AN ACT Relating to workers' compensation; amending RCW 43.22.030, 48.32.020, 51.04.020, 51.04.030, 51.04.040, 51.04.070, 51.04.085, 51.04.100, 51.04.105, 51.08.013, 41.06.070, 51.08.015, 51.08.100, 51.08.160, 51.12.050, 51.12.070, 51.12.100, 51.12.110, 51.12.120, 51.12.140, 51.12.150, 51.14.010, 51.14.020, 51.14.050, 51.14.150, 51.16.035, 51.16.060, 51.16.070, 51.16.100, 51.16.120, 51.16.140, 51.16.150, 51.24.030, 51.24.050, 51.24.060, 51.24.070, 51.24.080, 51.24.090, 51.28.010, 51.28.020, 51.28.025, 51.28.030, 51.28.070, 51.32.010, 51.32.015, 51.32.030, 51.32.040, 51.32.050, 51.32.055, 51.32.060, 51.32.072, 51.32.073, 51.32.075, 51.32.080, 51.32.090, 51.32.095, 51.32.110, 51.32.130, 51.32.135, 51.32.150, 51.32.160, 51.32.190, 51.32.200, 51.32.210, 51.32.220, 51.32.230, 51.32.240, 51.32.250, 51.36.010, 51.36.020, 51.36.040, 51.36.060, 51.36.070, 51.36.080, 51.44.040, 51.44.070, 51.44.140, 51.44.150, 51.48.010, 51.48.015, 51.48.017, 51.48.020, 51.48.040, 51.48.050, 51.48.060, 51.48.090, 51.48.110, 51.48.120, 51.48.130, 51.48.140, 51.48.150, 51.52.010, 51.52.030, 51.52.050, 51.52.060, 51.52.070, 51.52.080, 51.52.095, 51.52.100, 51.52.110, 51.52.120, 51.52.130, 51.52.132, and 51.52.135; adding a new section to chapter 48.19 RCW; adding a new section to chapter 51.04 RCW; adding new sections to chapter 51.08 RCW; adding a new section to chapter 51.16 RCW; adding a new section to chapter 51.28 RCW; adding a new section to chapter 51.32 RCW; adding new sections to chapter 51.44 RCW; adding a new section to chapter 51.52 RCW; adding a new section to chapter 51.98 RCW; adding a new chapter to Title 51 RCW; creating new sections; repealing RCW 51.04.110, 51.08.014, 51.08.175, 51.14.100, 51.14.110, 51.16.042, 51.16.050, 51.36.050, 51.41.005, 51.41.010, 51.41.020, 51.41.030, 51.41.040, 51.41.050, 51.41.060, 51.41.070, 51.41.080, 51.41.090, 51.41.100, 51.44.010, 51.44.020, 51.44.050, 51.44.060, 51.44.160, and 51.52.150; making appropriations; and providing an effective date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 51.08 RCW to read as follows:

"Industrial insurance benefits" means all compensation, monetary benefits, and medical and related benefits provided under this title.

NEW SECTION. Sec. 2. A new section is added to chapter 51.08 RCW to read as follows:

"Insurer" means:

(1) The state fund as defined in section 3 of this act;

(2) Any private company, corporation, mutual association, reciprocal or interinsurance exchange that meets the requirement of section 14 of this act, and that insures the total liability created under this title for one or more employers;

(3) The state fund or any private company, corporation, mutual association, reciprocal or interinsurance exchange that meets the requirements of this title, and that fully insures the liability created under this title for a group of employers as defined in RCW 51.16.035; or

(4) Any employer to whom a certificate of qualification to self-insure has been issued under RCW 51.14.030, or group of employers certified to self-insure in accordance with chapter 51.14 RCW.

NEW SECTION. Sec. 3. A new section is added to chapter 51.08 RCW to read as follows:

"State fund" means the Washington state industrial insurance fund as established by section 7 of this act.

NEW SECTION. Sec. 4. A new section is added to chapter 51.08 RCW to read as follows:

"Manager" means the manager of the state fund as established by section 7 of this act.

NEW SECTION. Sec. 5. A new section is added to chapter 51.08 RCW to read as follows:

"Industrial insurance administrative fund" means the fund established under section 15 of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 51.08 RCW to read as follows:

"Commissioner" means the insurance commissioner as defined by RCW 48.02.010.

NEW SECTION. Sec. 7. (1) The "Washington state industrial insurance fund" is established for the purpose of insuring employers for their liability arising out of this title beginning July 1, 1986.

(2) The state fund may also insure any other liability that an employer who has secured coverage under this title with the state fund may have to his or her workers for bodily injury arising out of and in the course of employment as fully as any other insurer, including but not limited to any liability the employer may have under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. 901 to 950, or any act amendatory or supplementary thereto or in lieu thereof, and may enter into any contract or obligation relating to the transaction of its business that is permitted by law.

If the state fund does not insure the liability under the Longshoremen's and Harbor Worker's Compensation Act, 33 U.S.C. 901 to 950, or any act amendatory or supplementary thereto or in lieu thereof, then the state fund shall arrange to make such insurance available from another insurer properly authorized under Title 48 RCW to provide such insurance to any employer who insures its industrial insurance liability with the state fund.

(3) The functions of the state fund shall be:

(a) To confer with and solicit employers and to handle, audit, and enforce collection of premiums, assessments, and fees of employers insured with it;

(b) To receive, handle, and process the claims of workers and beneficiaries of workers injured in the employ of employers insured with the state fund and to issue warrants for the payment of its obligations; and

(c) To perform all other functions that the laws of this state authorize an industrial insurance insurer to perform and that are necessary or appropriate to carry out the functions authorized, including securing reinsurance for any risk insured by the state fund.

(4) The state fund in its own name may sue and be sued in all actions arising out of any act or omission in connection with its business affairs, and shall be entitled to appear as a party in any proceedings involving claims payable by the state fund under this title.

(5) The attorney general is the legal advisor of the state fund and shall represent it in all legal proceedings. Any employer may also join in any legal proceedings arising from claims for which the employer has secured coverage from the state fund.

(6) The state fund shall allocate revenues received from its investments, other than revenues allocated for the payment of pensions, to reduce the premiums for employers insured by the state fund and shall apply, whenever possible, for a deviation as provided in section 13 of this act from manual rates filed by the department so that its charges for industrial insurance are the lowest possible rates necessary to maintain the actuarial solvency of the state fund.

(7) The state fund shall annually determine if it has excess funds that are not necessary under recognized insurance principles to maintain actuarial solvency, pay fees due to the industrial insurance administrative fund, pay fees due to the supplemental pension fund, pay fees as required in section 20 of this act, or pay any other fees required. Thereafter the state fund shall then return or credit to its insureds excess funds on a pro rata share relative to the premiums paid by each employer.

(8) The state fund shall participate in the Washington insurance guaranty association under chapter 48.32 RCW in the same manner as any other industrial insurance insurer.

(9) The state fund shall charge premiums in accordance with this title and based on the rates filed by the department under chapter 51.16 RCW.

(10) The state fund shall participate in the assigned risk plan under section 13 of this act.

(11) The state fund may acquire, lease, rent, own, and manage real property. It may construct, equip, and furnish buildings or other structures as are necessary to accommodate its needs. It may purchase, rent, lease, or otherwise acquire for its use all supplies, materials, equipment, and services necessary to carry out its functions. It may sell or otherwise dispose of any property acquired under this subsection.

(12) The state fund may furnish advice, services, insurance, or reinsurance to any employer, group of insured employers, employer qualified as a self-insured employer, or group of self-insured employers, on such terms and conditions as the state fund deems reasonable in accordance with this title.

(13) The state fund shall pay all taxes and fees as any other insurer meeting the requirements of section 14 of this act.

NEW SECTION. Sec. 8. (1) The state fund created by section 7 of this act shall be governed by policies established by a board of five directors appointed by the governor and approved by the senate. Three of the members shall be employers or representatives of employers who, as of the date of the appointment, are insured with the state fund and who had been continuously insured with the state fund for not less than twelve months except that the first such directors shall be employers or representatives of employers who, on June 30, 1986, are insured with the department of labor and industries and have been continuously insured with the department of labor and industries for twenty-four consecutive months. One of the employer members shall represent a business with twenty or fewer employees at the time of appointment. Two members shall represent the public.

The initial terms of the board members shall be: One member shall serve for two years, two members shall serve for four years, and two members shall serve for six years. Thereafter, each member shall serve a term of six years. No member may serve more than two consecutive terms. Any member of the board who is not able to fulfill his or her term due to any cause including but not limited to death, disability, resignation, or any other reason shall be replaced by the governor within thirty days of the date it is determined by three of the five board members that the member is not able to fulfill his or her term. A member appointed by the governor shall be considered for confirmation by the next regular meeting of the senate. Failure of the senate to vote on the confirmation of any member as required by this section shall allow that member to serve his or her full term as appointed by the governor without approval of the senate.

(2) The board of directors shall:

(a) Elect a chair from among its members to serve for the following calendar year.

(b) Meet not less than monthly to consider and act on the affairs of the state fund.

(d) Employ a manager to manage the daily operations of the state fund.

(e) Be paid a salary of two hundred fifty dollars per day when participating in meetings of the board and be reimbursed for all expenses in accordance with chapter 43.03 RCW.

(3) The manager shall not be a voting member of the board of directors but shall act at the will of and in support of the board of directors and provide staff support as required by the board of directors to carry out its activities.

(4) No member of the board of directors may have any pecuniary interest, other than an incidental interest which is disclosed and made a matter of public record at the time of appointment to the board, in any corporation or other business entity doing business as an industrial insurance insurer.

(5) A majority of the members of the board shall constitute a quorum for the transaction of business.

NEW SECTION. Sec. 9. The state fund shall be under the direct supervision of a manager who shall be selected and employed at the discretion of the board of directors. The salary of the manager shall be fixed by the board of directors. The manager's entire time shall be devoted to the operations of the state fund and carrying out the policies set by the board of directors. The manager shall report at least annually to the board of directors, the governor, and the legislature on the state of the state fund and shall include in the report a review of its operations for the previous twelve months.

NEW SECTION. Sec. 10. The assets and liabilities of the following funds are transferred on July 1, 1986, to the state fund:

(1) The accident fund previously maintained under RCW 51.44.010 before July 1, 1986;

(2) The medical aid fund previously maintained under RCW 51.44.020 before July 1, 1986;

(3) The reserve fund previously maintained under RCW 51.44.030, before July 1, 1986, except that portion attributable to self-insurers pursuant to RCW 51.44.140 before July 1, 1986;

(4) All other assets and liabilities held by the industrial insurance division of the department under this title on July 1, 1986, except the supplemental pension fund and any other funds pertaining to the regulatory functions of the department; and

(5) The equipment and fixtures used by the department on June 30, 1986, to administer insurance for the liability of employers under Title 51 RCW, shall be transferred to the state fund without cost to the state fund.

NEW SECTION. Sec. 11. (1) Effective July 1, 1986, all employers required to pay industrial insurance benefits, medical aid, and supplemental pension fees to the industrial insurance division of the department of labor and industries under this title shall become insureds of the state fund until: (a) The employer elects to secure otherwise the payment of industrial insurance benefits under this title; or (b) the employer receives notice from the state fund of the termination or nonrenewal of insurance.

(2) All liability accruing under the law in effect to July 1, 1986, for employers paying premiums to the industrial insurance division of the department of labor and industries under this title is transferred on July 1, 1986, to the state fund, together with liabilities for all expenses, claim costs, administrative costs, and all other obligations arising out of the operations of the division and having accrued until July 1, 1986.

(3) The powers, duties, and functions of the industrial insurance division relating to insurance coverage, actuarial computations, claims management, premium collection, accounting, and all other powers necessary to administer the state fund as an insurer, that are not otherwise transferred by this chapter, are vested in the state fund as of July 1, 1986.

NEW SECTION. Sec. 12. The state of Washington shall not be liable beyond the assets of the state fund for any obligations of the state fund. The state fund shall operate on a parity with other insurers, other than self-insurers and self-insured groups, and shall be self-supporting and without subsidy of any kind. It is the intent of the legislature that the state fund shall have authority to acquire any equipment, supplies, or other personal or real property, and employ such personnel as may be reasonably necessary to solicit and provide industrial insurance, and take all actions to enable it to be fully competitive in offering industrial insurance. The state fund shall be subject to the same regulation, examination, reporting requirements and disclosure as all other insurers other than self-insurers and self-insured groups providing insurance under this title.

All moneys received by and under the supervision and control of the state fund shall be deposited and maintained by the state fund. Disbursements from the state fund for all the operating costs of the fund and for payment of all claims obligations shall be on authorization of the manager or a duly authorized representative of the manager.

NEW SECTION. Sec. 13. A new section is added to chapter 48.19 RCW to read as follows:

(1) For the purposes of this chapter, the term "industrial insurance insurer" includes an insurer authorized to insure the liabilities defined by Title 51 RCW and includes the state fund as established by section 7 of this act, but does not include any employer or group of employers who are authorized to self-insure as provided by chapter 51.14 RCW, or any other insurer authorized to provide insurance in this state that insures a portion of the liability arising from this title for an employer that is self-insured or a group of employers that are self-insured. However, chapter 48.22 RCW shall not apply to industrial insurance unless specified. Where provisions of this section conflict with other provisions of this title, the provisions of this section shall control.

(2) The commissioner shall issue a certificate of authority to be an industrial insurance insurer if the insurer meets the requirements to be licensed to sell insurance in this state and meets the applicable provisions of this title and Title 51 RCW. The commissioner shall perform all duties required under this title to ensure that each insurer continues to meet the requirements of the applicable provisions of this title and Title 51 RCW.

(3) Any insurer may make written application to the commissioner for approval of uniform percentage deviations from the manual rates filed by the department and approved by the commissioner. An insurer shall not charge more than either the manual rates filed by the department or, for insurers who have approval to deviate, the manual rate multiplied by the percentage deviation.

(4) The commissioner shall establish an assigned risk plan for all industrial insurance insurers. The commissioner may agree to have the department operate the assigned risk plan if consistent with the requirements in this title and Title 51 RCW.

(5) Nothing in this chapter may be construed to prohibit or regulate the payment of dividends and savings on unabsorbed premium deposits allowed or returned by industrial insurance insurers to their policyholders, members, or subscribers. A plan returned by insurers to their policyholders, members, or subscribers shall not be deemed a rating plan or system.

NEW SECTION. Sec. 14. (1) Each insurer offering to sell industrial insurance meeting the requirements of this title, except for employers that are self-insured, or any group of employers who are self-insured as authorized under chapter 51.14 RCW, or insurers providing partial reinsurance for a self-insurer, shall:

(a) Hold a certificate of authority issued by the insurance commissioner under chapter 48.05 RCW permitting it to provide industrial insurance.

(b) Hold a certificate issued by the director that it will provide adequate safety engineering, loss prevention, and claims management services for all employers the insurer insures. Such a certificate shall not be valid if the insurer fails to maintain a location within the state where applications for industrial insurance benefits may be made and maintain with the director a list of the locations and telephone numbers where information may be obtained about all appropriate matters relating to claims.

(2) Each insurer may refuse to provide industrial insurance for any employer except that each insurer shall participate in the assigned risk plan as provided in section 13 of this act. Any insurer failing to provide insurance as required by the assigned risk plan shall not be permitted to sell industrial insurance in this state.

(3) Each insurer shall meet the requirements of the department in reporting information needed for the department to establish rates in accordance with chapter 51.16 RCW. Failure of any insurer to meet these requirements or failure to provide accurate data as required by the department shall prohibit such insurer from selling industrial insurance in this state.

(4) Each insurer shall provide or arrange for another insurance company properly authorized in this state to make coverage available to any of its insureds requesting to insure the employer's liability under the Federal Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. 901 to 950, or any act amendatory or supplementary thereto or in lieu thereof either directly or through any other insurer properly authorized under Title 48 RCW to provide such insurance.

(5) Each insurer shall continue to insure the liability under this title for any employer it has insured for the same cost except when it provides the employer a written notice not less than forty-five days before the renewal date of the insurance notifying the employer of the insurer's decision not to renew the insurance or notifying the employer of a different cost for the insurance upon renewal.

(6) On the effective date of this section, the state fund shall be issued a certificate of authority from the insurance commissioner and shall also be issued a certificate from the director as required in subsection (1) of this section. Thereafter, the state fund shall be required to maintain those certificates and meet all of the applicable provisions of Title 48 RCW and this title like any other insurer.

NEW SECTION. Sec. 15. A new section is added to chapter 51.44 RCW to read as follows:

A revolving fund to be known and designated as the "industrial insurance administrative fund" is created in the office of the state treasurer. The director shall be the administrator of this fund. The industrial insurance administrative fund is established to provide for the payment of all expenses of the department, the board of industrial insurance appeals, and the insurance commissioner with respect to the administration of their respective duties under this title and those sections of Title 48 RCW governing industrial insurance. There shall be separate appropriations approved by the legislature and the governor for the department, the board, and the insurance commissioner. Any money appropriated from the general fund for the uses and purposes of the administrative fund shall be placed in the administrative fund.

NEW SECTION. Sec. 16. A new section is added to chapter 51.44 RCW to read as follows:

(1) The director shall periodically calculate and collect from insurers assessments that, with the interest earned, are sufficient to cover the administrative costs described in sections 15 and 18 of this act. The time and manner of collecting assessments shall be set forth in rules promulgated by the director under chapter 34.04 RCW.

(2) The director shall prepare as soon as is practicable after July 1 each year, a line item budget for the industrial insurance administrative fund for the succeeding fiscal year. The budget shall be based upon the actual expenditures of the preceding fiscal year and a reasonable estimate of expenses for the succeeding year. This budget shall be adopted in accordance with chapter 34.04 RCW.

(3) The assessment of each insurer shall be an amount bearing the same ratio to such total administrative costs that each insurer's adjusted premium bears to the aggregated adjusted premium of all insurers. As used in this subsection "adjusted premium" means:

(a) For insurers, other than self-insurers or self-insured groups, the direct earned premium for industrial insurance under this title, determined under uniform rules promulgated by the director after consultation with the insurance commissioner; and

(b) For self-insurers and self-insured groups, the premium that would have been incurred had it insured its liability under this title with the state fund, determined under uniform rules promulgated by the director after consultation with the insurance commissioner.

(4) The assessment for each insurer shall be calculated in the following manner:

(a) The assessment for each insurer shall be based on adjusted premium for the period immediately preceding the period to which the assessment will apply.

(b) The periodic assessment shall be adjusted after each fiscal year to reflect the actual adjusted premium of each insurer for such fiscal year, as determined by the director after consultation with the insurance commissioner.

(c) Notwithstanding any provision of this section, each insurer may be assessed annually a minimum amount not to exceed five hundred dollars, as determined by the director after consultation with the insurance commissioner.

(d) As of July 1, 1987, assessments shall be determined for insurers on a fiscal year basis and collected annually, and the provisions of (b) of this subsection shall no longer apply.

(5) Assessments shall be payable in full within thirty days of the notice of assessment. If any insurer fails to pay the assessment by the date due, interest may be charged on all past due amounts at such reasonable market rate as the director may establish from time to time.

(6) In no event may any assessment made under this section exceed four percent per annum of the total taxable industrial insurance premiums in this state for the year immediately preceding such assessment.

(7) Any amount resulting from or anticipated for expenditures from the industrial insurance administrative fund that arises from the uncorrected default of a self-insurer or self-insured group shall be assessed only upon self-insurers and self-insured groups.

NEW SECTION. Sec. 17. A new section is added to chapter 51.44 RCW to read as follows:

There shall be created in the office of the state treasurer a fund to be known and designated as the "insurance commissioner's industrial insurance operating fund." This fund is established to provide for the payment of all expenses of the insurance commissioner for the administrative and regulatory duties relating to workers' compensation insurance imposed by this title and Title 48 RCW.

The insurance commissioner shall annually estimate the costs of administering the provisions of this title relating to industrial insurance and shall submit the estimate for inclusion, together with justification, in the assessment upon insurers to be imposed by the director of labor and industries pursuant to section 16 of this act. The director of labor and industries shall transfer the amount of the assessment relating to the office of the insurance commissioner to the insurance commissioner's industrial insurance operating fund. The commissioner shall report annually to the legislature the activity of the insurance commissioner's industrial insurance operating fund, including justification for assessments.

NEW SECTION. Sec. 18. A new section is added to chapter 51.16 RCW to read as follows:

Whenever industrial insurance benefits due under this title are not paid as required, it shall be defined as a default. Industrial insurance benefits due but which are the subject of a default shall be paid as follows:

(1) Where such default results from the failure of an employer to secure the payment of industrial insurance benefits due under this title, industrial insurance benefits shall be paid by the director from the industrial insurance administrative fund. In addition to any penalty imposed under RCW 51.48.010 and 51.48.015, the defaulting employer shall be liable for payment into the industrial insurance administrative fund the amounts paid therefrom by the director plus market interest on any outstanding balance. For the purpose of enforcing this liability, the director, for the benefit of the industrial insurance administrative fund, shall be subrogated to all of the rights of the person receiving such industrial insurance benefits;

(2) Where such default results from the failure of a self-insurer or a self-insured group to make industrial insurance payments, industrial insurance benefits shall be paid by the director from the industrial insurance administrative fund only after the moneys available from the bonds or other security provided under the requirements of this title have been exhausted. Such defaulting self-insurer or self-insured group shall be liable for payment into the industrial insurance administrative fund the amounts paid therefrom by the director plus market interest on any unpaid balance. For the purpose of enforcing this liability, the director, for the benefit of the industrial insurance administrative fund, shall be subrogated to all of the rights of the person receiving such industrial insurance benefits;

(3) Where such default results from the failure of an insolvent insurer as defined in RCW 48.32.030, to make industrial insurance benefit payments, industrial insurance benefits shall be paid by the director from the industrial insurance administrative fund. The Washington insurance guaranty association, as defined by chapter 48.32 RCW, shall be liable for payment into the industrial insurance administrative fund the amounts paid therefrom by the director in lieu of paying any such amounts of industrial insurance benefits directly to the claimant;

(4) In cases other than those involving insurer insolvency where industrial insurance benefits are not timely paid or where the payment of industrial insurance benefits are delayed as a result of a dispute as to which insurer is responsible for the payment of industrial insurance benefits, such payments shall be made from the industrial insurance administrative fund and the director shall have the right of recovery from the party or parties ultimately deemed responsible for the payment of such industrial insurance benefits;

(5) The director may purchase insurance for the industrial insurance administrative fund to pay for defaults under this section. The administrative fund shall pay for such insurance, and the liability of insurers shall be limited to the liabilities not paid by such insurance. The director shall actively pursue legal action to collect payments to the industrial insurance administrative fund as set forth in this section.

NEW SECTION. Sec. 19. (1) On the effective date of this section, the department, together with the commissioner, shall estimate the amount of all liabilities and all assets of the department as provided for in section 11 of this act. If the department and the commissioner estimate that the liabilities are greater than the assets on the effective date of this section, the amount of that liability shall be reported to the governor and the legislature within thirty days after the effective date of this section.

(2) If it is determined that there are greater liabilities than assets, the director and the commissioner shall determine the amount necessary, when invested with the other funds transferred to the state fund under section 10 of this act, to be a sufficient amount plus interest earned to pay the excess liabilities. The director and the commissioner shall determine the total amount of principal plus the cost of paying that amount in equal payments per calendar quarter for a period not to exceed five years beginning October 1, 1985. In determining the period over which the payments shall be made, the director and the commissioner shall set the period of time to minimize the financial impact on all employers of the state. The director and the commissioner shall fix the amount to be paid quarterly for each calendar quarter, beginning October 1, 1985. Each employer, other than employers who are self-insured or group self-insured pursuant to chapter 51.14 RCW before the effective date of this section shall pay its portion of the quarterly payment based on a flat percentage rate of the rates calculated for each employer including each employer's experience modification as calculated by the department. Employers who become self-insured or group self-insured after October 1, 1985, shall pay a flat percentage of the appropriate manual rates set by the department for their type of business. Insurers of employers who are not self-insured shall collect these payments from their insureds and remit them to the state fund, without charge. The state fund shall invest the payments received with its other reserves and together, these payments and their earnings shall be used to pay the excess liabilities of the department incurred before the effective date of this section.

