AGO 1959 No. 4 - Jan 21 1959
OFFICES AND OFFICERS ‑- STATE AUDITOR ‑- AUTHORITY TO PAY CERTAIN FUNDS OUT OF THE STATE TREASURY WITHOUT AN APPROPRIATION.
(1) The state accident fund, medical aid fund, reserve accident fund, state employees' retirement fund teachers' retirement pension reserve fund, volunteer firemen's relief and pension fund, and Washington state patrol retirement fund are not required by state constitution to be appropriated by the legislature prior to expenditure.
(2) The accident, reserve accident, and medical aid funds are subject to legislative appropriation by direction of the legislature.
(3) Moneys in the state employees' retirement, teachers' retirement pension reserve, volunteer firemen's relief and pension, and Washington state patrol funds, may be expended without legislative appropriation.
(4) The director of budget is authorized to provide information by which the budget will accurately reflect the amount of money appropriated by the legislature.
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January 21, 1959
Honorable Cliff Yelle
Olympia, Washington Cite as: AGO 59-60 No. 4
Because of the present practice of twice appropriating certain funds in the state treasury, thereby producing an overall appropriation figure which is much greater than actual appropriations, you have requested an opinion of this office which we paraphrase as follows:
Since the state auditor is prohibited by the state constitution from paying out of the state treasury any moneys except in pursuance of an appropriation by law, is there any course that may be followed so that the budget would reflect a true appropriation figure and the state auditor could legally issue warrants against the funds?
[[Orig. Op. Page 2]]
The specific funds to which you direct our attention are the accident fund, medical aid fund, reserve accident fund, state employees' retirement fund, teachers' retirement pension reserve fund, volunteer firemen's relief and pension fund, and Washington state patrol retirement fund.
The answer to your question is contained in the analysis.
None of the funds involved in your question are necessarily subject to the appropriation requirements of the 11th amendment to the Washington State Constitution. Of the funds enumerated, the accident, reserve accident, and medical aid funds are subject to specific appropriation by virtue of the legislation by which they are created. Moneys in the state employees' retirement, teachers' retirement pension reserve, volunteer firemen's relief and pension, and Washington state patrol funds, however, may be expendedwithout legislative appropriation.
The 11th amendment (Article 8, § 4) of the Washington Constitution reads 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 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."
Our state supreme court has evolved three distinct general rules with regard to the applicability of the 11th amendment to particular funds:
(1) State funds derived from the general revenue of the state, which are required by the constitution to be deposited in the state treasury, may be expendedonly pursuant to a specific appropriation as required by the 11th amendment.
(2) But an appropriation is not necessary when the legislature has created a special fund of a "proprietary nature" from funds not required by the constitution to be placed in the general fund.
[[Orig. Op. Page 3]]
(3) Funds which are not required by the constitution to be deposited in the general fund but which are nevertheless, by legislative direction, made a part of the general fund maynot be expended except pursuant to applicable legislative appropriation.
State ex rel. Employees' Retirement Board v. Yelle, 31 Wn. (2d) 87, 195 P. (2d) 646 (1948);State ex rel. Washington Toll Bridge Authority v. Yelle, 195 Wash. 636, 82 P. (2d) 120 (1938); State ex rel. Shuff v. Clausen, 131 Wash. 119, 229 Pac. 5 (1924);State ex rel. Davis v. Clausen, 160 Wash. 618, 295 Pac, 751 (1931);State ex rel. Sherman v. Pape, 103 Wash. 319, 174 Pac. 468 (1918); AGO 57-58 No. 131 [[to L. H. Burrus, Washington State Teachers' Retirement System on November 14, 1957]]; AGO 53-55 No. 308 [[to P. R. Giovine, Department of Employment Security on September 1, 1954]].
