Opioid Abatement Settlement Account (Settlement Account) is created in the State Treasury.  Allowable uses of the Settlement Account include the costs of future care, treatment, and other programs designed to:  (1) address the use and abuse of opioid products; (2) treat or mitigate opioid use or related disorders; or (3) mitigate other alleged effects of, including those injured as a result of, the opioid epidemic.  Revenue in the Settlement Account consists of settlement receipts and moneys received by the state and designated by the state to abate the opioid epidemic including the State v. McKesson Corp., et al. case, in addition to transfers from the existing Distributor Opioid Abatement Settlement Account.  The Settlement Account retains its own interest earnings.
 
The State Hazard Mitigation Revolving Loan Account (Mitigation Account) is created in the State Treasury.  Allowable uses of the Mitigation Account, consistent with federal law, include implementing the Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act program, including loans to local and tribal governments for:  (1) projects designed to mitigate the impact of natural hazards; (2) zoning and land use planning changes focused on low-impact development and community resiliency; (3) establishing and enforcing building codes for the protection of the building's users against disasters and natural hazards; and (4) technical assistance.  Revenue consists of federal STORM Act grants, appropriations and transfers of state funds, and repayments of moneys borrowed from the Mitigation Account.  The Mitigation Account retains its own interest earnings.
 
The GOV Central Service Account (GOV Account) is created in the State Treasury.  Allowable uses of the GOV Account include costs for the operation and maintenance of statewide equity functions, and the activities in the Office of Equity.  Revenue in the GOV Account consists of the fees and other charges to state agencies.
 
Existing Accounts.
The Personnel Service Fund charge may not exceed 1.5 percent of all salaries and wages for each entity subject to the charge.  Agencies must be billed at least quarterly.
 
The Higher Education Personnel Service Fund charge may not exceed 0.5 percent of all salaries and wages in the classified service for each entity subject to the charge.  References to obsolete collective bargaining language in effect prior to the enactment of the Personnel Services Reform Act in 2002 are removed.
 
The Office of Financial Management Central Service Account, during the 2023-25 biennium, may be used for the payment of salaries, wages, and other costs related to policy activities in the office.
 
Allowable uses for the Community Reinvestment Account are expanded, beginning July 1, 2025, to include agricultural and economic support and services available to historically marginalized communities.  The requirement that the distribution of grants be done in collaboration with the Governor's Office of Indian Affairs is removed.
 
Within the Foundational Public Health Services Account, specific set asides for tobacco, vapor product, nicotine control and prevention; substance abuse prevention; public health professionals training; and LCB enforcement of vapor product sales to minors are removed and all funding is dedicated to foundational public health services.
 
Moneys may be transferred between the Public Employees' and Retirees' Insurance Account and the School Employees' Insurance Account for short-term cash management and cash balance purposes.
 
For school districts, in fiscal year 2024, the proceeds of an interfund loan may be used to balance the budget of the borrowing fund, when the loan is used to address budget destabilization in the aftermath of the COVID-19 pandemic.  Additionally, interfund loans in fiscal year 2024 may be for a duration of two years.
 
The State Treasurer must begin distributing the moneys from the Climate Investment Account into the Climate Commitment Account and the Natural Climate Solutions Account on July 1, 2023, instead of July 1, 2024.
 
 Reenactments.
The Electric Vehicle Incentive Account is reenacted.

Appropriation: None.
Fiscal Note: Available.
Effective Date: Sections 1 through 13 and 15 through 17 contain an emergency clause and take effect July 1, 2023. Section 14 of the bill takes effect July 1, 2024.
Staff Summary of Public Testimony:

(In support) None.

 

(Opposed) None.

Persons Testifying: None.
Persons Signed In To Testify But Not Testifying: None.