(3) Within sixty days after the effective date of this section, the department shall set rates under chapter 51.16 RCW to avoid adding any additional liability. These rates shall not exceed the expected costs for the proper actuarial insuring of the liability under this title.

(4) If, at anytime after the effective date of this section it is determined by the state fund board of directors, the department, and the commissioner that the liabilities before the effective date of this section of the industrial insurance division of the department of labor and industries exceed the assets transferred from the industrial insurance division of the department of labor and industries to the state fund under section 10 of this act, plus all payments received by the state fund under subsection (2) of this section, the board of directors, the department, and the commissioner may use the provisions of subsection (2) of this section to recover this excess liability. The payments provided for in subsection (2) of this section may be established for a period of less than five years if it is determined by the board of directors, the department, and the commissioner that this will not place an excessive financial burden on all employers.

NEW SECTION. Sec. 20. A new section is added to chapter 51.28 RCW to read as follows:

(1) The insurer shall notify the employer of an injured worker:

(a) Of its decision whether or not to pay industrial insurance benefits for any application for industrial insurance benefits within five days of making such decision.

(b) Each time the insurer makes a decision to pay industrial insurance benefits pursuant to chapter 51.32 RCW.

(c) At intervals not to exceed thirty calendar days of any medical services approved or authorized pursuant to chapter 51.36 RCW.

(2) Each notice under this section shall include an explanation, in nontechnical language, of the potential impacts of the decision on the industrial insurance rates of the employer and the employer's right to request mediation or appeal the decision. The sixty day requirement to request reconsideration or appeal a decision shall not begin until the notice had been sent to the employer.

(3) Failure of the insurer to provide the notice required by this section prohibits the insurer from reporting against the employer's experience, the benefits provided but which the employer was not notified about in accordance with this section.

Sec. 21. Section 43.22.030, chapter 8, Laws of 1965 and RCW 43.22.030 are each amended to read as follows:

The director of labor and industries, through the division of industrial insurance, shall:

(1) Exercise all the powers and perform all the duties prescribed by law with respect to the ((~~administration~~)) regulation of ((~~workmen's compensation and medical aid~~)) this title in this state((;

(2) Have the custody of all property acquired by the state at execution sales upon judgments obtained for delinquent industrial insurance premiums or medical aid contributions, and penalties and costs; sell and dispose of the same at private sales for the sale purchase price, and pay the proceeds into the state treasury to the credit of the accident fund, or medical aid fund, as the case may be. In case of the sale of real estate the director shall execute the deed in the name of the state)) and the implementation of such laws and rules adopted to achieve the expressed legislative purpose and goals of the law.

Sec. 22. Section 2, chapter 265, Laws of 1971 ex. sess. as amended by section 2, chapter 109, Laws of 1975-'76 2nd ex. sess. and RCW 48.32.020 are each amended to read as follows:

This chapter shall apply to all kinds of direct insurance, except life, title, surety, disability, credit, mortgage guaranty, ((~~workmen's compensation~~)) and ocean marine insurance. This chapter shall not apply to an obligation of, nor create a duty in a self-insurer certified under RCW 51.14.030, or a self-insured group as defined in section 14 of this 1985 act, or the state fund as established in section 7 of this 1985 act.

NEW SECTION. Sec. 23. A new section is added to chapter 51.04 RCW to read as follows:

(1) The department shall attempt to mediate disputes concerning the provisions of this title between employers, workers claiming industrial insurance benefits under this title, or insurers. No person may file an appeal under chapter 51.52 RCW before the board without first submitting a written "notice of dispute" to the director or the director's designee and all other parties concerned. The director shall establish the format and contents of a "notice of dispute" by rules adopted in accordance with chapter 34.04 RCW.

(2) The department shall review each "notice of dispute" and send a notice within five days of receiving the "notice of dispute" to all parties identified in the dispute of its determination either:

(a) Setting a date to meet with the parties to the dispute to attempt to mediate the dispute; or

(b) That the department has determined that mediation will not be effective and notifying all parties of their right to proceed with an appeal in accordance with chapter 51.52 RCW.

(3) The department shall make every effort reasonably possible to mediate the dispute within twenty calendar days. If the department has been unsuccessful in achieving an agreement among the parties to the dispute within twenty calendar days, any party to the dispute may file an appeal to the board in accordance with chapter 51.52 RCW. The department may continue to attempt to mediate the dispute but such attempt to mediate shall not delay consideration of the appeal by the board, except where a settlement is reached by the parties before the industrial insurance appeals judge issuing his or her proposed decision and order of the appeal.

(4) Each party to the dispute may be represented by or may consult with counsel during mediation by the department. The department shall be objective and impartial during all mediation efforts. The department shall only advise the parties to the dispute of the application of the laws and facts under this title.

(5) If all parties agree to a settlement during mediation, the parties shall not have a right of appeal of the settlement to the board after fifteen days after agreeing to the settlement. The department shall mail a written notice of the terms of the settlement to each party within two business days of reaching the settlement.

(6) The records of the attempt to mediate by the department shall not be considered by the board when considering an appeal under this chapter.

(7) The department shall not charge any of the parties to a dispute for the costs of mediation under this section.

NEW SECTION. Sec. 24. A new section is added to chapter 51.52 RCW to read as follows:

The board shall not consider any appeal which has not met the requirements of section 23 of this act.

Sec. 25. Section 51.04.020, chapter 23, Laws of 1961 as last amended by section 77, chapter 75, Laws of 1977 and RCW 51.04.020 are each amended to read as follows:

The director shall:

(1) Establish and promulgate rules governing the administration of this title;

(2) ((~~Ascertain and establish the amounts to be paid into and out of the accident fund;~~

~~(3)~~)) Regulate the proof of accident and extent thereof, the proof of death and the proof of relationship and the extent of dependency;

((~~(4) Supervise the~~)) (3) Establish and promulgate rules governing the provision of medical, surgical, and hospital treatment to the intent that it may be in all cases efficient and up to the recognized standard of modern surgery;

(4) Regulate the claims handling practices of all insurers to achieve prompt and fair claims services to injured workers and beneficiaries;

(5) ((~~Issue proper receipts for moneys received and certificates for benefits accrued or accruing;~~

~~(6)~~)) Investigate the cause of all serious injuries and report to the governor from time to time any violations or laxity in performance of protective statutes or regulations coming under the observation of the department;

((~~(7)~~)) (6) Create a division of statistics within which shall be compiled such statistics as will afford reliable information upon which to base operations of all divisions under the department;

((~~(8)~~)) (7) Make an annual report to the governor of the workings of the department under this title;

((~~(9)~~)) (8) Be empowered to enter into agreements with the appropriate agencies of other states relating to conflicts of jurisdiction where the contract of employment is in one state and injuries are received in the other state, and insofar as permitted by the Constitution and laws of the United States, to enter into similar agreements with the provinces of Canada.

Sec. 26. Section 1, chapter 14, Laws of 1980 and RCW 51.04.030 are each amended to read as follows:

((The director shall, through the division of industrial insurance, supervise the providing of prompt and efficient care and treatment, including care provided by physicians' assistants governed by the provisions of chapters 18.57A and 18.71A RCW, acting under a supervising physician to workers injured during the course of their employment at the least cost consistent with promptness and efficiency, without discrimination or favoritism, and with as great uniformity as the various and diverse surrounding circumstances and locations of industries will permit and to that end shall, from time to time, establish and promulgate and supervise the administration of printed forms, rules, regulations, and practices for the furnishing of such care and treatment.))

The director shall make and, from time to time, change as may be, and promulgate a fee ((~~bill of~~)) schedule for the maximum charges to be made by any physician, surgeon, hospital, druggist, physicians' assistants as defined in chapters 18.57A and 18.71A RCW, acting under a supervising physician or other agency or person rendering services to injured workers. No service covered under this title shall be charged or paid at a rate or rates exceeding those specified in such fee ((~~bill~~)) schedule, and no contract providing for greater fees shall be valid as to the excess.

((~~The director or self-insurer, as the case may be,~~)) All insurers shall make a record of the commencement of every disability and the termination thereof and, when bills are rendered for the care and treatment of injured workers, shall approve and pay those which conform to the promulgated rules, regulations, and practices of the director and may reject any bill or item thereof incurred in violation of the principles laid down in this section or the rules and regulations promulgated under it.

Sec. 27. Section 51.04.040, chapter 23, Laws of 1961 as amended by section 1, chapter 323, Laws of 1977 ex. sess. and RCW 51.04.040 are each amended to read as follows:

The director shall have power to issue subpoenas to enforce the attendance and testimony of witnesses and the production and examination of books, papers, photographs, tapes, and records before the department in connection with any claim made ((~~to the department, or the assessment or collection of premiums~~)) under this title. The superior court shall have the power to enforce any such subpoena by proper proceedings.

Sec. 28. Section 2, chapter 14, Laws of 1980 and RCW 51.04.070 are each amended to read as follows:

A minor shall be deemed sui juris for the purpose of this title, and no other person shall have any cause of action or right to compensation for an injury to such minor worker, except as expressly provided in this title, but in the event of any disability payments becoming due under this title to a minor worker, under the age of eighteen, such disability payments shall be paid to his or her parent, guardian or other person having legal custody of his or her person until he or she reaches the age of eighteen. Upon the submission of written authorization by any such parent, guardian, or other person, any such disability payments may be paid directly to such injured worker under the age of eighteen years. If it is necessary to appoint a legal guardian to receive such disability payments, there shall be paid ((~~from the accident fund or by the self-insurer, as the case may be,~~)) by the insurer toward the expenses of such guardianship a sum not to exceed three hundred dollars.

Sec. 29. Section 26, chapter 323, Laws of 1977 ex. sess. and RCW 51.04.085 are each amended to read as follows:

((~~The department~~)) An insurer may, at any time, on receipt of written authorization, transmit amounts payable to a claimant, beneficiary, or any supplier of goods or services to the account of such person in a bank or other financial institution regulated by state or federal authority.

Sec. 30. Section 51.04.100, chapter 23, Laws of 1961 as amended by section 6, chapter 350, Laws of 1977 ex. sess. and RCW 51.04.100 are each amended to read as follows:

If the provisions of this title relative to compensation for injuries to or death of workers become invalid because of any adjudication, or be repealed, the period intervening between the occurrence of an injury or death, not previously compensated for under this title by lump payment or completed monthly payments, and such repeal or the rendition of the final adjudication of invalidity shall not be computed as a part of the time limited by law for the commencement of any action relating to such injury or death: PROVIDED, That such action be commenced within one year after such repeal or adjudication; but in any such action any sum paid out ((~~of the accident fund~~)) to the worker on account of injury, to whom the action is prosecuted, shall be taken into account or disposed of as follows: If the defendant employer shall have paid without delinquency ((~~into the accident fund~~)) the payment provided by this title, such sums shall be credited upon the recovery as payment thereon, otherwise the sum shall not be so credited but shall be deducted from the sum collected and be paid ((~~into the said fund~~)) to the source from which they had been previously disbursed.

Sec. 31. Section 25, chapter 323, Laws of 1977 ex. sess. and RCW 51.04.105 are each amended to read as follows:

The obligations of all medical aid contracts approved by the supervisor prior to the repeal of any section of this title pertaining to medical aid contracts shall continue until the expiration of such contracts notwithstanding any such repeal and all provisions of this title pertaining to the operation of medical aid contracts and the control and supervision of such contracts which were in effect at the time of such approval shall, notwithstanding any other provision of law, remain in full force and effect. All medical aid contracts shall expire on June 30, 1986.

Sec. 32. Section 3, chapter 107, Laws of 1961 as last amended by section 15, chapter 111, Laws of 1979 and RCW 51.08.013 are each amended to read as follows:

"Acting in the course of employment" means the worker acting at his or her employer's direction or in the furtherance of his or her employer's business ((~~which shall include time spent going to and from work on the jobsite~~)), as defined in RCW 51.32.015 and 51.36.040, insofar as such time is immediate to the actual time that the worker is engaged in the work process in areas controlled by his or her employer, except parking areas, and it is not necessary that at the time an injury is sustained by a worker he or she be doing the work on which his or her compensation is based or that the event be within the time limits on which industrial insurance ((~~or medical aid~~)) premiums or assessments are paid. The term shall not include time spent going to or coming from the employer's place of business in commuter ride sharing, as defined in RCW 46.74.010(1), notwithstanding any participation by the employer in the ride-sharing arrangement.

Sec. 33. Section 1, chapter 11, Laws of 1972 ex. sess. as last amended by section 2, chapter 210, Laws of 1984 and RCW 41.06.070 are each amended to read as follows:

The provisions of this chapter do not apply to:

(1) The members of the legislature or to any employee of, or position in, the legislative branch of the state government including members, officers, and employees of the legislative council, legislative budget committee, statute law committee, and any interim committee of the legislature;

(2) The justices of the supreme court, judges of the court of appeals, judges of the superior courts or of the inferior courts, or to any employee of, or position in the judicial branch of state government;

(3) Officers, academic personnel, and employees of state institutions of higher education, the state board for community college education, and the higher education personnel board;

(4) The officers of the Washington state patrol;

(5) Elective officers of the state;

(6) The chief executive officer of each agency;

(7) In the departments of employment security, fisheries, social and health services, the director and his confidential secretary; in all other departments, the executive head of which is an individual appointed by the governor, the director, his confidential secretary, and his statutory assistant directors;

(8) In the case of a multimember board, commission, or committee, whether the members thereof are elected, appointed by the governor or other authority, serve ex officio, or are otherwise chosen:

(a) All members of such boards, commissions, or committees;

(b) If the members of the board, commission, or committee serve on a part time basis and there is a statutory executive officer: (i) The secretary of the board, commission, or committee; (ii) the chief executive officer of the board, commission, or committee; and (iii) the confidential secretary of the chief executive officer of the board, commission, or committee;

(c) If the members of the board, commission, or committee serve on a full time basis: (i) The chief executive officer or administrative officer as designated by the board, commission, or committee; and (ii) a confidential secretary to the chairman of the board, commission, or committee;

(d) If all members of the board, commission, or committee serve ex officio: (i) The chief executive officer; and (ii) the confidential secretary of such chief executive officer;

(9) The confidential secretaries and administrative assistants in the immediate offices of the elective officers of the state;

(10) Assistant attorneys general;

(11) Commissioned and enlisted personnel in the military service of the state;

(12) Inmate, student, part time, or temporary employees, and part time professional consultants, as defined by the state personnel board or the board having jurisdiction;

(13) The public printer or to any employees of or positions in the state printing plant;

(14) Officers and employees of the Washington state fruit commission;

(15) Officers and employees of the Washington state apple advertising commission;

(16) Officers and employees of the Washington state dairy products commission;

(17) Officers and employees of the Washington tree fruit research commission;

(18) Officers and employees of the Washington state beef commission;

(19) Officers and employees of any commission formed under the provisions of chapter 191, Laws of 1955, and chapter 15.66 RCW;

(20) Officers and employees of the state wheat commission formed under the provisions of chapter 87, Laws of 1961 (chapter 15.63 RCW);

(21) Officers and employees of agricultural commissions formed under the provisions of chapter 256, Laws of 1961 (chapter 15.65 RCW);

(22) Officers and employees of the nonprofit corporation formed under chapter 67.40 RCW;

(23) Liquor vendors appointed by the Washington state liquor control board pursuant to RCW 66.08.050: PROVIDED, HOWEVER, That rules and regulations adopted by the state personnel board pursuant to RCW 41.06.150 regarding the basis for, and procedures to be followed for, the dismissal, suspension, or demotion of an employee, and appeals therefrom shall be fully applicable to liquor vendors except those part time agency vendors employed by the liquor control board when, in addition to the sale of liquor for the state, they sell goods, wares, merchandise, or services as a self-sustaining private retail business;

(24) Executive assistants for personnel administration and labor relations in all state agencies employing such executive assistants including but not limited to all departments, offices, commissions, committees, boards, or other bodies subject to the provisions of this chapter and this subsection shall prevail over any provision of law inconsistent herewith unless specific exception is made in such law;

(25) All employees of the marine employees' commission;

(26) The manager and all employees of the Washington state industrial insurance fund;

(27) In addition to the exemptions specifically provided by this chapter, the state personnel board may provide for further exemptions pursuant to the following procedures. The governor or other appropriate elected official may submit requests for exemption to the personnel board stating the reasons for requesting such exemptions. The personnel board shall hold a public hearing, after proper notice, on requests submitted pursuant to this subsection. If the board determines that the position for which exemption is requested is one involving substantial responsibility for the formulation of basic agency or executive policy or one involving directing and controlling program operations of an agency or a major administrative division thereof, the personnel board shall grant the request and such determination shall be final. The total number of additional exemptions permitted under this subsection shall not exceed one hundred seventy-five for those agencies not directly under the authority of any elected public official other than the governor, and shall not exceed a total of twenty-five for all agencies under the authority of elected public officials other than the governor. The state personnel board shall report to each regular session of the legislature during an odd-numbered year all exemptions granted pursuant to the provisions of this subsection, together with the reasons for such exemptions.

The salary and fringe benefits of all positions presently or hereafter exempted except for the chief executive officer of each agency, full time members of boards and commissions, administrative assistants and confidential secretaries in the immediate office of an elected state official, and the personnel listed in subsections (10) through (22) of this section, shall be determined by the state personnel board.

Any person holding a classified position subject to the provisions of this chapter shall, when and if such position is subsequently exempted from the application of this chapter, be afforded the following rights: If such person previously held permanent status in another classified position, such person shall have a right of reversion to the highest class of position previously held, or to a position of similar nature and salary.

Any classified employee having civil service status in a classified position who accepts an appointment in an exempt position shall have the right of reversion to the highest class of position previously held, or to a position of similar nature and salary, within four years from the date of appointment to the exempt position. However, (a) upon the prior request of the appointing authority of the exempt position, the personnel board may approve one extension of no more than four years; and (b) if an appointment was accepted prior to July 10, 1982, then the four-year period shall begin on July 10, 1982.

Sec. 34. Section 51.08.015, chapter 23, Laws of 1961 as last amended by section 9, chapter 350, Laws of 1977 ex. sess. and RCW 51.08.015 are each amended to read as follows:

Wherever and whenever in any of the provisions of this title relating to any payments by an employer or worker or insurer to the department, the words "amount" and/or "amounts," "payment" and/or "payments," ((~~"premium" and/or "premiums,"~~)) "contribution" and/or "contributions," and "assessment" and/or "assessments" appear said words shall be construed to mean taxes, which are the money payments by an employer or worker or insurer which are required by this title to be made to the state treasury for the ((~~accident~~)) industrial insurance administrative fund, ((~~the medical aid fund,~~)) the supplemental pension fund, the second injury fund, or any other fund created by this title that is administered by the director.

Sec. 35. Section 51.08.100, chapter 23, Laws of 1961 and RCW 51.08.100 are each amended to read as follows:

"Injury" means a sudden and tangible happening, of a traumatic nature, producing an immediate or prompt result, and occurring from without, and such physical conditions as result therefrom, that rise naturally and proximately out of employment, and that do not include physical conditions that occur or develop as the result of normal bodily movements that are not peculiar to the worker's employment and that occur commonly in nonemployment life.

Sec. 36. Section 51.08.160, chapter 23, Laws of 1961 as amended by section 13, chapter 350, Laws of 1977 ex. sess. and RCW 51.08.160 are each amended to read as follows:

"Permanent total disability" means: (1) Loss of both legs, or arms, or one leg and one arm, total loss of eyesight, or paralysis; or (2) other conditions permanently incapacitating the worker from performing any work at any gainful occupation as a direct result of the worker's injury or disease and without regard or consideration to the worker's age, education, prior work experience, or prior injuries, diseases, or disabilities.

If the basis for a claim for permanent total disability is subsection (2) of this section, in order to qualify as such, the injured worker shall present evidence sufficient to show that his or her inability to obtain employment is due to physical limitations related to the accident or disease and is not due to economic conditions or the lack of availability of employment. In any event, permanent total disability benefits shall not be paid to any worker who is over seventy years of age.

Sec. 37. Section 51.12.050, chapter 23, Laws of 1961 as last amended by section 18, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.050 are each amended to read as follows:

((Whenever the state, county, any municipal corporation, or other taxing district shall engage in any work, or let a contract therefor, in which workers are employed for wages, this title shall be applicable thereto. The employer's payments into the accident fund shall be made from the treasury of the state, county, municipality, or other taxing district. If the work is being done by contract, the payroll of the contractor and the subcontractor shall be the basis of computation and, in the case of contract work consuming less than one year in performance, the required payment into the accident fund shall be based upon the total payroll. The contractor and any subcontractor shall be subject to the provisions of this title, and the state for its general fund, the county, municipal corporation, or other taxing district shall be entitled to collect from the contractor the full amount payable to the accident fund and the contractor, in turn, shall be entitled to collect from the subcontractor his or her proportionate amount of the payment.))

Whenever and so long as, by state law, city charter, or municipal ordinance, provision is made for employees or peace officers injured in the course of employment, such employees shall not be entitled to the benefits of this title and shall not be included in the payroll of the municipality under this title: PROVIDED, That whenever any state law, city charter, or municipal ordinance only provides for payment to the employee of the difference between his or her actual wages and that received under this title such employees shall be entitled to the benefits of this title and may be included in the payroll of the municipality.

Sec. 38. Section 51.12.070, chapter 23, Laws of 1961 as last amended by section 4, chapter 128, Laws of 1981 and RCW 51.12.070 are each amended to read as follows:

The provisions of this title shall apply to all work done by contract; the person, firm, or corporation who lets a contract for such work shall be responsible primarily and directly for all premiums upon the work. The contractor and any subcontractor shall be subject to the provisions of this title and the person, firm, or corporation letting the contract shall be entitled to collect from the contractor the full amount payable in premiums and the contractor in turn shall be entitled to collect from the subcontractor his proportionate amount of the payment.

For the purposes of this section, a contractor registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW shall not be responsible for any premiums upon the work of any subcontractor if:

(1) The subcontractor is currently engaging in a business which is registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW;

(2) The subcontractor has a principal place of business which would be eligible for a business deduction for internal revenue service tax purposes other than that furnished by the contractor for which the business has contracted to furnish services;

(3) The subcontractor maintains a separate set of books or records that reflect all items of income and expenses of the business; and

(4) The subcontractor has contracted to perform:

(a) The work of a contractor as defined in RCW 18.27.010; or

(b) The work of installing wires or equipment to convey electric current or installing apparatus to be operated by such current as it pertains to the electrical industry as described in chapter 19.28 RCW.

It shall be unlawful for any county, city or town to issue a construction building permit to any person who has not submitted ((~~to the department an estimate of payroll and paid premium thereon as provided by chapter 51.16 RCW of this title or~~)) proof that such person has ((~~qualified as a self-insurer~~)) secured the payment of industrial insurance benefits under this title.

Sec. 39. Section 51.12.100, chapter 23, Laws of 1961 as last amended by section 21, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.100 are each amended to read as follows:

The provisions of this title shall not apply to a master or member of a crew of any vessel, or to employers and workers for whom a right or obligation exists under the maritime laws for personal injuries or death of such workers, except as provided in sections 7 and 14 of this 1985 act.

If an accurate segregation of payrolls of workers for whom such a right or obligation exists under the maritime laws cannot be made by the employer, the director is hereby authorized and directed to fix from time to time a basis for the approximate segregation of the payrolls of employees to cover the part of their work for which no right or obligation exists under the maritime laws for injuries or death occurring in such work, and the employer, if not a self-insurer, shall pay premiums on that basis for the time such workers are engaged in their work.

Where two or more employers are simultaneously engaged in a common enterprise at one and the same site or place in maritime occupations under circumstances in which no right or obligation exists under the maritime laws for personal injuries or death of such workers, such site or place shall be deemed for the purposes of this title to be the common plant of such employers.

In the event payments are made under this title prior to the final determination under the maritime laws, such benefits shall be repaid if recovery is subsequently made under the maritime laws.

Sec. 40. Section 6, chapter 14, Laws of 1980 as amended by section 17, chapter 63, Laws of 1982 and RCW 51.12.110 are each amended to read as follows:

Any employer who has in his or her employment any person or persons excluded from mandatory coverage pursuant to RCW 51.12.020 (1), (2), (3), (4), (6), (7), (8), or (9) may file notice in writing with the director and the insurer, on such forms as the department may provide, of his or her election to make such persons otherwise excluded subject to this title. The employer shall forthwith display in a conspicuous manner about his or her works, and in a sufficient number of places to reasonably inform his or her workers of the fact, printed notices furnished by the ((~~department~~)) insurer in a form substantially identical to a form prescribed by the director stating that he or she has so elected. Said election shall become effective upon the filing of said notice in writing. The employer and his or her workers shall be subject to all the provisions of this title and entitled to all of the benefits thereof: PROVIDED, That those who have heretofore complied with the foregoing conditions and are carried and considered ((~~by the department~~)) as within the purview of this title shall be deemed and considered as having fully complied with its terms and shall be continued ((~~by the department~~)) as entitled to all of the benefits and subject to all of the liabilities without other or further action. Any employer who has complied with this section may withdraw his or her acceptance of liability under this title by filing written notice with the director and the insurer of the withdrawal of his or her acceptance. Such withdrawal shall become effective thirty days after the filing of such notice or on the date of the termination of the security for payment of compensation, whichever last occurs. The employer shall, at least thirty days before the effective date of the withdrawal, post reasonable notice of such withdrawal where the affected worker or workers work and shall otherwise notify personally the affected workers. Withdrawal of acceptance of this title shall not affect the liability of the ((~~department or self-insurer~~)) insurer for compensation for any injury occurring during the period of acceptance.

The ((~~department~~)) insurer shall have the power to cancel the elective adoption coverage if any required payments or reports have not been made. Cancellation by the ((~~department~~)) insurer shall be no ((~~later~~)) earlier than thirty days from the date of notice in writing by the department advising of cancellation being made.

Sec. 41. Section 82, chapter 289, Laws of 1971 ex. sess. as last amended by section 23, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.120 are each amended to read as follows:

(1) If a worker, while working outside the territorial limits of this state, suffers an injury on account of which he or she, or his or her beneficiaries, would have been entitled to compensation under this title had such injury occurred within this state, such worker, or his or her beneficiaries, shall be entitled to compensation under this title: PROVIDED, That if at the time of such injury:

(a) His or her employment is principally localized in this state; or

(b) He or she is working under a contract of hire made in this state for employment not principally localized in any state; or

(c) He or she is working under a contract of hire made in this state for employment principally localized in another state whose workers' compensation law is not applicable to his or her employer; or

(d) He or she is working under a contract of hire made in this state for employment outside the United States and Canada.

(2) The payment or award of compensation under the workers' compensation law of another state, territory, province, or foreign nation to a worker or his or her beneficiaries otherwise entitled on account of such injury to compensation under this title shall not be a bar to a claim for compensation under this title: PROVIDED, That claim under this title is timely filed. If compensation is paid or awarded under this title, the total amount of compensation paid or awarded the worker or beneficiary under such other workers' compensation law shall be credited against the compensation due the worker or beneficiary under this title.

(3) If a worker or beneficiary is entitled to compensation under this title by reason of an injury sustained in this state while in the employ of an employer who is domiciled in another state and who has ((~~neither opened an account with the department nor qualified as a self-insurer~~)) not secured the payment of industrial insurance benefits under this title, such an employer or his or her insurance carrier shall file with the director a certificate issued by the agency which administers the workers' compensation law in the state of the employer's domicile, certifying that such employer has secured the payment of compensation under the workers' compensation law of such other state and that with respect to said injury such worker or beneficiary is entitled to the benefits provided under such law. In such event:

(a) The filing of such certificate shall constitute appointment by the employer or his or her insurance carrier of the director as its agent for acceptance of the service of process in any proceeding brought by any claimant to enforce rights under this title;

(b) The director shall send to such employer or his or her insurance carrier, by registered or certified mail to the address shown on such certificate, a true copy of any notice of claim or other process served on the director by the claimant in any proceeding brought to enforce rights under this title;

(c) (i) If such employer is a self-insurer or member of a self-insured group under the workers' compensation law of such other state, such employer shall, upon submission of evidence or security, satisfactory to the director, of his or her ability to meet his or her liability to such claimant under this title, be deemed to be a qualified self-insurer or member of a self-insured group under this title;

(ii) If such employer's liability under the workers' compensation law of such other state is insured, such employer's carrier, as to such claimant only, shall be deemed to be subject to this title: PROVIDED, That unless its contract with said employer requires it to pay an amount equivalent to the compensation benefits provided by this title, the insurer's liability for compensation shall not exceed its liability under the workers' compensation law of such other state;

(d) If the total amount for which such employer's insurer is liable under (c)(ii) above is less than the total of the compensation to which such claimant is entitled under this title, the director may require the employer to file security satisfactory to the director to secure the payment of compensation under this title; and

(e) If such employer has neither qualified as a self-insurer or member of a self-insured group nor secured insurance coverage under the workers' compensation law of another state, such claimant shall be paid compensation by the department from the industrial insurance administrative fund;

(f) Any such employer shall have the same rights and obligations as other employers subject to this title and where he or she has not provided coverage or sufficient coverage to secure the compensation provided by this title to such claimant, the director may impose a penalty payable to the department of a sum not to exceed fifty percent of the cost to the department of any deficiency between the compensation provided by this title and that afforded such claimant by such employer or his or her insurance carrier if any.

(4) As used in this section:

(a) A person's employment is principally localized in this or another state when (i) his or her employer has a place of business in this or such other state and he or she regularly works at or from such place of business, or (ii) if clause (i) foregoing is not applicable, he or she is domiciled in and spends a substantial part of his or her working time in the service of his or her employer in this or such other state;

(b) "Workers' compensation law" includes "occupational disease law" for the purposes of this section.

(5) A worker whose duties require him or her to travel regularly in the service of his or her employer in this and one or more other states may agree in writing with his or her employer that his or her employment is principally localized in this or another state, and, unless such other state refuses jurisdiction, such agreement shall govern as to any injury occurring after the effective date of the agreement.

(6) The director shall be authorized to enter into agreements with the appropriate agencies of other states and provinces of Canada which administer their workers' compensation law with respect to conflicts of jurisdiction and the assumption of jurisdiction in cases where the contract of employment arises in one state or province and the injury occurs in another, and when any such agreement has been executed and promulgated as a regulation of the department under chapter 34.04 RCW, it shall bind all employers and workers subject to this title and the jurisdiction of this title shall be governed by this regulation.

Sec. 42. Section 1, chapter 113, Laws of 1977 ex. sess. and RCW 51.12.140 are each amended to read as follows:

(1) As used in this section:

(a) "Municipal corporation" means any city, town, or county authorized by law to maintain and operate a law enforcement department;

(b) "Law enforcement department" means any regularly organized police department, sheriff's department, department of public safety, or other similar organization which has as its primary purpose the enforcement of state or local penal laws and the preservation of public order, which consists wholly of volunteer law enforcement officers or a combination of volunteer and paid law enforcement officers, and which is duly organized and maintained by a municipal corporation;

(c) "Volunteer law enforcement officer" means a person who is a member of a law enforcement department and who (i) performs assigned or authorized duties for the law enforcement department by his or her own free choice; (ii) serves in a position that is not basically clerical or secretarial in nature; (iii) is registered and accepted as a volunteer by the law enforcement department; and (iv) receives no monetary remuneration other than maintenance and reimbursement for actual expenses necessarily incurred in performing assigned duties; and

(d) "Performance of duty" includes any work in and about the volunteer law enforcement officers' quarters, police station, or any other place under the direction or general orders of the officer having the authority to order a volunteer law enforcement officer to perform the work; providing law enforcement assistance; patrol; drill; and any work of an emergency nature performed in accordance with the rules of the law enforcement department.

(2) Any municipal corporation maintaining and operating a law enforcement department may elect to provide coverage under this title for all of its volunteer law enforcement officers for death or disability occurring in the performance of their duties as volunteer law enforcement officers. Any municipal corporation electing to provide the coverage shall file a written notice of coverage with the director.

(3) Coverage under this section shall be for all the applicable death, disability, and medical aid benefits of this title and shall be effective only for injuries which occur and occupational diseases which are contracted after the notice of coverage has been filed with the director.

Nothing in this subsection shall be construed to prohibit a municipal corporation from covering its volunteer law enforcement officers and other volunteers under RCW 51.12.035(2), as now or hereafter amended, for medical aid benefits only.

(4) Volunteer law enforcement officers for whom municipal corporations have given notice of coverage under this section shall be deemed workers or employees, as the case may be, and the performance of their duties shall be deemed employment or in the course of employment, as the case may be, for all purposes of this title except where expressly excluded or where the context clearly requires otherwise.

(5) All premiums, assessments, contributions, and penalties due under this title because coverage is provided under this section shall be the obligation of and be paid by the municipal corporation giving the notice of coverage to the director.

(6) Any municipal corporation electing coverage under this section shall maintain a time log in which the number of hours worked by each of its volunteer law enforcement officers is recorded. The log shall be made available for inspection upon the request of any authorized employee of the department, or the insurer of the municipal corporation.

(7) Any municipal corporation electing coverage under this section may withdraw the coverage by filing a written notice of the withdrawal with the ((~~director~~)) insurer. The withdrawal shall become effective thirty days after filing the notice or on the date of the termination of the security for payment of compensation, whichever occurs later. At least thirty days before the effective date of the withdrawal, the municipal corporation shall notify each of its volunteer law enforcement officers of the withdrawal. Withdrawal of coverage under this section shall not affect the liability of the ((~~department or self-insurer~~)) insurer for compensation for any injury occurring during the period in which coverage was provided.

Sec. 43. Section 2, chapter 252, Laws of 1983 and RCW 51.12.150 are each amended to read as follows:

Any musician or entertainer who performs as a member of a group or recognized entity is deemed an employee of the group or entity and the leader of the group or entity shall be required to properly register as an employer ((~~with the department and pay industrial insurance premiums~~)) and comply with this title on behalf of his or her employees. If a musician or entertainer is a sole performer or performs as a partner in a group or entity, or performs on a casual basis, the musician or entertainer shall be exempted from mandatory coverage of this title. However, any such sole performer, partner, or casual performer may elect to be covered under this title and shall be subject to all the provisions and entitled to all the benefits under this title.

Sec. 44. Section 26, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.010 are each amended to read as follows:

Every employer under this title shall secure the payment of compensation under this title by:

(1) Insuring and keeping insured the payment of such industrial insurance benefits with the state fund; or

(2) Qualifying as a self-insurer or a member of a self-insured group under this title;

(3) Insuring and keeping insured the payment of such compensation with any private insurer meeting the requirements of section 14 of this 1985 act; or

(4) Insuring as a member of a group of employers that meets the requirements of RCW 51.16.035 and that insures with an insurer meeting the requirements of section 14 of this 1985 act.

Sec. 45. Section 27, chapter 289, Laws of 1971 ex. sess. as last amended by section 9, chapter 323, Laws of 1977 ex. sess. and RCW 51.14.020 are each amended to read as follows:

(1) An employer or group of employers may qualify as a self-insurer by establishing to the director's satisfaction that he or she has sufficient financial ability to make certain the prompt payment of all compensation under this title and all assessments which may become due from such employer. Each application for certification as a self-insurer submitted by an employer or group of employers shall be accompanied by payment of a fee of one hundred fifty dollars or such larger sum as the director shall find necessary for the administrative costs of evaluation of the applicant's qualifications. Any employer who has formerly been certified as a self-insurer and thereafter ceases to be so certified may not apply for certification within three years of ceasing to have been so certified.

(2) A self-insurer may be required by the director to supplement existing financial ability by depositing in an escrow account in a depository designated by the director, money and/or corporate or governmental securities approved by the director, or a surety bond written by any company admitted to transact surety business in this state filed with the department. The money, securities, or bond shall be in an amount reasonably sufficient in the director's discretion to insure payment of reasonably foreseeable compensation and assessments but not less than the employer's normal expected annual claim liabilities and in no event less than one hundred thousand dollars. In arriving at the amount of money, securities, or bond required under this subsection, the director shall take into consideration the financial ability of the employer to pay compensation and assessments and his or her probable continuity of operation. The money, securities, or bond so deposited shall be held by the director to secure the payment of compensation by the self-insurer and to secure payment of his or her assessments. The amount of security may be increased or decreased from time to time by the director. The income from any securities deposited may be distributed currently to the self-insurer.

(3) Securities or money deposited by an employer pursuant to subsection (2) of this section shall be returned to him or her upon his or her written request provided the employer files the bond required by such subsection.

(4) If the employer seeking to qualify as a self-insurer has previously insured with the state fund, the director shall require the employer to make up his or her proper share of any deficit or insufficiency in the state fund as a condition to certification as a self-insurer.

Any employer becoming self-insured individually or as a group after October 1, 1985, may, in lieu of paying the liability determined under this subsection, pay its share of the liability as provided in section 19 of this 1985 act provided that the employer provides sufficient security to the director and the insurance commissioner to assure that such liability will be paid by the employer.

(5) A self-insurer or group self-insurer may reinsure a portion of his or her liability under this title with any reinsurer authorized to transact such reinsurance in this state((: PROVIDED, That the reinsurer may not participate in the administration of the responsibilities of the self-insurer under this title. Such reinsurance may not exceed eighty percent of the liabilities under this title)).

Sec. 46. Section 30, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.050 are each amended to read as follows:

(1) Any employer may at any time terminate his status as a self-insurer by giving the director written notice stating when, not less than thirty days thereafter, such termination shall be effective, provided such termination shall not be effective until the employer either shall have ceased to be an employer or shall have filed with the director ((~~for state industrial insurance coverage~~)) proof that he or she has otherwise secured the payment of industrial insurance benefits under this title.

(2) An employer who ceases to be a self-insurer, and who so files with the director, must maintain money, securities or surety bonds deemed sufficient in the director's discretion to cover the entire liability of such employer for injuries or occupational diseases to his employees which occurred during the period of self-insurance: PROVIDED, That the ((~~director~~)) employer's new insurer may agree ((~~for the medical aid and accident funds~~)) to assume the obligation of such claims, in whole or in part, and shall adjust the employer's premium rate without approval by the insurance commissioner to provide for the payment of such obligations on behalf of the employer.

Sec. 47. Section 7, chapter 191, Laws of 1982 as amended by section 2, chapter 174, Laws of 1983 and RCW 51.14.150 are each amended to read as follows:

(1) Any two or more employers which are school districts or educational service districts, (2) any two or more employers which are hospitals, as defined in RCW 70.39.020(3), and are owned or operated by a state agency or municipal corporation of this state, ((or)) (3) any two or more employers which are hospitals, as defined in RCW 70.39.020(3), no one of which is owned or operated by a state agency or municipal corporation of this state or subject to RCW 70.39.150(3), or (4) any two or more employers which are members of a group of employers where the following conditions are met:

(a) All the employers in the group are members of an organization that has been in existence for at least two years;

(b) The organization was formed for a purpose other than that of obtaining workers' compensation coverage;

(c) The occupations or industries of the employers in a group within the organization are substantially similar, taking into consideration the nature of the services being performed by workers of such employers; and

(d) The formation and operation of the group program in the organization will substantially improve accident prevention and claim management for the employers in the group,

!ix may enter into agreements to form self-insurance groups for the purposes of this chapter: PROVIDED, That no more than one group may be formed under subsection (2) of this section and no more than one group may be formed under subsection (3) of this section. The self-insurance groups shall be organized and operated under rules promulgated by the director under RCW 51.14.160. Such a self-insurance group shall be deemed an employer for the purposes of this chapter, and may qualify as a self-insurer if it meets all the other requirements of this chapter.

Sec. 48. Section 16, chapter 289, Laws of 1971 ex. sess. as last amended by section 4, chapter 129, Laws of 1980 and RCW 51.16.035 are each amended to read as follows:

The department shall classify all occupations or industries in accordance with their degree of hazard and fix therefor basic rates of premium which shall be the lowest necessary to maintain actuarial solvency of the accident and medical aid funds in accordance with recognized insurance principles. The department shall formulate and adopt rules and regulations governing the method of premium calculation ((~~and collection~~)) based on the hours worked by employees and providing for ((a)) and calculating the experience rating ((~~system~~)) for each employer, other than employers authorized under chapter 51.14 RCW to self-insure or group self-insure, consistent with recognized principles of workers' compensation insurance which shall be designed to stimulate and encourage accident prevention and to facilitate collection. The department may annually, or at such other times as it deems necessary ((~~to maintain solvency of the funds~~)), readjust rates in accordance with the rating system to become effective on such dates as the department may designate.

((~~The department may insure the workers' compensation obligations~~)) An insurer meeting the requirements of section 14 of this 1985 act may insure the industrial insurance liability of employers as a group if the following conditions are met:

(1) All the employers in the group are members of an organization that has been in existence for at least two years;

(2) The organization was formed for a purpose other than that of obtaining workers' compensation coverage;

(3) The occupations or industries of the employers in the group within the organization are substantially similar, taking into consideration the nature of the services being performed by workers of such employers; and

(4) ((~~The employers in the group constitute at least fifty percent of the total employers in such organization; and~~

~~(5)~~)) The formation and operation of the group program in the organization will substantially improve accident prevention and claim management for the employers in the group.

In providing an employer group plan under this section, the ((~~department~~)) insurer may consider an employer group as a single employing entity for purposes of dividends or premium discounts.

Sec. 49. Section 13, chapter 260, Laws of 1981 and RCW 51.16.060 are each amended to read as follows:

Every employer not qualifying as a self-insurer, shall insure with ((~~the state and shall, on or before the last day of January, April, July and October of each year thereafter,~~)) an insurer as required under this title and furnish the ((~~department~~)) insurer with a true and accurate ((~~payroll~~)) record of all hours worked for the period in which workers were employed by it during the preceding calendar quarter, ((~~the total amount paid to such workers during such preceding calendar quarter, and~~)) a segregation of employment ((in)) into the different classes established pursuant to this title, and shall pay its premium thereon ((~~to the appropriate fund~~)). The sufficiency of such statement shall be subject to the approval of the director. The director shall require each insurer, other than qualified self-insured employers, to report to the department the information the department requires to carry out the provisions of this chapter: PROVIDED, That the director may in his or her discretion and for the effective administration of this title require an ((~~employer~~)) insurer in individual instances to furnish a supplementary report containing the name of each individual worker, his or her hours worked, his or her rate of pay and the class or classes in which such work was performed: ((PROVIDED FURTHER, That in the event an employer shall furnish the department with four consecutive quarterly reports wherein each such quarterly report indicates that no premium is due the department may close the account:)) PROVIDED FURTHER, That the department ((~~may~~)) shall promulgate rules and regulations in accordance with chapter 34.04 RCW to establish ((~~other~~)) reporting periods ((~~and payment due dates in lieu of reports and payments following each calendar quarter~~)) for insurers, and may also establish terms and conditions for payment of premiums and assessments based on estimated ((~~payrolls~~)) hours of employment, with such payments being subject to approval as to sufficiency of the estimated ((~~payroll~~)) hours by the department, and also subject to appropriate periodic adjustments made by the department based on actual ((~~payroll~~)) hours of employment: AND PROVIDED FURTHER, That a temporary help company which provides workers on a temporary basis to its customers shall be considered the employer for purposes of reporting and paying premiums and assessments under this title according to the appropriate rate classifications as determined by the department: PROVIDED, That the employer shall be liable for paying premiums and assessments, should the temporary help company fail to pay the premiums and assessments under this title.

Sec. 50. Section 51.16.070, chapter 23, Laws of 1961 and RCW 51.16.070 are each amended to read as follows:

Every employer shall keep at his place of business a record of his employment from which the information needed by the department may be obtained and such record shall at all times be open to the inspection of the director, ((~~supervisor of industrial insurance, or the traveling auditors, agents,~~)) or assistants of the department, as provided in RCW 51.48.040.

Information obtained from employing unit records under the provisions of this title shall be deemed confidential and shall not be open to public inspection (other than to public employees in the performance of their official duties), but any interested party shall be supplied with information from such records to the extent necessary for the proper presentation of the case in question: PROVIDED, That any employing unit may authorize inspection of its records by written consent.

Sec. 51. Section 51.16.100, chapter 23, Laws of 1961 and RCW 51.16.100 are each amended to read as follows:

((It is the intent that the accident fund shall ultimately become neither more nor less than self-supporting, except as provided in RCW 51.16.105 and, if in the adjustment of premium rates by the director the moneys paid into the fund by any class or classes shall be insufficient to properly and safely distribute the burden of accidents occurring therein,)) The department may divide, rearrange, or consolidate such class or classes, making such adjustment ((~~or transfer of funds~~)) as it may deem proper. The director shall make corrections of classifications or subclassifications or changes in rates, classes and subclasses when the best interest of such classes or subclasses will be served thereby.

Sec. 52. Section 7, chapter 14, Laws of 1980 as amended by section 1, chapter 63, Laws of 1984 and RCW 51.16.120 are each amended to read as follows:

(1) Whenever a worker has a previous bodily disability from any previous injury or disease, whether known or unknown to the employer, and shall suffer a further disability from injury or occupational disease in employment covered by this title and become totally and permanently disabled from the combined effects thereof or die when death was substantially accelerated by the combined effects thereof, then the ((~~experience record of an employer insured with the state fund~~)) employer's insurer at the time of said further injury or disease shall be charged, and a self-insured employer shall pay directly into the ((~~reserve~~)) second injury fund only the accident cost which would have resulted solely from said further injury or disease, had there been no preexisting disability, and which accident cost shall be based upon an evaluation of the disability by medical experts. The difference between the charge thus assessed to such employer at the time of said further injury or disease and the total cost of the pension reserve shall be assessed against the second injury fund. The department shall pass upon the application of this section in all cases where benefits are paid for total permanent disability or death and issue an order thereon appealable by the employer or insurer. Pending outcome of such appeal the transfer or payment shall be made as required by such order.

(2) ((~~The department shall,~~)) In cases of claims of workers sustaining injuries or occupational diseases in the employ of ((~~state fund~~)) insured employers, ((~~recompute~~)) the experience record of such employers shall be recomputed when the claims of workers injured in their employ have been found to qualify for payments from the second injury fund after the regular time for computation of such experience records and the ((~~department may~~)) insurer shall make appropriate adjustments in such cases including cash refunds or credits to such employers.

(3) To encourage employment of injured workers who are not reemployed by the employer at the time of injury, the department may adopt rules providing for the reduction or elimination of premiums or assessments from subsequent employers of such workers through its insurer, and may also adopt rules for the reduction or elimination of charges against such employers in the event of further injury to such workers in their employ.

(4) The director shall annually determine the amount necessary to fund or insure the obligations of the second injury fund, whichever is less, and shall collect that amount from the industrial insurance administrative fund.