InState ex rel. Washington Toll Bridge Authority v. Yelle, supra, the court expressed the following conclusions with regard to funds of the Toll Bridge Authority:
"In the final analysis, the test of whether the state treasurer, under this act, is acting as such, or merely as a convenient, qualified, and suitable official to serve as the custodian of the funds of an administrative body, namely, the toll bridge authority, is whether its funds are required by the constitution to be placed with the state treasurer. The mere fact that the state treasurer is called upon to render certain services with respect to these funds in no wise makes the moneys so received by him state funds in the state treasury.
"Viewing the act as a whole, and bearing in mind that the great bulk of the revenue of the toll bridge authority are not taxes, that the funds deposited with the treasury were expressly declared not to be state funds, that the funds were to be credited to the toll bridge authority and segregated from all other funds and not to be paid into the state treasury, we think the legislature could have provided that the funds of the toll bridge authority be paid into a revolving fund as in the Washington state liquor act, supra, or placed in the custody of some other competent and qualified state official, and therefore the funds of the toll bridge authority under this act may be expended as directed by the legislature without a specific appropriation." (p. 648)
[[Orig. Op. Page 4]]
The fundamental question then, in determining the applicability of the 11th amendment to any given fund not required by the constitution to be paid into the state treasury, is one of legislative intent‑-whether as a matter of statutory construction the legislature has in fact created a state fund subject to the constitutional restriction, or whether, on the contrary, it has simply established a special proprietary fund to be expended as directed by the legislature without a specific appropriation.
The court inState ex rel. Employees' Retirement Board v. Yelle, supra, in ruling that moneys in the employees' savings fund of the state retirement system were not subject to legislative appropriation set forth certain factors upon which they based their determination of legislative intent as follows:
"(a) The act obviously contemplates the establishment of a retirement system for the benefit of state and municipal employees, approximating in principle a plan of insurance, to be administered with as little governmental restriction as possible, consistent with the expeditious accomplishment of its objectives;
"(b) the members of the retirement board are vested with the authority and charged with the responsibility of making the provisions of the act effective;
"(c) the members of the board are made trustees of the funds created by the act with full power to invest such funds in certain types of bonds and in appropriate contracts of life insurance or annuity;
"(d) the retirement board is required to keep on deposit in the state treasury only such amounts as does not exceed ten per cent of the total amount of the funds provided by the act, for the purpose of meeting disbursements for annuities and other payments in excess of the receipts;
"(e) the state treasurer who is a member of the retirement board is designated by the act ascustodian of the funds belonging to the administrative body;
"(f) the state treasurer is not required to deposit in the manner required for the deposit of [[Orig. Op. Page 5]] state funds, any portion of the funds of the retirement systemneeded for immediate use;
"(g) the state treasurer is required to furnish to the retirement board an annual 'statement of the amount of the funds in his custody belonging to the Retirement System,' copies of which shall be available to the members of the system;
"(h) the moneys in the employees' savings fund . . . are not derived from taxes which under Art. VII, § 6, of the constitution must be paid into the state treasury, but are contributions of the employees themselves, deducted from their earnable compensation;
"(i) the members' deductions or contributions must be transmitted to the retirement board and by it paid to the state treasurer 'for use according to the provisions of this act';
"(j) the board must make refund of such contributions, upon written request, to any member who ceases to be an employee before becoming eligible to retirement benefits;
"(k) if a member dies before his service retirement becomes effective, the amount of his contributions shall be paid to certain persons nominated by the member in writing, or else to his legal representatives, thus indicating the proprietary interest of the member in the fund in which such contributions are placed;
". . .
"(m) the funds of the retirement system shall be disbursed by the state auditorupon vouchers duly authorized by the retirement board;
"(n) any member withdrawing his contributions from the employees' savings fund is entitled to interest thereon;
"(o) the legislature made an appropriation of one hundred thousand dollars to the expense fund, for [[Orig. Op. Page 6]] costs of administering the act, but made no appropriation for any of the other funds created by the act, thus evidencing the deliberate intention of the legislature not to make any appropriation to those other funds because the legislative body was of the view that such funds were capable of disbursement without further legislative appropriation." (pp. 111-113)
We turn now, to a discussion of each separate fund:
STATE ACCIDENT FUND
RCW 51.44.010 reads as follows:
"There shall be, in the office of the state treasurer, a fund to be known and designated as the 'accident fund.'"
