FUNDS ‑- OASI CONTRIBUTIONS ‑- SEGREGATION FROM OTHER FUNDS ‑- INVESTMENT ‑- DELEGATION OF AUTHORITY FROM GOVERNOR TO STATE FINANCE COMMITTEE

FUNDS ‑- OASI CONTRIBUTIONS ‑- SEGREGATION FROM OTHER FUNDS ‑- INVESTMENT ‑- DELEGATION OF AUTHORITY FROM GOVERNOR TO STATE FINANCE COMMITTEE.

1. Under existing law it is necessary that all monies belonging to the OASI fund be physically segregated from other treasury monies as well as being segregated by bookkeeping processes.

2. The governor, in exercising his statutory authority over the OASI contributions fund may, under RCW 41.48.100, authorize the state finance committee to invest the fund surpluses in accordance with RCW 43.84.080.

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                                                               November 22, 1965

Honorable Robert S. O'Brien
State Treasurer
Legislative Building
Olympia, Washington

                                                                                                                Cite as:  AGO 65-66 No. 51

Dear Sir:

            By letter previously acknowledged you have posed certain questions relative to the OASI contribution fund.  This fund was established pursuant to § 6, chapter 184, Laws of 1951 (cf. RCW 41.48.060).

            Your questions are as follows:

            (1) "Is it necessary that monies belonging to this fund be physically segregated from other treasury monies as well as segregated by the bookkeeping processes?"

            (2) "Would it be legal for the Governor in exercising his authority over the OASI Contribution Fund as granted in RCW 41.48.060 and 41.48.100 to authorize the State Finance Committee to invest fund surpluses in accordance with RCW 43.84.080?"

            In our opinion both questions are answerable in the affirmative, for the reasons set forth in our analysis.

                                                                     ANALYSIS

            The OASI contribution fund was created by § 6, chapter 184,  [[Orig. Op. Page 2]] Laws of 1951 (cf. RCW 41.48.060), as a receptacle for all monies involved in the program of making available to employees of the state and its political subdivisions1/ the basic protection afforded by federal social security.  Subsection (1) of this section, to which reference will hereinafter be made in response to your second question, established the fund and made provision for its administration.

            Subsection (2) of this same section contains the provision which specifically answers your first question.  This subsection reads as follows:

            "(2) The OASI contribution fund shall be established and held separate and apart from any other funds or moneys of the state and shall be used and administered exclusively for the purpose of this chapter.  Withdrawals from such fund shall be made for, and solely for (a) payments of amounts required to be paid to the secretary of the treasury pursuant to an agreement entered into under RCW 41.48.030; (b) payment of refunds provided for in RCW 41.48.040 (3); and (c) refunds of overpayments, not otherwise adjustable, made by a political subdivision or instrumentality."  (Emphasis supplied.)

            In our opinion, this statutory language is plain, clear and unambiguous in regard to the precise point which you have raised.  We believe the portion of the statute which we have underlined clearly establishes the necessity that all monies belonging to the OASI fund be physically segregated from other treasury monies as well as being segregated by bookkeeping processes.

            In order to answer your second question it is necessary to quote in full the text of subsection (1) of § 6, chapter 184, Laws of 1951 (cf. RCW 41.48.060),supra.  This subsection reads as follows:

            "(1) There is hereby established a special fund to be known as the OASI contribution fund.  Such fund shall consist of and there shall be deposited in such fund: (a) All contributions, interest, and penalties collected under RCW 41.48.040 and 41.48.050; (b) all moneys appropriated thereto under this chapter; (c) any property or securities and earnings thereof acquired through the use of moneys belonging to the fund; (d) interest earned upon any moneys in the fund, and  [[Orig. Op. Page 3]] (e) all sums recovered upon the bond of the custodian or otherwise for losses sustained by the fund and all other moneys received for the fund from any other source.  All moneys in the fund shall be mingled and undivided.  Subject to the provisions of this chapter, the governor is vested with full power, authority and jurisdiction over the fund, including all moneys and property or securities belonging thereto, and may perform any and all acts whether or not specifically designated, which are necessary to the administration thereof and are consistent with the provisions of this chapter."  (Emphasis supplied.)

            In addition, see subsection (4) of the same section, which reads as follows:

            "(4) The treasurer of the state shall be ex officio treasurer and custodian of the OASI contribution fund and shall administer such fund in accordance with the provisions of this chapter and the directions of the governor and shall pay all warrants drawn upon it in accordance with the provisions of this section and with the regulations as the governor may prescribe pursuant thereto."

            Clearly, clauses (c) and (d) of subsection (1), supra, contemplate the investment of monies in the OASI contribution fund.  Next, as demonstrated by the portion of the subsection which we have underlined, the governor has been vested with full power, authority and jurisdiction over the fund, including all monies and property or securities belonging thereto.  Finally, according to subsection (4), the treasurer of the state is the custodian of the fund and is to administer it in accordance with the provisions of the act and the authorized directions of the governor.

            Against this background, your second question is simply whether it would be lawful for the governor to authorize the state finance committee to invest fund surpluses in accordance with the provisions of RCW 43.84.080.  This last-cited section provides as follows:

            "Whenever there is in any fund or in cash balances in the state treasury more than  [[Orig. Op. Page 4]] sufficient to meet the current expenditures properly payable therefrom, the state finance committee may invest such portion of such such [sic] funds or balances as it deems expedient in certificates, notes, or bonds of the United States, or in state, county, municipal, or school district bonds, or in warrants of taxing districts of the state.  Such bonds and warrants shall be only those found to be within the limit of indebtedness prescribed by law for the taxing district issuing them and to be general obligations.  The state finance committee may purchase such bonds or warrants directly from the taxing district or in the open market at such prices and upon such terms as it may determine, and may sell them at such times as it deems advisable.  The committee may, in addition, invest such excess funds in motor vehicle fund warrants when authorized by agreement between the committee and the state highway commission requiring repayment of invested funds from any moneys in the motor vehicle fund available for state highway construction."

            Undoubtedly, the governor, under RCW 41.48.060 (1), supra, could lawfully direct the state treasurer (as custodian under subsection (4), supra) to invest OASI contribution fund surpluses in accordance with RCW 43.84.080, supra.  The question of whether the governor might lawfully delegate this investment responsibility to the state finance committee seems equally clearly answered.  In this regard, § 11, chapter 184, Laws of 1951 (cf. RCW 41.48.100) states: