AN ACT Relating to the Washington basic health plan; amending RCW 82.24.020, 82.24.070, and 82.02.030; reenacting and amending RCW 82.24.260; adding a new section to chapter 50.20 RCW; adding a new section to chapter 74.08 RCW; adding a new section to chapter 82.24 RCW; adding a new section to chapter 70.39 RCW; adding a new section to chapter 82.04 RCW; adding new sections to chapter 43.131 RCW; adding a new chapter to Title 70 RCW; creating a new section; repealing RCW 28A.47.440 and 82.24.025; making appropriations; providing effective dates; providing an expiration date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that:

(1) A substantial percentage of the population of this state does not have reasonably available insurance or other coverage of the costs of necessary basic health care services;

(2) This lack of basic health care coverage is detrimental to the health of the individuals lacking coverage and to the public welfare, and often results in substantial expenditures for emergency and remedial health care, often at the expense of health care providers, health care facilities, and all purchasers of health care, including the state;

(3) The use of managed health care systems, as defined in section 2 of this act, has significant potential to reduce the growth of health care costs incurred by the people of this state, and low-income pregnant women are an especially vulnerable population, along with their children, who need greater access to managed health care; and

(4) As declared in RCW 70.39.010, health care is a right of the people and one of the primary purposes for which governments are established.

The purpose of this chapter is to establish a program providing access to affordable basic health care for low-income persons through the use of managed health care systems. This chapter is intended to establish an appropriate mechanism that will foster the entrepreneurial abilities of health care providers in many communities to join together in helping to address a significant portion of that unmet need for access to affordable health care that exists among the residents of the state and in almost every community. The legislature intends that the program be designed and operated in a fiscally prudent manner within the funds appropriated from the basic health plan account established in this chapter, and that the program emphasize primary and preventive health care services while also covering necessary hospitalization.

NEW SECTION. Sec. 2. As used in this chapter:

(1) "Washington basic health plan" or "plan" means the system of enrollment and payment on a prepaid capitated basis for basic health care services, administered by the board through participating managed health care systems, created by this chapter.

(2) "Board" means the Washington basic health plan board created under section 3 of this act.

(3) "Managed health care system" means any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, or any combination thereof, that provides directly or by contract basic health care services, as defined by the board and rendered by duly licensed providers, to a defined patient population by enrollment in the plan and in the managed health care system.

(4) "Enrollee" means an individual, or an individual plus the individual's spouse and dependent children, all under the age of sixty-five, who resides in the state, whose gross family income at the time of enrollment does not exceed twice the federal nonfarm poverty level as adjusted for family size and determined annually by the federal office of management and budget, who chooses to obtain basic health care coverage from a particular managed health care system in return for periodic payments to the board, and who, at the time of enrollment, is not eligible for medical coverage under chapter 74.09 RCW and does not have access to employer-sponsored health care coverage.

(5) "Subsidy" means the difference between the amount of periodic payment the board makes, from funds appropriated from the trust account, to a managed health care system on behalf of an enrollee and the amount the board determines to be the enrollee's responsibility under section 8(2) of this act.

NEW SECTION. Sec. 3. The basic health plan trust account is hereby established in the state treasury. All revenues received under sections 18, 19, and 20 of this act shall be deposited in the basic health plan trust account. Disbursements from the account shall be made pursuant to appropriation and upon warrants drawn by the Washington basic health plan board created in section 4 of this act. Moneys in the account shall be used exclusively for the purposes of this chapter, including payments to participating managed health care systems on behalf of enrollees in the plan and payment of costs of administering the plan. The earnings on any surplus balances in the basic health plan trust account shall be credited to the account, notwithstanding RCW 43.84.090. After January 1, 1987, the legislature shall not appropriate for an ensuing fiscal period amounts exceeding ninety percent of the revenues anticipated to accrue to the account during the fiscal period.

NEW SECTION. Sec. 4. There is hereby created a Washington basic health plan board, which shall be a separate and independent board of the state. For efficiencies in operation and consultation, the offices of the board shall be co-located with those of the hospital commission. The board shall be composed of nine members appointed by the governor, as follows:

(1) One member representing hospitals, as defined in RCW 70.41.020.

(2) Two members representing individual health care professionals licensed under Title 18 RCW, at least one of whom shall be a physician.