This language is a codification of section 1, chapter 247, Laws of 1947 which amended the original workmen's compensation act, chapter 74, Laws of 1911.
Section 4, chapter 74, Laws of 1911 prior to its amendment in 1947 read in part as follows:
". . . each employer shall, . . . pay into the state treasury, in accordance with the following schedule, a sum equal to a percentage of his total payroll . . . (p. 349)
"For the purpose of such payments, accounts shall be kept with each industry in accordance with the classification herein provided and no class shall be liable for the depletion of the accident fund from accidents happening in any other class. Each class shall meet and be liable for the accidents occurring in such class. . . .
"The fund thereby created shall be termed the 'accident fund' which shall be devoted exclusively to the purpose specified for it in this act." (p. 352)
[[Orig. Op. Page 7]]
In 1924, inState ex rel. Shuff v. Clausen, supra, the court seized upon the phrase "shall . . . pay into the state treasury", as conclusively indicative of a legislative intent that such funds be treated as state funds in the state treasury and thus subject to specific legislative appropriation.
In 1947, the legislature amended section 4 of the 1911 act to read as follows: (§ 1, chapter 247, Laws of 1947)
". . . each employer shall . . . pay into the State Treasury (1) for the accident fund and (2) for the medical aid fund, a certain number of cents for each man hour worked . . ."
In 1948, in the case ofState ex rel. Employees' Retirement Board v. Yelle, supra, the court in holding that the "employees' savings fund", an accounting subdivision of the employees' retirement fund, is a special fund not subject to legislative appropriation, cited with approval language in State ex rel. Toll Bridge Authority v. Yelle, supra, in which the court had distinguished the Shuff case, supra, on the grounds that the workmen's compensation act expressly required moneys for the accident fund to be paid into the state treasury. However, upon close scrutiny of the statutory provisions relating to the accident fund, most, if not all, of the standards established by the court in the employees' retirement case are met. In the Shuff case attention was directed by the court to the fact that the legislature had itself considered an appropriation necessary to the disbursement of accident fund moneys since it had consistently made appropriations from that fund. Following theShuff decision the legislature continued the practice of biennial appropriation from the fund. While enacting rather comprehensive amendments to the workmen's compensation act in 1947, the legislature failed to provide any language which would avoid the effect of theShuff decision and to this date the legislature has continued to make biennial appropriations from the accident fund.
It is a well recognized rule of statutory construction that the legislature is presumed to know the prior construction of an original act and if previously construed terms in the unamended sections are used in the amendment, it is an indication that the legislature intended to adopt the prior construction as to the terms used in the amendment. White v. State, 49 Wn. (2d) 716, 306 P. (2d) 230 (1957); Nyland v. Dept. of Labor and Industries, 41 Wn. (2d) 511, 250 P. (2d) 551 (1952);Adams v. The Building Service Employees International Union, Local No. 6, 197 Wash. 242, 84 P. (2d) 1021 (1938).
This is not to suggest that the mere fact that the legislature continues to make such appropriations is highly significant in itself but this, together with the apparent acquiescence of the legislature in the court's prior [[Orig. Op. Page 8]] interpretation of the workmen's compensation act, is persuasive.
The effect of this reasoning is only that moneys paid into the state treasury for the accident fund are within the constitutional prohibition against disbursements without a specific appropriation. Once a specific appropriation has been made, disbursements may be made in accordance with the terms of the act without further action on the part of the legislature. If this practice is followed the budget should then accurately reflect the actual amount of money allocated by way of appropriation for expenditure from the accident fund.
