J. Elliott Hibbs, Director

Arizona Department of Administration

A. The RASL Benefit Is Not Available to University Employees Participating in a Federal Retirement System Who Retired Before the Effective Date of the 1999 Amendments to A.R.S. § 38-615.

The 1999 amendments to A.R.S. § 38-615, which became effective August 6, 1999, expanded the RASL program to include "an officer or employee of a university under the jurisdiction of the Arizona Board of Regents who participates in a federal retirement system." 1999 Ariz. Sess. Laws, ch. 300, § 9. You have asked whether university employees participating in a federal retirement system who retired prior to August 6, 1999, are eligible for compensation for unused sick leave.

As a general rule, statutes are not applied retroactively unless declared so by the Legislature. See A.R.S. § 1-244; State v. Gonzales, 144 Ariz. 512, 513, 687 P.2d 1267, 1268 (1984). The 1999 amendments to A.R.S. § 38-615 did not contain a retroactivity provision. Although there was a specific effort to make the federal retirees amendment retroactive, the Legislature did not approve the proposed retroactivity clause. See HB 2353, 44^th Leg., 1^st Reg. Sess. (Ariz. 1999) (Conference Committee Amendment).⁽¹⁾ Based on the statutory language and legislative history, university employees participating in a federal retirement system who retired prior to August 6, 1999, are not eligible for RASL. Therefore, the 1999 amendments apply only to those university employees in a federal retirement system who retire on or after the effective date of the 1999 amendments.

B. The RASL Benefit Is Not Available to the Beneficiary of a University Officer or Employee Who Died Before the Effective Date of the 1999 Amendments to A.R.S. § 38-615.

You also asked whether RASL benefits are available to the beneficiary of a university officer or employee who died before the effective date of the 1999 amendments to the RASL. You advised that at least one university retirement system employee who had reached normal retirement age, but had not yet retired, died before the 1999 amendments became effective August 6, 1999. In 1998, the Legislature amended A.R.S. § 38-615 to provide a death benefit. 1998 Ariz. Sess. Laws ch. 292, § 3. The 1998 amendment provided that, if an employee with accrued sick leave who had reached normal retirement age died before retiring, the employee's beneficiary would receive the allowable payment for unused sick leave Id.⁽²⁾ The 1998 amendments also provided that sick leave was payable to employees in three annual installments and that an employee's beneficiaries would receive any balance due if that retired employee died before receiving all three installment payments. Id.

The provision relating to retired employees who die before receiving their three installments applied to members of all retirement programs enumerated in A.R.S. § 38-615 because it applied to all employees under "this section." Id. However, the 1998 amendments regarding payments to beneficiaries of employees who, although eligible to retire, died before retiring, expressly applied only to the members of three of the retirement systems included in the RASL program -- the Arizona State retirement system, the public safety personnel retirement system, and the corrections officer retirement plan ("chapter 5, article 2, 4 or 6" of Title 38). Id. This death benefits provision did not include members of optional retirement programs established by the Arizona Board of Regents.

The expression of one or more items of a class in a statute indicates a legislative intent to exclude all items of the same class that are not expressed. Pima County v. Heinfeld, 134 Ariz. 133, 134, 654 P.2d 281, 282 (1982). Here, the Legislature made the death benefit expressly applicable to three retirement programs but failed to include a fourth -- the university retirement plans. Additionally, a more recent, specific statutory provision governs over an older, more general provision. Lemons v. Superior Court, 141 Ariz. 502, 505, 687 P.2d 1257, 1260 (1984). Thus, the 1998 amendment creating the death benefit applied only to the three retirement plans specified, even though other portions of the statute applied to four retirement plans. For these reasons, the death benefit for employees eligible for retirement who die before retiring, as enacted in 1998, did not apply to participants in the university retirement programs.

The following year, the Legislature eliminated the language that restricted death benefits to only three of the four eligible retirement programs. Under the 1999 amendments, the beneficiaries receive a lump sum under the RASL "if an officer or employee dies before the officer or employee receives the total payment due to the officer or employee or if an officer or employee is eligible for normal retirement but has not retired at the time of the officer's or employee's death." 1999 Ariz. Sess. Laws ch. 300, § 9. Under these 1999 amendments, all officers and employees eligible for RASL are eligible for the death benefit. Therefore, people in university retirement plans who were not covered by the death benefits in the 1998 legislation are now covered because of the 1999 amendments to A.R.S. § 38-615.

However, as discussed previously, the 1999 amendments to the RASL are not retroactive because the 1999 legislation did not include a retroactivity clause. See A.R.S. § 1-244, Gonzales, 141 Ariz. at 513, 687 P.2d at 1268. Because the 1999 amendments are not retroactive, beneficiaries of university employees who died before the effective date of the 1999 amendments are ineligible for RASL payments. See 1998 Ariz. Sess. Laws ch. 292, § 3.

C. The RASL Program Is Only Available to Officers and Employees Who Apply for Retirement Benefits Immediately Upon Termination of Employment.

When interpreting statutes, words and phrases are to be given their ordinary meanings. State v. Takacs, 169 Ariz. 392, 397, 819 P.2d 978, 983 (App. 1991). When applied to A.R.S. § 38-615, this principle establishes that an officer or employee is ineligible for RASL if the officer or employee separates from State employment and later applies for retirement benefits.

Section 38-615, A.R.S., directs payment for accumulated sick leave "on retirement." This payment for accumulated sick leave on retirement is available to an officer or employee "who has at least 500 . . . hours of sick leave." A.R.S. § 38-615(A)(1) (emphasis added). Yet, Arizona Administrative Code R2-5-404(F) (1999), provides that "all sick leave credits are forfeited upon separation from State service." As a result, no officer or employee "has" accumulated sick leave if retirement is delayed until some time after separation from state service. The use of the present tense -- "has" -- together with the regulations regarding forfeiture of sick leave indicates an employee must retire immediately upon termination of employment to qualify for RASL.

This conclusion is further supported by the Legislature's use of the phrase "current hourly rate." The amount of payment for sick leave on retirement is equal to a specified "percent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave." A.R.S. § 38-615(A)(1) (emphasis added). An employee who leaves State employment and later applies for retirement has no "current hourly rate" against which to measure sick leave payments.

Thus, the accumulated sick leave payments are available only to an officer or employee who "has" an accumulated sick leave balance and who has a "current hourly rate." Consequently, RASL can only apply to State employees going immediately from State employment into retirement.

Conclusion