(3) Two members representing the health care insurance industry and possessing actuarial experience or expertise or experience in health care financing and/or benefit design, who may be associated with health care service contractors or commercial health insurers registered and doing business in the state under Title 48 RCW.

(4) One member representing labor, who is an active trustee of a union-sponsored health care fund.

(5) One representative of private employers who provide or purchase health care benefits for employees.

(6) Two representatives of consumers, at least one of whom represents the interests of low-income persons.

The governor shall designate one of the members designated in subsections (5) and (6) of this section to serve as chairman. At least two of the three members designated in subsections (1) and (2) of this section shall be persons actively engaged in rendering health care services through a managed health care system. No member designated in subsection (3), (4), (5), or (6) of this section shall have any fiduciary obligation to any health care provider or facility, or any material financial interest in the provision of health care services.

Members of the board shall serve for four-year terms: PROVIDED, That of the members initially appointed after the effective date of this act, three shall be appointed to four-year terms, two to three-year terms, two to two-year terms, and two to one-year terms. Appointments shall require senate confirmation. No member of the board shall serve for more than two consecutive terms. A vacancy shall be filled by appointment for the remainder of the unexpired term and the initial appointments and vacancies shall not require senate confirmation until the legislature next convenes.

NEW SECTION. Sec. 5. Meetings of the board shall be held as frequently as its duties require. The board shall keep minutes of its meetings and adopt procedures for the governing of its meetings, minutes, and transactions. Five members of the board shall constitute a quorum, but a vacancy on the board shall not impair its power to act. No action of the board shall be effective unless five members concur therein. The board may, consistent with the procedural requirements of chapter 42.30 RCW, meet in executive session with representatives of prospective or participating managed health care systems to discuss matters of a proprietary or sensitive nature.

The members of the board shall be compensated in accordance with RCW 43.03.250 and shall be reimbursed for their travel expenses in accordance with RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 6. The board shall employ a full-time executive director, who shall be the chief administrative officer of the board and shall be subject to its direction. The executive director, medical director, and up to three other employees shall be exempt from the civil service law, chapter 41.06 RCW.

The board shall employ such other staff as are necessary to fulfill the responsibilities and duties of the board, such staff to be subject to the civil service law, chapter 41.06 RCW. In addition, the board may contract with third parties for services necessary to carry out its activities where this will promote economy, avoid duplication of effort, and make best use of available expertise. Any such contractor or consultant shall be prohibited from releasing, publishing, or otherwise using any information made available to it under its contractual responsibility without specific permission of the board. The board may call upon other agencies of the state to provide available information as necessary to assist the board in meeting its responsibilities under this chapter, which information shall be supplied as promptly as circumstances permit. The board may create committees from its membership, and may appoint such ad hoc advisory committees as it deems necessary.

The board may apply for and receive and accept grants, gifts, and other payments, including property and service, from any governmental or other public or private entity or person, and may make arrangements as to the use of these receipts, including the undertaking of special studies and other projects relating to health care costs and access to health care.

NEW SECTION. Sec. 7. The board may promulgate and adopt, under chapter 34.04 RCW, regulations consistent with this chapter to carry out the purposes of this chapter.

NEW SECTION. Sec. 8. The board shall have the following powers and duties:

(1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, and other services that may be necessary for basic health care, which enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive in return for periodic payments to the board. The schedule of services shall emphasize preventive and primary health care, shall include all services necessary for prenatal, postnatal, and well-child care, and shall include a separate schedule of basic health care services for children, eighteen years of age and younger, for those enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services the board shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080. No major professional service may be included in the schedule until legislation is enacted imposing a tax or other assessment, to be deposited in the basic health plan trust account, upon the class of providers or practitioners by whose members that professional service is to be performed.

(2) To design and implement a structure of periodic payments due from enrollees. The payment structure shall be based upon enrollee family size and shall include a sliding scale whereby payments shall vary according to enrollee family income. The structure shall be designed so as to include payment amounts for enrollment of children without requiring enrollment of their parents. The board shall not enroll such numbers of enrollees who qualify for subsidies as might reasonably be expected to result in an overexpenditure of appropriations for such purposes. Whenever the board finds that there is danger of such an overexpenditure, the board shall close all enrollment in the plan until the board finds the danger no longer exists. Payments to the board by the department of social and health services on behalf of any person eligible for medical coverage under chapter 74.09 RCW, subject to section 13 of this act, shall not be less than the payments the board makes to managed health care systems for coverage of those persons.

