AGLO 1977 No. 22 - Jun 2 1977
COLLEGES AND UNIVERSITIES ‑- REGENTS ‑- TRUSTEES ‑- SOCIAL SECURITY ‑- OASI COVERAGE FOR COLLEGE REGENTS AND TRUSTEES
(1) Payments received by college or university trustees or regents under RCW 28B.10.525, prior to its amendment by § 72, chapter 34, Laws of 1975-76, 2nd Ex.Sess., were subject to employees' contributions for federal social security under chapter 41.48 RCW.
(2) Under RCW 41.48.040 it is the responsibility of an employer (including a state college or university) to cause employees' contributions for federal social security to be collected and remitted to the state and the fact that a particular individual is no longer serving as a regent or trustee does not terminate that obligation insofar as past due contributions are concerned.
(3) Past due employers' social security payments covering services rendered during a prior biennium may only be made from a current appropriation for that purpose or from such local funds as are not subject to the appropriation process under Article VIII, § 4 (Amendment 11) of the state constitution and the budget and accounting act.
(4) Payments made to members of a college or university board of regents or trustees under RCW 28B.10.525, as amended by § 72, chapter 34, Laws of 1975-76, 2nd Ex. Sess., do not constitute "wages" as defined in RCW 41.48.020(1) and, for that reason, are no longer subject to employers' or employees' contributions for federal social security.
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June 2, 1977
Honorable Donn Charnley
State Representative, 44th District
301 House Office Building
Olympia, Washington 98504 Cite as: AGLO 1977 No. 22
By letter previously acknowledged you requested our opinion [[Orig. Op. Page 2]] on several questions pertaining to federal social security coverage for members of the various state college and university boards of regents or trustees. We will state the essence of your questions, together with our answers thereto, within the body of our analysis.
Prior to its amendment by § 72, chapter 34, Laws of 1975-76, 2nd Ex. Sess., RCW 28B.10.525 read as follows:
"Each member of a university board of regents or college board of trustees of a state institution of higher education, shall be entitled to receive, in lieu of per diem or any other payment, for each day or major portion thereof in which he is actually engaged in business of the board, notwithstanding any laws to the contrary, twenty-five dollars per day, plus mileage allowance at the rate of ten cents per mile."
By reason of the foregoing 1976 amendment, however, RCW 28B.10.525 now provides, instead, that:
"Each member of a university board of regents or college board of trustees of a state institution of higher education, shall be entitled to receive travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended for each day or major portion thereof in which he is actually engaged in business of the board."
Your first question is whether such payments as were received by individual regents or trustees under RCW 28B.10.525, supra, prior to its amendment by the 1976 legislature were subject to employees' contributions for federal social security under chapter 41.48 RCW. Our answer is in the affirmative.
RCW 41.48.040, which deals with employees' contributions for federal social security in the case of state employees, reads as follows:
"(1) Every employee of the state whose services are covered by an agreement entered into under RCW 41.48.030 shall be required [[Orig. Op. Page 3]] to pay for the period of such coverage, into the contribution fund established by RCW 41.48.060, contributions, with respect to wages (as defined in RCW 41.48.020), equal to the amount of employee tax which would be imposed by the federal insurance contributions act if such services constituted employment within the meaning of that act. Such liability shall arise in consideration of the employees' retention in the service of the state, or his entry upon such service, after the enactment of this chapter.
"(2) The contribution imposed by this section shall be collected by deducting the amount of the contribution from wages as and when paid, but failure to make such deduction shall not relieve the employee from liability for such contribution.
"(3) If more or less than the correct amount of the contribution imposed by this section is paid or deducted with respect to any remuneration, proper adjustments, or refund if adjustment is impracticable, shall be made, without interest, in such manner and at such times as the state agency shall prescribe."
