BASIS FOR EXPENDITURES FROM ELECTRICAL LICENSE FUND UNDER RCW 19.28.330

OFFICES AND OFFICERS ‑- STATE ‑- DIRECTOR OF LABOR AND INDUSTRIES ‑- BOARD OF ELECTRICAL EXAMINERS ‑- APPROPRIATIONS ‑- FUNDS ‑- BASIS FOR EXPENDITURES FROM ELECTRICAL LICENSE FUND UNDER RCW 19.28.330

(1) RCW 19.28.330 does not authorize the director of Labor and Industries to make expenditures from the Electrical License Fund without a legislative appropriation.

(2) Exercising its authority under RCW 19.28.330, the Board of Electrical Examiners may, in effect, require the Department of Labor and Industries to reduce expenditures from the Electrical License Fund below the levels contained in the budget developed under the provisions of the Budget and Accounting Act, chapter 43.88 RCW, by disapproving, in advance, particular expenditures or kinds of expenditures.   

(3) The Board of Electrical Examiners does not have the authority to require the department to modify proposed expenditures in budgets that are to be submitted to the legislature in future biennia.           

(4) While RCW 19.28.330 does not refer to a budget to be developed by the Board of Electrical Examiners, in order to make the determination required by that statute, the board will, as a practical matter, be required to develop some sort of budget or spending plan.

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                                                                   May 12, 1981

Honorable Sam Kinville, Director
Department of Labor and Industries
General Administration Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1981 No. 13

Dear Sir:

            By letter previously acknowledged you posed to us several questions relating to expenditures from the electrical license fund under RCW 19.28.330 as amended by sec. 1, chapter 67, Laws of 1979, 1st Ex. Sess.  Specifically, you asked:

            (1) Does RCW 19.28.330 give the director of labor and industries the authority to make expenditures from the electrical license fund beyond the appropriation from the fund for the 1979-81 biennium?

             [[Orig. Op. Page 2]]

            (2) If the legislature does not make an appropriation to the department from the electrical license fund for the 1981-83 biennium, does RCW 19.28.330 nevertheless give the director the authority to make expenditures from the electrical license fund during that biennium without a legislative appropriation?

            (3) If the department is bound by the legislature's appropriation, does RCW 19.28.330 give the board of electrical examiners the authority to require the department to reduce expenditures from the electrical license fund below the levels contained in the budget developed under the provisions of the budget and accounting act, chapter 43.88 RCW?

            (4) Under RCW 19.28.330, could the board require the department to reduce proposed electrical license fund expenditures in the budgets that the department develops for submission to the office of financial management in future biennia?

            (5) If the department has the authority to make expenditures from the electrical license fund without legislative appropriation, does RCW 19.28.330 give the board the authority to require the department to reduce expenditures from the electrical license fund below the level determined by the department to be necessary to administer the electrical inspection program?

            (6) If the answer to questions (3), (4) or (5) is in the affirmative, is the board required to provide the department with any sort of a budget for expenditures from the electrical license fund?

            We answer questions (1), (2), and (4) in the negative.  We answer question (3) in the affirmative and question (6) with a qualified no.  An answer to question (5) is unnecessary.

                                                                     ANALYSIS

           Legislation Involved:

            Set forth in bill form for ease of understanding, RCW 19.28.330, as amended by sec. 1, chapter 67, Laws of 1979, 1st Ex. Sess., reads as follows:

             [[Orig. Op. Page 3]]

            "All sums received from licenses, permit fees, or other sources, herein shall be paid to the state treasurer ((as ex officio custodian thereof)) and ((by him, as such custodian,)) placed in a special fund designated as the 'electrical license fund,' and by him paid out upon vouchers duly and regularly issued therefor and approved by the director of labor and industries or the director's designee following determination by the board of electrical examiners that the sums are necessary to accomplish the intent of chapter 19.28 RCW.  The ((said)) treasurer ((as ex officio custodian of said fund)) shall keep an accurate record of payments into, or receipts of, said fund, and of all disbursements therefrom.  ((Said fund shall be charged with its pro rata share of the cost of administering said fund to be determined by the director of labor and industries and the director of efficiency of this state.))"

            Your questions also involve the following appropriation to the department of labor and industries by the legislature for the 1979-81 biennium as set forth in sec. 71, chapter 270, Laws of 1979, 1st Ex. Sess.:

            General Fund Appropriation‑-State...... $    7,778,000
            General Fund Appropriation‑-Federal... $         110,000
            General Fund‑-Crime Victims' Compensation
           Account Appropriation........................ $          10,000
            Accident Fund Appropriation‑-State...... $28,276,000
            Accident Fund Appropriation‑-Federal... $       366,000
            Electrical License Fund........................ $   5,888,000
            Medical Aid Fund Appropriation........... $ 24,647,000
            Plumbing Certificate Fund................... $        199,000
            Pressure Systems Safety Fund.............. $        499,000
                        Total Appropriation.................... $  67,773,000

            [Emphasis supplied]

           Introduction:

            We will begin our response to your questions by briefly describing the provisions of chapter 19.28 RCW and the history of the electrical license fund created by RCW 19.28.330, supra.

            Chapter 19.28 RCW contains a state electrical code and an inspection scheme to ensure compliance with the code.1/   It also requires the  [[Orig. Op. Page 4]] licensing and bonding of electrical contractors and the licensing of an administrator for each electrical contractor.2/   In 1980, by chapter 30, Laws of 1980, the legislature added the licensing of individual electricians to chapter 19.28 RCW.3/  There are fees charged for the licensing of electrical contractors,4/ the licensing of individual electricians,5/ the issuance of electrical training certificates,6/ the examination of individual electricians,7/ and the inspection of electrical wires and equipment.8/   All those fees are deposited in the electrical license fund provided for by RCW 19.28.330, supra.

            There are also three boards created by chapter 19.28 RCW:  the electrical advisory board,9/ the board of electrical examiners,10/ and the electrical board of appeals.11/   The electrical advisory board and the electrical board of appeals have relatively minor functions under the law that are not relevant to your questions.

            The board of electrical examiners, to which your questions refer, has the duty to write and administer the examinations for electrical administrators, to establish classifications of specialty electrical contractor licenses and to advise the director of labor and industries on the need for additional electrical inspectors and compliance officers.12/   This board also  [[Orig. Op. Page 5]] assists the department of labor and industries in the preparation of the licensing examination for electricians, advises the department on matters related to licensing of electricians, and hears appeals from revocations of electricians' licenses.13/

             The legislature originally created the electrical license fund in 1935.14/   However, it made no appropriation to the department of labor and industries from the fund for administration of chapter 19.28 RCW until the biennium beginning April 1, 1941.15/   Since then there has been an appropriation to the department from the fund for every ensuing biennium.16/

            Applicable Principles of Statutory Construction:

            We will next summarize the basic rules of statutory construction which are here applicable, as follows.

            The purpose of statutory construction is to discern and give effect to the intent of the legislature.  Krystad v. Lau, 65 Wn.2d 827, 400 P.2d 72 (1965).  Legislative intent is determine from a careful consideration of the words used by the legislature in the statute.  In re Lyons' estate, 83 Wn.2d 105, 515 P.2d 1293 (1973).  Legislative intent is also to be ascertained from the statutory text as a whole, interpreted in terms of  [[Orig. Op. Page 6]] the general purpose and object of the act.  Amburn v. Daly, 81 Wn.2d 241, 501 P.2d 178 (1972).

Questions Presented:

            We turn now to your questions, beginning with:

            Questions (1) and (2):

            Repeated for ease of reference these two questions ask:

            (1) Does RCW 19.28.330 give the director of labor and industries the authority to make expenditures from the electrical license fund beyond the appropriation from the fund for the 1979-81 biennium?

            (2) If the legislature does not make an appropriation to the department from the electrical license fund for the 1981-83 biennium, does RCW 19.28.330 nevertheless give the department authority to make expenditures from the electrical license fund during that biennium without a legislative appropriation?

            We answer both of these questions in the negative.

            To begin with, even if an appropriation was not deemed to be necessary in order to permit expenditures from the electrical license fund, generally speaking, there is in fact such an appropriation for the current, 1979-81, biennium.  See, again, Sec. 72, chapter 270, Laws of 1979, 1st Ex. Sess.,supra.

            When there is a conflict between a statute treating a subject in a general manner and another statute treating the same subject in a specific manner, the specific statute prevails.  Pannell v. Thompson, 91 Wn.2d 591, 589 P.2d 1235 (1979). RCW 19.28.330 sets up a special fund which will continue to exist indefinitely unless the legislature decides to repeal or amend the statute.  The budget act for the 1979-81 biennium, however, appropriated certain moneys from the fund for a limited period of time.  The budget act thus deals specifically with the subject of expenditures from the electrical license fund for the current biennium and prevails over any more general power to expend moneys from the fund arguably given to the department by RCW 19.28.330.17/

             [[Orig. Op. Page 7]]

            With that we move to your second question which, in essence, inquires as to the legal necessity for an appropriation.  Our answer, here, begins with a recognition that Article VIII, section 4 (amendment 11) of the state constitution generally prohibits the payment of moneys out of the state treasury without an appropriation.18/   The Supreme Court, however, has held that the legislature can create a special fund which does not become part of the state treasury and is held by the state treasurer only as a custodian.  State ex rel. Washington Toll Bridge Authority v. Yelle, 195 Wash. 636, 82 P.d 120 (1938).  And it has also held that a special fund held by the treasurer in his capacity as custodian can be distributed without an appropriation.  See,State ex rel. State Employees Retirement Board v. Yelle, 31 Wn.2d 87, 106, 195 P.2d 646, 201 P.2d 172 (1948), involving state and municipal employees' retirement funds, in which the court summarized its interpretation of the constitutional provision by describing the two ways that the state treasurer could hold public moneys.

               "Under the law as enunciated in the cases above cited, and others, it is indisputable that, in establishing such a system, the legislature could elect to create a fund for that purpose either (1) by making such fund astate fund to be placed and kept in the state treasury, under the control of the state treasurer and the state auditor, and disbursable only in  [[Orig. Op. Page 8]] pursuant of an appropriation as provided by Art. VIII, § 4, of the constitution, or (2) by making the fund, in whole or in part, a special one, of a proprietary nature and designed to meet certain specific objectives, which fund is to be placed in the custody of the state treasurer acting ex officio as a member of the retirement system rather than in his constitutional capacity, and which is to be expended as directed by the legislature without a specific appropriation."

            The determinative issue here is thus whether the legislature intended that the electrical license fund (a special fund in the custody of the treasurer) be a non-appropriated fund.  The answer, in turn, is to be based upon a careful consideration of the language used by the legislature to describe this particular fund.  Municipality of Metropolitan Seattle v. O'Brien 86 Wn.2d 339, 544 P.2d 729 (1976).

            In those cases in which the court has held that the legislature created a fund that was not subject to appropriation, the legislature took pains to emphasize the special status of the fund.  Thus, in theToll Bridge Authority case, the legislature declared that the toll bridge fund was not a state fund.  And in theRetirement Board case, the legislature stated that the treasurer held the moneys only asex officio custodian.  Finally, in theMetropolitan Seattle case, the legislature provided that moneys were held onbehalf of the municipality and were to be remitted to the municipality.

            Here, on the other hand, RCW 19.28.330 does not contain a comparable indication that the electrical license fund is not subject to appropriation.  While the legislature described the fund as a "special" fund it did not indicate what characteristics made the fund special and did not provide for a specific way to handle the fund.  We note, in fact, that the legislature, by the 1979 amendment, deleted language which would have weighed in favor of a conclusion that no appropriation is required by striking three prior references to the treasurer holding the fund only as "ex officio custodian."

            The legislature is presumed to be aware of pertinent decisions of the Supreme Court.  State v. Fenter, 89 Wn.2d 57, 569 P.2d 67 (1977).  By thus deleting the references to the treasurer as ex officio custodian of the fund‑-which had been significant in earlier court decisions‑-the legislature in our opinion placed the electrical license fund within the purview of Article VIII, section 4 of the constitution.19/   Accordingly, it follows that the  [[Orig. Op. Page 9]] department of labor and industries cannot make expenditures from the electrical license fund without a legislative appropriation.  And thus, this question must also be answered in the negative.

            Questions (3) through (6):

            Your four remaining questions, also repeated for ease of reference, ask:

            (3) If the department is bound by the legislature's appropriation, does RCW 19.28.330 give the board of electrical examiners the authority to require the department to reduce expenditures from the electrical license fund below the levels contained in the budget developed under the provisions of the budget and accounting act, chapter 43.88 RCW?

            (4) Under RCW 19.28.330, could the board require the department to reduce proposed electrical license fund expenditures in the budgets that the department develops for submission to the office of financial management in future biennia?

            (5) If the department has the authority to make expenditures from the electrical license fund without legislative appropriation, does RCW 19.28.330 give the board the authority to require the department to reduce expenditures from the electrical license fund below the level determined by the department to be necessary to administer the electrical inspection program?

            (6) If the answer to questions (3), (4), or (5) is in the affirmative, is the board required to provide the department with any sort of a budget for expenditures from the electrical license fund?