Those moneys which now constitute the reserve fund appear to have been first provided for in § 5, chapter 74, Laws of 1911, which reads in part as follows:
"For every case of injury resulting in death or permanent total disability it shall be the duty of the department to forthwith notify the state treasurer, and he shall set apart out of the accident fund a sum of money for the case, to be known as the estimated lump value of the monthly payments provided for it . . . The state treasurer shall invest said sum . . . and out of the same and its earnings shall be paid the monthly installments and any lump sum payment then or thereafter arranged for the case. . . ." (p. 359)
This language was amended by § 5, chapter 219, Laws of 1949 to read in part:
"There is hereby created, in the office of the state treasurer a fund to be known and designated as the Reserve Fund out of which shall be made the payments specified in this section for all cases of death or permanent total disability including future payments to be made for the cases of that character which have heretofore arisen." (p. 720)
Additional aspects of the reserve fund are as follows:
(1) In case of death or total disability the present cash value of the total monthly payments, calculated on the basis of an annuity, are to [[Orig. Op. Page 9]] be transferred from the accident fund to the reserve fund. (RCW 51.44.070.)
(2) Each year the surplus of money in the reserve fund over the then annuity value of the outstanding pension obligations of any class is to be returned to the accident fund. Conversely, any deficiency in such funds is to be paid out of the accident fund into the reserve fund. (RCW 51.44.080)
(3) To meet current demands for pension or lump sum payments the state treasurer may, if necessary, make temporary loans to the reserve fund out of the accident fund repaying the same from that reserve fund or from collections of its investments, or if necessary, sales of the same. (RCW 51.44.090)
(4) Whenever there are sufficient funds in the accident fund in excess of the amount sufficient to meet current expenditures, such funds may be invested by the state finance committee. (RCW 51.44.100)
(5) The investment and earnings and balance of the total reserve fund are required to be at all times, as nearly as possible, properly and fully invested. (RCW 51.44.090)
It appears that since the reserve fund is composed of moneys transferred from the accident fund for the purpose of meeting existing obligations, such moneys must be appropriated to the accident fund prior to their transfer to the reserve fund. To hold otherwise would be inconsistent with our conclusion concerning the accident fund, as it would ultimately mean that moneys in the accident fund may or may not be subject to appropriation depending upon whether they were disbursed upon warrants drawn against the accident fund or transferred to the reserve fund and subsequently disbursed upon warrants drawn against that fund. However, this does not mean that more than one appropriation is needed. In the case ofState ex rel. Peel v. Clausen, 94 Wash. 166, 162 Pac. 1, (1917) the court aptly stated the purpose and effect of the 11th amendment of the constitution as follows:
"The object of the constitution . . . is to prevent expenditures of the public funds at the will of those who have them in charge, and without legislative direction.
". . .
[[Orig. Op. Page 10]]
"It is well understood that these provisions‑-and they are common to most, if not all, of our written constitutions‑-are mandatory, and that no moneys can be paid out without the sanction of the legislative body."
Thus, a separate appropriation is unnecessary to transfer amounts from the accident to the reserve fund or from the reserve to the accident fund since these do not constitute expenditures of money from the treasury.
There is no express legislative mandate that a legislative appropriation is necessary to effectuate the maintenance of the reserve fund. To the contrary they have left that function to the department, by RCW 51.44.070 (section 2, chapter 70, Laws of 1957) which reads, in part:
"For every case resulting in death or permanent total disability the department shall transfer on its books from the accident fund . . . to the 'reserve fund' . . ."
What the legislative language relating to these funds suggests is that the money be remitted to the state treasurer for credit to the proper fund, a periodic adjustment of balances in the funds at the direction of the department to maintain a reserve, and finally (adopting the rule that they are subject to appropriation) expenditure pursuant to the terms of the workmen's compensation act, of so much of those moneys as has been directed by the legislature by appropriation to be expended.