Sec. 53. Section 51.16.140, chapter 23, Laws of 1961 as last amended by section 29, chapter 350, Laws of 1977 ex. sess. and RCW 51.16.140 are each amended to read as follows:

Every employer ((~~who is not a self-insurer~~)) shall deduct from the pay of each of his or her workers one-half of ((~~the amount he or she is required to pay, for medical benefits within each risk classification. Such amount shall be periodically~~)) that portion of the employer's premium or cost that is determined annually by the ((~~director and reported by him or her to all employers under this title~~)) department to be that portion of the industrial insurance premium or cost attributable to overall medical benefits. Employers insured by an insurer which deviates from the rates filed by the rating organization shall deduct a proportionate amount of the premiums charged: PROVIDED, That the state governmental unit shall pay the entire amount ((~~into the medical aid fund~~)) to the insurer for volunteers, as defined in RCW 51.12.035, and the state apprenticeship council shall pay the entire amount into the medical aid fund for registered apprentices or trainees, for the purposes of RCW 51.12.130. It shall be unlawful for ((~~the~~)) any employer, unless specifically authorized by this title, to deduct or obtain any part of the premium or other costs required to be by him or her paid by reason of this title from the wages or earnings of any of his or her workers, and the making of or attempt to make any such deduction shall be a gross misdemeanor.

Sec. 54. Section 51.16.150, chapter 23, Laws of 1961 as amended by section 15, chapter 43, Laws of 1972 ex. sess. and RCW 51.16.150 are each amended to read as follows:

If any employer or insurer shall default in any payment to any fund administered by the director the sum due shall be collected by action at law in the name of the state as plaintiff, and such right of action shall be in addition to any other right of action or remedy. If such default occurs after demand, there shall also be collected a penalty equal to twenty-five percent of the amount of the defaulted payment or payments, and the director may require from the defaulting employer or insurer a bond to the state for the benefit of any fund, with surety to the director's satisfaction, in the penalty of double the amount of the estimated payments which will be required from such employer or insurer into the said funds for and during the ensuing one year, together with any penalty or penalties incurred. In case of refusal or failure after written demand personally served to furnish such bond, the state shall be entitled to an injunction restraining the delinquent from prosecuting an occupation or work until such bond is furnished, and until all delinquent ((~~premiums~~)) payments, penalties, interest and costs are paid, conditioned for the prompt and punctual making of all payments into said funds during such periods, and any sale, transfer, or lease attempted to be made by such delinquent during the period of any of the defaults herein mentioned, of his works, plant, or lease thereto, shall be invalid until all past delinquencies are made good, and such bond furnished.

Sec. 55. Section 1, chapter 85, Laws of 1977 ex. sess. as amended by section 3, chapter 218, Laws of 1984 and RCW 51.24.030 are each amended to read as follows:

(1) If an injury to a worker for which benefits and compensation are provided under this title is due to the negligence or wrong of a third person not in the same employ, the injured worker or beneficiary may elect to seek damages from the third person. However, no liability exists on the part of and no cause of action shall arise against:

(a) Any insurer or safety consultant concerning the scope of or any other safety related service undertaking to assist an employer in carrying out the employer's obligation under this title and chapter 49.17 RCW if the consultation or any other related service was consistent with chapter 49.17 RCW;

(b) Any collective bargaining unit or other organization of employees concerning any suggestions made or offered to the employer relating to the safety of the workplace.

(2) For the purposes of this chapter, "injury" shall include any physical or mental condition, disease, ailment or loss, including death, for which compensation and benefits are paid or payable under this title.

Sec. 56. Section 3, chapter 85, Laws of 1977 ex. sess. as last amended by section 4, chapter 218, Laws of 1984 and RCW 51.24.050 are each amended to read as follows:

(1) An election not to proceed against the third person operates as an assignment of the cause of action to the ((~~department~~)) insurer or self-insurer, which may prosecute or compromise the action in its discretion in the name of the injured worker, beneficiary or legal representative.

(2) If an injury to a worker results in the worker's death, the ((~~department~~)) insurer or self-insurer to which the cause of action has been assigned may petition ((a)) the appropriate court for the appointment of a special personal representative for the limited purpose of maintaining an action under this chapter and chapter 4.20 RCW.

(3) If a beneficiary is a minor child, an election not to proceed against a third person on such beneficiary's cause of action may be exercised by the beneficiary's legal custodian or guardian.

(4) Any recovery made by the ((~~department~~)) insurer or self-insurer shall be distributed as follows:

(a) The ((~~department~~)) insurer or self-insurer shall be paid the expenses incurred in making the recovery including reasonable costs of legal services;

(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the recovery made, which shall not be subject to subsection (5) of this section: PROVIDED, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;

(c) The ((~~department~~)) insurer and/or self-insurer shall be paid the compensation and benefits paid to or on behalf of the injured worker or beneficiary by the ((~~department~~)) insurer and/or self-insurer; and

(d) The injured worker or beneficiary shall be paid any remaining balance.

(5) Thereafter no payment shall be made to or on behalf of a worker or beneficiary by the ((~~department~~)) insurer and/or self-insurer for such injury until the amount of any further compensation and benefits shall equal any such remaining balance. Thereafter, such benefits shall be paid by the ((~~department~~)) insurer and/or self-insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person.

(6) In the case of an employer not qualifying as a self-insurer, ((~~the department~~)) its insurers shall make a retroactive adjustment to such employer's experience rating in which the third party claim has been included to reflect that portion of the award or settlement which is reimbursed for compensation and benefits paid and, if the claim is open at the time of recovery, applied against further compensation or benefits to which the injured worker or beneficiary may be entitled.

(7) When the cause of action has been assigned to the self-insurer and compensation and benefits have been paid and/or are payable from state funds for the same injury:

(a) The prosecution of such cause of action shall also be for the benefit of the department to the extent of compensation and benefits paid and payable from state funds;

(b) Any compromise or settlement of such cause of action which results in less than the entitlement under this title is void unless made with the written approval of the department;

(d) The department shall bear its proportionate share of the costs and reasonable attorneys' fees incurred by the self-insurer in obtaining the award or settlement; and

(e) Any remaining balance under subsection (4)(d) of this section shall be applied, under subsection (5) of this section, to reduce the obligations of the ((~~department~~)) insurer and self-insurer to pay further compensation and benefits in proportion to which the obligations of each bear to the remaining entitlement of the worker or beneficiary.

Sec. 57. Section 4, chapter 85, Laws of 1977 ex. sess. as last amended by section 5, chapter 218, Laws of 1984 and RCW 51.24.060 are each amended to read as follows:

(1) If the injured worker or beneficiary elects to seek damages from the third person, any recovery made shall be distributed as follows:

(a) The costs and reasonable attorneys' fees shall be paid proportionately by the injured worker or beneficiary and the ((~~department~~)) insurer and/or self-insurer;

(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the award: PROVIDED, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;

(c) The ((~~department~~)) insurer and/or self-insurer shall be paid the balance of the recovery made, but only to the extent necessary to reimburse the ((~~department~~)) insurer and/or self-insurer for compensation and benefits paid;

(i) The ((~~department~~)) insurer and/or self-insurer shall bear its proportionate share of the costs and reasonable attorneys' fees incurred by the worker or beneficiary to the extent of the benefits paid or payable under this title: PROVIDED, That the ((~~department~~)) insurer or self-insurer may require court approval of costs and attorneys' fees or may petition a court for determination of the reasonableness of costs and attorneys' fees.

(ii) The sum representing the ((~~department's~~)) insurer's and/or self-insurer's proportionate share shall not be subject to subsection (1) (d) and (e) of this section.

(d) Any remaining balance shall be paid to the injured worker or beneficiary;

(e) Thereafter no payment shall be made to or on behalf of a worker or beneficiary by the ((~~department~~)) insurer and/or self-insurer for such injury until the amount of any further compensation and benefits shall equal any such remaining balance. Thereafter, such benefits shall be paid by the ((~~department~~)) insurer and/or self-insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person.

(2) The recovery made shall be subject to a lien by the ((~~department~~)) insurer and/or self-insurer for its share under this section.

(3) The ((~~department~~)) insurer or self-insurer has sole discretion to compromise the amount of its lien. In deciding whether or to what extent to compromise its lien, the ((~~department~~)) insurer or self-insurer shall consider at least the following:

(a) The likelihood of collection of the award or settlement as may be affected by insurance coverage, solvency, or other factors relating to the third person;

(b) Factual and legal issues of liability as between the injured worker or beneficiary and the third person. Such issues include but are not limited to possible contributory negligence and novel theories of liability; and

(4) In the case of an employer not qualifying as a self-insurer, the department shall make a retroactive adjustment to such employer's experience rating in which the third party claim has been included to reflect that portion of the award or settlement which is reimbursed for compensation and benefits paid and, if the claim is open at the time of recovery, applied against further compensation and benefits to which the injured worker or beneficiary may be entitled.

(5) In an action under this section, the self-insurer may act on behalf and for the benefit of the department to the extent of any compensation and benefits paid or payable from state funds.

(6) It shall be the duty of the person to whom any recovery is paid before distribution under this section to advise the ((~~department~~)) insurer or self-insurer of the fact and amount of such recovery, the costs and reasonable attorneys' fees associated with the recovery, and to distribute the recovery in compliance with this section.

(7) The distribution of any recovery made by award or settlement of the third party action shall be confirmed by department order, served by registered or certified mail, and shall be subject to chapter 51.52 RCW. In the event the order of distribution becomes final under chapter 51.52 RCW, the director or the director's designee may file with the clerk of any county within the state a warrant in the amount of the sum representing the unpaid lien plus interest accruing from the date the order became final. The clerk of the county in which the warrant is filed shall immediately designate a superior court cause number for such warrant and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of such worker or beneficiary mentioned in the warrant, the amount of the unpaid lien plus interest accrued and the date when the warrant was filed. The amount of such warrant as docketed shall become a lien upon the title to and interest in all real and personal property of the injured worker or beneficiary against whom the warrant is issued, the same as a judgment in a civil case docketed in the office of such clerk. The sheriff shall then proceed in the same manner and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgment in the superior court. Such warrant so docketed shall be sufficient to support the issuance of writs of garnishment in favor of the department in the manner provided by law in the case of judgment, wholly or partially unsatisfied. The clerk of the court shall be entitled to a filing fee of five dollars, which shall be added to the amount of the warrant. A copy of such warrant shall be mailed to the injured worker or beneficiary within three days of filing with the clerk.

(8) The director, or the director's designee, may issue to any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state, a notice and order to withhold and deliver property of any kind if he or she has reason to believe that there is in the possession of such person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state, property which is due, owing, or belonging to any worker or beneficiary upon whom a warrant has been served by the department for payments due to the state fund. The notice and order to withhold and deliver shall be served by the sheriff of the county or by the sheriff's deputy, or by any authorized representatives of the director. Any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or agency of the state upon whom service has been made shall answer the notice within twenty days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice and order to withhold and deliver. In the event there is in the possession of the party named and served with such notice and order, any property which may be subject to the claim of the department, such property shall be delivered forthwith to the director or the director's authorized representative upon demand. If the party served and named in the notice and order fails to answer the notice and order within the time prescribed in this section, the court may, after the time to answer such order has expired, render judgment by default against the party named in the notice for the full amount claimed by the director in the notice together with costs. In the event that a notice to withhold and deliver is served upon an employer and the property found to be subject thereto is wages, the employer may assert in the answer to all exemptions provided for by chapter 7.33 RCW to which the wage earner may be entitled.

Sec. 58. Section 5, chapter 85, Laws of 1977 ex. sess. as amended by section 6, chapter 218, Laws of 1984 and RCW 51.24.070 are each amended to read as follows:

(1) The ((~~department~~)) insurer or self-insurer may require the injured worker or beneficiary to exercise the right of election under this chapter by serving a written demand by registered mail, certified mail, or personal service on the worker or beneficiary.

(2) Unless an election is made within sixty days of the receipt of the demand, and unless an action is instituted or settled within the time granted by the ((~~department~~)) insurer or self-insurer, the injured worker or beneficiary is deemed to have assigned the action to the ((~~department~~)) insurer or self-insurer. The ((~~department~~)) insurer or self-insurer shall allow the worker or beneficiary at least ninety days from the election to institute or settle the action. When a beneficiary is a minor child the demand shall be served upon the legal custodian or guardian of such beneficiary.

(3) If an action which has been filed is not diligently prosecuted, the ((~~department~~)) insurer or self-insurer may petition the court in which the action is pending for an order assigning the cause of action to the ((~~department~~)) insurer or self-insurer. Upon a sufficient showing of a lack of diligent prosecution the court in its discretion may issue the order.

(4) If the ((~~department~~)) insurer or self-insurer has taken an assignment of the third party cause of action under subsection (2) of this section, the injured worker or beneficiary may, at the discretion of the ((~~department~~)) insurer or self-insurer, exercise a right of reelection and assume the cause of action subject to reimbursement of litigation expenses incurred by the ((~~department~~)) insurer or self-insurer.

Sec. 59. Section 6, chapter 85, Laws of 1977 ex. sess. and RCW 51.24.080 are each amended to read as follows:

(1) If the injured worker or beneficiary elects to seek damages from the third person, notice of the election must be given to the ((~~department or self-insurer~~)) insurer. The notice shall be by registered mail, certified mail, or personal service. If an action is filed by the injured worker or beneficiary, a copy of the complaint must be sent by registered mail to the ((~~department or self-insurer~~)) insurer.

(2) A return showing service of the notice on the ((~~department or self-insurer~~)) insurer shall be filed with the court but shall not be part of the record except as necessary to give notice to the defendant of the lien imposed by RCW 51.24.060(2).

Sec. 60. Section 7, chapter 85, Laws of 1977 ex. sess. as amended by section 7, chapter 218, Laws of 1984 and RCW 51.24.090 are each amended to read as follows:

(1) Any compromise or settlement of the third party cause of action by the injured worker or beneficiary which results in less than the entitlement under this title is void unless made with the written approval of the ((~~department~~)) insurer or self-insurer: PROVIDED, That for the purposes of this chapter, "entitlement" means benefits and compensation paid and payable.

(2) If a compromise or settlement is void because of subsection (1) of this section, the ((~~department~~)) insurer or self-insurer may petition the court in which the action was filed for an order assigning the cause of action to the ((~~department~~)) insurer or self-insurer. If an action has not been filed, the ((~~department~~)) insurer or self-insurer may proceed as provided in chapter 7.24 RCW.

Sec. 61. Section 51.28.010, chapter 23, Laws of 1961 as last amended by section 32, chapter 350, Laws of 1977 ex. sess. and RCW 51.28.010 are each amended to read as follows:

Whenever any accident occurs to any worker it shall be the duty of such worker or someone in his or her behalf to forthwith report such accident to his or her employer, superintendent or foreman or forewoman in charge of the work, and of the employer to at once report such accident and the injury resulting therefrom to the ((~~department pursuant to RCW 51.28.025, as now or hereafter amended~~)) insurer, where the worker has received treatment from a physician, has been hospitalized, disabled from work, or has died as the apparent result of such accident and injury.

Upon receipt of such notice of accident, the ((~~department~~)) insurer shall immediately forward to the worker or his or her beneficiaries or dependents written notification, in nontechnical language, of their rights under this title.

Sec. 62. Section 51.28.020, chapter 23, Laws of 1961 as last amended by section 3, chapter 159, Laws of 1984 and RCW 51.28.020 are each amended to read as follows:

Where a worker is entitled to ((~~compensation~~)) industrial insurance benefits under this title he or she shall file with the ((~~department or his or her self-insuring employer, as the case may be,~~)) insurer his or her application for such, ((~~together with~~)) and the certificate of the physician who attended him or her((~~, and~~)). It shall be the duty of the ((~~physician~~)) insurer to inform the injured worker of his or her rights under this title and to lend all necessary assistance in making this application for compensation and such proof of other matters as required by the rules of the department without charge to the worker. The department shall provide physicians with a manual which outlines the procedures to be followed in applications for compensation involving occupational diseases, and which describes claimants' rights and responsibilities related to occupational disease claims. ((~~If application for compensation is made to a self-insuring employer, he or she~~)) A copy of this application shall be sent forthwith ((~~send a copy thereof~~)) to the department by the insurer.

Sec. 63. Section 39, chapter 289, Laws of 1971 ex. sess. as amended by section 5, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.28.025 are each amended to read as follows:

(1) Whenever an employer has notice or knowledge of an injury or occupational disease sustained by any ((~~workman~~)) worker in his or her employment who has received treatment from a physician, has been hospitalized, disabled from work or has died as the apparent result of such injury or occupational disease, ((he)) the employer shall immediately report the same to the department, and to the employer's insurer, on forms prescribed by ((it)) the department. The report shall include:

(a) The name, address, and business of the employer;

(b) The name, address, and occupation of the ((~~workman~~)) worker;

(d) Whether the injury or occupational disease arose in the course of the injured ((~~workman's~~)) worker's employment;

(e) All available information pertaining to the nature of the injury or occupational disease including but not limited to any visible signs, any complaints of the ((~~workman~~)) worker, any time lost from work, and the observable effect on the ((~~workman's~~)) worker's bodily functions, so far as is known; and

(f) Such other pertinent information as the department may prescribe by regulation.

(2) Failure or refusal to timely file the report required by subsection (1) of this section shall subject the offending employer to a penalty of one hundred dollars for each offense, to be collected in a civil action in the name of the department and paid into the ((~~supplemental pension~~)) industrial insurance administrative fund.

Sec. 64. Section 51.28.030, chapter 23, Laws of 1961 as last amended by section 17, chapter 43, Laws of 1972 ex. sess. and RCW 51.28.030 are each amended to read as follows:

Where death results from an injury, the parties entitled to ((~~compensation~~)) industrial insurance benefits under this title, or someone in their behalf, shall make application for the same to the ((~~department or self-insurer as the case may be~~)) insurer, which application must be accompanied with proof of death and proof of relationship showing the parties to be entitled to compensation under this title, certificates of attending physician, if any, and such proof as required by the rules of the department.

Upon receipt of notice of accident under RCW 51.28.010, the ((~~director~~)) department shall immediately forward to the party or parties required to make application for compensation under this section, written notification, in nontechnical language, of their rights under this title.

Sec. 65. Section 51.28.070, chapter 23, Laws of 1961 as last amended by section 36, chapter 350, Laws of 1977 ex. sess. and RCW 51.28.070 are each amended to read as follows:

Information contained in the claim files and records of injured workers, under the provisions of this title, shall be deemed confidential and shall not be open to public inspection (other than to public employees in the performance of their official duties), but representatives of a claimant, be it an individual or an organization, may review a claim file or receive specific information therefrom upon the presentation of the signed authorization of the claimant. Employers or their duly authorized representatives may review any files of their own injured workers in connection with any pending claims. Physicians treating or examining workers claiming benefits under this title, or physicians giving medical advice to the ((~~department~~)) insurer regarding any claim may, at the discretion of the ((~~department~~)) insurer, inspect the claim files and records of injured workers, and other persons may make such inspection, at the ((~~departments~~)) insurer's discretion, when such persons are rendering assistance to the ((~~department~~)) insurer at any stage of the proceedings on any matter pertaining to the administration of this title.

Sec. 66. Section 51.32.010, chapter 23, Laws of 1961 as last amended by section 37, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.010 are each amended to read as follows:

Each worker injured in the course of his or her employment, or his or her family or dependents in case of death of the worker, shall receive ((~~compensation~~)) industrial insurance benefits in accordance with this chapter, and, except as in this title otherwise provided, such payment shall be in lieu of any and all rights of action whatsoever against any person whomsoever: PROVIDED, That if an injured worker, or the surviving spouse of an injured worker shall not have the legal custody of a child for, or on account of whom payments are required to be made under this title, such payment or payments shall be made to the person or persons having the legal custody of such child but only for the periods of time after the ((~~department~~)) insurer has been notified of the fact of such legal custody, and it shall be the duty of any such person or persons receiving payments because of legal custody of any child immediately to notify the ((~~department~~)) insurer of any change in such legal custody.

NEW SECTION. Sec. 67. A new section is added to chapter 51.32 RCW to read as follows:

Benefits payable under this chapter shall be reduced by the amount of any other disability, medical, or retirement insurance, benefits, or proceeds available from any other public or private system or insurance to which the employer has made a contribution, including, but not limited to the federal old age, survivors and disability insurance act (42 U.S.C. Sec. 402(d)(1)), union disability or retirement, or any other plan or form of public or private disability, medical, or retirement system.

Sec. 68. Section 1, chapter 107, Laws of 1961 as last amended by section 38, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.015 are each amended to read as follows:

The benefits of Title 51 RCW shall be provided to each worker receiving an injury, as defined therein, during the course of his or her employment and also during his or her lunch period as established by the employer while on the jobsite. The jobsite shall consist of the premises as are occupied, used or contracted for by the employer for the business or work process in which the employer is then engaged: PROVIDED, That if a worker by reason of his or her employment leaves such jobsite under the direction, control or request of the employer and if such worker is injured during his or her lunch period while so away from the jobsite, the worker shall receive the benefits as provided herein: AND PROVIDED FURTHER, That the employer need not consider the lunch period in his or her payroll for the purpose of reporting to the ((~~department~~)) insurer unless the worker is actually paid for such period of time.

Sec. 69. Section 8, chapter 14, Laws of 1980 and RCW 51.32.030 are each amended to read as follows:

Any sole proprietor, partner, or joint venturer who has requested coverage under this title and who shall thereafter be injured or sustain an occupational disease, shall be entitled to the benefit of this title, as and under the same circumstances and subject to the same obligations as a worker: PROVIDED, That no such person or the beneficiaries thereof shall be entitled to benefits under this title unless the ((~~department~~)) insurer has received notice in writing of such request on such forms as the ((~~department~~)) insurer may provide prior to the date of the injury or occupational disease as the result of which claims are made: PROVIDED, That the ((~~department~~)) insurer shall have the power to cancel the personal coverage of any such person if any required payments or reports have not been made.

Sec. 70. Section 13, chapter 2, Laws of 1983 and RCW 51.32.040 are each amended to read as follows:

No money paid or payable under this title shall, except as provided for in RCW 74.04.530 or 74.20A.260, prior to the issuance and delivery of the check or warrant therefor, be capable of being assigned, charged, or ever be taken in execution or attached or garnished, nor shall the same pass, or be paid, to any other person by operation of law, or by any form of voluntary assignment, or power of attorney. Any such assignment or charge shall be void, unless the transfer is to a financial institution at the request of a worker or other beneficiary and in accordance with RCW 51.32.045 shall be made: PROVIDED, That if any worker suffers a permanent partial injury, and dies from some other cause than the accident which produced such injury before he or she shall have received payment of his or her award for such permanent partial injury, or if any worker suffers any other injury before he or she shall have received payment of any monthly installment covering any period of time prior to his or her death, the amount of such permanent partial award, or of such monthly payment or both, shall be paid to the surviving spouse, or to the child or children if there is no surviving spouse: PROVIDED FURTHER, That, if any worker suffers an injury and dies therefrom before he or she shall have received payment of any monthly installment covering time loss for any period of time prior to his or her death, the amount of such monthly payment shall be paid to the surviving spouse, or to the child or children if there is no surviving spouse: PROVIDED FURTHER, That any application for compensation under the foregoing provisos of this section shall be filed with the ((~~department~~)) insurer or self-insuring employer within one year of the date of death: PROVIDED FURTHER, That if the injured worker resided in the United States as long as three years prior to the date of injury, such payment shall not be made to any surviving spouse or child who was at the time of the injury a nonresident of the United States: PROVIDED FURTHER, That any worker receiving benefits under this title who is subsequently confined in, or who subsequently becomes eligible therefor while confined in any institution under conviction and sentence shall have all payments of such compensation canceled during the period of confinement but after discharge from the institution payment of benefits thereafter due shall be paid if such worker would, but for the provisions of this proviso, otherwise be entitled thereto: PROVIDED FURTHER, That if any prisoner is injured in the course of his or her employment while participating in a work or training release program authorized by chapter 72.65 RCW and is subject to the provisions of this title, he or she shall be entitled to payments under this title subject to the requirements of chapter 72.65 RCW unless his or her participation in such program has been canceled, or unless he or she is returned to a state correctional institution, as defined in RCW 72.65.010(3), as a result of revocation of parole or new sentence: PROVIDED FURTHER, That if such incarcerated worker has during such confinement period, any beneficiaries, they shall be paid directly the monthly benefits which would have been paid to him or her for himself or herself and his or her beneficiaries had he or she not been so confined. Any lump sum benefits to which the worker would otherwise be entitled but for the provisions of these provisos shall be paid on a monthly basis to his or her beneficiaries.

Sec. 71. Section 51.32.050, chapter 23, Laws of 1961 as last amended by section 18, chapter 63, Laws of 1982 and RCW 51.32.050 are each amended to read as follows:

(1) Where death results from the injury the expenses of burial not to exceed two thousand dollars shall be paid.

(2) (a) Where death results from the injury, a surviving spouse of a deceased worker eligible for benefits under this title shall receive monthly for life or until remarriage payments according to the following schedule:

(i) If there are no children of the deceased worker, sixty percent of the wages of the deceased worker but not less than one hundred eighty-five dollars;

(ii) If there is one child of the deceased worker and in the legal custody of such spouse, sixty-two percent of the wages of the deceased worker but not less than two hundred twenty-two dollars;

(iii) If there are two children of the deceased worker and in the legal custody of such spouse, sixty-four percent of the wages of the deceased worker but not less than two hundred fifty-three dollars;

(iv) If there are three children of the deceased worker and in the legal custody of such spouse, sixty-six percent of the wages of the deceased worker but not less than two hundred seventy-six dollars;

(v) If there are four children of the deceased worker and in the legal custody of such spouse, sixty-eight percent of the wages of the deceased worker but not less than two hundred ninety-nine dollars; or

(vi) If there are five or more children of the deceased worker and in the legal custody of such spouse, seventy percent of the wages of the deceased worker but not less than three hundred twenty-two dollars.

(b) Where the surviving spouse does not have legal custody of any child or children of the deceased worker or where after the death of the worker legal custody of such child or children passes from such surviving spouse to another, any payment on account of such child or children not in the legal custody of the surviving spouse shall be made to the person or persons having legal custody of such child or children. The amount of such payments shall be five percent of the monthly benefits payable as a result of the worker's death for each such child but such payments shall not exceed twenty-five percent. Such payments on account of such child or children shall be subtracted from the amount to which such surviving spouse would have been entitled had such surviving spouse had legal custody of all of the children and the surviving spouse shall receive the remainder after such payments on account of such child or children have been subtracted. Such payments on account of a child or children not in the legal custody of such surviving spouse shall be apportioned equally among such children.

(c) Payments to the surviving spouse of the deceased worker shall cease at the end of the month in which remarriage occurs: PROVIDED, That the monthly payment made to the child or children of the deceased worker shall from the month following such remarriage be a sum equal to five percent of the wages of the deceased worker for one child and a sum equal to five percent for each additional child up to a maximum of five such children. Payments to such child or children shall be apportioned equally among such children. Such sum shall be in place of any payments theretofore made for the benefit of or on account of any such child or children.

(d) In no event shall the monthly payments provided in subsection (2) of this section exceed seventy-five percent of the average monthly wage in the state as computed under RCW 51.08.018.

(e) In addition to the monthly payments provided for in (2)(a) through (2)(c) of this section, a surviving spouse or child or children of such worker if there is no surviving spouse, or dependent parent or parents, if there is no surviving spouse or child or children of any such deceased worker shall be forthwith paid the sum of one thousand six hundred dollars, any such children, or parents to share and share alike in said sum.

(f) Upon remarriage of a surviving spouse the monthly payments for the child or children shall continue as provided in this section, but the monthly payments to such surviving spouse shall cease at the end of the month during which remarriage occurs. However, after September 8, 1975, an otherwise eligible surviving spouse of a worker who died at any time prior to or after September 8, 1975, shall have an option of:

(i) Receiving, once and for all, a lump sum of seventy-five hundred dollars or fifty percent of the then remaining annuity value of his or her pension, whichever is the lesser: PROVIDED, That if the injury occurred prior to July 1, 1971, the remarriage benefit lump sum available shall be as provided in the remarriage benefit schedules then in effect; or

(ii) If a surviving spouse does not choose the option specified in (2)(f)(i) of this section to accept the lump sum payment, the remarriage of the surviving spouse of a worker shall not bar him or her from claiming the lump sum payment authorized in (2)(f)(i) of this section during the life of the remarriage, or shall not prevent subsequent monthly payments to him or to her if the remarriage has been terminated by death or has been dissolved or annulled by valid court decree provided he or she has not previously accepted the lump sum payment.

(g) If the surviving spouse during the remarriage should die without having previously received the lump sum payment provided in (2)(f)(i) of this section, his or her estate shall be entitled to receive the sum of seventy-five hundred dollars or fifty percent of the then remaining annuity value of his or her pension whichever is the lesser.

(h) The effective date of resumption of payments under (2)(f)(ii) of this section to a surviving spouse based upon termination of a remarriage by death, annulment, or dissolution shall be the date of the death or the date the judicial decree of annulment or dissolution becomes final and when application for the payments has been received.

(i) If it should be necessary to increase the reserves ((~~in the reserve fund or to create a new pension reserve fund~~)) for any case as a result of the amendments in chapter 45, Laws of 1975-'76 2nd ex. sess. or chapter --, Laws of 1985 (this 1985 act), the amount of such increase in ((~~pension~~)) reserve in any such case shall be transferred to the ((~~reserve fund~~)) insurer from the supplemental pension fund.

(3) If there is a child or children and no surviving spouse of the deceased worker or the surviving spouse is not eligible for benefits under this title, a sum equal to thirty-five percent of the wages of the deceased worker shall be paid monthly for one child and a sum equivalent to fifteen percent of such wage shall be paid monthly for each additional child, the total of such sum to be divided among such children, share and share alike: PROVIDED, That benefits under this subsection or subsection (4) shall not exceed sixty-five percent of the wages of the deceased worker at the time of his or her death or seventy-five percent of the average monthly wage in the state as defined in RCW 51.08.018, whichever is the lesser of the two sums.

(4) In the event a surviving spouse receiving monthly payments dies, the child or children of the deceased worker shall receive the same payment as provided in subsection (3) of this section.

(5) If the worker leaves no surviving spouse or child, but leaves a dependent or dependents, a monthly payment shall be made to each dependent equal to fifty percent of the average monthly support actually received by such dependent from the worker during the twelve months next preceding the occurrence of the injury, but the total payment to all dependents in any case shall not exceed sixty-five percent of the wages of the deceased worker at the time of the death or seventy-five percent of the average monthly wage in the state as defined in RCW 51.08.018, whichever is the lesser of the two sums. If any dependent is under the age of eighteen years at the time of the occurrence of the injury, the payment to such dependent shall cease when such dependent reaches the age of eighteen years except such payments shall continue until the dependent reaches age twenty-three while permanently enrolled at a full time course in an accredited school. The payment to any dependent shall cease if and when, under the same circumstances, the necessity creating the dependency would have ceased if the injury had not happened.

(6) If the injured worker dies during the period of permanent total disability, whatever the cause of death, leaving a surviving spouse, or child, or children, the surviving spouse or child or children shall receive benefits as if death resulted from the injury as provided in subsections (2) through (4) of this section. Upon remarriage or death of such surviving spouse the payments to such child or children shall be made as provided in subsection (2) of this section when the surviving spouse of a deceased worker remarries.

Sec. 72. Section 46, chapter 289, Laws of 1971 ex. sess. as last amended by section 1, chapter 326, Laws of 1981 and RCW 51.32.055 are each amended to read as follows:

(1) One purpose of this title is to restore the injured worker as near as possible to the condition of self-support as an able-bodied worker. Benefits for permanent disability shall be determined under the director's supervision only after the injured worker's condition becomes fixed.

(2) All determinations of the existence and extent of permanent disabilities shall be made by the ((~~department. Either the worker, employer, or self-insurer may make a request or such inquiry may be initiated by the director on his or her own motion~~)) insurer. Such determinations shall be required in every instance where permanent disability is likely to be present. ((~~All medical reports and other pertinent information in the possession of or under the control of the employer or self-insurer shall be forwarded to the director with such requests.~~

~~(3) A request for determination of permanent disability shall be examined by the department and an order shall issue in accordance with RCW 51.52.050.~~

~~(4)~~)) (3) The ((~~department~~)) insurer may require that the worker present himself or herself for a special medical examination by a physician, or physicians, selected by the ((~~department~~)) insurer, and the ((~~department~~)) insurer may require that the worker present himself or herself for a personal interview. In such event the costs of such examination or interview, including payment of any reasonable travel expenses, shall be paid by the ((~~department or self-insurer as the case may be~~)) insurer.

((~~(5)~~)) (4) The director may establish a medical bureau within the department to perform medical examinations ((~~under this section~~)). Physicians hired or retained for this purpose shall be grounded in industrial medicine and in the assessment of industrial physical impairment. ((~~Self-insurers~~)) Insurers shall bear ((a)) their proportionate share of the cost of such medical bureau in a manner to be determined by the department.

((~~(6)~~)) (5) Where a dispute arises from the handling of any claim((s)) prior to the condition of the injured worker becoming fixed, the worker, employer, or ((~~self-insurer~~)) insurer may request the department to resolve the dispute or the director may initiate an inquiry on his or her own motion. In such cases the department shall proceed as provided in ((~~this~~)) section 23 of this 1985 act and, thereafter, an order shall ((~~issue~~)) be issued in accordance with RCW 51.52.050.

((~~(7)~~)) (6) In the case of claims accepted by ((self-insurers which involve only medical treatment and which do not involve payment of temporary disability compensation under RCW 51.32.090 and which at the time medical treatment is concluded do not involve permanent disability,)) insurers, when all treatment has been concluded, such claims may be closed by the ((~~self-insurers subject to reporting of claims to the department in a manner prescribed by department rules promulgated pursuant to chapter 34.04 RCW~~)) insurer when appropriate. Upon such closure the ((~~self-insurers~~)) insurers shall enter a written order, ((~~communicated~~)) mailed to the worker and employer, which contains the following statement clearly set forth in bold-face type: "This order constitutes notification that your claim is being closed with payment of (Medical benefits only), (Medical benefits and temporary disability compensation only), or (Medical benefits, temporary disability compensation, and a permanent partial disability award) as provided. If for any reason you disagree with this closure, you may ((~~protest~~)) request mediation by filing a "Notice of Dispute" in writing to the Department of Labor and Industries, Olympia, within ((60)) thirty days of the date you received this order. The department ((~~will then review~~)) may mediate your claim and shall enter a ((~~further determinative order~~)) determination." In the event the department receives such a ((~~protest~~)) request it shall review the claim and ((~~enter a further determinative order as provided for in RCW 51.52.050~~)) may mediate the dispute if the facts justify such mediation and shall enter a determination.

Sec. 73. Section 51.32.060, chapter 23, Laws of 1961 as last amended by section 159, chapter 3, Laws of 1983 and RCW 51.32.060 are each amended to read as follows:

When ((~~the supervisor of industrial insurance shall determine~~)) it is determined that permanent total disability results from the injury, the worker shall receive monthly during the period of such disability:

(1) If married at the time of injury, sixty-five percent of his or her wages but not less than two hundred fifteen dollars per month.

(2) If married with one child at the time of injury, sixty-seven percent of his or her wages but not less than two hundred fifty-two dollars per month.

(3) If married with two children at the time of injury, sixty-nine percent of his or her wages but not less than two hundred eighty-three dollars per month.

(4) If married with three children at the time of injury, seventy-one percent of his or her wages but not less than three hundred six dollars per month.

(5) If married with four children at the time of injury, seventy-three percent of his or her wages but not less than three hundred twenty-nine dollars per month.

(6) If married with five or more children at the time of injury, seventy-five percent of his or her wages but not less than three hundred fifty-two dollars per month.

(7) If unmarried at the time of the injury, sixty percent of his or her wages but not less than one hundred eighty-five dollars per month.

(8) If unmarried with one child at the time of injury, sixty-two percent of his or her wages but not less than two hundred twenty-two dollars per month.

(9) If unmarried with two children at the time of injury, sixty-four percent of his or her wages but not less than two hundred fifty-three dollars per month.

(10) If unmarried with three children at the time of injury, sixty-six percent of his or her wages but not less than two hundred seventy-six dollars per month.

(11) If unmarried with four children at the time of injury, sixty-eight percent of his or her wages but not less than two hundred ninety-nine dollars per month.

(12) If unmarried with five or more children at the time of injury, seventy percent of his or her wages but not less than three hundred twenty-two dollars per month.

(13) For any period of time where both husband and wife are entitled to compensation as temporarily or totally disabled workers, only that spouse having the higher wages of the two shall be entitled to claim their child or children for compensation purposes.

(14) In case of permanent total disability, if the character of the injury is such as to render the worker so physically helpless as to require the hiring of the services of an attendant, the ((~~department~~)) insurer shall make monthly payments to such attendant for such services as long as such requirement continues, but such payments shall not obtain or be operative while the worker is receiving care under or pursuant to the provisions of chapter 51.36 RCW ((~~and RCW 51.04.105~~)).

(15) Should any further ((~~accident~~)) injury result in the permanent total disability of an injured worker, he or she shall receive the pension to which he or she would be entitled, notwithstanding the payment of a lump sum for his or her prior injury.

(16) In no event shall the monthly payments provided in this section exceed seventy-five percent of the average monthly wage in the state as computed under the provisions of RCW 51.08.018, except that this limitation shall not apply to the payments provided for in subsection (14) of this section.

Sec. 74. Section 12, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.32.072 are each amended to read as follows:

Notwithstanding any other provision of law, every surviving spouse and every permanently totally disabled workman or temporarily totally disabled workman, if such workman was unmarried at the time of his injury or was then married but the marriage was later terminated by judicial action, receiving a pension or compensation for temporary total disability under this title pursuant to compensation schedules in effect prior to July 1, 1971, shall after July 1, 1975, be paid fifty percent of the average monthly wage in the state as computed under RCW 51.08.018 per month and an amount equal to five percent of such average monthly wage per month to such totally disabled workman if married at the time of his injury and the marriage was not later terminated by judicial action, and an additional two percent of such average monthly wage for each child of such totally disabled workman at the time of injury in the legal custody of such totally disabled workman or such surviving spouse up to a maximum of five such children. The monthly payments such surviving spouse or totally disabled workman are receiving pursuant to compensation schedules in effect prior to July 1, 1971 shall be deducted from the monthly payments above specified.

Where such a surviving spouse has remarried, or where any such child of such workman, whether living or deceased, is not in the legal custody of such workman or such surviving spouse there shall be paid for the benefit of and on account of each such child a sum equal to two percent of such average monthly wage up to a maximum of five such children in addition to any payments theretofore paid under compensation schedules in effect prior to July 1, 1971 for the benefit of and on account of each such child. In the case of any child or children of a deceased workman not leaving a surviving spouse or where the surviving spouse has later died, there shall be paid for the benefit of and on account of each such child a sum equal to two percent of such average monthly wage up to a maximum of five such children in addition to any payments theretofore paid under such schedules for the benefit of and on account of each such child.

If the character of the injury or occupational disease is such as to render the workman so physically helpless as to require the hiring of the services of an attendant, the ((~~department~~)) insurer shall make monthly payments to such attendant for such services as long as such requirement continues but such payments shall not obtain or be operative while the workman is receiving care under or pursuant to the provisions of this title except for care granted at the discretion of the ((~~supervisor~~)) insurer pursuant to RCW 51.36.010: PROVIDED, That such payments shall not be considered compensation nor shall they be subject to any limitation upon total compensation payments.

((~~No part of such additional payments shall be payable from the accident fund.~~))

The director shall pay monthly from the supplemental pension fund such an amount as will, when added to the compensation theretofore paid under compensation schedules in effect prior to July 1, 1971, equal the amounts hereinabove specified.

In cases where money has been or shall be advanced to any such person from the pension reserve, the additional amount to be paid under this section shall be reduced by the amount of monthly pension which was or is predicated upon such advanced portion of the pension reserve.

Sec. 75. Section 9, chapter 14, Laws of 1980 and RCW 51.32.073 are each amended to read as follows:

Each employer shall retain from the earnings of each worker that amount as shall be fixed from time to time by the director, the basis for measuring said amount to be determined by the director. The money so retained shall be matched in an equal amount by each employer, and all such moneys shall be remitted to the department in such manner and at such intervals as the department directs and shall be placed in the supplemental pension fund: PROVIDED, That the state apprenticeship council shall pay the entire amount into the supplemental pension fund for registered apprentices or trainees during their participation in supplemental and related instruction classes. The moneys so collected shall be used exclusively for the additional payments from the supplemental pension fund prescribed in this title and for the amount of any increase payable under the provisions of RCW 51.32.075, as now or hereafter amended, and shall be no more than necessary to make such payments on a current basis. The department may require ((~~a self-insurer~~)) an insurer to make any additional payments which are payable from the supplemental pension fund and thereafter such ((~~self-insurer~~)) insurer shall be reimbursed therefrom. Within twelve months after the effective date of this 1985 act, the department shall determine the amount of liability for each employer for amounts payable from the supplemental pension fund directly on behalf of each employer. The department shall allocate those costs to each employer and assess the insurer for each of those employers a monthly amount to cover those costs. The liabilities of the second injury fund directly assessed to individual employers shall be deducted from the total amount of the liabilities of the supplemental pension fund. The remaining amount of liability of the supplemental pension fund shall be charged as a percent of the manual premium rates that would be charged that employer, without deviation, for all employers including those employers who have been charged a direct assessment as provided in this section.

Sec. 76. Section 2, chapter 286, Laws of 1975 1st ex. sess. as last amended by section 1, chapter 203, Laws of 1983 and RCW 51.32.075 are each amended to read as follows:

The compensation or death benefits payable pursuant to the provisions of this chapter for temporary total disability, permanent total disability, or death arising out of injuries or occupational diseases shall be adjusted as follows:

(1) On July 1, 1982, there shall be an adjustment for those whose right to compensation was established on or after July 1, 1971, and before July 1, 1982. The adjustment shall be determined by multiplying the amount of compensation to which they are entitled by a fraction, the denominator of which shall be the average monthly wage in the state under RCW 51.08.018 for the fiscal year in which such person's right to compensation was established, and the numerator of which shall be the average monthly wage in the state under RCW 51.08.018 on July 1, 1982.

(2) In addition to the adjustment established by subsection (1) of this section, there shall be another adjustment on July 1, 1983, for those whose right to compensation was established on or after July 1, 1971, and before July 1983, which shall be determined by multiplying the amount of compensation to which they are entitled by a fraction, the denominator of which shall be the average monthly wage in the state under RCW 51.08.018 for the fiscal year in which such person's right to compensation was established, and the numerator of which shall be the average monthly wage in the state under RCW 51.08.018 on July 1, 1983.

(((3) In addition to the adjustments under subsections (1) and (2) of this section, further adjustments shall be made beginning on July 1, 1984, and on each July 1st thereafter for those whose right to compensation was established on or after July 1, 1971. The adjustment shall be determined by multiplying the amount of compensation to which they are entitled by a fraction, the denominator of which shall be the average monthly wage in the state under RCW 51.08.018 for the fiscal year in which such person's right to compensation was established, and the numerator of which shall be the average monthly wage in the state under RCW 51.08.018 on July 1st of the year in which the adjustment is being made.))

Sec. 77. Section 51.32.080, chapter 23, Laws of 1961 as last amended by section 2, chapter 20, Laws of 1982 1st ex. sess. and RCW 51.32.080 are each amended to read as follows:

(1) For the permanent partial disabilities here specifically described, the injured worker shall receive compensation as follows:

LOSS BY AMPUTATION

@i2!tp1Of leg above the knee joint with short thigh stump (3" or less below the tuberosity of ischium)!w× !tr!sc ,10

!ae0!tr$36,000.00

@i2Of leg at or above knee joint with functional stump!w× !tr!sc ,10

!ae0!tr32,400.00

@i2Of leg below knee joint!w× !tr!sc ,10

!ae0!tr28,800.00

@i2Of leg at ankle (Syme)!w× !tr!sc ,10

!ae0!tr25,200.00

@i2Of foot at mid-metatarsals!w× !tr!sc ,10

!ae0!tr12,600.00

@i2Of great toe with resection of metatarsal bone!w× !tr!sc ,10

!ae0!tr7,560.00

@i2Of great toe at metatarsophalangeal joint!w× !tr!sc ,10

!ae0!tr4,536.00

@i2Of great toe at interphalangeal joint!w× !tr!sc ,10

!ae0!tr2,400.00

@i2Of lesser toe (2nd to 5th) with resection of metatarsal bone!w× !tr!sc ,10

!ae0!tr2,760.00

@i2Of lesser toe at metatarsophalangeal joint!w× !tr!sc ,10

!ae0!tr1,344.00

@i2Of lesser toe at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr996.00

@i2Of lesser toe at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr252.00

@i2Of arm at or above the deltoid insertion or by disarticulation at the shoulder!w× !tr!sc ,10

!ae0!tr36,000.00

@i2Of arm at any point from below the deltoid insertion to below the elbow joint at the insertion of the biceps tendon!w× !tr!sc ,10

!ae0!tr34,200.00

@i2Of arm at any point from below the elbow joint distal to the insertion of the biceps tendon to and including mid-metacarpal amputation of the hand!w× !tr!sc ,10

!ae0!tr32,400.00

@i2Of all fingers except the thumb at metacarpophalangeal joints!w× !tr!sc ,10

!ae0!tr19,440.00

@i2Of thumb at metacarpophalangeal joint or with resection of carpometacarpal bone!w× !tr!sc ,10

!ae0!tr12,960.00

@i2Of thumb at interphalangeal joint!w× !tr!sc ,10

!ae0!tr6,480.00

@i2Of index finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr8,100.00

@i2Of index finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr6,480.00

@i2Of index finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr3,564.00

@i2Of middle finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr6,480.00

@i2Of middle finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr5,184.00

@i2Of middle finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr2,916.00

@i2Of ring finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr3,240.00

@i2Of ring finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr2,592.00

@i2Of ring finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr1,620.00

@i2Of little finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr1,620.00

@i2Of little finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr1,296.00

@i2Of little finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr648.00

MISCELLANEOUS

@i2Loss of one eye by enucleation!w× !tr!sc ,10

!ae0!tr14,400.00

@i2Loss of central visual acuity in one eye!w× !tr!sc ,10

!ae0!tr12,000.00

@i2Complete loss of hearing in both ears!w× !tr!sc ,10

!ae0!tr28,800.00

@i2Complete loss of hearing in one ear!w× !tr!sc ,10

!ae0!tr4,800.00!te

(2) Compensation for amputation of a member or part thereof at a site other than those above specified, and for loss of central visual acuity and loss of hearing other than complete, shall be in proportion to that which such other amputation or partial loss of visual acuity or hearing most closely resembles and approximates. Compensation for any other permanent partial disability not involving amputation shall be in the proportion which the extent of such other disability, called unspecified disability, shall bear to that above specified, which most closely resembles and approximates in degree of disability such other disability, compensation for any other unspecified permanent partial disability shall be in an amount as measured and compared to total bodily impairment: PROVIDED, That in order to reduce litigation and establish more certainty and uniformity in the rating of unspecified permanent partial disabilities, the department shall enact rules having the force of law classifying such disabilities in the proportion which the department shall determine such disabilities reasonably bear to total bodily impairment. In enacting such rules, the department shall give consideration to, but need not necessarily adopt, any nationally recognized medical standards or guides for determining various bodily impairments. For purposes of calculating monetary benefits, the amount payable for total bodily impairment shall be deemed to be sixty thousand dollars: PROVIDED, That compensation for unspecified permanent partial disabilities involving injuries to the back that do not have marked objective clinical findings to substantiate the disability shall be determined at an amount equal to seventy-five percent of the monetary value of such disability as related to total bodily impairment: PROVIDED FURTHER, That the total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed the sum of sixty thousand dollars, except that the total compensation for all unspecified permanent partial disabilities involving injuries to the back that do not have marked objective clinical findings to substantiate the disability and resulting from the same injury shall not exceed the sum of forty-five thousand dollars: PROVIDED FURTHER, That in case permanent partial disability compensation is followed by permanent total disability compensation, any portion of the permanent partial disability compensation which exceeds the amount that would have been paid the injured worker if permanent total disability compensation had been paid in the first instance, shall be deducted from the pension reserve of such injured worker and his or her monthly compensation payments shall be reduced accordingly.

(3) Should a worker receive an injury to a member or part of his or her body already, from whatever cause, permanently partially disabled, resulting in the amputation thereof or in an aggravation or increase in such permanent partial disability but not resulting in the permanent total disability of such worker, his or her compensation for such partial disability shall be adjudged with regard to the previous disability of the injured member or part and the degree or extent of the aggravation or increase of disability thereof.

(4) When the compensation provided for in subsections (1) and (2) exceeds three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, payment shall be made in monthly payments in accordance with the schedule of temporary total disability payments set forth in RCW 51.32.090 until such compensation is paid to the injured worker in full, except that the first monthly payment shall be in an amount equal to three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, and interest shall be paid at the rate of eight percent on the unpaid balance of such compensation commencing with the second monthly payment: PROVIDED, That upon application of the injured worker or survivor the monthly payment may be converted, in whole or in part, into a lump sum payment, in which event the monthly payment shall cease in whole or in part. Such conversion may be made only upon written application of the injured worker or survivor to the ((~~department and shall rest in the discretion of the department depending upon the merits of each individual application~~)) insurer: PROVIDED FURTHER, That upon death of a worker all unpaid installments accrued shall be paid according to the payment schedule established prior to the death of the worker to the widow or widower, or if there is no widow or widower surviving, to the dependent children of such claimant, and if there are no such dependent children, then to such other dependents as defined by this title.

Sec. 78. Section 51.32.090, chapter 23, Laws of 1961 as last amended by section 1, chapter 129, Laws of 1980 and RCW 51.32.090 are each amended to read as follows:

(1) When the total disability is only temporary, the schedule of payments contained in subdivisions (1) through (13) of RCW 51.32.060 as amended shall apply, so long as the total disability continues.

(2) Any compensation payable under this section for children not in the custody of the injured worker as of the date of injury shall be payable only to such person as actually is providing the support for such child or children pursuant to the order of a court of record providing for support of such child or children.

(3) As soon as recovery is so complete that the present earning power of the worker, at any kind of work, is restored to that existing at the time of the occurrence of the injury, the payments shall cease. If and so long as the present earning power is only partially restored, the payments shall continue in the proportion which the new earning power shall bear to the old. No compensation shall be payable unless the loss of earning power shall exceed five percent. In any event, temporary total disability benefits shall not be paid to any worker who is over seventy years of age. The worker shall present evidence sufficient to show that his or her inability to obtain employment is due to physical limitations related to the accident or disease and is not due to economic conditions or the lack of availability of employment.

(4) Whenever an employer requests that a worker who is entitled to temporary total disability under this chapter be certified by a physician as able to perform available work other than his or her usual work, the employer shall furnish to the physician, with a copy to the worker, a statement describing the available work in terms that will enable the physician to relate the physical activities of the job to the worker's disability. The physician shall then determine whether the worker is physically able to perform the work described. If the worker is released by his or her physician for said work, and the work thereafter comes to an end before the worker's recovery is sufficient in the judgment of his or her physician to permit him or her to return to his or her usual job, or to perform other available work, the worker's temporary total disability payments shall be resumed. Should the available work described, once undertaken by the worker, impede his or her recovery to the extent that in the judgment of his or her physician he or she should not continue to work, the worker's temporary total disability payments shall be resumed when the worker ceases such work.

Once the worker returns to work under the terms of this subsection, he or she shall not be assigned by the employer to work other than the available work described without the worker's written consent, or without prior review and approval by the worker's physician.

In the event of any dispute as to the worker's ability to perform the available work offered by the employer, the department shall make the final determination.

(5) No worker shall receive compensation for or during the day on which injury was received or the three days following the same, unless his or her disability shall continue for a period of fourteen consecutive calendar days from date of injury: PROVIDED, That attempts to return to work in the first fourteen days following the injury shall not serve to break the continuity of the period of disability if the disability continues fourteen days after the injury occurs.

(6) Should a worker suffer a temporary total disability and should his or her employer at the time of the injury continue to pay him or her the wages which he or she was earning at the time of such injury, such injured worker shall not receive any payment provided in subsection (1) of this section during the period his or her employer shall so pay such wages.

(7) In no event shall the monthly payments provided in this section exceed seventy-five percent of the average monthly wage in the state as computed under the provisions of RCW 51.08.018.

Sec. 79. Section 10, chapter 14, Laws of 1980 as last amended by section 2, chapter 70, Laws of 1983 and RCW 51.32.095 are each amended to read as follows:

One of the primary purposes of this title is the restoration of the injured worker to gainful employment. To this end, ((~~the department~~)) insurers shall utilize the services of ((~~individuals~~)) rehabilitation counselors and organizations, public or private, whose experience, training, and interests in vocational rehabilitation and retraining qualify them to lend expert assistance to the ((~~supervisor of industrial insurance~~)) insurers in such programs of vocational rehabilitation, retraining, and job placement as may be reasonable to qualify the worker for employment consistent with his or her physical and mental status. Where, after evaluation and recommendation by such individuals or organizations and prior to final evaluation of the worker's permanent disability ((~~and in the sole opinion of the supervisor or supervisor's designee~~)), whether or not medical treatment has been concluded, vocational rehabilitation or retraining with job placement is both necessary and likely to restore the injured worker to a form of gainful employment, including self-employment, the ((~~supervisor or supervisor's designee may, in his or her sole discretion, pay or, if the employer is a self-insurer, direct the self-insurer to pay~~)) insurer may provide the cost of books, tuition, fees, supplies, equipment, transportation, child or dependent care, and other necessary expenses for any such worker ((~~in an amount not to exceed three thousand dollars in any fifty-two week period~~)), and continue the temporary total disability compensation under RCW 51.32.090 while the worker is actively and successfully undergoing a formal program of vocational rehabilitation ((or)), retraining ((~~with~~)), or job placement. Such expenses may include training fees for on-the-job training and the cost of furnishing tools and other equipment necessary for self-employment or reemployment: PROVIDED, That such compensation or payment of retraining with job placement expenses may not be ((~~authorized~~)) provided for a period of more than fifty-two weeks: PROVIDED FURTHER, That such period may((~~, in the sole discretion of the supervisor after his or her review,~~)) be extended for an additional fifty-two weeks or portion thereof ((~~by written order of the supervisor~~)) if deemed necessary by the insurer.

In cases where the worker is required to reside away from his or her customary residence, the reasonable cost of board and lodging shall also be paid. Said costs shall be ((~~chargeable to the employer's cost experience or~~)) paid by the ((~~self-insurer as the case may be~~)) insurer.

((~~The benefits provided for in this section are available to any otherwise eligible worker regardless of the date of industrial injury.~~))

Sec. 80. Section 11, chapter 14, Laws of 1980 and RCW 51.32.110 are each amended to read as follows:

Any worker entitled to receive any benefits or claiming such under this title shall, if requested by the ((~~department or self-insurer~~)) insurer, submit himself or herself for medical examination, at a time and from time to time, at a place reasonably convenient for the worker and as may be provided by the rules of the department. If the worker refuses to submit to medical examination, or obstructs the same, or, if any injured worker shall persist in unsanitary or injurious practices which tend to imperil or retard his or her recovery, or shall refuse to submit to such medical or surgical treatment as is reasonably essential to his or her recovery or refuse or obstruct evaluation or examination for the purpose of vocational rehabilitation or does not cooperate in reasonable efforts at such rehabilitation, the ((~~department or the self-insurer upon approval by the department~~)) insurer, with notice to the worker may suspend any further action on any claim of such worker so long as such refusal, obstruction, noncooperation, or practice continues and reduce, suspend, or deny any compensation for such period: PROVIDED, That the ((~~department or the self-insurer~~)) insurer shall not suspend any further action on any claim of a worker or reduce, suspend, or deny any compensation if a worker has good cause for refusing to submit to or to obstruct any examination, evaluation, treatment or practice requested by the ((~~department~~)) insurer or required under this section. If the worker necessarily incurs traveling expenses in attending for examination pursuant to the request of the ((~~department~~)) insurer, such traveling expenses shall be repaid to him or her ((~~out of the accident fund upon proper voucher and audit or shall be repaid~~)) by the ((~~self-insurer, as the case may be~~)) insurer.

If the medical examination required by this section causes the worker to be absent from his or her work without pay he or she shall be paid for such time lost in accordance with the schedule of payments provided in RCW 51.32.090 as amended.

Sec. 81. Section 51.32.130, chapter 23, Laws of 1961 and RCW 51.32.130 are each amended to read as follows:

(1) In case of death or permanent total disability, the monthly payment provided may be converted, in whole or in part, into a lump sum payment, not in any case to exceed eight thousand five hundred dollars, equal or proportionate, as the case may be, to the value of the annuity then remaining, to be fixed and certified by the state insurance commissioner, in which event the monthly payments shall cease in whole or in part accordingly or proportionately. Such conversion may be made ((~~only upon written application (in case of minor children the application may be by either parent) to the department and shall rest in the discretion of the department~~)) upon agreement between the applicant and the insurer. ((~~Within the rule aforesaid~~)) Under this subsection the amount and value of the lump sum payment may be agreed upon between the ((~~department~~)) insurer and applicant.

(2) In the event any payment shall be due to an alien residing in a foreign country, the ((~~department~~)) insurer may settle the same by making a lump sum payment in such amount as may be agreed to by such alien, not to exceed fifty percent of the value of the annuity then remaining.

(3) Nothing ((~~herein~~)) in this section shall preclude the ((~~department~~)) insurer from ((~~making~~)) awarding, and authority is hereby given it to ((~~make~~)) award, on its own motion, lump sum payments equal or proportionate, as the case may be, to the value of the annuity then remaining, in full satisfaction of claims due to dependents. Such payment shall be made by the insurer upon written agreement between the insurer and the injured worker or the legal guardian of the worker's dependents.

Sec. 82. Section 51.32.135, chapter 23, Laws of 1961 as last amended by section 52, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.135 are each amended to read as follows:

In pension cases when a worker or beneficiary closes his or her claim by full conversion to a lump sum or in any other manner as provided in RCW 51.32.130 and 51.32.150, such action shall be conclusive and effective to bar any subsequent application or claim relative thereto by the worker or any beneficiary which would otherwise exist had such person not elected to close the claim: PROVIDED, The ((~~director~~)) insurer may require the spouse of such worker to consent in writing as a prerequisite to conversion and/or the closing of such claim.

Sec. 83. Section 51.32.150, chapter 23, Laws of 1961 as amended by section 18, chapter 323, Laws of 1977 ex. sess. and RCW 51.32.150 are each amended to read as follows:

If a beneficiary shall reside or move out of the state, the ((~~department~~)) insurer may, with the written consent of the beneficiary, convert any monthly payments provided for such cases into a lump sum payment (not in any case to exceed the value of the annuity then remaining, to be fixed and certified by the state insurance commissioner, but in no case to exceed the sum provided in RCW 51.32.130 as now or hereafter amended).

Sec. 84. Section 51.32.160, chapter 23, Laws of 1961 as amended by section 1, chapter 192, Laws of 1973 1st ex. sess. and RCW 51.32.160 are each amended to read as follows:

If aggravation, diminution, or termination of disability takes place or be discovered after the rate of compensation shall have been established or compensation terminated, in any case the director((~~, through and by means of the division of industrial insurance,~~)) may, upon the application of the beneficiary, made within seven years ((~~after the establishment or termination of such compensation, or upon his own motion~~)) from the first date of application for industrial insurance benefits for an injury or disease, readjust for further application the rate of compensation in accordance with the rules in this section provided for the same, or in a proper case terminate the payment: PROVIDED, That the time limitation of this section shall be ten years in claims involving loss of vision or function of the eyes: PROVIDED FURTHER, That the injured worker and his or her employer's insurer have not agreed to a final settlement of the claim. If the injured worker and the insurer have agreed to such a settlement and have signed a compromise and release agreement to that effect, then the claim shall not be subject to this section and an application shall not be accepted.

No act done or ordered to be done by the director, or the department prior to the signing and filing in the matter of a written order for such readjustment shall be ground for such readjustment.

Sec. 85. Section 47, chapter 289, Laws of 1971 ex. sess. as last amended by section 3, chapter 20, Laws of 1982 1st ex. sess. and RCW 51.32.190 are each amended to read as follows:

(1) If the ((~~self-insurer~~)) insurer denies a claim for compensation, written notice of such denial, clearly informing the claimant of the reasons therefor and that the ((~~director will rule on~~)) department may mediate the matter shall be mailed or given to the claimant and the director within ((~~thirty~~)) fourteen days after the ((~~self-insurer~~)) insurer has notice of the claim.

(2) Until such time as the department has entered an order in a disputed case acceptance of compensation by the claimant shall not be considered a binding determination of his or her rights under this title. Likewise the payment of compensation shall not be considered a binding determination of the obligations of the ((~~self-insurer~~)) insurer as to future compensation payments.

(3) ((Upon making the first payment of income benefits, and upon stopping or changing of such benefits except where a determination of the permanent disability has been made as elsewhere provided in this title, the self-insurer shall immediately notify the director in accordance with a form to be prescribed by the director that the payment of income benefits has begun or has been stopped or changed.)) Where temporary disability compensation is payable, the first payment thereof shall be made, in person or by mail, within fourteen days after ((~~notice~~)) receipt of claim by the insurer and shall continue at regular semimonthly or biweekly intervals.

(4) If, after the payment of compensation without an award, the ((~~self-insurer~~)) insurer elects to controvert the right to compensation, the payment of compensation shall not be considered a binding determination of the obligations of the ((~~self-insurer~~)) insurer as to future compensation payments. The acceptance of compensation by the worker or his or her beneficiaries shall not be considered a binding determination of their rights under this title.

(5) The director (a) may, upon his or her own initiative at any time in a case in which payments are being made without an award, and (b) shall, upon receipt of information from any person claiming to be entitled to compensation, from the ((~~self-insurer~~)) insurer, or otherwise that the right to compensation is controverted, or that payment of compensation has been opposed, stopped or changed, whether or not claim has been filed, promptly make such inquiry as circumstances require, cause such medical examinations to be made, hold such hearings, require the submission of further information, make such orders, decisions or awards, and take such further action as he or she considers will properly determine the matter and protect the rights of all parties.

(6) The director, upon his or her own initiative, may make such inquiry as circumstances require or is necessary to protect the rights of all the parties and he or she may enact rules and regulations providing for procedures to ensure fair and prompt handling by ((~~self-insurers~~)) insurers of the claims of workers and beneficiaries. The cost of such inquiries under subsection (5) of this section shall be paid by the individual insurer unless the insurer is found to be without fault in which case the cost shall be provided by the industrial insurance administrative fund.

Sec. 86. Section 48, chapter 289, Laws of 1971 ex. sess. and RCW 51.32.200 are each amended to read as follows:

(1) If ((~~a self-insurer~~)) an insurer fails, refuses, or neglects to comply with a compensation order which has become final and is not subject to review or appeal, the director or any person entitled to compensation under the order may institute proceedings for injunctive or other appropriate relief for enforcement of the order. These proceedings may be instituted in the superior court for the county in which the claimant resides, or, if the claimant is not then a resident of this state, in the superior court for the county in which the ((~~self-insurer~~)) insurer may be served with process.

(2) The court shall enforce obedience to the order by proper means, enjoining compliance upon the person obligated to comply with the compensation order. The court may issue such writs and processes as are necessary to carry out its orders.

(3) A proceeding under this section does not preclude other methods of enforcement provided for in this title.

Sec. 87. Section 26, chapter 43, Laws of 1972 ex. sess. as amended by section 55, chapter 350, Laws of 1977 ex. sess. and RCW 51.32.210 are each amended to read as follows:

Claims of injured workers of employers ((~~who have secured the payment of compensation by insuring with the department~~)) shall be promptly acted upon by the ((~~department~~)) insurer. Where temporary disability compensation is payable, the first payment thereof shall be mailed within fourteen days after receipt of the claim ((at)) by the ((~~department's offices in Olympia~~)) insurer and shall continue at regular semimonthly intervals. The payment of this or any other benefits under this title, prior to the ((~~entry of an order by the department in accordance with RCW 51.52.050 as now or hereafter amended~~)) insurer's accepting the claim, shall be not considered a binding determination of the obligations of the ((~~department~~)) insurer under this title. The acceptance of compensation by the worker or his or her beneficiaries prior to such order shall likewise not be considered a binding determination of their rights under this title.

Sec. 88. Section 3, chapter 286, Laws of 1975 1st ex. sess. as last amended by section 19, chapter 63, Laws of 1982 and RCW 51.32.220 are each amended to read as follows:

(1) For persons under the age of ((~~sixty-five~~)) seventy receiving compensation for temporary or permanent total disability pursuant to the provisions of chapter 51.32 RCW, such compensation shall be reduced by an amount equal to the benefits payable under all employer contributed disability and retirement plans, and under the federal old-age, survivors and disability insurance act as now or hereafter amended not to exceed the amount of the reduction established pursuant to 42 USC 424a. However, such reduction shall not apply when the combined compensation provided pursuant to chapter 51.32 RCW and the federal old-age, survivors and disability insurance act is less than the total benefits to which the federal reduction would apply, pursuant to 42 USC 424a. Where any person described in this section refuses to authorize the release of information concerning the amount of benefits payable under said federal act the ((~~department's~~)) insurer's estimate of said amount shall be deemed to be correct unless and until the actual amount is established and no adjustment shall be made for any period of time covered by any such refusal.

(2) Any reduction under subsection (1) of this section shall be effective the month following the month in which the ((~~department or self-insurer~~)) insurer is notified by the federal social security administration that the person is receiving disability benefits under the federal old-age, survivors and disability insurance act, or the insurer becomes aware the person is receiving benefits from any employer paid disability income or pension program: PROVIDED, That in the event of an overpayment of benefits the ((~~department or self-insurer~~)) insurer may not recover more than the overpayments for the six months immediately preceding the date the ((~~department or self-insurer~~)) insurer notifies the worker that an overpayment has occurred: PROVIDED FURTHER, That upon determining that there has been an overpayment, the ((~~department or self-insurer~~)) insurer shall immediately notify the person who received the overpayment that he or she shall be required to make repayment pursuant to this section and RCW 51.32.230.

(3) Recovery of any overpayment ((~~must~~)) may be taken from future temporary or permanent total disability benefits or permanent partial disability benefits provided by this title or by reduction in salary or other benefits payable to the worker from his or her employment with the original employer. In the case of temporary or permanent total disability benefits, the recovery shall not exceed twenty-five percent of the monthly amount due from the ((~~department or self-insurer~~)) insurer or one-sixth of the total overpayment, whichever is the lesser.

(4) No reduction may be made unless the worker receives notice of the reduction prior to the month in which the reduction is made.

(5) In no event shall the reduction reduce total benefits to less than the greater amount the worker may be entitled to under this title or the federal old-age, survivors and disability insurance act.

(6) The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any overpayment where the recovery would be against equity and good conscience.

(7) The amendment in subsection (1) of this section by ((~~this 1982 act~~)) section 19, chapter 63, Laws of 1982 raising the age limit during which the reduction shall be made from age sixty-two to age sixty-five shall apply with respect to workers whose effective entitlement to total disability compensation begins after January 1, 1983.

Sec. 89. Section 2, chapter 151, Laws of 1979 ex. sess. and RCW 51.32.230 are each amended to read as follows:

Notwithstanding any other provisions of law, any overpayments previously recovered under the provisions of RCW 51.32.220 as now or hereafter amended shall be limited to six months' overpayments. Where greater recovery has already been made, the director, in his discretion, may ((~~make~~)) order restitution in those cases where an extraordinary hardship has been created.

Sec. 90. Section 13, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.32.240 are each amended to read as follows:

(1) Whenever any payment of benefits under this title is made because of clerical error, mistake of identity, innocent misrepresentation by or on behalf of the recipient thereof mistakenly acted upon, or any other circumstance of a similar nature, all not induced by fraud, the recipient thereof shall repay it and recoupment may be made from any future payments due to the recipient on any claim with the ((~~state fund or self-insurer, as the case may be~~)) insurer. The ((~~department or self-insurer, as the case may be,~~)) insurer must make claim for such repayment or recoupment within one year of the making of any such payment or it will be deemed any claim therefor has been waived. The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any such timely claim where the recovery would be against equity and good conscience.

(2) Whenever any payment of benefits under this title has been made pursuant to an adjudication by the department or by order of the board or any court and timely appeal therefrom has been made where the final decision is that any such payment was made pursuant to an erroneous adjudication, the recipient thereof shall repay it and recoupment may be made from any future payments due to the recipient on any claim with the ((~~state fund or self-insurer, as the case may be~~)) same insurer. The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any such payments where the recovery would be against equity and good conscience.

(3) Whenever any payment of benefits under this title has been induced by fraud the recipient thereof shall repay any such payment together with a penalty of fifty percent of the total of any such payments and the amount of such total sum may be recouped from any future payments due to the recipient on any claim ((~~with the state fund or self-insurer against whom the fraud was committed, as the case may be,~~)) filed within this state and the amount of such penalty shall be placed in the ((~~supplemental pension~~)) industrial insurance administrative fund. Such repayment or recoupment must be demanded or ordered within one year of the discovery of the fraud.

Sec. 91. Section 13, chapter 63, Laws of 1982 as amended by section 3, chapter 70, Laws of 1983 and RCW 51.32.250 are each amended to read as follows:

Modification of the injured worker's previous job is recognized as a desirable method of returning the injured worker to suitable gainful employment. In order to assist employers in meeting the costs of job modification, and to encourage employers to modify jobs to accommodate retaining or hiring workers with disabilities resulting from work-related injury, the ((~~supervisor~~)) insurer in his or her discretion may pay job modification costs in an amount not to exceed five thousand dollars per worker per job modification. This payment is intended to be a cooperative participation with the employer and funds shall be taken from the appropriate account within the second injury fund.

The benefits provided for in this section are available to any otherwise eligible worker regardless of the date of industrial injury.

Sec. 92. Section 51.36.010, chapter 23, Laws of 1961 as last amended by section 56, chapter 350, Laws of 1977 ex. sess. and RCW 51.36.010 are each amended to read as follows:

Upon the occurrence of any injury to a worker entitled to compensation under the provisions of this title, he or she shall receive proper and necessary medical and surgical services at the hands of a physician of his or her own choice, if conveniently located, and proper and necessary hospital care and services during the period of his or her disability from such injury, but the same shall be limited in point of duration as follows:

In the case of permanent partial disability, not to extend beyond the date when compensation shall be awarded him or her, except when the worker returned to work before permanent partial disability award is made, in such case not to extend beyond the time when monthly allowances to him or her shall cease; in case of temporary disability not to extend beyond the time when monthly allowances to him or her shall cease: PROVIDED, That after any injured worker has returned to his or her work his or her medical and surgical treatment may be continued if, and so long as, such continuation is ((~~deemed~~)) necessary ((~~by the supervisor of industrial insurance to be necessary~~)) to his or her more complete recovery; in case of a permanent total disability not to extend beyond the date on which a lump sum settlement is made with him or her or he or she is placed upon the permanent pension roll: PROVIDED, HOWEVER, That the ((~~supervisor of industrial insurance, solely in his or her discretion~~)) department, may authorize continued medical and surgical treatment for conditions previously accepted ((~~by the department~~)) when such medical and surgical treatment is deemed necessary ((~~by the supervisor of industrial insurance~~)) to protect such worker's life or provide for the administration of medical and therapeutic measures including payment of prescription medications, but not including those controlled substances currently scheduled by the state board of pharmacy as Schedule I, II, III, or IV substances under chapter 69.50 RCW, which are necessary to alleviate continuing pain which results from the industrial injury. In order to authorize such continued treatment the written order of the ((~~supervisor of industrial insurance~~)) director of labor and industries issued in advance of the continuation shall be necessary.

Sec. 93. Section 51.36.020, chapter 23, Laws of 1961 as last amended by section 12, chapter 63, Laws of 1982 and RCW 51.36.020 are each amended to read as follows:

(1) When the injury to any worker is so serious as to require his or her being taken from the place of injury to a place of treatment, his or her employer shall, at the expense of the ((~~medical aid fund, or self-insurer, as the case may be~~)) insurer, furnish transportation to the nearest place of proper treatment.

(2) Every worker whose injury results in the loss of one or more limbs or eyes shall be provided with proper artificial substitutes and every worker, who suffers an injury to an eye producing an error of refraction, shall be once provided proper and properly equipped lenses to correct such error of refraction and his or her disability rating shall be based upon the loss of sight before correction.

(3) Every worker whose accident results in damage to or destruction of an artificial limb, eye, or tooth, shall have same repaired or replaced.

(4) Every worker whose hearing aid ((or)), eyeglasses, or corrective lenses are damaged, destroyed, or lost as a result of an industrial accident shall have the same restored or replaced. The ((~~department or self-insurer~~)) insurer shall be liable only for the cost of restoring damaged hearing aids ((or)), eyeglasses, or corrective lenses to their condition at the time of the accident.

(5) All mechanical appliances necessary in the treatment of an injured worker, such as braces, belts, casts, and crutches, shall be provided and all mechanical appliances required as permanent equipment after treatment has been completed shall continue to be provided or replaced without regard to the date of injury or date treatment was completed, notwithstanding any other provision of law.

(6) A worker, whose injury is of such short duration as to bring him or her within the time limit provisions of RCW 51.32.090, shall nevertheless receive during the omitted period medical, surgical, and hospital care and service and transportation under the provisions of this chapter.

(7) Whenever in the sole discretion of the ((~~supervisor~~)) department it is reasonable and necessary to provide residence modifications necessary to meet the needs and requirements of the worker who has sustained catastrophic injury, the ((~~department or self-insurer~~)) insurer may be ordered to pay an amount not to exceed the state's average annual wage for one year as determined under RCW 50.04.355, as now existing or hereafter amended, toward the cost of such modifications or construction. Such payment shall only be made for the construction or modification of a residence in which the injured worker resides. Only one residence of any worker may be modified or constructed under this subsection, although the ((~~supervisor~~)) department may order more than one payment for any one home, up to the maximum amount permitted by this section.

(8) Whenever in the sole discretion of the ((~~supervisor~~)) department it is reasonable and necessary to modify a motor vehicle owned by a worker who has become an amputee or becomes paralyzed because of an industrial injury, the supervisor may order up to fifty percent of the state's average annual wage for one year, as determined under RCW 50.04.355, as now existing or hereafter amended, to be paid by the ((~~department or self-insurer~~)) insurer toward the costs thereof.

(9) The benefits provided by subsections (7) and (8) of this section are available to any otherwise eligible worker regardless of the date of industrial injury.

Sec. 94. Section 2, chapter 107, Laws of 1961 as amended by section 59, chapter 350, Laws of 1977 ex. sess. and RCW 51.36.040 are each amended to read as follows:

The benefits of Title 51 RCW shall be provided to each worker receiving an injury, as defined therein, during the course of his or her employment and also during his or her lunch period as established by the employer while on the jobsite. The jobsite shall consist of the premises as are occupied, used or contracted for by the employer for the business of work process in which the employer is then engaged: PROVIDED, That if a worker by reason of his or her employment leaves such jobsite under the direction, control or request of the employer and if such worker is injured during his or her lunch period while so away from the jobsite, the worker shall receive the benefits as provided herein: AND PROVIDED FURTHER, That the employer need not consider the lunch period in worker hours for the purpose of reporting to ((~~the department~~)) its insurer unless the worker is actually paid for such period of time.

Sec. 95. Section 53, chapter 289, Laws of 1971 ex. sess. as amended by section 15, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.36.060 are each amended to read as follows:

Physicians examining or attending injured ((~~workmen~~)) workers under this title shall comply with rules and regulations adopted by the director, and shall make such reports as may be requested by the department or ((~~self-insurer~~)) insurer upon the condition or treatment of any such ((~~workman~~)) worker, or upon any other matters concerning such ((~~workmen~~)) workers in their care. All medical information in the possession or control of any person and relevant to the particular injury, in the opinion of the department or insurer, pertaining to any ((~~workman~~)) worker whose injury or occupational disease is the basis of a claim under this title shall be made available at any stage of the proceedings to the employer, the claimant's representative, the insurer and the department upon request, and no person shall incur any legal liability by reason of releasing such information.

Sec. 96. Section 54, chapter 289, Laws of 1971 ex. sess. as amended by section 60, chapter 350, Laws of 1977 ex. sess. and RCW 51.36.070 are each amended to read as follows:

Whenever the director or the ((~~self-insurer~~)) insurer deems it necessary in order to resolve any medical issue, a worker shall submit to examination by a physician or physicians selected by the director or the insurer, with the rendition of a report to the person ordering the examination. The director, in his or her discretion, may charge the cost of such examination or examinations to the ((~~self-insurer or to the medical aid fund as the case may be~~)) insurer. The cost of said examination shall include payment to the worker of reasonable expenses connected therewith. If the medical examination required by this section causes the worker to be absent from his or her work without pay, the worker shall be paid for such time lost under the applicable provisions of this title.

Sec. 97. Section 55, chapter 289, Laws of 1971 ex. sess. and RCW 51.36.080 are each amended to read as follows:

All fees and medical charges under this title shall conform and be paid according to ((~~regulations~~)) rules promulgated by the director.

Sec. 98. Section 51.44.040, chapter 23, Laws of 1961 as last amended by section 14, chapter 63, Laws of 1982 and RCW 51.44.040 are each amended to read as follows:

(1) There shall be in the office of the state treasurer, a fund to be known and designated as the "second injury fund", which shall be used only for the purpose of defraying charges against it as provided in RCW 51.16.120 and 51.32.250, as now or hereafter amended. Said fund shall be administered by the director. The state treasurer shall be the custodian of the second injury fund and shall be authorized to disburse moneys from it only upon written order of the director.

(2) ((~~Payments to~~)) Assessments for the second injury fund ((~~from the accident fund~~)) shall be ((~~made~~)) imposed and collected from all insurers pursuant to rules and regulations promulgated by the director.

(((3) Assessments for the second injury fund shall be imposed on self-insurers pursuant to rules and regulations promulgated by the director to ensure that self-insurers shall pay to such fund in the proportion that the payments made from such fund on account of claims made against self-insurers bears to the total sum of payments from such fund.))

NEW SECTION. Sec. 99. A new section is added to chapter 51.44 RCW to read as follows:

There shall be created in the office of the state treasurer a fund to be known and designated as the self-insurance reserve fund.

Sec. 100. Section 51.44.070, chapter 23, Laws of 1961 as last amended by section 1, chapter 312, Laws of 1983 and RCW 51.44.070 are each amended to read as follows:

(1) For every case resulting in death or permanent total disability ((the department shall transfer on its books from the accident fund of the proper class and/or appropriate account to the "reserve fund" a sum of money for that case equal to the estimated present cash value of the monthly payments provided for it, to be calculated upon the basis of an annuity covering the payments in this title provided to be made for the case. Such annuity values shall be based upon rates of mortality, disability, remarriage, and interest as determined by the state insurance commissioner, taking into account the experience of the reserve fund in such respects.

~~Similarly, a self-insurer in these circumstances~~)), the insurer shall pay into the reserve fund a sum of money ((~~computed in the same manner, and the disbursements therefrom shall be made as in other cases~~)) for that case equal to the estimated present cash value of the monthly payments provided for it, to be calculated upon the basis of an annuity covering the payments in this title provided to be made for the case. Such annuity values shall be based upon rates of mortality, disability, remarriage, and interest as determined by the state insurance commissioner, taking into account the commissioner's experience in such respects.

(2) As an alternative to the payment procedures ((~~otherwise~~)) provided under ((~~law~~)) subsection (1) of this section, in the event of death or permanent total disability to a worker((~~s of self-insured employers, a self-insured employer~~)), the insurer may upon establishment of such obligation file with the department a bond, or an assignment of account from a federally or state chartered commercial banking institution authorized to conduct business in the state of Washington, in an amount deemed by the insurance commissioner to be reasonably sufficient to insure payment of the pension benefits provided by law. The department shall adopt rules governing assignments of account. Such rules shall ensure that the funds are available if needed, even in the case of failure of the banking institution or of the ((~~employer's~~)) insurer's business.

The annuity value for every such case shall be determined by the insurance commissioner based upon the commissioner's experience as to rates of mortality, disability, remarriage, and interest. The amount of the required bond or assignment of account may be reviewed and adjusted periodically by the department, based upon periodic redeterminations by the insurance commissioner as to the outstanding annuity value for the case.

Under such alternative, the department shall make the monthly payments from the ((~~pension~~)) reserve fund for the benefits provided for by RCW 51.32.050 and 51.32.060 to the ((~~self-insured~~)) insurer's beneficiary or beneficiaries and the department shall be reimbursed for all such payments from the particular ((~~self-insured employer~~)) insurer through periodic charges not less than quarterly in a manner to be determined by the director.

Any ((~~self-insured employer~~)) insurer electing this alternative method of providing for payment to the beneficiary or beneficiaries shall additionally pay to the department a deposit equal to the first three months' payments otherwise required under RCW 51.32.050 and 51.32.060. Such deposit shall be placed in the reserve fund in accordance with RCW 51.44.140 and shall be returned to the respective ((~~self-insured employer~~)) insurer when monthly payments are no longer required for such particular obligation.

If ((~~a self-insurer~~)) an insurer delays or refuses to reimburse the department beyond fifteen days after the reimbursement charges become due, there shall be a penalty paid by the ((~~self-insurer~~)) insurer upon order of the director of an additional amount equal to twenty-five percent of the amount then due which shall be paid into the ((~~pension~~)) reserve fund. Such an order shall conform to the requirements of RCW 51.52.050.

(3) The insurer shall have an account within the reserve fund, and the department shall make disbursements therefrom to beneficiaries or workers in the monthly amounts provided for by RCW 51.32.050 and 51.32.060. Each such account shall be credited with its proportionate share of interest or other earnings, if any. Each such insurer's account shall be examined by the insurance commissioner to ascertain its standing as of June 30th of each year and the relations of its outstanding annuities at their then-value on the bases currently employed for new cases to the cash on hand or at interest belonging to the account. The commissioner shall promptly report the result of such examination to the department and to the state treasurer in writing not later that September 30th, following. If the report shows that there was as of such June 30th in the account in cash or at interest a greater sum than the then-annuity value of the outstanding pension obligations, the surplus shall be forthwith returned to the insurer, but if the report shows the contrary condition of the account, the deficiency shall be forthwith made good to the account by the insurer.

Sec. 101. Section 58, chapter 289, Laws of 1971 ex. sess. as amended by section 30, chapter 43, Laws of 1972 ex. sess. and RCW 51.44.140 are each amended to read as follows:

Each ((~~self-insurer~~)) insurer shall make such deposits, into the reserve fund, as the department shall require pursuant to RCW 51.44.070, as are necessary to guarantee the payments of the pensions established pursuant to RCW 51.32.050 and 51.32.060.

Each ((~~self-insurer~~)) insurer shall have an account within the reserve fund. Each such account shall be credited with its proportionate share of interest or other earnings as determined in RCW 51.44.080.

Each such account in the reserve fund shall be experted by the insurance commissioner as required in RCW 51.44.080. Any surpluses shall be forthwith returned to the respective ((~~self-insurers~~)) insurers, and each deficit shall forthwith be made good to the reserve fund by the ((~~self-insurer~~)) insurer.

Sec. 102. Section 59, chapter 289, Laws of 1971 ex. sess. and RCW 51.44.150 are each amended to read as follows:

The director shall impose and collect assessments each fiscal year upon all ((~~self-insurers~~)) insurers in the amount of the estimated costs of administering their portion of this title during such fiscal year. The time and manner of imposing and collecting assessments due the department shall be set forth in regulations promulgated by the director in accordance with chapter 34.04 RCW.

Sec. 103. Section 51.48.010, chapter 23, Laws of 1961 as last amended by section 20, chapter 63, Laws of 1982 and RCW 51.48.010 are each amended to read as follows:

Every employer shall be liable for the penalties described in this title and may also be liable if an injury or occupational disease has been sustained by a worker prior to the time ((~~he or she~~)) the employer has secured the payment of such compensation to a penalty in a sum not less than fifty percent nor more than one hundred percent of the cost for such injury or occupational disease. Any employer who has failed to secure payment of ((~~compensation~~)) industrial insurance benefits for his or her workers covered under this title may also be liable to a maximum penalty in a sum of two hundred dollars or in a sum double the amount of premiums incurred prior to securing payment of ((~~compensation~~)) industrial insurance benefits under this title, whichever is greater, for the benefit of the ((~~medical aid~~)) industrial insurance administrative fund.

Sec. 104. Section 62, chapter 289, Laws of 1971 ex. sess. and RCW 51.48.015 are each amended to read as follows:

Any employer who engages in work who has wilfully failed to secure the payment of ((~~compensation~~)) industrial insurance benefits under this title shall be guilty of a misdemeanor. Violation of this section is punishable, upon conviction, by a fine of not less than twenty-five dollars nor more than one hundred dollars. Each day such person engages as a subject employer in violation of this section constitutes a separate offense. Any fines paid pursuant to this section shall be paid directly by the court to the director for deposit in the ((~~medical aid~~)) industrial insurance administrative fund.

Sec. 105. Section 66, chapter 289, Laws of 1971 ex. sess. and RCW 51.48.017 are each amended to read as follows:

If ((~~a self-insurer~~)) any insurer unreasonably delays or refuses to pay benefits as they become due there shall be paid by the ((~~self-insurer~~)) insurer upon order of the director, personally, an additional amount equal to twenty-five percent of the amount then due and owing which shall accrue for the benefit of the claimant and shall be paid to him or her with the benefits which may be assessed under this title. Such an order shall conform to the requirements of RCW 51.52.050. For the purposes of this section "unreasonable delay" means the delay in the payment of benefits that are clearly due and payable and not subject to a request for mediation to the department or appeal to the board of industrial insurance appeals or to the court by any party. In all other cases a payment that is made within fifteen days from the date it is due, or within fifteen days from the time in which a party may appeal the payment, shall be deemed not to be unreasonable.

Sec. 106. Section 51.48.020, chapter 23, Laws of 1961 as last amended by section 22, chapter 323, Laws of 1977 ex. sess. and RCW 51.48.020 are each amended to read as follows:

(1) Any employer, who misrepresents to ((~~the department~~)) an insurer the amount of his or her payroll upon which the premium under this title is based, shall be civilly liable to the ((~~state in~~)) industrial insurance administrative fund for damages of ten times the amount of the difference in premiums paid and the amount the employer should have paid and for the reasonable expenses of auditing his or her books and collecting such sums. ((~~Such liability may be enforced in the name of the department.~~)) Such an employer shall also be guilty of a class C felony if such misrepresentations are made knowingly, if the amount of the difference in premiums is five hundred dollars or more and shall be guilty of a gross misdemeanor if such amount is less than five hundred dollars.

(2) Any person claiming benefits under this title, who knowingly gives false information required in any claim or application under this title shall be guilty of a class C felony when such claim or application involves an amount of five hundred dollars or more. When such claim or application involves an amount less than five hundred dollars, the person giving such information shall be guilty of a gross misdemeanor.

Sec. 107. Section 51.48.040, chapter 23, Laws of 1961 and RCW 51.48.040 are each amended to read as follows:

The books, records and payrolls of the employer pertinent to the administration of this title shall always be open to inspection by the department or its traveling auditor, agent, or assistant, and to the employer's insurer for the purpose of ascertaining the correctness of the payroll, the ((~~men~~)) workers employed, and such other information as may be necessary for the insurer and the department and its management under this title. Refusal on the part of the employer to submit his or her books, records, and payrolls for such inspection to the department((,)) or any assistant presenting written authority from the director((,)) or to any authorized representative of an insurer shall subject the offending employer to a civil penalty of one hundred dollars for each offense and the individual who personally gives such refusal shall be guilty of a misdemeanor.

Sec. 108. Section 13, chapter 14, Laws of 1980 and RCW 51.48.050 are each amended to read as follows:

It shall be unlawful for any employer to directly or indirectly demand or collect from any of his or her workers any sum of money whatsoever for or on account of medical, surgical, hospital, or other treatment or transportation of injured workers, other than as specified in RCW 51.16.140, and any employer who directly or indirectly violates the foregoing provisions of this section shall be liable to the state for the benefit of the ((~~medical aid~~)) industrial insurance administrative fund in ten times the amount so demanded or collected, and such employer and every officer, agent, or servant of such employer knowingly participating therein shall also be guilty of a misdemeanor.

Sec. 109. Section 51.48.060, chapter 23, Laws of 1961 as last amended by section 71, chapter 350, Laws of 1977 ex. sess. and RCW 51.48.060 are each amended to read as follows:

Any physician who fails, neglects or refuses to file a report with the director or insurer, as required by this title, within five days of the date of treatment, showing the condition of the injured worker at the time of treatment, a description of the treatment given, and an estimate of the probable duration of the injury, or who fails or refuses to render all necessary assistance to the injured worker, as required by this title, shall be subject to a civil penalty of one hundred dollars.

Sec. 110. Section 51.48.090, chapter 23, Laws of 1961 and RCW 51.48.090 are each amended to read as follows:

Civil penalties to the state under this title shall be collected by civil action in the name of the state and paid into the ((~~accident~~)) industrial insurance administrative fund unless a different fund is designated.

Sec. 111. Section 65, chapter 289, Laws of 1971 ex. sess. and RCW 51.48.110 are each amended to read as follows:

Where death results from the injury and the deceased leaves no beneficiaries, ((~~a self-insurer~~)) an insurer shall pay into the ((~~supplemental pension~~)) second injury fund the sum of ten thousand dollars.

Sec. 112. Section 32, chapter 43, Laws of 1972 ex. sess. and RCW 51.48.120 are each amended to read as follows:

If any employer should default in any payment due to ((~~the state fund the director or his designee~~)) its insurer, the insurer may issue a notice of assessment certifying the amount due, which notice shall be served upon the employer by mailing such notice to the employer by registered mail to his last known address, accompanied by an affidavit of service by mailing, or served in the manner prescribed for the service of a summons in a civil action. Such notice shall contain the information that a petition for review must be filed with the superior court within thirty days of the date of service of the notice of assessment.

Sec. 113. Section 33, chapter 43, Laws of 1972 ex. sess. as amended by section 3, chapter 109, Laws of 1982 and RCW 51.48.130 are each amended to read as follows:

Any employer who is served with a notice of assessment may within thirty days from the date of service upon the employer of the notice of assessment appeal such notice of assessment by serving the ((~~director~~)) insurer by registered mail with a petition for review and file the same with the clerk of the superior court of the county wherein the work covered by the provisions of the industrial insurance act was performed. This shall be the exclusive means for appeal from notices of assessment. Such petition shall set forth the reasons why the ((~~tax~~)) assessment should be reduced or abated. Within ten days after the filing of the petition for review the employer shall file with the clerk a good and sufficient surety bond in the sum of one hundred dollars, conditioned to diligently prosecute the appeal and pay all the ((~~department's~~)) insurer's costs that may be awarded if the appeal of the employer is not sustained.

The trial in the superior court on appeal shall be de novo and without the necessity of any pleading other than the petition for review, and the burden of proof shall rest upon the employer to prove that the ((~~tax assessed~~)) assessment upon the employer in the notice of assessment is incorrect, either in whole or in part, and to establish the correct amount of the ((~~tax~~)) assessment, if any. In such proceeding the employer shall be deemed the plaintiff and the ((~~department of labor and industries~~)) insurer the defendant; and both parties shall be entitled to subpoena the attendance of witnesses as in other civil actions and to produce evidence that is relevant, competent and material to determine the correct amount of the tax. Either party shall be allowed to appeal to the court of appeals or the supreme court in the same manner as other civil actions are appealed to those courts. No court action or proceeding shall be maintained by any employer to dispute the amount of notice of assessment except as herein provided.

Sec. 114. Section 34, chapter 43, Laws of 1972 ex. sess. and RCW 51.48.140 are each amended to read as follows:

If a petition for review is not filed with the clerk of the superior court and served upon the ((~~director~~)) insurer within thirty days from the date of service of the notice of assessment, as indicated in the affidavit of service by mailing of the ((~~department~~)) insurer, or in the event of a final decree of any court in favor of the ((~~department~~)) insurer in a petition for review, which is not appealed within the time allowed by law, the amount of the notice of assessment shall be deemed final and established and the ((~~director or his designee~~)) insurer may file with the clerk of any county within the state a warrant in the amount of the notice of assessment. The clerk of the county wherein the warrant is filed shall immediately designate a superior court cause number for such warrant, and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of such employer mentioned in the warrant, the amount of the ((~~taxes and penalties~~)) assessment due thereon, and the date when such warrant was filed. The aggregate amount of such warrant as docketed shall become a lien upon the title to, and interest in all real and personal property of the employer against whom the warrant is issued, the same as a judgment in a civil case duly docketed in the office of such clerk. The sheriff shall thereupon proceed upon the same in all respects and with like effect as prescribed by law with respect to execution or other process issued against rights or property upon judgment in the superior court. Such warrant so docketed shall be sufficient to support the issuance of writs of garnishment in favor of the ((~~state~~)) insurer in a manner provided by law in case of judgment, wholly or partially unsatisfied. The clerk of the court shall be entitled to a filing fee of five dollars, which shall be added to the amount of the warrant. A copy of such warrant shall be mailed to the employer within three days of filing with the clerk.

Sec. 115. Section 35, chapter 43, Laws of 1972 ex. sess. and RCW 51.48.150 are each amended to read as follows:

The ((~~director or his designee~~)) insurer is hereby authorized to issue to any person, firm, corporation, municipal corporation, political subdivision of the state, a public corporation, or any agency of the state, a notice and order to withhold and deliver property of any kind whatsoever when he has reason to believe that there is in the possession of such person, firm, corporation, municipal corporation, political subdivision of the state, public corporation, or any agency of the state, property which is due, owing, or belonging to any employer upon whom a notice of assessment has been served by the ((~~department~~)) insurer for payments due ((~~to the state fund~~)). The notice and order to withhold and deliver shall be served by the sheriff of the county or by his deputy((~~, or by any duly authorized representatives of the director~~)). Any person, firm, corporation, municipal corporation, political subdivision of the state, public corporation or any agency of the state upon whom service has been made is hereby required to answer the notice within twenty days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice and order to withhold and deliver. In the event there is in the possession of the party named and served with a notice and order to withhold and deliver, any property which may be subject to the claim of the ((~~department~~)) insurer, such property shall be delivered forthwith to the director or his duly authorized representative upon demand to be held in trust by the director for application on the employer's indebtedness to the ((~~department~~)) insurer, or for return without interest, in accordance with a final determination of a petition for review, or in the alternative such party shall furnish a good and sufficient surety bond satisfactory to the director conditioned upon final determination of liability. Should any party served and named in the notice to withhold and deliver fail to make answer to such notice and order to withhold and deliver, within the time prescribed herein, it shall be lawful for the court, after the time to answer such order has expired, to render judgment by default against the party named in the notice to withhold and deliver for the full amount claimed by the director in the notice to withhold and deliver together with costs. In the event that a notice to withhold and deliver is served upon an employer and the property found to be subject thereto is wages, then the employer shall be entitled to assert in the answer to all exemptions provided for by chapter 7.33 RCW to which the wage earner may be entitled.

Sec. 116. Section 51.52.010, chapter 23, Laws of 1961 as last amended by section 10, chapter 338, Laws of 1981 and RCW 51.52.010 are each amended to read as follows:

There shall be a "board of industrial insurance appeals," hereinafter called the "board," consisting of three members appointed by the governor, with the advice and consent of the senate, as hereinafter provided. One shall be a representative of the public and a lawyer, appointed from a mutually agreed to list of not less than three active members of the Washington state bar association, submitted to the governor by the two organizations defined below, and such member shall be the chairperson of said board. The second member shall be a representative of the majority of workers engaged in employment under this title and selected from a list of not less than three names submitted to the governor by an organization, state-wide in scope, which through its affiliates embraces a cross section and a majority of the ((~~organized labor~~)) workers of the state. The third member shall be a representative of employers under this title, and appointed from a list of at least three names submitted to the governor by a recognized state-wide organization of employers, representing a majority of employers. The initial terms of office of the members of the board shall be for six, four, and two years respectively. Thereafter all terms shall be for a period of six years. Each member of the board shall be eligible for reappointment and shall hold office until his or her successor is appointed and qualified. In the event of a vacancy the governor is authorized to appoint a successor to fill the unexpired term of his or her predecessor. All appointments to the board shall be made in conformity with the foregoing plan. Whenever the workload of the board and its orderly and expeditious disposition shall necessitate, the governor may appoint two additional pro-tem members in addition to the regular members. Such appointments shall be for a definite period of time, and shall be made from lists submitted respectively by labor and industry as in the case of regular members. One pro-tem member shall be a representative of labor and one shall be a representative of industry. Members shall devote their entire time to the duties of the board and shall receive for their services a salary as fixed by the governor in accordance with the provisions of RCW 43.03.040 which shall be in addition to travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended. Headquarters for the board shall be located in Olympia. The board shall adopt a seal which shall be judicially recognized.

Sec. 117. Section 51.52.030, chapter 23, Laws of 1961 and RCW 51.52.030 are each amended to read as follows:

The board may incur such expenses as are reasonably necessary to carry out its duties hereunder, which expenses shall be paid((~~, one-half from the accident fund and one-half from the medical aid~~)) from the industrial insurance administrative fund upon vouchers approved by the board.

Sec. 118. Section 51.52.050, chapter 23, Laws of 1961 as last amended by section 4, chapter 109, Laws of 1982 and RCW 51.52.050 are each amended to read as follows:

Whenever the ((~~department~~)) insurer has made any order, decision, or award, it shall promptly serve the worker, beneficiary, employer, department, or other person affected thereby, with a copy thereof by mail, which shall be addressed to such person at his or her last known address as shown by the records of the ((~~department~~)) insurer. The copy, in case the same is a final order, decision, or award, shall bear on the same side of the same page on which is found the amount of the award, a statement, set in black faced type of at least ten point body or size, that such final order, decision, or award shall become final within ((~~sixty~~)) thirty days from the date the order is communicated to the parties unless a written ((~~request for reconsideration~~)) notice of dispute is filed with the department of labor and industries, Olympia((~~, or an appeal is filed with the board of industrial insurance appeals, Olympia~~)).

Whenever an insurer or the department has taken any action or made any decision relating to any phase of the administration of this title the worker, beneficiary, employer, insurer, or other person aggrieved thereby may request reconsideration of the department, or may appeal to the board. In an appeal before the board, the appellant shall have the burden of proceeding with the evidence to establish a prima facie case for the relief sought in such appeal. Any such person aggrieved by the decision and order of the board may thereafter appeal to the superior court, as prescribed in this chapter.

Nothing in this section shall be construed to permit an appeal to the board from a notice of assessment issued pursuant to RCW 51.48.120.

Sec. 119. Section 51.52.060, chapter 23, Laws of 1961 as last amended by section 76, chapter 350, Laws of 1977 ex. sess. and RCW 51.52.060 are each amended to read as follows:

Any worker, beneficiary, employer, insurer, or other person aggrieved by an order, decision, or award of the department must, before he or she appeals to the courts, file with the board and the director, by mail or personally, within ((~~sixty~~)) thirty days from the day on which such copy of such order, decision, or award was communicated to such person, a notice of appeal to the board. Within ten days of the date on which an appeal has been granted by the board, the board shall notify the other interested parties thereto of the receipt thereof and shall forward a copy of said notice of appeal to such other interested parties. Within twenty days of the receipt of such notice of the board, the worker or the employer may file with the board a cross-appeal from the order of the department from which the original appeal was taken: PROVIDED, That nothing contained in this section shall be deemed to change, alter or modify the practice or procedure ((~~of the department~~)) for the payment of awards pending appeal((: AND PROVIDED, That failure to file notice of appeal with both the board and the department shall not be ground for denying the appeal if the notice of appeal is filed with either the board or the department: AND PROVIDED, That, if within the time limited for filing a notice of appeal to the board from an order, decision, or award of the department, the department shall direct the submission of further evidence or the investigation of any further fact, the time for filing such notice of appeal shall not commence to run until such person shall have been advised in writing of the final decision of the department in the matter: PROVIDED, FURTHER, That in the event the department shall direct the submission of further evidence or the investigation of any further fact, as above provided, the department shall render a final order, decision, or award within ninety days from the date such further submission of evidence or investigation of further fact is ordered which time period may be extended by the department for good cause stated in writing to all interested parties for an additional ninety days: PROVIDED, FURTHER, That the department, either within the time limited for appeal, or within thirty days after receiving a notice of appeal, may modify, reverse or change any order, decision, or award, or may hold any such order, decision, or award in abeyance for a period of ninety days which time period may be extended by the department for good cause stated in writing to all interested parties for an additional ninety days pending further investigation in light of the allegations of the notice of appeal, and the board shall thereupon deny the appeal, without prejudice to the appellant's right to appeal from any subsequent determinative order issued by the department)).

Sec. 120. Section 51.52.070, chapter 23, Laws of 1961 as last amended by section 77, chapter 350, Laws of 1977 ex. sess. and RCW 51.52.070 are each amended to read as follows:

The notice of appeal to the board shall set forth in full detail the grounds upon which the person appealing considers such order, decision, or award is unjust or unlawful, and shall include every issue to be considered by the board, and it must contain a detailed statement of facts upon which such worker, beneficiary, employer, insurer, or other person relies in support thereof. The worker, beneficiary, employer, insurer, or other person shall be deemed to have waived all objections or irregularities concerning the matter on which such appeal is taken other than those specifically set forth in such notice of appeal or appearing in the records of the department. Failure to so specify shall be deemed jurisdictional to any issue not so specified. The department and insurer shall promptly transmit its original record, or a legible copy thereof produced by mechanical, photographic, or electronic means, in such matter to the board.

Sec. 121. Section 51.52.080, chapter 23, Laws of 1961 as last amended by section 69, chapter 289, Laws of 1971 ex. sess. and RCW 51.52.080 are each amended to read as follows:

If the notice of appeal raises no issue or issues of fact and the board finds that the ((~~department~~)) insurer properly and lawfully decided all matters raised by such appeal it may, without further hearing, deny the same and confirm the ((~~department's~~)) insurer's decision or award, or if the ((~~department's~~)) insurer's record sustains the contention of the person appealing to the board, it may, without further hearing, allow the relief asked in such appeal; otherwise, it shall grant the appeal.

Sec. 122. Section 51.52.095, chapter 23, Laws of 1961 as last amended by section 7, chapter 109, Laws of 1982 and RCW 51.52.095 are each amended to read as follows:

The board, upon request of the worker, beneficiary, ((or)) employer, or insurer, or upon its own motion, may direct all parties interested in an appeal, together with their attorneys, if any, to appear before it, a member of the board, or an authorized industrial appeals judge, for a conference for the purpose of determining the feasibility of settlement, the simplification of issues of law and fact, the necessity of amendments to the notice of appeal or other pleadings, the possibility of obtaining admissions of fact and of documents which will avoid unnecessary proof, the limitation of the number of expert witnesses, and such other matters as may aid in the disposition of the appeal. Such conference may be held prior to the hearing, or it may be held during the hearing, at the discretion of the board member or industrial appeals judge conducting the same, in which case the hearing will be recessed for such conference. Following the conference, the board member or industrial appeals judge conducting the same, shall state on the record the results of such conference, and the parties present or their representatives shall state their concurrence on the record. Such agreement as stated on the record shall control the subsequent course of the proceedings, unless modified at a subsequent hearing to prevent manifest injustice. If agreement concerning final disposition of the appeal is reached by the parties present at the conference, or by the employer or insurer and worker or beneficiary, the board ((~~may~~)) shall enter a final decision and order in accordance therewith((~~, providing the board finds such agreement is in conformity with the law and the facts~~)).

Sec. 123. Section 51.52.100, chapter 23, Laws of 1961 as last amended by section 8, chapter 109, Laws of 1982 and RCW 51.52.100 are each amended to read as follows:

Hearings shall be held in the county of the residence of the worker or beneficiary, or in the county where the injury occurred, at a place designated by the board. Such hearing shall be de novo and summary, but no witness' testimony shall be received unless he or she shall first have been sworn to testify the truth, the whole truth and nothing but the truth in the matter being heard, or unless his or her testimony shall have been taken by deposition according to the statutes and rules relating to superior courts of this state. The ((~~department~~)) insurer shall be entitled to appear in all proceedings before the board and introduce testimony in support of its ((~~order~~)) decision. The board shall cause all oral testimony to be stenographically reported and thereafter transcribed, and when transcribed, the same, with all depositions, shall be filed in, and remain a part of, the record on the appeal. Such hearings on appeal to the board may be conducted by one or more of its members, or a duly authorized industrial appeals judge, and depositions may be taken by a person duly commissioned for the purpose by the board.

Members of the board, its duly authorized industrial appeals judges, and all persons duly commissioned by it for the purpose of taking depositions, shall have power to administer oaths; to preserve and enforce order during such hearings; to issue subpoenas for, and to compel the attendance and testimony of, witnesses, or the production of books, papers, documents, and other evidence, or the taking of depositions before any designated individual competent to administer oaths, and it shall be their duty so to do to examine witnesses; and to do all things conformable to law which may be necessary to enable them, or any of them, effectively to discharge the duties of his or her office.

If any person in proceedings before the board disobeys or resists any lawful order or process, or misbehaves during a hearing or so near the place thereof as to obstruct the same, or neglects to produce, after having been ordered so to do, any pertinent book, paper or document, or refuses to appear after having been subpoenaed, or upon appearing refuses to take oath as a witness, or after having the oath refuses to be examined according to law, the board or any member or duly authorized industrial appeals judge may certify the facts to the superior court having jurisdiction in the place in which said board or member or industrial appeals judge is sitting; the court shall thereupon, in a summary manner, hear the evidence as to the acts complained of, and, if the evidence so warrants, punish such person in the same manner and to the same extent as for a contempt committed before the court, or commit such person upon the same conditions as if the doing of the forbidden act had occurred with reference to the proceedings, or in the presence, of the court.

Sec. 124. Section 1, chapter 40, Laws of 1973 as last amended by section 6, chapter 109, Laws of 1982 and RCW 51.52.110 are each amended to read as follows:

Within thirty days after a decision of the board to deny the petition or petitions for review upon such appeal has been communicated to such worker, beneficiary, employer or other person, or within thirty days after the final decision and order of the board upon such appeal has been communicated to such worker, beneficiary, employer, insurer, or other person, or within thirty days after the appeal is denied as herein provided, such worker, beneficiary, employer, insurer, or other person aggrieved by the decision and order of the board may appeal to the superior court. If such worker, beneficiary, employer, insurer, or other person fails to file with the superior court its appeal as provided in this section within said thirty days, the decision of the board to deny the petition or petitions for review or the final decision and order of the board shall become final.

In cases involving injured workers, an appeal to the superior court shall be to the superior court of the county of residence of the worker or beneficiary, as shown by the ((~~department's~~)) insurer's records, or to the superior court of the county wherein the injury occurred or where neither the county of residence nor the county wherein the injury occurred are in the state of Washington then the appeal may be directed to the superior court for Thurston county. In all other cases the appeal shall be to the superior court of Thurston county. Such appeal shall be perfected by filing with the clerk of the court a notice of appeal and by serving a copy thereof by mail, or personally, on the director, the insurer, and on the board. If the case is one involving ((~~a self-insurer~~)) an insurer, a copy of the notice of appeal shall also be served by mail, or personally, on such ((self-insurer. The department shall, in all cases not involving a self-insurer, within twenty days after the receipt of such notice of appeal, serve and file its notice of appearance and such appeal shall thereupon be deemed at issue. If the case is one involving a self-insurer, such self-insurer)) insurer. The insurer shall, within twenty days after receipt of such notice of appeal, serve and file its notice of appearance and such appeal shall thereupon be deemed to be at issue. In such cases the department may appear and take part in any proceedings. The board shall serve upon the appealing party, the director, the ((~~self-insurer if the case involves a self-insurer~~)) insurer, and any other party appearing at the board's proceeding, and file with the clerk of the court before trial, a certified copy of the board's official record which shall include the notice of appeal and other pleadings, testimony and exhibits, and the board's decision and order, which shall become the record in such case. No bond shall be required on appeals to the superior court or on appeals to the supreme court or the court of appeals, except that an appeal by the employer from a decision and order of the board under RCW 51.48.070, shall be ineffectual unless, within five days following the service of notice thereof, a bond, with surety satisfactory to the court, shall be filed, conditioned to perform the judgment of the court. Except in the case last named an appeal shall not be a stay((: PROVIDED, HOWEVER, That whenever the board has made any decision and order reversing an order of the supervisor of industrial insurance on questions of law or mandatory administrative actions of the director, the department shall have the right of appeal to the superior court)).

Sec. 125. Section 51.52.120, chapter 23, Laws of 1961 as last amended by section 22, chapter 63, Laws of 1982 and RCW 51.52.120 are each amended to read as follows:

(1) It shall be unlawful for an attorney engaged in the representation of any worker or beneficiary to charge ((~~for services in the department~~)) any fee in excess of a reasonable fee, of not more than thirty percent of the increase in the award secured by the attorney's services. ((Such reasonable fee shall be fixed by the director for services performed by an attorney for such worker or beneficiary, prior to the notice of appeal to the board if written application therefor is made by the attorney, worker, or beneficiary.))

(2) If, on appeal to the board, the order, decision, or award of the ((~~department~~)) insurer is reversed or modified and additional relief is granted to a worker or beneficiary, or in cases where a party other than the worker or beneficiary is the appealing party and the worker's or beneficiary's right to relief is sustained by the board, the board shall fix a reasonable fee for the services of his or her attorney in proceedings before the board if written application therefor is made by the attorney, worker, or beneficiary. ((In fixing the amount of such attorney's fee, the board shall take into consideration the fee allowed, if any, by the director, for services before the department, and the board may review the fee fixed by said director.)) Any attorney's fee set by the ((~~department or the~~)) board may be reviewed by the superior court upon application of such attorney, worker, or beneficiary. The ((~~department~~)) insurer or self-insured employer, as the case may be, shall be served a copy of the application and shall be entitled to appear and take part in the proceedings. Where the board, pursuant to this section, fixes the attorney's fee, it shall be unlawful for an attorney to charge or receive any fee for services before the board in excess of that fee fixed by the board. Any person who violates any provision of this section shall be guilty of a misdemeanor.

Sec. 126. Section 51.52.130, chapter 23, Laws of 1961 as last amended by section 23, chapter 63, Laws of 1982 and RCW 51.52.130 are each amended to read as follows:

If, on appeal to the court from the decision and order of the board, said decision and order is reversed or modified and additional relief is granted to ((~~a worker or beneficiary, or in cases where a party other than the worker or beneficiary is the appealing party and the worker's or beneficiary's right to relief is sustained by the court~~)) the prevailing party, a reasonable fee for the services of the ((~~worker's or beneficiary's~~)) prevailing party's attorney shall be fixed by the court. In fixing the fee the court shall take into consideration the fee or fees, if any, fixed by the director and the board for such attorney's services before the department and the board. If the court finds that the fee fixed by the director or by the board is inadequate for services performed before the department or board, or if the director or the board has fixed no fee for such services, then the court shall fix a fee for the attorney's services before the department, or the board, as the case may be, in addition to the fee fixed for the services in the court. If the decision and order of the board is reversed or modified ((~~and if the accident fund is affected by the litigation~~)), then the attorney's fee fixed by the court for services before the court only, and the fees of medical and other witnesses and the costs shall be payable ((out of the administrative fund of the department. In the case of self-insured employers, if the decision and order of the board is reversed or modified resulting in additional benefits by the litigation that would be paid from the accident fund if the employer were not self-insured, then the attorney fees fixed by the court for services before the court, only, and the fees of medical and other witnesses and the costs shall be payable directly by the self-insured employer)) to the prevailing party by the nonprevailing party. The prevailing party shall be defined as that party who has improved its position by filing such appeal and a determination by the court, or, by maintaining its position in an appeal filed by an opposing party.

Sec. 127. Section 51.52.132, chapter 23, Laws of 1961 as amended by section 2, chapter 63, Laws of 1965 ex. sess. and RCW 51.52.132 are each amended to read as follows:

Where the ((~~department, the~~)) board or the court, pursuant to RCW 51.52.120 or 51.52.130 fixes the attorney's fee, it shall be unlawful for an attorney to charge or receive any fee in excess of that fixed by the ((~~department,~~)) board or the court. Any person who violates any provision of this section shall be guilty of a misdemeanor.

Sec. 128. Section 1, chapter 301, Laws of 1983 and RCW 51.52.135 are each amended to read as follows:

(1) When a worker or beneficiary prevails in an appeal by the employer to the board or in an appeal by the employer to the court from the decision and order of the board, the worker or beneficiary shall be entitled to interest at the rate of twelve percent per annum on the unpaid amount of the award after deducting the amount of attorney fees.

(2) When a worker or beneficiary prevails in an appeal by the worker or beneficiary to the board or the court regarding a claim for temporary total disability, the worker or beneficiary shall be entitled to interest at the rate of twelve percent per annum on the unpaid amount of the award after deducting the amount of attorney fees.

(3) The interest provided for in subsections (1) and (2) of this section shall accrue from the date of the ((~~department's order~~)) insurer's decision granting the award or denying payment of the award. The interest shall be paid by the party having the obligation to pay the award. The amount of interest to be paid shall be fixed by the board or court, as the case may be.

NEW SECTION. Sec. 129. The exercise of the following functions shall begin on the effective date of this section:

(1) Promulgation of rules authorized by RCW 43.22.030 and 51.04.020;

(2) Filings authorized by section 13 of this act;

(3) Qualifications of insurers to write industrial insurance;

(4) Provision of statistical information under RCW 51.04.020;

(5) Computation of assessments, if any, to be imposed under section 16 of this act payable after the effective date of that section, and based upon estimated expenses of the administrative fund and estimated assessments therefor;

(6) The provisions of section 19 of this act;

(7) Appointment of a board of directors and the selection of a manager of the state fund by the board, and permitting the board, manager, and the director to do all things necessary to establish the state fund and prepare for the transfer of funds, functions, and personnel as required by Title 51 RCW.

NEW SECTION. Sec. 130. A new section is added to chapter 51.98 RCW to read as follows:

It is the intent of the legislature that the industrial insurance laws of the state of Washington be construed fairly and equitably, after considering the facts of each case and the positions and interests of all parties concerned.

NEW SECTION. Sec. 131. The following acts or parts of acts are each repealed:

(1) Section 3, chapter 14, Laws of 1980, section 2, chapter 109, Laws of 1982 and RCW 51.04.110;

(2) Section 75, chapter 289, Laws of 1971 ex. sess. and RCW 51.08.014;

(3) Section 88, chapter 289, Laws of 1971 ex. sess., section 5, chapter 43, Laws of 1972 ex. sess., section 5, chapter 323, Laws of 1977 ex. sess. and RCW 51.08.175;

(4) Section 34, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.100;

(5) Section 35, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.110;

(6) Section 2, chapter 151, Laws of 1963, section 84, chapter 289, Laws of 1971 ex. sess., section 25, chapter 350, Laws of 1977 ex. sess. and RCW 51.16.042;

(7) Section 51.16.050, chapter 23, Laws of 1961, section 1, chapter 274, Laws of 1971 ex. sess. and RCW 51.16.050;

(8) Section 52, chapter 289, Laws of 1971 ex. sess., section 1, chapter 42, Laws of 1979 ex. sess. and RCW 51.36.050;

(9) Section 1, chapter 70, Laws of 1983 and RCW 51.41.005;

(10) Section 1, chapter 63, Laws of 1982 and RCW 51.41.010;

(11) Section 2, chapter 63, Laws of 1982 and RCW 51.41.020;

(12) Section 3, chapter 63, Laws of 1982, section 1, chapter 86, Laws of 1983 and RCW 51.41.030;

(13) Section 5, chapter 63, Laws of 1982, section 2, chapter 86, Laws of 1983 and RCW 51.41.040;

(14) Section 8, chapter 63, Laws of 1982 and RCW 51.41.050;

(15) Section 6, chapter 63, Laws of 1982, section 3, chapter 86, Laws of 1983 and RCW 51.41.060;

(16) Section 9, chapter 63, Laws of 1982 and RCW 51.41.070;

(17) Section 10, chapter 63, Laws of 1982 and RCW 51.41.080;

(18) Section 4, chapter 63, Laws of 1982 and RCW 51.41.090;

(19) Section 7, chapter 63, Laws of 1982 and RCW 51.41.100;

(20) Section 51.44.010, chapter 23, Laws of 1961 and RCW 51.44.010;

(21) Section 51.44.020, chapter 23, Laws of 1961 and RCW 51.44.020;

(22) Section 51.44.050, chapter 23, Laws of 1961 and RCW 51.44.050;

(23) Section 51.44.060, chapter 23, Laws of 1961, section 28, chapter 43, Laws of 1972 ex. sess. and RCW 51.44.060;

(24) Section 60, chapter 289, Laws of 1971 ex. sess., section 17, chapter 224, Laws of 1975 1st ex. sess. and RCW 51.44.160; and

(25) Section 51.52.150, chapter 23, Laws of 1961 and RCW 51.52.150.

NEW SECTION. Sec. 132. The sum of .......... dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1987, from the general fund to the industrial insurance administrative fund for the purposes of this act.

NEW SECTION. Sec. 133. The sum of two hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1987, from the general fund to the Washington state industrial insurance fund for the purposes of this act, and shall be repaid with interest at an annual rate of ten percent per year on the unpaid balance by the Washington state industrial insurance fund to the general fund on or before June 30, 1989.

NEW SECTION. Sec. 134. Sections 1 through 5, 10 through 18, 20 through 22, 25 through 30, 34, 38 through 42, 44, 46, 48, 49 through 54, 99, and 100 shall take effect July 1, 1986. The director of the department of labor and industries is authorized immediately to take such steps as are necessary to insure that this act is implemented on its effective date.

NEW SECTION. Sec. 135. Sections 7 through 12, 14, and 19 of this act shall constitute a new chapter in Title 51 RCW.

NEW SECTION. Sec. 136. (1) If the provisions of this act providing for the establishment of the separate state fund shall be held invalid but the other provisions for the securing of payment of compensation are not held invalid, then only the provisions relating to such state fund shall be considered deleted from the act and the provisions repealing the laws governing the state fund as it existed prior to the effective date of this act shall be considered deleted from the act, void, and having never taken effect.

(2) In other respects, if any other 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.