(3) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The board shall endeavor to assure that covered basic health care services are available through the plan to prospective enrollees living in all areas of the state and, where possible, from among a selection of participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems, and in its dealings with such systems the board shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several communities of the state.

(4) To receive periodic payments from enrollees, deposit the payments in the basic health plan operating account, keep records of enrollee payments and status, and authorize periodic payments to managed health care systems on the basis of the number of enrollees participating in the respective managed health care systems.

(5) To accept applications from individuals, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and at least annually thereafter, or at the request of any enrollee, eligibility due to current gross family income for reduced sliding scale payments that will be the responsibility of the enrollee. An enrollee who remains current in making periodic sliding-scale payments, as determined by the board under subsection (2) of this section, may continue enrollment if the enrollee's gross family income rises above twice the federal nonfarm poverty level, but shall then make payment at the maximum rate established in the sliding fee schedule. No subsidy shall be paid with respect to any enrollee whose current gross family income exceeds two hundred percent of the federal nonfarm poverty level.

(6) To require that prospective enrollees who may be eligible for medical coverage under chapter 74.09 RCW apply for such coverage.

(7) To determine, on a community rating basis, the amount of each periodic per capita or per family payment to a participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for all enrollees, the periodic per capita or per family payments to participating managed health care systems may vary among the systems. In negotiating payment levels with participating systems the board shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area or community, and other factors the board finds relevant.

(8) To monitor the provision of covered services to enrollees by participating managed health care systems in order to assure enrollee access to good quality basic health care, to require periodic reports on health care services rendered to enrollees, and to inspect the books and records of participating managed health care systems to assure compliance with the purposes of this chapter. In requiring reports from participating managed health care systems, including data on services rendered enrollees, the board shall endeavor to minimize costs, both to the managed health care systems and to the board. The board shall coordinate any such reporting requirements with other state agencies, such as the insurance commissioner and the hospital commission, to minimize duplication of effort.

(9) To monitor the access that state residents have to adequate and necessary health care services, determine the extent of any unmet needs for such services or lack of access that may exist from time to time, and make such reports and recommendations to the legislature as it deems appropriate.

NEW SECTION. Sec. 9. The benefits available under the plan shall be subject to the provisions of RCW 48.21.200 and shall be excess to the benefits payable under the terms of any insurance policy issued to or on the behalf of an enrollee which provides payments toward medical expenses without a determination of liability for the injury.

NEW SECTION. Sec. 10. On and after July 1, 1986, enrollees whose payments to the board are current shall be entitled to receive covered basic health care services as defined by the board from the respective managed health care systems in which they are enrolled. Before January 1, 1987, the board may not enroll more than thirty thousand individuals who are eligible for subsidies. Before January 1, 1987, the board shall endeavor to secure participation agreements with managed health care systems in not more than twelve areas of the state, including urban, suburban and rural areas, and to the extent possible with a mixture of public hospitals, community clinics, cities and counties, nonprofit hospitals, and health care professionals engaged in independent practice. The board shall closely monitor growth patterns so as not to exceed that consistent with the orderly development of the plan.

NEW SECTION. Sec. 11. Any enrollee whose payments to the board are delinquent may be dropped from enrollment status. The board shall make reasonable efforts to notify delinquent enrollees of their removal from the plan and shall provide for a hearing under chapters 34.04 and 34.12 RCW for any enrollee who contests the board's decision to drop the enrollee from the plan. Upon removal of an enrollee from the plan, the board shall promptly notify the managed health care system in which the enrollee has been enrolled, and shall not be responsible for payment for health care services provided to the enrollee (including, when applicable, members of the enrollee's family) after the date of notification. A managed health care system may contest the denial of payment for coverage of an enrollee through a hearing under chapters 34.04 and 34.12 RCW.

NEW SECTION. Sec. 12. Managed health care systems participating in the plan shall do so by contract with the board and, on and after July 1, 1986, shall provide, directly or by contract with other health care providers, covered basic health care services to each enrollee as long as payments from the board on behalf of the enrollee are current. Subject to board approval and with full disclosure to enrollees and prospective enrollees, a managed health care system may impose nominal copayments upon enrollees as an incentive for proper utilization of services. The board may receive and act upon complaints from enrollees regarding failure to provide covered services or efforts to obtain payment, other than copayments authorized under this section, for covered services directly from enrollees, but nothing in this chapter empowers the board to impose any sanctions under Title 18 RCW or any other professional or facility licensing statute.

