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AGO 1957 No. 58 - May 06, 1957
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John J. O'Connell | 1957-1968 | Attorney General of Washington


A public utility district may provide retirement benefits to its employees as part of its "group insurance" program.

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                                                                    May 6, 1957

Honorable Martin J. Durkan
State Representative, 31st District
908 American Building
Seattle 4, Washington                                                                                                                Cite as:  AGO 57-58 No. 58

Dear Sir:

            This will acknowledge receipt of your request for an opinion dealing with the right of a public utility district under the authority granted by chapter 54.04 RCW, to provide "group insurance" pursuant to contract negotiated by collective bargaining for the employees of the district in question.

            You have particularly called our attention to the existing plan afforded to the employees of the Grant County Public Utility District prepared for distribution by the Aetna Insurance Company.  We paraphrase your inquiry as follows:

            Does chapter 54.04 of the Revised Code of Washington permit a public utility district to provide retirement benefits as a portion of a "group insurance" program maintained by a public utility district for its employees, pursuant to contract with the collective bargaining agent of the employees of such a public utility district?

            We answer your question in the affirmative.

             [[Orig. Op. Page 2]]


            The program offered by the Grant County Public Utility District to its employees, to which you have called our attention, provides retirement benefits in conjunction with a group insurance program, for the employees of the district.  In general, the plan compares favorably to that offered at the state level by the State Employees Retirement System, established pursuant to chapter 274, Laws of 1947, as amended by the Laws of 1949, 1951, 1953, 1955, and 1957.

            This office on June 8, 1950, issued an informal opinion to the prosecuting attorney of Grant County, which concluded that the Grant County Public Utility District group insurance and retirement program is permitted by chapter 54.04 RCW.  We have reviewed that opinion in its entirety, and we now concur that the plan of the Grant County Public Utility District is "group insurance," and that the plan is authorized by chapter 54.04 RCW.

            The authority of a public utility district to act in this manner must be derived from RCW 54.04.050, which provides in part as follows:

            "A district engaged in the operation of electric or water utilities may contract for group insurance for the benefits of ten or more of its employees, and pay all or any part of the premiums therefor out of the revenue derived from the operation of its properties. . . ."

            As observed in our letter of June 8, 1950, even though the above authority was passed by the legislature in 1941, whereas the present insurance code was not passed until 1947, the 1941 enactment was so broad and comprehensive it is our considered opinion that it must have intended to include within the term of "group insurance" any type of insurance which subsequent legislatures might include within such class.  If the legislature intended to limit the scope of the term, it could easily have done so.

            As observed in our letter of June 8, 1950:

            "The situation is quite similar to that involved in the so-called 'reference statutes,' a subject discussed in 50 A.J. at page 57 et seq.  Where the adopting statute  [[Orig. Op. Page 3]] makes no reference to any particular statute, but refers to the law generally which covers a particular subject the reference in such case not only includes the law in force at the date of the adopting act, but also all subsequent laws on the particular subject referred to.  50 A.J., pages 58-59.  Corkery v. Hinkle, 125 Wash. 671, 217 Pac. 47; State v. Rasmussen, 14 Wn. (2d) 397, 128 Pac. 318.  We believe we must hold that the legislature in authorizing public utility districts under the conditions named to enter into contracts of 'group insurance,' in effect adopted the law pertaining to 'group insurance' as such law might be changed by future legislatures.

            ". . .

            "It should be noted that section 11616-6 Rem. Supp. 1941 has no application unless the public utility district is actually operating and deriving revenue from which the cost of the group insurance can be paid.  Here the public utility district is actually operating and is an activity which is being carried on in a purely proprietary capacity and of the same general nature as that which private corporations or individuals formerly had the exclusive right to carry on.  We call your attention to the case of Christie v. Port of Olympia, 27 Wn. (2d) 534, 179 P. (2d) 295, a case involving the implied powers of a port district to pay compensation to longshoremen.  In such opinion the court said, at page 548:

            "'. . . We are dealing with a very general grant of powers to a municipal corporation, but one that is not created to govern in any such sense as in the case of a county or a city, but only to engage in purely proprietary undertakings in direct competition with private corporations or individuals engaged in the same business. . . .'

            "and further, on page 550, the opinion says:

            "'. . . we think a port necessarily has the implied power to make such contracts relating to wages, hours, vacations, and so forth as are customarily offered to longshoremen by its competitors in the same business. . . .'"

             [[Orig. Op. Page 4]]

            We find the case ofChristie v. Port of Olympia, supra, to be particularly persuasive in the instant situation.  Therefore, we conclude that inasmuch as public utility districts are actively competing with private utilities of a similar nature, our court would also hold that a public utility district necessarily has the implied power to make contracts relating to wages, hours, vacations, group insurance programs with retirement provisions, etc., such benefits being customarily offered to employees of its competitors in the same business.

            I trust that the foregoing will be of assistance to you.

Very truly yours,

Attorney General

Chief Assistant Attorney General

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