If this practice is followed, a true budget figure would be presented.
MEDICAL AID FUND
On the basis of our analysis of the accident fund we must conclude that the medical aid fund is also subject to appropriation, since it is established and required to be paid into the state treasury by virtue of the same language governing the accident fund. (RCW 51.44.020.)
Once a specific appropriation has been made there is no legal necessity for any further legislative action, and consequently there should be no distortion of theactual amount of money appropriated.
STATE EMPLOYEES' RETIREMENT FUND
In view of the court's decision in State ex rel. Employees' Retirement Board v. Yelle, supra, as discussed at the beginning of this opinion no [[Orig. Op. Page 11]] further analysis of this fund is necessary to support the conclusion that it is not a "state fund in the state treasury" and consequently no appropriation is necessary for the auditor to issue warrants drawn on this fund upon presentation of vouchers authorized by the retirement board and bearing the signature of the duly authorized officer of the retirement board pursuant to RCW 41.40.080 (2).
TEACHERS' RETIREMENT PENSION RESERVE FUND
In determining the nature of this fund the following considerations are helpful:
(1) All of the assets of the teachers' retirement system are credited according to the purposes for which they are held to either the teachers' retirement pension reserve fund or the teachers' retirement fund, both of which are maintained in the state treasury. (RCW 41.32.030.)
(2) These funds are administered pursuant to rules and regulations established by the retirement system board of trustees. (RCW 41.32.160.)
(3) The board of trustees are the trustees of the pension reserve fund and are empowered to authorize the state finance committee to invest and reinvest such funds and certain bonds or other obligations. The board of trustees also have power to hold, purchase, sell, assign, and dispose of any of the securities and investments in which the fund has been invested as well as the proceeds of the investments and any moneys belonging to the fund. (RCW 41.32.200.)
(4) The purpose of the retirement system is to provide a retirement plan for all teachers employed in the public schools of this state except those who have previously exempted themselves from membership in the retirement system. (RCW 41.32.240.)
(5) If a member ceases to be employed in the public schools, upon request he may receive a refund of his accumulated contributions with interest. However, if the employee seeks to reestablish his former service credits in the retirement system, the amount previously withdrawn together with interest must be repaid. (RCW 41.32.510.)
(6) It is specifically provided that the state treasurer shall beex officio treasurer of the board of trustees. (RCW 41.32.090.)
[[Orig. Op. Page 12]]
(7) The treasurer is appointed "custodian" of all moneys received by him for the retirement system. Payments from retirement system funds may be made only upon vouchers signed by two members of the board of trustees, and no voucher shall be drawn unless it has been previously authorized by resolution of the board of trustees. (RCW 41.32.220.)
In addition, other pertinent statutes are as follows:
RCW 41.32.400 providing for the preparation of estimates of disbursements and needed appropriation by the board of trustees states that:
". . . the board shall compute the amount necessary to be appropriated during the next legislative session to establish and maintain an actuarial reserve adequate to meet all pension commitments of the system. . . . The legislature shall make the necessary appropriations to the teachers' retirement fund and thepension reserve fund after considering the estimates as prepared and submitted and shall appropriate from the teachers' retirement fund the amounts to be expended during the next biennium." (Emphasis supplied.)
RCW 41.32.380 provides in part as follows:
"There shall be placed in the pension reserve fund all appropriations made by the legislature for the purpose of establishing and maintaining an actuarial reserve and all gifts and bequests to the pension reserve fund, and contributions of persons entering the retirement system who have established prior service credit. . . ."
Further, RCW 41.32.370 provides that the state treasurer, upon certificate of the board of trustees
"shall annually transfer from the pension reserve fund to the teachers' retirement fund that portion of the funds accumulated in the pension reserve fund which since the date of the last preceding transfer has become allocable under the actuarial tables for the payment of current pensions to all members who shall have retired."