The plan shall allow, at least annually, an opportunity for enrollees to transfer their enrollments among participating managed health care systems. The board shall establish a period of at least twenty days in a given year when this opportunity is afforded enrollees, and in those areas served by more than one participating managed health care systems the board shall endeavor to establish a uniform period for such opportunity.

Prior to negotiating with any managed health care system the board shall determine, on an actuarially sound basis, the reasonable cost of providing the schedule of basic health care services, expressed in terms of upper and lower limits, and recognizing variations in the cost of providing the services through the various systems and in different areas of the state. In negotiating with managed health care systems for participation in the plan, the board shall adopt a uniform procedure that includes at least the following:

(1) The board shall issue a request for proposals, including standards regarding the quality of services to be provided; financial integrity of the responding systems; and responsiveness to the unmet health care needs of the local communities or populations that may be served;

(2) The board shall then review responsive proposals and may negotiate with respondents to the extent necessary to refine any proposals;

(3) The board may then select one and preferably more than one system to provide the covered services under the plan within a specific geographic area; and

(4) The board may adopt a policy that gives preference to systems substantially supported by public revenues or involving public agencies.

NEW SECTION. Sec. 13. Any enrollee who, after enrollment in the plan, becomes eligible for medical assistance or medical care services under chapter 74.09 RCW may continue as a plan enrollee, and shall so continue if the enrollee's minimum enrollment period, if any, has not expired. If the enrollee continues enrollment in the plan under this section, the department of social and health services shall make periodic payments to the plan on the enrollee's behalf, at the maximum rate established in the sliding fee scale, for the services covered by the plan: PROVIDED, That with respect to enrollees eligible for medical assistance under RCW 74.09.510, the periodic amount payable to the plan shall not be greater than the amount with respect to which full federal financial participation is available under title XIX of the federal social security act. Any enrollee on whose behalf the department of social and health services makes payments to the plan under this section and chapter 74.09 RCW may continue as an enrollee, making periodic payments based on his own income as determined under the sliding scale, after eligibility for coverage under chapter 74.09 RCW has ended. Nothing in this section affects the right of any person eligible for coverage under chapter 74.09 RCW to receive the services offered to other persons under that chapter but not included in the schedule of basic health care services covered by the plan. The board and the department of social and health services shall cooperatively adopt procedures to facilitate the transition of plan enrollees and payments on their behalf between the plan and the programs established under chapter 74.09 RCW.

NEW SECTION. Sec. 14. In addition to the powers and duties specified in sections 6 and 8 of this act, the board shall have the power to enter into contracts for the following functions and services:

(1) With public or private agencies, to assist the board in its duties to design or revise the schedule of covered basic health care services, and/or to monitor the performance of participating managed health care systems.

(2) With public or private agencies, to provide technical or professional assistance to health care providers, particularly public or private nonprofit organizations and providers serving rural areas, who show serious intent and apparent capability to participate in the plan as managed health care systems.

(3) With health care service contractors registered under RCW 48.44.015 and doing business in the state, for marketing and administrative services in connection with participation of managed health care systems, enrollment of enrollees, billing and collection services to the board, and other administrative functions ordinarily performed by health care service contractors, other than insurance: PROVIDED, That any activities of a health care service contractor pursuant to a contract with the board under this section shall be exempt from the provisions and requirements of Title 48 RCW.

(4) With any public hospital district established under chapter 70.44 RCW or with any county or city, to administer the plan as the board's agent with respect to enrollees residing and managed health care systems serving the geographic area within the boundaries of the district, county, or city: PROVIDED, That the district, county, or city shares with the board, on a dollar for dollar matching basis, the cost of payments to participating managed health care systems for coverage of enrollees residing within the boundaries of the district, county, or city less the amounts payable by enrollees to the district, county, or city as agent for the board. In the event a hospital district, county, or city provides the board with adequate assurances of its ability to administer the plan for potential enrollees residing within its jurisdiction and agrees to share in the cost of any subsidy required for enrollees under the schedule for sliding scale payments, and the board has agreements for participation with a managed health care system or systems within the boundaries of such district, county, or city, and with the approval of the legislature, the plan may commence operations in that jurisdiction on or after March 30, 1986 notwithstanding the implementation dates in sections 10 and 12 of this act.

