WSR 01-21-043

OFFICE OF THE GOVERNOR


[ Filed October 12, 2001, 2:51 p.m. ]

October 11, 2001

Mr. Bobby J. Woolley

4007 S.W. 325th Street

Federal Way, Washington 98023


Re: Appeal of the August 6, 2001 denial by the Department of Retirement Systems (the "Department") of that certain Petition for repeal of WAC 415-112-0161(1), filed by Bobby J. Wooley (the "Petition")

Dear Mr. Woolley:


Pursuant to RCW 34.05.330(3), I have reviewed your appeal of the Department of Retirement Systems' decision denying your Petition to initiate rule-making proceedings for repeal of WAC 415-112-0161(1). That WAC subsection defines "school year" for Teachers' Retirement System (TRS) Plan I members as the fiscal year running from July 1 to June 30.


While I have denied your appeal for reasons discussed below, you have raised an important issue, and I have requested the Department to investigate legislative solutions.


It is my policy to intervene in matters under RCW 34.05.330(3) only when I believe the administrative agency whose decision is at issue has abused its discretion or acted arbitrarily or capriciously. It is also my policy not to second-guess the thoughtful and deliberate decisions of a state agency, so long as those decisions are well-founded and proper under the law. This is an extremely high standard of review.


Your appeal raises a legal question regarding whether or not the Department's rule, which defines "school year" for TRS Plan I as the fiscal year running from July 1 to June 30, reflects the intent of statutes governing this retirement plan. There are three pertinent statutes related to this issue. They are RCW 41.32.498(2), which describes the retirement allowance for members and references "earnable compensation;" RCW 41.32.010 (10)(a)(i), which defines "earnable compensation" for Plan I members and specifies that it includes salaries and wages for services rendered during a "fiscal year"; and RCW 41.32.010(12), which defines "fiscal year" as a year beginning July 1 and ending June 30 of the following year.


After reviewing these statutes and the implementing rule, the Department's action on your appeal, and the arguments offered in your appeal, I have determined that the Department had a strong legal basis for denying your Petition. In adopting that rule and in denying your Petition for repeal, the Department did not abuse its discretion or act arbitrarily or capriciously. Following are my reasons for this determination.


First, in adopting WAC 415.112.0161(1), the Department was performing its statutory duty to adopt administrative rules to carry out the purposes of the law. In carrying out that duty, the Department must adopt rules that are based on statutes that specifically pertain to the program in question. Chapter 41.32 RCW deals specifically with teachers' retirement and defines the type of year that must be used to calculate Plan I benefits. The Department, therefore, correctly chose to base its rule on the clear and specific language contained in that RCW Chapter.


I do not believe that the Department's decision to base Plan I benefits on language contained by Chapter 41.32 RCW is rooted in false premises, as you argued in your Petition. To do otherwise, such as using the school year definition contained in RCW 28A.150.040, as you proposed in your Petition, would be a misapplication of law, since that definition applies to the allocation and distribution of state funds to school districts. RCW 28A.150.040 was clearly not intended to be used in making administrative decisions for Plan I members regarding earnable compensation, retirement dates, and service credit.


In denying your petition for repeal of WAC 415.112.0161(1), I am not, however, rejecting the possibility that current law may not be adequate, particularly as it is applied to extended school year teachers retiring from schools on a continuous-learning calendar. As you know, for these teachers in TRS Plan I, the typical continuous-learning school calendar extends beyond the end of the fiscal year (June 30th).


For that reason, I have requested the Department to evaluate the relevant statutes. In conducting this evaluation, I expect the Department to review many of the issues and concerns raised in your Petition. The Department will report back to me this year as to the advisability of supporting legislation that will make appropriate changes in law. I understand that the Legislative Joint Committee on Pension Policy is also examining this issue.


While I have denied your petition, I must commend you for your extensive efforts and strong commitment to ensure that important laws are faithfully implemented.


Sincerely,

Gary Locke

Governor

cc: Dennis W. Cooper, Code Reviser
Tim Martin, Co-Chief Clerk, House of Representatives
Cindy Zehnder, Co-Chief Clerk, House of Representatives
Tony Cook, Secretary of the Senate
John Charles, Department of Retirement Systems

Washington State Code Reviser's Office