For the purposes of this statute the term "employee" is defined by RCW 41.48.020(3) to include:
". . . all officers and employees of the state or its political subdivisions except officials compensated on a fee basis;"
Also to be noted is the definition of "wages" in RCW 41.48.020(1); i.e.,
". . . all remuneration for employment as defined herein, including the cash value of all remuneration paid in any medium other than cash, except that such term shall not include that part of such remuneration which, even if it were for 'employment' within the meaning of the federal insurance contributions act, would not constitute 'wages' within the meaning of that act;"
[[Orig. Op. Page 4]]
We do not believe that payments made to individual regents or trustees under RCW 28B.10.525,supra, prior to its amendment, are susceptible to be characterized as "fees" as that term is used in RCW 41.48.020(3),supra. The term "fee", instead, denotes a form of compensation paid in return for the performance of a particular statutory or contractual service whereas, in this case, regents or trustees were entitled to be paid, under RCW 28B.10.525, supra, on the basis of given time periods during which they were ". . . actually engaged in business of the board." On the other hand, we are equally unpersuaded that the payments in question, prior to the 1976 amendment, could properly be characterized as mere expense reimbursements. Contrast, in that regard, the current version of the statute which, as amended, is now clearly an expense reimbursement statute only.
Therefore, it necessarily follows that the pre‑1976 payments constituted a form of "wages" as defined in RCW 41.48.020, supra. And that, in turn, obviously meant that those payments were subject to the employee contribution procedures under RCW 41.48.040,supra.
Your second question assumes the foregoing answer to question (1) and asks:
". . . does a college . . . have any obligation to recover a trustee's contribution from an individual who once was, but no longer is, a member of the board of trustees of that . . . [college]?"
Under RCW 41.48.040,supra, it is the responsibility of an employer to cause employees' contributions for federal social security to be collected and remitted to the state. Thus, at this time, the administrators of the social security program within the state department of employment security may properly look to each such institution for any employees' constributions which are currently due and owing in accordance with our answer to your initial question. In turn, each such college or university will undoubtedly have a legal basis for seeking reimbursement from the individuals involved ‑ irrespective of whether or not they are still serving as regents or trustees of the particular institution. Whether and to what extent that right will be asserted in any particular case, however, will presumably [[Orig. Op. Page 5]] be dependent upon various factual circumstances involving a balancing of the potential recovery against the costs involved in pursuing the matter.
Your next question concerns the correlative "employers'" social security contributions provided for under chapter 41.48 RCW and asks:
". . . is there any legal authority for a community college district to pay the 'employer's' social security contribution related to such payments received by trustees in any fiscal biennium other than the current one?"
Article VIII, § 4 (Amendment 11) of the state constitution, as you know, provides that:
"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 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."
Given the existence of a legal obligation on the part of a state agency to pay an employer's social security tax it is, however, quite clear that the obligation itself is not terminated merely because the biennium in which it was incurred has passed. Instead, the only consequence of that fact would be a question as to the constitutional availability of funds with which to discharge that obligation. Moneys appropriated solely to cover the expenses of an agency during the current biennium may not be used to pay debts incurred during a prior biennium. Therefore, in seeking to enforce such past obligations a creditor (in this case the social security division of the department of employment security) must look either to local funds which are not subject to the appropriation process or to such funds as may have been specifically appropriated by the legislature to pay belated claims
[[Orig. Op. Page 6]]
Your next question asks whether, in terms of our basic answer to question (1),supra, any distinction is to be drawn between the following circumstances:
"a) A trustee attends a special or regular meeting of the board of trustees of several hours duration, but incurs no travel or subsistence expense as a result; however, he is reimbursed $25 as authorized by statute.
"b) A trustee attends a meeting as a representative of the board of trustees, travels to another city, and requires overnight lodging. He is reimbursed $25 for each day of such service as authorized by statute."
We see no reason to distinguish between the two situations thus described. In neither case was the trustee involved being paid a mere expense reimbursement stipend. Instead, irrespective of his or her own factual situation, the $25 payment was paid, under the "old" version of the statute, as a form of compensation or "wages." In other words, we do not believe that the proper legal characterization of the payment can be said to be affected by the personal costs incurred by a given regent or trustee in performing the services for which the payment was made.
Finally you have asked whether, and to what extent, the foregoing is now different by reason of the amendment to RCW 28B.10.525 which was enacted by § 72, chapter 34, supra.
Basically, we have already answered that question in passing, in our response to question (1), supra. As amended, RCW 28B.10.525,supra, is now strictly an "expense reimbursement" statute. Accordingly, payments made thereunder no longer constitute "wages" as defined in RCW 41.48.020(1),supra, and, for that reason, they are no longer subject to employees' contributions for federal social security under RCW 41.48.040, supra.
It is hoped that the foregoing will be of some assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General