(5) With any community health center or other public or private nonprofit health care provider participating in a managed health care system under the plan and demonstrating financial need, to furnish direct financial assistance in meeting the start-up costs of providing covered basic health care services under the plan, for a period not exceeding one year after the managed health care system commences coverage of enrollees.

NEW SECTION. Sec. 15. The activities and operations of the Washington basic health plan under this chapter, including those of managed health care systems to the extent of their participation in the plan, shall be exempt from the provisions and requirements of Title 48 RCW.

NEW SECTION. Sec. 16. A new section is added to chapter 50.20 RCW to read as follows:

The commissioner shall notify in writing any person filing a claim under this chapter of the availability of basic health care coverage to qualified enrollees in the Washington basic health plan under chapter 70.__ RCW (sections 1 through 15 of this act). The commissioner shall maintain a supply of Washington basic health plan enrollment application forms, which shall be provided in reasonably necessary quantities by the Washington basic health plan board, in each employment service office for the use of persons wishing to apply for enrollment in the Washington basic health plan.

NEW SECTION. Sec. 17. A new section is added to chapter 74.08 RCW to read as follows:

The department shall notify in writing any person found ineligible for public assistance of the availability of basic health care coverage to qualified enrollees in the Washington basic health plan under chapter 70.__ RCW (sections 1 through 15 of this act). The department shall maintain a supply of Washington basic health plan enrollment application forms, which shall be provided in reasonably necessary quantities by the Washington basic health plan board, in each community service office for the use of persons wishing to apply for enrollment in the Washington basic health plan.

NEW SECTION. Sec. 18. A new section is added to chapter 82.24 RCW to read as follows:

Effective October 1, 1985, there is hereby levied and there shall be collected by the department of revenue from the persons mentioned in and in the manner provided by this chapter, an excise tax upon the sale, use, consumption, handling, possession, or distribution of cigarettes in an amount equal to the rate of four mills per cigarette. The moneys collected under this section shall be deposited in the basic health plan trust account of the state treasury.

NEW SECTION. Sec. 19. A new section is added to chapter 70.39 RCW to read as follows:

Effective July 1, 1986, the commission shall assess against each hospital an annual charge equal to one percent of the hospital's gross annual operating costs for the provision of hospital services for its last fiscal year ending on or before June 30 of the preceding calendar year, less the gross annual operating costs related to revenue received from any managed health care system participating in the Washington basic health plan, revenue received from the department of social and health services under provisions of chapter 74.09 RCW, and the costs of services carried as charity care, as such care is defined by the commission. A hospital that does not charge any fees for services rendered to patients may apply for a waiver of the annual assessment fee from the Washington basic health plan board. One-twelfth of the assessment shall be payable each month to the department of revenue and all such payments shall be deposited in the basic health plan trust account of the state treasury. The commission shall take into account, in establishing annual target amounts of state-wide hospital revenues under RCW 70.39.150(6), the duty of each hospital to pay the assessment.

NEW SECTION. Sec. 20. A new section is added to chapter 82.04 RCW to read as follows:

Effective July 1, 1986, there is levied and shall be collected from every person engaging in the business of practicing medicine as defined in chapter 18.57 or 18.71 RCW, other than a health maintenance organization as defined in chapter 48.46 RCW, for the act or privilege of engaging in business activities, as a part of the tax imposed by the provisions of RCW 82.04.290, an additional tax equal to the gross income of the business activity multiplied by the rate of one percent. Revenue received from any managed health care system participating in the Washington basic health plan, revenue received from the department of social and health services under the provisions of chapter 74.09 RCW, and the amount of professional liability insurance premiums paid during the reporting period may be deducted from revenues subject to the additional tax. Such deductions may not reduce revenues subject to the basic tax imposed by RCW 82.04.290. The department of revenue shall deposit the revenues collected under this section in the basic health plan trust account of the state treasury.

NEW SECTION. Sec. 21. The Washington basic health plan board shall be appointed, hire an executive director, and commence operations as promptly as practicable after the effective date of this act. Not later than January 1, 1986, the board shall submit to the legislature a progress report including:

(1) The schedule of covered basic health care services adopted under section 8 of this act;

(2) A proposal for legislation imposing, effective July 1, 1986, a tax or other assessment upon any class of health care providers or practitioners providing major professional services included in the schedule of basic health care services adopted under section 8 of this act, designed to raise sufficient revenue to cover the anticipated cost to participating managed health care systems of the professional services of providers or practitioners within the class;

(3) A descriptive listing of managed health care systems expected to participate in the Washington basic health plan, along with an identification of geographical areas within the state where no managed health care system is expected to be participating in the plan by July 1, 1986, together with any proposals that might assist or stimulate the development of managed health care systems in such areas;

(4) The approximate amount of funds estimated to be on deposit in the basic health plan trust account as of June 30, 1986;

(5) An estimate of the number of enrollees whose basic health care coverage under this chapter can be expected to be financed during the 1986-87 state fiscal year by combining revenues received under sections 18, 19, and 20 of this act with payments from the enrollees;

(6) A description of the sliding fee schedule for periodic enrollee payments adopted by the board under section 8 of this act;

(7) Jointly with the department of social and health services, a proposal for maximizing federal financial participation with respect to persons who may be eligible both for enrollment in the plan and for the limited casualty program under RCW 74.09.700;

(8) A proposal or set of proposals that would allow any health care provider subject to any assessment or tax imposed under this act an appropriate deduction, from the base used for such assessment or tax, of the costs associated with the provision of charity care by the health care provider;

(9) Any proposals for statutory changes which the board deems necessary to implement the purposes of this chapter; and

(10) Any other information which the board deems appropriate.

Not later than January 1, 1987, the board shall submit to the legislature a further progress report, updating its 1986 report, and covering the same items provided for therein, with projections based upon implementation of the plan to date. Further, the report shall include a description of the performance of the first managed health care systems included as eligible providers as provided in section 10 of this act.

NEW SECTION. Sec. 22. Sections 1 through 15 of this act shall constitute a new chapter in Title 70 RCW.

NEW SECTION. Sec. 23. There is appropriated from the general fund to the basic health plan trust account, for the biennium ending June 30, 1987, the sum of one million dollars, to carry out the purposes of this act. Such appropriation shall be repaid to the general fund as soon as practicable, but not later than June 30, 1987, from the revenues accruing to the basic health plan trust account under sections 18, 19, and 20 of this act.

There is appropriated from the basic health plan trust account of the state treasury to the Washington basic health plan board, for the biennium ending June 30, 1987, the sum of sixty million dollars, or as much thereof as shall be necessary, not exceeding funds deposited in the account, to carry out the purposes of this act.

There is appropriated from the general fund to the department of revenue, for the biennium ending June 30, 1987, the sum of seven thousand dollars, or as much thereof as shall be necessary, to carry out the purposes of this act.

Sec. 24. Section 82.24.020, chapter 15, Laws of 1961 as last amended by section 15, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.24.020 are each amended to read as follows:

(1) There is levied and there shall be collected as hereinafter provided, a tax upon the sale, use, consumption, handling, possession or distribution of all cigarettes, in an amount equal to the rate of ((~~eight~~)) eleven and one-half mills per cigarette.

(2) Wholesalers and retailers subject to the payment of this tax may, if they wish, absorb one-half mill per cigarette of the tax and not pass it on to purchasers without being in violation of this section or any other act relating to the sale or taxation of cigarettes.

(3) For purposes of this chapter ((~~and RCW 28A.47.440~~)), "possession" shall mean both (a) physical possession by the purchaser and, (b) when cigarettes are being transported to or held for the purchaser or his designee by a person other than the purchaser, constructive possession by the purchaser or his designee, which constructive possession shall be deemed to occur at the location of the cigarettes being so transported or held.

((~~(2) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section, RCW 82.24.025, and 28A.47.440.~~))

Sec. 25. Section 82.24.070, chapter 15, Laws of 1961 as last amended by section 14, chapter 299, Laws of 1971 ex. sess. and RCW 82.24.070 are each amended to read as follows:

Wholesalers and retailers subject to the provisions of this chapter shall be allowed compensation for their services in affixing the stamps herein required a sum equal to two percent of the first four mills of the value of the stamps purchased or affixed by them, one percent of the next one mill of the value of the stamps purchased or affixed by them, and one-half of one percent of the next one-half mill of the value of the stamps purchased or affixed by them.@p0

Sec. 26. Section 7, chapter 157, Laws of 1972 ex. sess. as last amended by section 217, chapter 3, Laws of 1983 and by section 3, chapter 189, Laws of 1983 and RCW 82.24.260 are each reenacted and amended to read as follows:

Any retailer who sells or otherwise disposes of any unstamped cigarettes other than (1) a federal instrumentality with respect to sales to authorized military personnel and (2) a federally recognized Indian tribal organization with respect to sales to enrolled members of the tribe shall collect from the buyer or transferee thereof the tax imposed on such buyer or transferee by ((~~RCW 82.24.020, 82.24.025, and 28A.47.440~~)) this chapter and remit the same to the department after deducting from the tax collected the compensation he would have been entitled to under the provisions of this chapter ((~~and RCW 28A.47.440~~)) if he had affixed stamps to the unstamped cigarettes. Such remittance shall be made at the same time and manner as remittances of the retail sales tax as required under chapters 82.08 and 82.32 RCW. In the event the retailer fails to collect the tax from the buyer or transferee, or fails to remit the same, the retailer shall be personally liable therefor, and shall be subject to the administrative provisions of RCW 82.24.230 with respect to the collection thereof by the department. The provisions of this section shall not relieve the buyer or possessor of unstamped cigarettes from personal liability for the tax imposed by ((~~RCW 82.24.020, 82.24.025, and 28A.47.440~~)) this chapter.

Nothing in this section shall relieve a wholesaler or a retailer from the requirements of affixing stamps pursuant to RCW 82.24.040 and 82.24.050.

Sec. 27. Section 31, chapter 35, Laws of 1982 1st ex. sess. as last amended by section 6, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.02.030 are each amended to read as follows:

(1) The rate of the additional taxes under RCW 54.28.020(2), 54.28.025(2), 66.24.210(2), 66.24.290(2), 82.04.2901, 82.16.020(2), 82.20.010(2), 82.26.020(2), 82.27.020(5), 82.29A.030(2), 82.44.020(5), and 82.45.060(2) shall be seven percent;

(2) The rate of the additional taxes under RCW 82.08.150(4) shall be fourteen percent; and

(3) ((~~The rate of the additional taxes under RCW 82.24.020(2) shall be fifteen percent; and~~

~~(4)~~)) The rate of the additional taxes under RCW 48.14.020(3) shall be four percent.

NEW SECTION. Sec. 28. The following acts or parts of acts are each repealed:

(1) Section 28A.47.440, chapter 223, Laws of 1969 ex. sess., section 1, chapter 70, Laws of 1971 ex. sess., section 1, chapter 157, Laws of 1972 ex. sess., section 2, chapter 189, Laws of 1983 and RCW 28A.47.440; and

(2) Section 2, chapter 59, Laws of 1979 ex. sess. and RCW 82.24.025.

NEW SECTION. Sec. 29. A new section is added to chapter 43.131 RCW to read as follows:

The Washington basic health plan board and its powers and duties shall be terminated on June 30, 1991, as provided in section 30 of this act.

NEW SECTION. Sec. 30. A new section is added to chapter 43.131 RCW to read as follows:

The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 1992:

(1) Section 1 of this act and RCW 70.__.___;

(2) Section 2 of this act and RCW 70.__.___;

(3) Section 3 of this act and RCW 70.__.___;

(4) Section 4 of this act and RCW 70.__.___;

(5) Section 5 of this act and RCW 70.__.___;

(6) Section 6 of this act and RCW 70.__.___;

(7) Section 7 of this act and RCW 70.__.___;

(8) Section 8 of this act and RCW 70.__.___;

(9) Section 9 of this act and RCW 70.__.___;

(10) Section 10 of this act and RCW 70.__.___;

(11) Section 11 of this act and RCW 70.__.___;

(12) Section 12 of this act and RCW 70.__.___;

(13) Section 13 of this act and RCW 70.__.___;

(14) Section 14 of this act and RCW 70.__.___;

(15) Section 15 of this act and RCW 70.__.___;

(16) Section 16 of this act and RCW 50.20.___;

(17) Section 17 of this act and RCW 74.08.___;

(18) Section 18 of this act and RCW 82.24.___;

(19) Section 19 of this act and RCW 70.39.___; and

(20) Section 20 of this act and RCW 82.04.___.

NEW SECTION. Sec. 31. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 32. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1985.