            These questions require us to delineate the respective functions given to the director of labor and industries and the board of electrical examiners by so much of RCW 19.28.330,supra, as reads:

                         [[Orig. Op. Page 10]]

            ". . . by him [the state treasurer] paid out upon vouchers duly and regularly issued therefor and approved by the director of labor and industries or the director's designee following determination by the board of electrical examiners that the sums are necessary to accomplish the intent of chapter 19.28 RCW. . . ."

            The duty of the director is to approve vouchers for sums to be paid out of the electrical license fund.  A voucher is defined in theAmerican Heritage Dictionary of the English Language (1980), as:

            ". . . A signed or stamped document that serves as proof that the terms of a transaction have been met."20/

             The transaction occurring in this instance is the payment of money from the electrical license fund for a purposes for which that fund is legally available.  The voucher should thus list materials, labor or services which are to be used in the administration of chapter 19.28 RCW.  The director's approval of the vouchers represents his certification that the materials, labor, and services have been actually delivered or rendered and that they have been used, or will be used, for electrical code enforcement and electrical contractor licensing.

            On the other hand, the function of the board is to determine whether the monies to be paid out of the electrical license fund ". . . are necessary to accomplish the intent of chapter 19.28 RCW."  This function, as earlier noted, was added by the 1979 legislature.  And, when the legislature enacts a new statute or a provision it is assumed that it enacts that provision for some purpose and to meet a situation which was not appropriately controlled by the previous provision.  Trudeau v. Pacific States Box and Basket Co., 20 Wn.2d 561, 148 P.2d 453 (1944).  Therefore, the function thus given to the board should not be deemed to be the same as  [[Orig. Op. Page 11]] the function given to the director because it is a new provision and different language is used to describe it.

            The critical words used to describe the board's new function are "intent of chapter 19.28 RCW" and "necessary."  We can thus delineate the function by carefully examining the meaning of these words.  First, the intent of chapter 19.28 RCW is clear; it is meant to provide for public safety through the adoption and enforcement of a state electrical code and a scheme for licensing electrical contractors.  As for the meaning of "necessary," the American Heritage Dictionary of the English Language (1980), supra, defines that word as:

            "Needed for the continuing existence or functioning of something; essential; indispensable: . . ."

            Therefore, the function of the board is to determine if proposed expenditures from the electrical license fund are essential or indispensable for administration of the state electrical code and electrical contractor licensing.

            Having thus identified the respective functions of the board and the director under the law we next must examine the interrelationship between those two functions.  In order of time, it seems clear that the board's function is to be performed first;i.e., before the director approves the vouchers‑-or similar documents under the current budget and accounting system.  We further observe that those determinations would most likely be made well before the vouchers are reviewed by the director because of the different responsibilities of the board and the director.  The director certifies only that sums can legally be paid out off the electrical license fund for goods or services that have already been received or for obligations that have already been incurred‑-such as lease payments or employees' salaries for a previous month.  The board determines, earlier, whether the thenproposed expenditures are necessary for purposes of the electrical code program.  This determination would therefore have to be made even before the obligations are incurred.

            The board's function of thus overseeing electrical license fund expenditures must be coordinated with the existing state budget process.  Chapter 43.88 RCW, the Budget and Accounting Act, establishes a procedure for the Office of Financial Management and state agencies to prepare a biennial budget for each state agency.  After legislative review and approval of the budget, a state agency is governed by the resulting spending plan for two years.  And clearly, chapter 43.88 RCW was not expressly repealed or modified when, in 1979, the new function of the board of electrical examiners was added to RCW 19.28.330‑-because it is not so  [[Orig. Op. Page 12]] inconsistent with and repugnant to RCW 19.28.330 that it is irreconcilable with the latter statute and cannot be given effect.  State v. J-R Distributors, Inc., 82 Wn.2d 584, 512 P.2d 1049; cf.,Gross v. City of Lynnwood, 90 Wn.2d 395, 583 P.2d 1197 (1978).

            The function of the board can be reconciled with the Budget and Accounting Act if the department continues to follow the normal budget process and the board uses the results of that process as the starting point for its determination.  In essence, the legislature approves a level of expenditure from the electrical license fund.  The board then determines whether particular kinds of expenditures are necessary to accomplish the intent of chapter 19.28 RCW.  And finally, the director determines whether the goods or services being purchased have actually been delivered or rendered for the purpose of electrical code enforcement and electrical contractor licensing.

            Summary:

            Based upon the foregoing analysis, we therefore respond to your third through sixth questions as follows: