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AGO 1968 No. 31 - October 02, 1968
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John J. O'Connell | 1957-1968 | Attorney General of Washington


FUNDS - STATE GENERAL - PAYMENT OF STATE TORT CLAIM JUDGMENTS.

(1) The tort claims account in the state general fund cannot be regarded as a revolving fund under present law; therefore, tort judgments against the state can only be paid to the extent that appropriations have been made by the legislature for their payment from this account.

(2) After the $400,000 originally allocated from the governor's emergency appropriation to the tort claims account for the current biennium by the 1967 legislature is expended, the governor may not allocate any additional funds from his emergency appropriation to this account.

(3) The governor may not allocate funds to the tort claims account from his contingency fund, under the terms of this appropriation for the current biennium, even upon approval of 60% of the legislative budget committee and the legislative council.

                                                              - - - - - - - - - - - - -

                                                                 October 2, 1968

Honorable Walter C. Howe, Jr.
Budget Director
Central Budget Agency
Insurance Building
Olympia, Washington 98501

                                                                                                                 Cite as:  AGO 1968 No. 31

Dear Sir:

            By letter previously acknowledged you have requested the opinion of this office on several questions pertaining to the availability of funds to pay tort claims and judgments against the state.  We paraphrase your questions as follows:

            (1) Can the tort claims account in the state general fund be considered a revolving fund, from which funds can be disbursed as they are paid into the account by state agencies under the provisions of RCW 4.92.170?

            (2) After the $400,000 originally allocated from the governor's emergency appropriation to the tort claims account for the current biennium by the 1967 legislature is expended, may the governor allocate any additional funds from his emergency appropriation to this account?

            (3) May the governor allocate funds to the tort claims  [[Orig. Op. Page 2]] account from his contingency fund, under the terms of this appropriation for the current biennium, upon the approval of 60% of the legislative budget committee and the legislative council?

            We answer all three questions in the negative for the reasons set forth in the following analysis.

                                                                     ANALYSIS

            In your letter you have acknowledged that advice has previously been given by this office to your office, either by prior opinion, informal memoranda, or verbal communication, on each of these questions.1/   The purpose of your present request, as we understand it, is to obtain official review and confirmation of our earlier advice in anticipation of the forthcoming 1969 legislative session.

            Question (1):

            Your first question asks whether or not funds which are reimbursed to the tort claims account as the result of action by the budget director under RCW 4.92.170 may be utilized for expenditure without specific appropriation during the same biennium in which they are reimbursed to the tort claims account.

             [[Orig. Op. Page 3]]

            The tort claims account in the general fund is established by RCW 4.92.130, which provides in pertinent part as follows:

            "A tort claims account in the state general fund is hereby created to be used solely and exclusively for the payment of claims against the state arising out of tortious conduct. . . ."

            RCW 4.92.170, as a basis for subsequent provisions regarding reimbursements, declares in pertinent part as follows:

            "Liability for and payment of claims arising out of tortious conduct is declared to be a proper charge as part of the normal cost of operating the various agencies and departments of state government whose operations and activities give rise to the liability and a lawful charge against moneys appropriated or available to such agencies and departments."

            The same statute then goes on to provide:

            "State agencies over which the budget director has authority to revise allotments under chapter 43.88 RCW shall make reimbursement to the tort claims account for any payment made from it for the benefit of such agencies.  The budget director is authorized and directed to transfer or order the transfer to the account, from moneys available or appropriated to such agencies, that sum of money which is a proper charge against them: . . ."

            In our opinion dated September 10, 1965, written to your office, we concluded that reimbursements received in this manner in one biennium could not be expended without appropriation in the next biennium.  In so concluding we reasoned that disbursements from the tort claims account can only be made pursuant to a specific appropriation.  The basis of that conclusion is Article VIII, § 4 (Amendment 11), Washington state constitution, providing as follows:

            "No moneys shall ever be paid out of the treasury of this state, or any of its funds, or any of the funds under its management, except in pursuance of an appropriation by law; nor unless such payment be made within one  [[Orig. Op. Page 4]] calendar month after the end of the next ensuing fiscal biennium, and every such law making a new appropriation, or continuing or reviving an appropriation, shall distinctly specify the sum appropriated, and the object to which it is to be applied, and it shall not be sufficient for such law to refer to any other law to fix such sum."