[[Orig. Op. Page 13]]
While the legislature has expressly directed that appropriations be made bothto andfrom the teachers' retirement fund it has directed only that an amount necessary to meet outstanding annuities be appropriatedto the pension reserve fund.
In a previous opinion (AGO 57-58 No. 131) we concluded that the pension reserve fund was a special fund and while we still agree with the conclusion expressed in that opinion we felt that further analysis might be helpful. Certainly those funds paidinto the pension reserve fund by appropriation are not subject to further legislative appropriation prior to being disbursed in accordance with the terms of the teachers' retirement act.
Also required to be paid into the pension fund are gifts, bequests, and contributions of persons entering the retirement system who have established prior service credit. In RCW 41.32.380 specific reference is made to those moneys as distinguished from legislative appropriations, clearly indicating a legislative intent that those moneys not be appropriated to the fund. Therefore, as to those moneys, not being expressly required to be appropriated to the fund and being part of a "special" fund itself not subject to appropriation, we must conclude that they are not subject to any appropriation, and may be disbursed according to the terms of the teachers' retirement act without legislative action.
VOLUNTEER FIREMEN'S RELIEF AND PENSION FUND
This fund is created in the state treasury as a "trust fund" for the benefit of the firemen of the state covered by the volunteer firemen's relief and pension act (chapter 41.24 RCW) and consists of the following moneys, as designated by RCW 41.24.030:
". . .
"(1) All bequests, fees, gifts, emoluments, or donations given or paid to the fund.
"(2) An annual fee for each member of its fire department to be paid by each municipal corporation for the purpose of affording the members of its fire department with protection from death or disability . . .
"(3) Where a municipal corporation has elected to make available to the members of its fire department the retirement provisions as herein provided, an annual fee of twenty-two dollars [[Orig. Op. Page 14]] dollars for each of its firemen electing to enroll therein, . . .
"(4) Ten percent of all moneys received by the state from its tax on fire insurance premiums . . .
". . .
"(6) All bonds or other obligations purchased . . . shall be forthwith placed in the custody of the state treasurer, and he shall collect the principal thereof and interest thereon when due."
The other pertinent statutes provide as follows:
(1) The state finance committee upon request of the state treasurer shall invest such portion of the amounts credited to the fund as is not, in the judgment of the treasurer, required to meet current withdrawals. (RCW 41.24.030.)
(2) The state finance committee may sell any of the bonds or obligations so acquired and the proceeds thereof shall be paid to the state treasurer. (RCW 41.24.030.)
(3) All amounts credited to the fund shall be available for making the payments required by this chapter. (RCW 41.24.030.)
(4) The state treasurer is required to make an annual report showing the condition of the fund. (RCW 41.24.030.)
(5) There is created a board of trustees of each municipal corporation to, among other things, provide for disbursements of relief and compensation, determine the eligibility of firemen for pensions, pass on all claims, and direct payment thereof from the volunteer firemen's relief and pension fund to those entitled thereto. All vouchers must be signed by the chairman and the secretary of the board. (RCW 41.24.080.)
The first question which presents itself, with regard to this fund is whether the moneys comprising the fund are constitutionally required to be paid into the state treasury by virtue of the fact that they include state insurance tax receipts. We answer this question in the negative.
Article VII, § 6 of the Washington Constitution reads as follows:
"All taxes levied and collected for state purposes shall be paid in money only into the state treasury."
[[Orig. Op. Page 15]]
We believe it is well settled in this jurisdiction that this constitutional provision is to be construed as having reference only toproperty taxes. Ernst v. Hingeley, 11 Wn. (2d) 171, 118 P. (2d) 795 (1941); Ajax v. Gregory, 177 Wash. 465, 32 P. (2d) 560 (1934);State v. Sheppard, 79 Wash. 328, 140 Pac, 332 (1914).
InState v. Sheppard, supra, our court said:
"The only taxes mentioned in article 7, or elsewhere in the constitution are property taxes, and from the reading of that article as a whole, we are of the opinion that the limitation here sought to be invoked is no more applicable to this tax than the equality rule is applicable to the inheritance tax. This tax, like the inheritance tax, finds no mention in the constitution, and like the inheritance tax, is exacted by virtue of the inherent power of the legislature, unrestrained, we think, by any constitutional rule of the exercise of that power. . . ." (p. 330)
We conclude, therefore, that the proceeds of the state's tax on fire insurance premiums are not required constitutionally to be paid into the state treasury. Thus, the legislature, as indicated by the decision in State Employees' Retirement Board v. Yelle, supra, may provide that these moneys, together with the rest of the volunteer firemen's relief and pension fund, be maintained as a special fund for specifically designated objects and purposes to be expended pursuant to legislative direction but not subject to specific appropriation.
These considerations outlined above lead us to the conclusion that the legislature intended to provide a special fund, to be administered by the various local boards under the supervision of the state board, for the purpose of providing medical and disability relief and pensions for municipal volunteer firemen with as little governmental restriction as possible. The treasurer holds the funds ex officio as custodian only, and not in his constitutional capacity.
These funds may, therefore, be disbursed upon vouchers signed by the chairman and secretaries of the various local boards, without having been previously appropriated by the legislature.
WASHINGTON STATE PATROL RETIREMENT FUND
A Washington state patrol retirement fund is established for members of [[Orig. Op. Page 16]] the Washington state patrol which includes funds created and placed under the management of a retirement board for the payment of retirement allowances and other benefits under the provisions of the Washington state patrol retirement act. (RCW 43.43.130.)
Particular aspects of the fund are as follows:
(1) The general administration and management of the retirement fund is vested in the retirement board which has the authority to make the necessary rules and regulations to effectuate the provisions of this retirement act. (RCW 43.43.140.)
(2) Contributions for deposit in the retirement fund may be received by the Washington state patrol retirement board from any public or private source, and such contributions must be dealt with in the same manner as other state patrol retirement funds and subject to the terms of the contribution. (RCW 43.43.165.)
(3) Whenever the retirement board determines that the fund contains moneys in excess of current needs they are required to authorize the state finance committee to invest such surplus. (RCW 43.43.170.)
(4) All bonds or other obligations purchased are to be placed in the custody of the state treasurer, and he must collect the principal and interest thereon when due. The state finance committee may sell any of the bonds or obligations so acquired and the proceeds thereof shall be paid to the state treasurer. Any interest earned and the proceeds from the sale or redemption of any bond or other obligationsheld by the fund shall be credited to and form a part of the fund. All amounts credited to the fund shall be available for making the payments required by the retirement act. (RCW 43.43.175.)
(5) RCW 43.43.220 further provides that:
"(1) The Washington state patrol retirement fund shall be the fund from which shall be paid all retirement allowances or benefits in lieu thereof which are payable as provided herein. The expenses of operating the retirement system shall be paid from appropriations made for the operation of the Washington state patrol.
"(2) The contributions by the state for benefits under the retirement system shall consist of the [[Orig. Op. Page 17]] sum of a percentage of the compensation of members to be known as the current service contribution, and a fixed sum to be known as the prior service contribution.
"(3) After the completion of each actuarial valuation, the retirement board shall determine or redetermine the current service contribution rate. Such current service contribution rate shall become effective in the ensuing biennium. Such contribution rate shall be the uniform and constant percentage of the prospective compensation of all members in the retirement system at the date of such valuation required, together with the prospective value of future contributions from members, and all funds (other than funds allocated to prior service benefits) currently standing to the credit of the retirement fund, to provide for the payment of all future benefits for such members (other than prior service benefits).
"(4) The prior service contribution shall be thirty-seven thousand five hundred dollars in each calendar year, and shall continue at such rate until the assets of the retirement fund allocated to prior service benefits are equal to the then outstanding liability for prior service benefits.