            The same reasoning compelled the conclusion in a subsequent memorandum that reimbursements to the tort claims account in one biennium may not be expended during the same biennium without appropriation, in the absence of a statute establishing the tort claims account as a revolving fund.  In our memorandum to your office dated April 16, 1968, we said:

            ". . . It is our position that the proviso in the governor's emergency fund appropriation, which authorizes the governor to allocate up to a specified amount to the tort claims account, does constitute an appropriation to the tort claims account, and that the amount specified for allocation constitutes a ceiling on the amount of disbursements that can be made for the payment of tort claims during that biennium.  Furthermore, it is our position that the tort claims account was not established as a revolving-fund-type account.

            "The above conclusion is substantially the same as that presented in an informal opinion from our office dated September 10, 1965 . . .  The principles stated above are implicit in our affirmative answer to that question and also in our negative answer to another question from Mr. Stastny (former budget director) asking whether reimbursements during one biennium would be available for expenditure during an ensuing biennium without an additional appropriation for that purpose."2/

             [[Orig. Op. Page 5]]

            We then pointed out, in our memorandum, that no change in the statutes was sought by the budget director, and the legislature did not make any changes in the law during its 1967 session, which would warrant any different conclusion.  It is a well-known principle of statutory construction that when an interpretation is placed upon statutes by those responsible for their interpretation and enforcement, and the legislature acquiesces in that interpretation, the executive interpretation will be afforded great weight in any civil action involving the interpretation of the statute.  Huntworth v. Tanner, 87 Wash. 670, 152 Pac. 523 (1915); State ex rel. Ball v. Rathbun, 144 Wash. 56, 256 Pac. 330 (1927);In re Smiley's Estate, 35 Wn.2d 863, 216 P.2d 212 (1950);White v. State, 49 Wn.2d 716, 306 P.2d 230 (1957).

            In the present case, as noted in our April 16, 1968, memorandum, the attorney general's office has construed a statute in a certain way, the budget director has administratively followed that construction, and the legislature although  [[Orig. Op. Page 6]] meeting in the interim has taken no steps to change the result.  Therefore, the reasoning of our September 10, 1965, opinion must be considered to be the interpretation accepted by the legislature itself, and the conclusion of our April 16, 1968, memorandum must be affirmed.

            Question (2):

            Turning to your second question, the answer has been stated in clear and unequivocal terms by the legislature itself.  Section 1, chapter 143, Laws of 1967, Ex. Sess., supra, relating to the governor's emergency appropriation provides in pertinent part that ". . . not to exceed $400,000 may be allocated for payments of tort claims in accordance with RCW 4.92.160 and 4.92.170."

            Question (3):

            Your third question asks whether the allocation from the governor's emergency fund may be supplemented by further allocation from the contingency fund upon approval of 60% of the legislative budget committee and the legislative council.

            The source of the governor's contingency fund is another section of chapter 143, Laws of 1967, Ex. Sess., the appropriation act.  Section 5 provides as follows:

            "There is hereby appropriated from the General Fund the sum of $10,000,000, or so much thereof as may be necessary for allocation to state agencies, departments and institutions to meet any catastrophe, disaster or unforeseen or unanticipated condition or circumstance or abnormal change of condition or circumstance affecting the functions of the state agency, department or institutions: PROVIDED, That no expenditure shall be made herefrom except such as shall be certified by the Governor as meeting the requirements hereof and has been approved by a sixty percent majority each of the Legislative Budget Committee and the Legislative Council."  (Emphasis supplied.)

            Section 6 explains the use of the word "agency" as follows:

            "The word 'agency' used herein shall mean and include every state government office, officer,  [[Orig. Op. Page 7]] each institution, whether educational, correctional, or other, and every department, division, board and commission, except as otherwise provided in this act.

            ". . ."

            While none of our previous opinions or memoranda discuss this specific question, there have been conversations with one or more members of your staff in which members of this office, including this writer, expressed doubt that the contingency fund could be used for that purpose.

            Our present answer to this question must be also in the negative.

            An unusual number of tort claim judgments against an agency would undoubtedly affect the agency's functions, within the meaning of § 5, if payable immediately from the appropriations of that agency.  However, that is not the case.  Such judgments, or compromised claims, are payable ". . . solely and exclusively . . ." from the tort claims account created by RCW 4.92.130.  The legislature has thus intentionally provided a shield against an agency's functions being drastically affected by reason of unanticipated tort claims or judgments.

            As further protection, the legislature added a proviso to the language of RCW 4.92.170, which we have quoted above, as follows:

            "State agencies over which the budget director has authority to revise allotments under chapter 43.88 RCW shall make reimbursement to the tort claims account for any payment made from it for the benefit of such agencies.  The budget director is authorized and directed to transfer or order the transfer to the account, from moneys available or appropriated to such agencies, that sum of money which is a proper charge against them: Provided, That in any case where reimbursement would seriously disrupt or prevent substantial performance of the operations or activities of the state agency, the budget director may relieve the agency of all or a portion of the obligation to make reimbursement."  (Emphasis supplied.)

             [[Orig. Op. Page 8]]   Thus, there would be no occasion for unanticipated tort judgments (over the $400,000 allocated amount) to affect any state agency's operations within the meaning of § 5, unless:

            (1) The excess claims were paid out of funds already allocated to the tort claims account from some source (such as the contingency fund);

            (2) The budget director subsequently required reimbursement from the agency, as to such additional amounts expended, under the authority of RCW 4.92.170.

            Neither of these conditions could occur once the original $400,000 allocation is exhausted unless the language of § 5 were so generally worded as to allow allocations from the contingency fund merely because of a desire of the governor or budget director to pay tort judgments in excess of the original $400,000 allocation.

            That, again, is not the case.  Specific causes are required for allocation, and no such cause can exist, under the statutes relating to payment of tort claims, once the $400,000 original allocation has been exhausted.

            We are again compelled to the conclusion that § 1, chapter 143, Laws of 1967, Ex. Sess., was intended to be a ceiling upon the amount payable to satisfy tort claims during this biennium.  To permit the use of the contingency fund at this time to supplement the appropriation would be in effect a violation of the ceiling placed by the legislature itself upon that class of expenditures.

            In summary, it is our opinion that:

            (1) Reimbursements from agencies to the tort claims account pursuant to RCW 4.92.170,supra, may not be reexpended for the purpose of paying tort claims without further legislative appropriation.

            (2) The $400,000 allocation from the governor's emergency fund, authorized by § 1, chapter 143, Laws of 1967, Ex. Sess., constitutes a ceiling upon the amount that may be expended for the payment of tort claims during the 1967-1969 biennium.

            (3) The $400,000 allocation which may be made from the governor's emergency fund may not be supplemented by further  [[Orig. Op. Page 9]] allocation either from that fund or from the contingency fund created by § 5 of the same act.

            We trust this information will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

ROBERT F. HAUTH
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/The substance of this earlier advice is that the $400,000 allocation to the tort claims account in the 1967 appropriation act constitutes an absolute ceiling and cannot be supplemented by:

            (1) Treating the tort claims account as a revolving fund thereby making reimbursements available for expenditure during the same biennium;

            (2) Supplementation from the governor's emergency fund; or

            (3) Supplementation form the contingency fund, upon approval of 60% of the legislative budget committee and the legislative council.

2/By way of explanation the legislature has never declared the tort claims account to be a revolving account or that any of the reimbursements to the account could be reexpended without further appropriation (which would amount to the same thing).  In enacting these statutes the legislature presumably had in mind the provisions of the budget and accounting act, and particularly RCW 43.88.190, which provides in pertinent part as follows:

            "Revolving funds shall not be created by law except to finance the operations of service units, or units set up to supply goods and services to other units or agencies.  Such service units where created shall be self-supporting operations featuring continuous turnover of working capital. . . ."  [The legislature is presumed to be familiar with existing laws on any given subject.  State v. Thornbury, 190 Wash. 549, 69 P.2d 815 (1937).]

            Instead, from its inception, the tort claims account has been funded by special appropriations.  As noted in our September 10, 1965, opinion to you, in both the 1963 and 1965 legislative sessions the legislature appropriated ". . . not to exceed . . ."  a certain sum out of a general fund appropriation to the governor, making up the so-called "Governor's Emergency Fund."  Cf., § 1, chapter 21, Laws of 1963, Ex. Sess.; also, § 1, chapter 169, Laws of 1965, Ex. Sess.  The same procedure was followed in the 1967 session of the legislature.  See, § 1, chapter 143, Laws of 1967, Ex. Sess.

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