"(5) The retirement board shall estimate biennially the amount required to maintain the retirement fund for the ensuing biennium." (Emphasis supplied.)
(6) Contributions by members are assessed at five percent of the members monthly salary which is contributed by way of payroll deduction. Whenever a member severs his connection with the patrol or is dismissed, the amount paid by the state of Washington shall remain in the retirement fund. (RCW 43.43.300.)
(7) Whenever a member dies before retirement all contributions made by him with interest at 2 1/2% compounded annually to his legal representative or other person designated by him. If after retirement a member dies before he has received an amount equal to his own contributions with interest compounded to the date of his retirement, the excess shall be paid to his legal representative or other designated person. In [[Orig. Op. Page 18]] the event a member ceases to be an employee before attaining age sixty for reasons other than his death or retirement, he may request and shall be paid a refund of all or part of his contributions to the retirement fund with interest at 2 1/2% compounded annually.
On the basis of these provisions we are compelled to conclude that the legislature established the state patrol retirement fund to provide moneys for a limited specifically designated purpose, to be administered separately and apart from state funds and did not intend the fund to be subject to legislative appropriation.
Since no appropriations at all are necessary prior to disbursements from the fund if this practice is followed there should be no distortion of the amount actually expended or budgeted for expenditure.
The mere fact that no appropriation or not more than a single appropriation is necessary does not mean that the legislature cannot in fact make such appropriations. If the practice continues of making appropriations which are not required by law, the problem of devising a method whereby the budget will reflect a true picture ofthe total amount of money appropriated as opposed to thetotal of all appropriations becomes essentially an administrative one.
Appropriations are required, by statute, to appear in the budget, in both the comparative summary by departments, and the comparative summary by funds.
RCW 43.86.040 (2) requires the following data to be set forth by funds:
"Actual receipts for last completed fiscal year; estimated receipts for ensuing fiscal biennium; appropriations for last completed fiscal biennium; expenditures for last completed fiscal biennium; appropriations for current fiscal biennium; expenditures for the completed year and for the first six months of the second year of the current fiscal biennium, separately; estimated expenditures for ensuing fiscal biennium. An extra column shall be provided for the governor's revision of the estimates."
RCW 43.86.040 (3) requires a comparative summary by departments containing the same data as outlined above for the summary by funds, except for that information relating to actual and estimated receipts.
[[Orig. Op. Page 19]]
It is clear that in comparing, for any department or fund, theexpenditures for the last completed fiscal biennium and theappropriations for the last completed fiscal biennium it would not be possible to accurately project needs for the ensuing biennium if the appropriation figure represents a multiple appropriation; in other words if it represents money which has been spent only once but counted twice
The information required in the budget law was designed to provide a workable reflection of the state's fiscal status on a receipts and expenditures basis. This leads us to the conclusion that the legislature in providing a column for appropriations intended it to be an indication of the amount "earmarked" by the legislaturefor expenditure out of the state treasury. An appropriation figure which does not reflect the amount intended to be made available forspending is unrealistic and meaningless for budget purposes.
The budget law requires that all appropriations be listed and we do not suggest that multiple or legally superfluous appropriations be simply ignored in the budget. Regardless of whether a particular appropriation is necessary, it is the legislature's prerogative to make such appropriations.
However, there is authority for the budget director to provide information which would more accurately reflect the actual amount of money appropriated for expenditure. The final sentence of RCW 43.86.040 reads as follows:
"Accompanying the preliminary budget the director shall transmit to the governor any other information or data that he may have, bearing on the sufficiency or insufficiency of the departmental requests, which would be of assistance to the governor in making proper revisions of the estimates."
Such additional information might include a column which would more accurately reflect the amount of money designated for expenditure, than do appropriation figures.
The authority for providing information exists. The method of doing so is entirely within the administrative discretion of the director. [[Orig. Op. Page 20]]
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
GERALD F. COLLIER
Assistant Attorney General