HJ88

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EIGHTY-EIGHTH DAY

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MORNING SESSION

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House Chamber, Olympia, Thursday, April 8, 1993

The House was called to order at 10:00 a.m. by the Speaker (Representative R. Meyers presiding). The Clerk called the roll and a quorum was present.

The flag was escorted to the rostrum by a Sergeant at Arms Color Guard, Pages Dolma Halstead and Erin Romine. Inspirational Message was offered by Representative J. Kohl.

Reading of the Journal of the previous day was dispensed with and it was ordered to stand approved.

There being no objection, the House advanced to the fourth order of business.

INTRODUCTIONS AND FIRST READING

HB 2127 by Representatives Dunshee and Valle

AN ACT Relating to boards, commissions, committees, and other subdivisions of state government; amending RCW 43.63A.230, 18.44.010, 18.44.080, 18.44.360, 18.44.380, 74.21.020, 74.21.030, 74.21.040, 74.21.080, 74.21.090, 74.21.100, 74.21.110, 74.21.120, 74.21.130, 74.21.150, 74.21.180, 74.21.200, 70.112.010, 70.112.020, 39.04.220, 18.135.030, 41.05.021, 43.185.110, 43.185A.020, 43.185A.050, 43.131.354, 18.19.110, 18.19.911, 38.40.030, 38.12.105, 39.19.030, 43.131.348, 46.20.520, 18.51.070, 28B.107.020, 18.106.040, 18.106.010, 46.61.380, 18.84.020, 18.84.040, 18.84.090, 18.84.110, 75.30.050, 75.30.210, 75.30.250, 18.145.030, 28A.415.250, 43.51.300, 43.51.320, 43.51.330, 70.94.527, 70.94.541, 70.94.544, 70.94.551, 70.47.040, 15.58.030, 15.92.070, 17.21.020, and 43.185.074; creating a new section; and repealing RCW 18.44.208, 18.44.215, 74.21.050, 74.21.060, 74.21.070, 74.21.140, 41.05.150, 28B.115.050, 43.105.032, 48.17.135, 44.60.010, 44.60.020, 44.60.030, 44.60.040, 44.60.050, 44.60.070, 44.60.080, 44.60.090, 44.60.100, 44.60.110, 44.60.120, 44.60.130, 18.19.070, 38.12.095, 38.12.115, 38.12.125, 38.12.135, 39.19.040, 43.200.050, 43.200.150, 18.106.110, 67.08.001, 67.08.002, 67.08.003, 67.08.005, 67.08.007, 67.08.009, 67.08.010, 67.08.015, 67.08.030, 67.08.040, 67.08.050, 67.08.055, 67.08.060, 67.08.080, 67.08.090, 67.08.100, 67.08.110, 67.08.120, 67.08.130, 67.08.140, 67.08.150, 67.08.160, 67.08.170, 67.08.180, 67.08.900, 18.84.060, 18.145.060, 28B.102.040, 43.51.340, 70.94.537, 15.58.380, 17.21.230, 17.21.240, 17.21.250, 17.21.260, 17.21.270, 43.30.150, 18.85.500, 43.185.076, 27.60.010, 27.60.020, 27.60.030, 27.60.040, 27.60.050, 27.60.070, 27.60.900, 72.09.230, and 28B.04.085.

Referred to Committee on Appropriations.

HCR 4418 by Representatives Padden, Casada, Vance, Forner, Chandler, Sheahan, Mielke, Edmondson, Van Luven, Carlson, Stevens, Tate, Brumsickle, Sehlin, Morton, Silver, Schoesler and Ballard

Exempting certain bills from Senate Concurrent Resolution No. 8401.

Referred to Committee on Rules.

On motion of Representative Sheldon, the bill and resolution listed on today's introduction sheet under the fourth order of business were referred to the committees so designated.

There being no objection, the House advanced to the sixth order of business.

SECOND READING

MOTION

Representative Sheldon moved that the House immediately consider Substitute Senate Bill No. 5052 on today's suspension calendar. The motion was carried.

SUBSTITUTE SENATE BILL NO. 5052, by Senate Committee on Government Operations (originally sponsored by Senators A. Smith, Haugen and Quigley)

Removing the requirement that city and town council meetings be held within the corporate limits.

The bill was read the second time.

Representative Bray moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5052 as amended by the House was advanced to third reading (For committee amendments see Journal, 75th Day, March 25, 1993.) The motion was carried.

Representatives Bray and Edmondson spoke in favor of passage of the bill.

On motion of Representative Zellinsky, Representative Locke was excused.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5052 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5052 as amended by the House and the bill passed the House by the following vote: Yeas - 90, Nays - 0, Absent - 7, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Dorn, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Leonard, Linville, Lisk, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Vance, Van Luven, Veloria, Wang, Wolfe, Wood, Zellinsky and Mr. Speaker - 90.

Absent: Representatives Campbell, Cothern, Dellwo, Dunshee, Dyer, Lemmon and Wineberry - 7.

Excused: Representative Locke - 1.

Substitute Senate Bill No. 5052, as amended by the House, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5112, by Senators Drew and von Reichbauer

Revising hiring procedures for cities and towns.

The bill was read the second time.

Representative Bray moved that the committee recommendation be adopted and that Senate Bill No. 5112 was advanced to third reading. The motion was carried.

Representatives Bray and Edmondson spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5112.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5112 and the bill passed the House by the following vote: Yeas - 95, Nays - 0, Absent - 2, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Vance, Van Luven, Veloria, Wang, Wolfe, Wood, Zellinsky and Mr. Speaker - 95.

Absent: Representatives Campbell and Wineberry - 2.

Excused: Representative Locke - 1.

Senate Bill No. 5112, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5176, by Senate Committee on Labor & Commerce (originally sponsored by Senators Vognild, Pelz, Moore, Wojahn and Fraser)

Concerning the cashing of government issued checks or warrants.

The bill was read the second time.

Representative Zellinsky moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5176 as amended by the House was advanced to third reading (For committee amendments see Journal, 82nd Day, April 2, 1993.) The motion was carried.

Representative Zellinsky spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5176 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5176 as amended by the House and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Vance, Van Luven, Veloria, Wang, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

Absent: Representative Wineberry - 1.

Substitute Senate Bill No. 5176, as amended by the House, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5195, by Senate Committee on Labor & Commerce (originally sponsored by Senator Moore)

Regulating excessive securities transactions.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5195 as amended by the House, was advanced to third reading (For committee amendments see Journal, 82nd Day, April 2, 1993.) The motion was carried.

Representative Zellinsky spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5195 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5195 as amended by the House and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Substitute Senate Bill No. 5195, as amended by the House, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5205, by Senators Wojahn, Moyer, Sheldon, Erwin, Fraser, Winsley, Prentice, Niemi and Talmadge

Modifying review of infant and child mortality rates.

The bill was read the second time.

Representative Leonard moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5205 was advanced to third reading. The motion was carried.

Representative Leonard spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5205.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5205 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Engrossed Senate Bill No. 5205, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5255, by Senate Committee on Ecology & Parks (originally sponsored by Senators Fraser, Barr, Talmadge, Bluechel and Haugen)

Providing for evaluation and transfer to the parks and recreation commission of land acquired by the state by escheat.

Representative Pruitt moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5255 was advanced to third reading. The motion was carried.

Representatives Pruitt and Morton spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5255.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5255 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Substitute Senate Bill No. 5255, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5262, by Senate Committee on Agriculture (originally sponsored by Senators M. Rasmussen and Barr)

Modifying composition of the beef commission.

The bill was read the second time.

Representative Rayburn moved that the committee recommendation be adopted and the Substitute Senate Bill No. 5262 was advanced to third reading. The motion was carried.

Representatives Rayburn and Chandler spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5262.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5262 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Substitute Senate Bill No. 5262, having received the constitutional majority, was declared passed.

With the consent of the House, Senate Bill No. 5300 was deferred and the bill held its place on the suspension calendar.

SUBSTITUTE SENATE BILL NO. 5316, by Senate Committee on Labor & Commerce (originally sponsored by Senators Moore and McCaslin)

Regulating private moorage facilities.

The bill was read the second time.

Representative G. Cole moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5316 as amended by the House was advanced to third reading. (For committee amendments see Journal, 81st Day, April 1, 1993.) The motion was carried.

Representatives G. Cole and Lisk spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5316 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5316, as amended by the House and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Substitute Senate Bill No. 5316, as amended by the House, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5324, by Senator Pelz; by request of Law Revision Commission

Correcting a double amendment related to reimbursement of school transportation costs.

The bill was read the second time.

Representative Dorn moved that the committee recommendation be adopted and that Senate Bill No. 5324 was advanced to third reading. The motion was carried.

Representatives Dorn and Thomas spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5324.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5324 and the bill, as amended by the House, passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Senate Bill No. 5324, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5358, by Senators Pelz, Fraser, Prince and Winsley; by request of Department of Licensing

Creating an appropriated real estate education account.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Senate Bill No. 5358 was advanced to third reading. The motion was carried.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5358.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5358 and the bill, as amended by the House, passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Senate Bill No. 5358, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5385, by Senators Moore, Newhouse, McAuliffe and Winsley; by request of Department of Licensing

Creating the uniform commercial code fund.

The bill was read the second time.

Representative Holm moved that the committee recommendation be adopted and that Senate Bill No. 5385 was advanced to third reading. The motion was carried.

Representatives Holm and Foreman spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5385.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5385 and the bill, as amended by the House, passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Senate Bill No. 5385, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5386, by Senate Committee on Health & Human Services (originally sponsored by Senators Wojahn, Moyer, Gaspard, Deccio, Hochstatter and Winsley)

Modifying licensure of home health, hospice, and home care agencies.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5386 was advanced to third reading. The motion was carried.

Representative Silver spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5386.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5386 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Substitute Senate Bill No. 5386, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5411, by Senators Vognild, Prince, Prentice, Drew, Sheldon and Sellar; by request of Department of Licensing

Modifying provisions regarding fuel taxes.

The bill was read the second time.

Representative Brown moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5411 was advanced to third reading. The motion was carried.

Representative Brown spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5411.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5411 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 1, Excused - 0.

Absent: Representative Wineberry - 1.

Engrossed Senate Bill No. 5411, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5423, by Senators Skratek and Prince; by request of Department of Transportation

Developing a public transportation policy plan.

The bill was read the second time.

Representative Brown moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5423 was advanced to third reading. The motion was carried.

Representative Brown spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5423.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5423 and the bill passed the House by the following vote: Yeas - 96, Nays - 0, Absent - 2, Excused - 0.

Absent: Representatives Veloria and Wineberry - 2.

Engrossed Senate Bill No. 5423, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5427, by Senator Loveland; by request of Department of Transportation

Setting tire limits on vehicles weighing over ten thousand pounds.

The bill was read the second time.

Representative Jones moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5427 was advanced to third reading. The motion was carried.

Representative Jones spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5427.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5427 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Senate Bill No. 5427, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5444, by Senator Talmadge; by request of Department of Social and Health Services

Eliminating the termination of hospice care and service coverage as medical assistance.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Senate Bill No. 5444 was advanced to third reading. The motion was carried.

Representative Dyer spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5444.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5444 and the bill, as amended by the House, passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5444, having received the constitutional majority, was declared passed.

ENGROSSED SUBSTITUTE SENATE BILL NO. 5482, by Senate Committee on Trade, Technology & Economic Development (originally sponsored by Senators Skratek, M. Rasmussen, Spanel, Prentice, Franklin, McAuliffe, A. Smith, Drew and von Reichbauer)

Defining rights of tenants in mobile home parks.

The bill was read the second time.

Representative Shin moved that the committee recommendation be adopted and that Engrossed Substitute Senate Bill No. 5482 was advanced to third reading. The motion was carried.

Representatives Shin and Forner spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Substitute Senate Bill No. 5482.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Substitute Senate Bill No. 5482 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Substitute Senate Bill No. 5482, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5492, by Senate Committee on Law & Justice (originally sponsored by Senators Spanel, Snyder, Nelson and M. Rasmussen; by request of Secretary of State)

Authorizing the secretary of state to set fees by rule.

The bill was read the second time.

Representative G. Fisher moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5492 as amended by the House be advanced to third reading (For committee amendments see Journal, 80th Day, March 31, 1993.) The motion was carried.

Representatives G. Fisher and Foreman spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5492 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5492 as amended by the House and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Bill No. 5492, as amended by the House, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5556, by Senate Committee on Education (originally sponsored by Senators Bauer, Snyder, Deccio and Sutherland; by request of Washington State School for the Blind and Washington State School for the Deaf)

Changing provisions relating to state schools for the blind, deaf, and sensory impaired.

The bill was read the second time.

Representative Dorn moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5556 as amended by the House be advanced to third reading (For committee amendments see Journal, 82nd Day, April 2, 1993.) The motion was carried.

Representatives Dorn and Carlson spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5556 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5556 as amended by the House and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Bill No. 5556, as amended by the House, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5572, by Senators Prentice, Vognild, Prince, Hargrove, Barr, McAuliffe, Haugen, Snyder, Pelz, Loveland, Sheldon, Moore, Erwin, Fraser, M. Rasmussen and Wojahn

Assessing environmental costs of transportation projects.

The bill was read the second time.

Representative Jones moved that the committee recommendation be adopted and that Senate Bill No. 5572 was advanced to third reading. The motion was carried.

Representative Jones spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5572.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5572 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5572, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5580, by Senators Moore, Barr, McAuliffe, Vognild, Newhouse, Prentice, Prince, Amondson, Sutherland, Fraser, Winsley and von Reichbauer; by request of Department of Community Development

Modifying the regulation of manufactured housing.

The bill was read the second time.

Representative Shin moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5580 was advanced to third reading. The motion was carried.

Representatives Shin and Forner spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5580.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5580 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Senate Bill No. 5580, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5596, by Senate Committee on Government Operations (originally sponsored by Senator Loveland; by request of State Treasurer)

Destroying redeemed warrants.

The bill was read the second time.

Representative Anderson moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5596 was advanced to third reading. The motion was carried.

Representatives Anderson and Reams spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5596.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5596 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Bill No. 5596, having received the constitutional majority, was declared passed.

MOTION

On motion of Representative Sheldon, Senate Bill No. 5675 was deferred and the bill held its place on the suspension calendar.

SUBSTITUTE SENATE BILL NO. 5678, by Senate Committee on Agriculture (originally sponsored by Senators Loveland, Newhouse, Deccio and Winsley)

Exempting licensed domestic wineries from commission merchant requirements.

The bill was read the second time.

Representative Rayburn moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5678 was advanced to third reading. The motion was carried.

Representatives Rayburn and Chandler spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5678.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5678 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Bill No. 5678, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5693, by Senators Vognild, Drew and Quigley

Authorizing exemptions from county vehicle license fees.

The bill was read the second time.

Representative Brown moved that the committee recommendation be adopted and that Senate Bill No. 5693 was advanced to third reading. The motion was carried.

Representative Brown spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5693.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5693 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5693, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5696, by Senators Haugen, Newhouse and Spanel; by request of Department of Retirement Systems

Authorizing the department of retirement systems to be divided into three divisions.

The bill was read the second time.

Representative Anderson moved that the committee recommendation be adopted and that Senate Bill No. 5696 was advanced to third reading. The motion was carried.

Representatives Anderson and Reams spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5696.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5696 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5696, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5703, by Senators Prentice, Prince, Moore, Amondson and Franklin; by request of Employment Security Department

Codifying the labor market information and economic analysis responsibilities of the employment security department.

The bill was read the second time.

Representative G. Cole moved that the committee recommendation be adopted and that Senate Bill No. 5703 was advanced to third reading. The motion was carried.

Representatives G. Cole and Lisk spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5703.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5703 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5703, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5729, by Senator Rinehart

Changing the family emergency assistance program.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5729 was advanced to third reading. The motion was carried.

Representative Carlson spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5729.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5729 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Senate Bill No. 5729, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5751, by Senate Committee on Government Operations (originally sponsored by Senators Haugen and Spanel)

Authorizing rural partial-county library districts.

The bill was read the second time.

Representative Bray moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5751, as amended by the House, was advanced to third reading (For committee amendments see Journal, 82nd Day, April 2, 1993.) The motion was carried.

Representatives Bray and Edmondson spoke in favor of passage of the bill.

On motion of Representative Wood, Representative Vance was excused.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5751 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5751 as amended by the House and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 0, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Van Luven, Veloria, Wang, Wineberry, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

Excused: Representative Vance - 1.

Substitute Senate Bill No. 5751, as amended by the House, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5821, by Senate Committee on Government Operations (originally sponsored by Senator Loveland; by request of Department of Community Development)

Modifying public works board loan restrictions.

The bill was read the second time.

Representative Wang moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5821 was advanced to third reading. The motion was carried.

Representatives Wang and Sehlin spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5821.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5821 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 0, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Van Luven, Veloria, Wang, Wineberry, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

Excused: Representative Vance - 1.

Substitute Senate Bill No. 5821, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5841, by Senators Moyer, Prentice, Talmadge, Quigley, Prince, Hochstatter, McAuliffe, Erwin, West, Sheldon and Winsley

Requiring an outreach campaign on shaken baby syndrome.

The bill was read the second time.

Representative Leonard moved that the committee recommendation be adopted and that Senate Bill No. 5841 was advanced to third reading. The motion was carried.

Representatives Leonard and Cooke spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5841.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5841 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 0, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Van Luven, Veloria, Wang, Wineberry, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

Excused: Representative Vance - 1.

Senate Bill No. 5841, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5883, by Senators Bauer, Erwin, M. Rasmussen and Roach; by request of Superintendent of Public Instruction

Changing funding procedures for high school students enrolled in the running start program in community or technical colleges.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Senate Bill No. 5883, as amended by the House, was advanced to third reading (For committee amendments see Journal, 82nd Day, April 2, 1993.) The motion was carried.

Representative Silver spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5883 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5883 as amended by the House and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 0, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Van Luven, Veloria, Wang, Wineberry, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

Excused: Representative Vance - 1.

Senate Bill No. 5883, as amended by the House, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5889, by Senate Committee on Higher Education (originally sponsored by Senators Bauer, Prince, Loveland, Jesernig, Drew, Sheldon, Snyder and Spanel)

Awarding grants for pilot regional collaborative professional development school projects.

The bill was read the second time.

Representative Valle moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5889 be advanced to third reading. The motion was carried.

Representative Carlson spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5889.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5889 and the bill passed the House by the following vote: Yeas - 97, Nays - 0, Absent - 0, Excused - 1.

Voting yea: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Bray, Brough, Brown, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Grant, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Ludwig, Mastin, Meyers, R., Mielke, Miller, Morris, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Romero, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Shin, Silver, Sommers, Springer, Stevens, Talcott, Tate, Thibaudeau, Thomas, Valle, Van Luven, Veloria, Wang, Wineberry, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

Excused: Representative Vance - 1.

Substitute Senate Bill No. 5889, having received the constitutional majority, was declared passed.

The Speaker (Representative R. Meyers presiding) declared the House at recess until 1:30 p.m.

AFTERNOON SESSION

The Speaker (Representative R. Meyers presiding) called the House to order at 1:30 p.m.

The Clerk called the roll and a quorum was present.

MESSAGES FROM THE SENATE

April 8, 1993

Mr. Speaker:

The President has signed:

SUBSTITUTE SENATE BILL NO. 5313,

SUBSTITUTE SENATE BILL NO. 5432,

SUBSTITUTE SENATE BILL NO. 5487,

SENATE BILL NO. 5546,

ENGROSSED SENATE BILL NO. 5831,

and the same are herewith transmitted.

Marty Brown, Secretary

Mr. Speaker:

The Senate has passed:

HOUSE BILL NO. 1143,

SUBSTITUTE HOUSE BILL NO. 1389,

HOUSE BILL NO. 1651,

SUBSTITUTE HOUSE BILL NO. 1787,

and the same are herewith transmitted.

Marty Brown, Secretary

Mr. Speaker:

The President has signed:

SUBSTITUTE SENATE BILL NO. 5026,

SENATE BILL NO. 5053,

SENATE BILL NO. 5077,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5110,

SENATE BILL NO. 5233,

and the same are herewith transmitted.

Marty Brown, Secretary

Mr. Speaker:

The President has signed:

HOUSE BILL NO. 1130,

HOUSE BILL NO. 1216,

HOUSE BILL NO. 1217,

ENGROSSED HOUSE BILL NO. 1238,

SUBSTITUTE HOUSE BILL NO. 1253,

HOUSE BILL NO. 1255,

HOUSE BILL NO. 1400,

SUBSTITUTE HOUSE BILL NO. 1480,

ENGROSSED HOUSE BILL NO. 1481,

SUBSTITUTE HOUSE BILL NO. 1527,

SUBSTITUTE HOUSE BILL NO. 1578,

HOUSE BILL NO. 1643,

ENGROSSED HOUSE JOINT MEMORIAL NO. 4000,

and the same are herewith transmitted.

Marty Brown, Secretary

MOTIONS

With the consent of the House, Senate Bill No. 5300, Senate Bill No. 5675 and Senate Bill No. 5903 were referred to the Committee on Rules. The motion was carried.

Representative Sheldon moved the House immediately consider Substitute Senate Bill No. 5896 on the second reading calendar. The motion was carried.

SUBSTITUTE SENATE BILL NO. 5896, by Senate Committee on Government Operations (originally sponsored by Senators M. Rasmussen, Amondson, Haugen, Winsley, Sheldon, Gaspard and Snyder)

Authorizing counties to use the hotel-motel tax for public restroom facilities.

The bill was read the second time.

Representative G. Fisher moved that the committee recommendation be adopted and that Substitute Senate Bill No. 5896 was advanced to third reading. The motion was carried.

Representatives G. Fisher and Foreman spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5896.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5896 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Bill No. 5896, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5905, by Senators Vognild, Fraser and Deccio; by request of County Road Administration Board

Changing provisions regarding the county road administration board.

The bill was read the second time.

Representative Jones moved that the committee recommendation be adopted and that Senate Bill No. 5905 was advanced to third reading. The motion was carried.

Representative Jones spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5905.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5905 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5905, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5917, by Senators Drew, Vognild, McAuliffe and M. Rasmussen

Restructuring statutes on state participation in rail freight service.

The bill was read the second time.

Representative Jones moved that the committee recommendation be adopted and that Engrossed Senate Bill No. 5917, as amended by the House, was advanced to third reading (For committee amendments see Journal, 82nd Day, April 2, 1993.) The motion was carried.

Representative Jones spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Engrossed Senate Bill No. 5917 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Senate Bill No. 5917 as amended by the House and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Engrossed Senate Bill No. 5917, as amended by the House, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE JOINT MEMORIAL NO. 8009, by Senate Committee on Trade, Technology & Economic Development (originally sponsored by Senators Bluechel, Snyder, Sellar, Skratek, M. Rasmussen, Erwin, Gaspard, Fraser, McDonald, Franklin, Winsley and Oke)

Supporting Guam in its quest for commonwealth status.

The memorial was read the second time.

Representative Wineberry moved that the committee recommendation be adopted and that Substitute Senate Joint Memorial No. 8009 be advanced to third reading. The motion was carried.

Representatives Wineberry, Leonard and Forner spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Joint Memorial No. 8009.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Joint Memorial No. 8009 and the memorial passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Joint Memorial No. 8009, having received the constitutional majority, was declared passed.

MOTION

Representative Sheldon moved the House consider the following bills in the following order: Senate Bill No. 5275, Substitute Senate Bill No. 5634, Senate Bill No. 5375, Substitute Senate Bill No. 5483 and Engrossed Senate Bill No. 5508 on the second reading calendar. The motion was carried.

SENATE BILL NO. 5275, by Senators Oke, Haugen and Winsley

Authorizing nonprofit corporations to restore, maintain, and protect abandoned cemeteries.

The bill was read the second time.

On motion of Representative Sheldon, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Anderson, Reams and Padden spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5275.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5275 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5275, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5634, by Senate Committee on Government Operations (originally sponsored by Senators Bauer, Newhouse, Snyder, Haugen, Gaspard, Vognild, Sutherland, Rinehart, Spanel, Talmadge, Winsley, McAuliffe, Moore and Drew)

Requiring state agencies to submit interagency disputes to mediation before filing lawsuits.

The bill was read the second time.

Representative Anderson moved adoption of the following amendment by Representative Anderson:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. It is the intent of the legislature to reduce the number of time-consuming and costly lawsuits between state agencies by establishing alternative dispute resolution processes available to any agency.

NEW SECTION. Sec. 2. A new section is added to chapter 43.17 RCW to read as follows:

For purposes of sections 2 through 4 of this act, "state agency" means:

(1) Any agency for which the executive officer is listed in RCW 42.17.2401; and

(2) The office of the secretary of state; the office of the state treasurer; the office of the state auditor; the department of natural resources; the office of the insurance commissioner; and the office of the superintendent of public instruction.

NEW SECTION. Sec. 3. A new section is added to chapter 43.17 RCW to read as follows:

Whenever a dispute arises between state agencies, agencies shall employ every effort to resolve the dispute themselves without resorting to litigation. These efforts shall involve alternative dispute resolution methods. If a dispute cannot be resolved by the agencies involved, any one of the disputing agencies may request the governor to assist in the resolution of the dispute. The governor shall employ whatever dispute resolution methods that the governor deems appropriate in resolving the dispute. Such methods may include, but are not limited to, the appointment by the governor of a mediator, acceptable to the disputing agencies, to assist in the resolution of the dispute. The governor may also request assistance from the attorney general to advise the mediator and the disputing agencies.

NEW SECTION. Sec. 4. A new section is added to chapter 43.17 RCW to read as follows:

Sections 2 and 3 of this act shall not apply to any state agency that is a party to a lawsuit, which: (1) Impleads another state agency into the lawsuit when necessary for the administration of justice; or (2) files a notice of appeal, petitions for review, or makes other filings subject to time limits, in order to preserve legal rights and remedies."

On page 1, line 1 of the title, after "agencies;" strike the remainder of the title and insert "adding new sections to chapter 43.17 RCW; and creating a new section."

Representative Dyer moved adoption of the following amendment to the amendment:

On page 1, line 32, after "dispute". insert "To ensure the impartiality and effectiveness of the mediation process, mediators appointed under this section shall be trained and experienced professional mediators who are not officers or employees of any federal, state, or local government."

Representatives Dyer, Padden, Ludwig, Foreman and Campbell spoke in favor of adoption of the amendment to the amendment and Representatives Anderson, Sommers and Wang spoke against it.

Representative Dyer again spoke in favor of adoption of the amendment to the amendment and Representative Anderson again spoke against it.

A division was called. The result of the division were 41-YEAS; 57-NAYS. The amendment to the amendment was not adopted.

The striking amendment was adopted.

On motion of Representative Sheldon, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Anderson and Reams spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5634 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5634, as amended by the House and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Substitute Senate Bill No. 5634, as amended by the House, having received the constitutional majority, was declared passed.

SENATE BILL NO. 5375, by Senators Bauer, Wojahn, Barr, Oke, Rinehart, von Reichbauer and Winsley; by request of Legislative Budget Committee

Regulating personal service contracts.

The bill was read the second time.

Representative Ogden moved adoption of the following amendment by Representatives Ogden and Valle:

On page 1, line 11, after "contracts" strike everything through "process." and insert "((negotiated without an open competitive process)), to centralize the location of information about personal service contracts for ease of public review, and ensure proper accounting of personal services expenditures."

On page 4, after line 8, insert the following:

"Sec. 5. RCW 39.29.018 and 1987 c 414 s 5 are each amended to read as follows:

(1) Sole source contracts shall be filed with the office of financial management and the legislative budget committee and made available for public inspection at least ten working days prior to the proposed starting date of the contract. Documented justification for sole source contracts shall be provided to the office of financial management and the legislative budget committee when the contract is filed. For sole source contracts of ten thousand dollars or more that are state funded, documented justification shall include evidence that the agency attempted to identify potential consultants by advertising through state-wide or regional newspapers or other appropriate media or by notifying consultants on established bidders' lists approved by the office of financial management.

(2) The office of financial management shall approve sole source contracts of ten thousand dollars or more that are state funded, before any such contract becomes binding and before any services may be performed under the contract. These requirements shall also apply to sole source contracts of less than ten thousand dollars if the total amount of such contracts between an agency and the same consultant is ten thousand dollars or more within a fiscal year. The office of financial management shall ensure that the costs, fees, or rates negotiated in filed sole source contracts of ten thousand dollars or more are reasonable.

NEW SECTION. Sec. 6. A new section is added to chapter 39.29 RCW to read as follows:

Personal services may be procured only to resolve a particular agency problem or issue or to expedite a specific project that is temporary in nature. An agency may procure personal services only if it documents that:

(1) The service is critical to agency responsibilities or operations, or is mandated or authorized by the legislature;

(2) Sufficient staffing or expertise is not available within the agency to perform the service; and

(3) Other qualified public resources are not available to perform the service.

NEW SECTION. Sec. 7. A new section is added to chapter 39.29 RCW to read as follows:

(1) State-funded personal service contracts subject to competitive solicitation shall be filed with the office of financial management and the legislative budget committee and made available for public inspection at least ten working days before the proposed starting date of the contract.

(2) The office of financial management shall review and approve state-funded personal service contracts subject to competitive solicitation that provide services relating to management consulting, organizational development, marketing, communications, employee training, or employee recruiting.

NEW SECTION. Sec. 8. A new section is added to chapter 39.29 RCW to read as follows:

The office of financial management shall maintain a publicly available list of all personal service contracts entered into by state agencies during each fiscal year. The list shall identify the contracting agency, the contractor, the purpose of the contract, effective dates and periods of performance, the cost of the contract and funding source, any modifications to the contract, and whether the contract was competitively procured or awarded on a sole source basis. The office of financial management shall also ensure that state accounting definitions and procedures are consistent with RCW 39.29.006 and permit the reporting of personal services expenditures by agency and by type of service. Designations of type of services shall include, but not be limited to, management and organizational services, legal and expert witness services, financial services, computer and information services, social or technical research, marketing, communications, and employee training or recruiting services. The office of financial management shall report annually to the fiscal committees of the senate and house of representatives on sole source contracts filed under this chapter. The report shall describe: (1) The number and aggregate value of contracts for each category established in this section; (2) the number and aggregate value of contracts of two thousand five hundred dollars or greater but less than ten thousand dollars; (3) the number and aggregate value of contracts of ten thousand dollars or greater; (4) the justification provided by agencies for the use of sole source contracts; and (5) any trends in the use of sole source contracts.

NEW SECTION. Sec. 9. A new section is added to chapter 39.80 RCW to read as follows:

Contracts entered into by any state agency for architectural and engineering services, and modifications thereto, shall be reported to the office of financial management on a quarterly basis, in such form as the office of financial management prescribes."

Representative Ogden spoke in favor of adoption of the amendment and the amendment was adopted.

On motion of Representative Sheldon, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Ogden and Reams spoke in favor of passage of the bill.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Senate Bill No. 5375 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Senate Bill No. 5375, as amended by the House and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

Senate Bill No. 5375, as amended by the House, having received the constitutional majority, was declared passed.

SUBSTITUTE SENATE BILL NO. 5483, by Senators Prentice, Winsley, Vognild, Wojahn, Moore, Rinehart, McAuliffe, Sutherland, Pelz and Franklin

Providing for arbitration in public transportation labor negotiations.

The bill was read the second time. Committee on Commerce and Labor recommendation: Majority, do pass as amended. (For committee amendment see Journal, 81st Day, April 1, 1993.)

Representative G. Cole moved adoption of the committee amendment.

Representative G. Cole spoke in favor of adoption of the amendment and Representative Lisk spoke against it. The amendment was adopted.

On motion of Representative Sheldon, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representative G. Cole spoke in favor of passage of the bill and Representative Lisk spoke against it.

The Speaker (Representative R. Meyers presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 5483 as amended by the House.

ROLL CALL

The Clerk called the roll on final passage of Substitute Senate Bill No. 5483, as amended by the House and the bill passed the House by the following vote: Yeas - 62, Nays - 36, Absent - 0, Excused - 0.

Voting yea: Representatives Anderson, Appelwick, Brown, Campbell, Carlson, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Flemming, Grant, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Mastin, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Reams, Riley, Roland, Romero, Rust, Scott, Shin, Springer, Talcott, Thibaudeau, Valle, Vance, Van Luven, Veloria, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 62.

Voting nay: Representatives Ballard, Ballasiotes, Basich, Bray, Brough, Brumsickle, Casada, Chandler, Cooke, Dyer, Edmondson, Fisher, R., Foreman, Forner, Fuhrman, Hansen, Horn, Lisk, Long, Mielke, Miller, Morton, Padden, Rayburn, Schmidt, Schoesler, Sehlin, Sheahan, Sheldon, Silver, Sommers, Stevens, Tate, Thomas, Wang and Wood - 36.

Substitute Senate Bill No. 5483, as amended by the House, having received the constitutional majority, was declared passed.

ENGROSSED SENATE BILL NO. 5508, by Senators Hargrove, Niemi, A. Smith, Nelson and Spanel

Modifying child support orders in dependency cases.

The bill was read the second time. Committee on Judiciary recommendation: Majority, do pass as amended. (For committee amendments see Journal, 80th Day, March 31, 1993.)

Representative Appelwick moved adoption of the committee amendments and spoke in favor of them. The committee amendments were adopted.

Representative Vance moved adoption of the following amendment by Representative Vance:

On page 8, line 33, after "children" insert ". Special educational needs do not include postsecondary education for a child over eighteen years of age"

On page 10, after line 14, insert the following:

"Sec. 7. RCW 26.09.225 and 1991 sp.s. c 28 s 3 are each amended to read as follows:

(1) Each parent shall have full and equal access to the education and health care records of the child absent a court order to the contrary. Neither parent may veto the access requested by the other parent.

(2) Educational records are limited to academic, attendance, and disciplinary records of public and private schools in all grades kindergarten through twelve and any form of alternative school for all periods for which child support is paid or the child is the dependent in fact of the parent requesting access to the records.

(3) Educational records of postsecondary educational institutions are limited to enrollment and academic records necessary to determine, establish, or continue support ordered pursuant to RCW 26.19.090 before the effective date of this act.

Sec. 8. RCW 26.18.210 and 1990 1st ex.s. c 2 s 22 are each amended to read as follows:

(1) The administrator for the courts shall develop a child support order summary report form to provide for the reporting of summary information in every case in which a child support order is entered or modified either judicially or administratively. The administrator for the courts shall attempt to the greatest extent possible to make the form simple and understandable by the parties. The form shall indicate the following:

(a) The county in which the order was entered and the cause number;

(b) Whether it was a judicial or administrative order;

(d) The number of children of the parties and the children's ages;

(e) The combined monthly net income of parties;

(f) The monthly net income of the father as determined by the court;

(g) The monthly net income of the mother as determined by the court;

(h) The basic child support obligation for each child as determined from the economic table;

(i) Whether or not the court deviated from the child support for each child;

(j) The reason or reasons stated by the court for the deviation;

(k) The amount of child support after the deviation;

(l) Any amount awarded for day care;

(m) Any other extraordinary amounts in the order;

(n) ((Any amount ordered for postsecondary education;

(o))) The total amount of support ordered;

(((p))) (o) In the case of a modification, the amount of support in the previous order;

(((q))) (p) If the change in support was in excess of thirty percent, whether the change was phased in;

(((r))) (q) The amount of the transfer payment ordered;

(((s))) (r) Which parent was ordered to make the transfer payment; and

(((t))) (s) The date of the entry of the order.

(2) The administrator for the courts shall make the form available to the parties.

Sec. 9. RCW 26.19.035 and 1992 c 229 s 6 are each amended to read as follows:

(1) Application of the child support schedule. The child support schedule shall be applied:

(a) In each county of the state;

(b) In judicial and administrative proceedings under this title or Title 13 or 74 RCW;

(d) In setting temporary and permanent support;

(e) In automatic modification provisions or decrees entered pursuant to RCW 26.09.100; and

(f) In addition to proceedings in which child support is determined for minors, to adult children who are dependent on their parents and for whom support is ordered pursuant to RCW 26.09.100. However, child support shall not be made mandatory for postsecondary education of a child over eighteen years of age.

The provisions of this chapter for determining child support and reasons for deviation from the standard calculation shall be applied in the same manner by the court, presiding officers, and reviewing officers.

(2) Written findings of fact supported by the evidence. An order for child support shall be supported by written findings of fact upon which the support determination is based and shall include reasons for any deviation from the standard calculation and reasons for denial of a party's request for deviation from the standard calculation. The court shall enter written findings of fact in all cases whether or not the court: (a) Sets the support at the presumptive amount, for combined monthly net incomes below five thousand dollars; (b) sets the support at an advisory amount, for combined monthly net incomes between five thousand and seven thousand dollars; or (c) deviates from the presumptive or advisory amounts.

(3) Completion of worksheets. Worksheets in the form developed by the office of the administrator for the courts shall be completed under penalty of perjury and filed in every proceeding in which child support is determined. The court shall not accept incomplete worksheets or worksheets that vary from the worksheets developed by the office of the administrator for the courts.

(4) Court review of the worksheets and order. The court shall review the worksheets and the order setting support for the adequacy of the reasons set forth for any deviation or denial of any request for deviation and for the adequacy of the amount of support ordered. Each order shall state the amount of child support calculated using the standard calculation and the amount of child support actually ordered. Worksheets shall be attached to the decree or order or if filed separately shall be initialed or signed by the judge and filed with the order.

Sec. 10. RCW 26.19.090 and 1991 sp.s. c 28 s 7 are each amended to read as follows:

(((1))) The child support schedule shall ((be advisory and not mandatory)) not be used for postsecondary educational support of a child over eighteen years of age.

(((2) When considering whether to order support for postsecondary educational expenses, the court shall determine whether the child is in fact dependent and is relying upon the parents for the reasonable necessities of life. The court shall exercise its discretion when determining whether and for how long to award postsecondary educational support based upon consideration of factors that include but are not limited to the following: Age of the child; the child's needs; the expectations of the parties for their children when the parents were together; the child's prospects, desires, aptitudes, abilities or disabilities; the nature of the postsecondary education sought; and the parents' level of education, standard of living, and current and future resources. Also to be considered are the amount and type of support that the child would have been afforded if the parents had stayed together.

(3) The child must enroll in an accredited academic or vocational school, must be actively pursuing a course of study commensurate with the child's vocational goals, and must be in good academic standing as defined by the institution. The court-ordered postsecondary educational support shall be automatically suspended during the period or periods the child fails to comply with these conditions.

(4) The child shall also make available all academic records and grades to both parents as a condition of receiving postsecondary educational support. Each parent shall have full and equal access to the postsecondary education records as provided in RCW 26.09.225.

(5) The court shall not order the payment of postsecondary educational expenses beyond the child's twenty-third birthday, except for exceptional circumstances, such as mental, physical, or emotional disabilities.

(6) The court shall direct that either or both parents' payments for postsecondary educational expenses be made directly to the educational institution if feasible. If direct payments are not feasible, then the court in its discretion may order that either or both parents' payments be made directly to the child if the child does not reside with either parent. If the child resides with one of the parents the court may direct that the parent making the support transfer payments make the payments to the child or to the parent who has been receiving the support transfer payments.))"

POINT OF ORDER

Representative Appelwick: I would request a ruling on the scope and object on the amendment to Engrossed Senate Bill No. 5508.

With the consent of the House, Engrossed Senate Bill No. 5508 was deferred and the bill held its place on the second reading calendar.

The Speaker (Representative R. Meyers presiding) declared the House to be at ease.

The Speaker (Representative Heavey presiding) called the House to order.

The Speaker assumed the chair.

Representative Peery demanded a call of the House. The demand was sustained.

The Clerk called the roll under the call of the House and all members were present except Representatives Springer and Locke.

Representative Peery moved that the House excuse the absent members and proceed under the call of the House. The motion was carried.

With the consent of the House, the House considered Engrossed Second Substitute Senate Bill No. 5304.

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5304, by Senate Committee on Ways & Means (originally sponsored by Senators Talmadge, Gaspard, Moore, Deccio, Wojahn, Moyer, Snyder, Winsley, Fraser, Haugen, McAuliffe, Drew, Sheldon, Skratek and Pelz)

Reforming health care cost control and access.

The bill was read the second time. Committee on Health Care recommendation: Majority, do pass as amended. Committee on Revenue recommendation: Majority, do pass as amended by Committee on Health care. (For committee amendment see Journal, 85th Day, April 5, 1993.)

Representative Dellwo moved that the committee amendment on Health Care not be adopted. The amendment was not adopted.

Representative G. Fisher moved adoption of the Revenue committee amendment.

With the consent of the House, Representative Dyer withdrew amendment numbers 347 and 336.

Representative Mielke moved adoption of the following amendment to the committee amendment by Representative Mielke:

Beginning on page 5, line 6 of the amendment, strike all material through page 6, line 33

On page 9, beginning on line 2 of the amendment, after "administrator" strike all material through "authority" on line 3

On page 11, beginning on line 2 of the amendment, after "created as" strike all material through "authority" on line 4, and insert "an independent agency of the state"

Representative Mielke spoke in favor of adoption of the amendment to the committee amendment and Representative Dellwo spoke against it.

Representative Fuhrman demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment beginning on page 5, line 6 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 34, Nays - 63, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Cooke, Dyer, Edmondson, Foreman, Forner, Fuhrman, Horn, Lisk, Long, Mastin, Mielke, Miller, Morton, Padden, Reams, Schmidt, Schoesler, Sehlin, Sheahan, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 34.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Grant, Hansen, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Rayburn, Riley, Roland, Romero, Rust, Scott, Sheldon, Shin, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 63.

Excused: Representative Springer - 1.

Representative Johanson moved adoption of the following amendment to the committee amendment:

On page 14, beginning on line 1, strike all of subsection (d)

On page 17, line 3, strike "Prior to July 1, 1997, the", and insert "The"

On page 17, line 6, after "the plan." strike all language through and including "under this section." on line 9

On page 35, line 4, strike "but not more than ninety-five percent"

On page 104, line 21, after "(7)" strike all language through and including "income and shall" on line 26, and insert "Establish enrollee premium share levels that are related to enrollee household income and that do"

On page 152, line 31, strike "as determined by the commission"

On page 152, line 35, strike "as determined by the commission"

On page 153, line 16, strike "as determined by the commission", and insert "within their geographic region"

On page 153, line 21, strike "area, as determined by the commission", and insert "region"

On page 153, line 39, strike "as determined by the commission" and insert "within their geographic region".

On page 154, line 5, strike "area as determined by the commission" and insert "region"

On page 154, beginning on line 34, strike section 456

Representatives Johanson, Dellwo and Dyer spoke in favor of adoption of the amendment to the committee amendment and the amendment was adopted.

With the consent of the House, Representative Mastin withdrew amendment number 358.

Representative Mielke moved adoption of the following amendment to the committee amendment:

On page 18, after line 25 of the amendment, insert the following:

"(16) To accept for enrollment as subsidized or nonsubsidized enrollees, persons specified in RCW 51.12.020."

On page 106, after line 32 of the amendment, insert the following:

"(22) Assure that subsidies or other premiums established by the commission for low-income persons or households are available to persons specified in RCW 51.12.020 and whose employers are exempt under section 455 of this act."

On page 154, after line 33 of the amendment, insert the following:

"(9) Employers of persons specified in RCW 51.12.020 are exempt from the requirements of this section. This exemption may not be construed as exempting an individual from the provisions of section 454 of this act."

Representatives Mielke, Ballard and Dyer spoke in favor of adoption of the amendment and Representative Dellwo spoke against it.

Representative Fuhrman demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment on page 18, after line 25 to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 36, Nays - 61, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Campbell, Carlson, Casada, Chandler, Cooke, Dyer, Edmondson, Foreman, Forner, Fuhrman, Horn, Lisk, Long, Mastin, Mielke, Miller, Morton, Padden, Reams, Roland, Schmidt, Schoesler, Sehlin, Sheahan, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 36.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Grant, Hansen, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Rayburn, Riley, Romero, Rust, Scott, Sheldon, Shin, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 61.

Excused: Representative Springer - 1.

Representative Schoesler moved adoption of the following amendment to the committee amendment:

On page 20, beginning on line 13 of the amendment, after "service;" strike all material through "districts;" on line 15

On page 20, beginning on line 28 of the amendment, after "41.04.205" strike all material through "organization" on line 37 and insert ", ((and)) employees of a school district if the board of directors of the school district seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority as provided in RCW 28A.400.350, and employees of employee organizations representing state civil service employees, at the option of each such employee organization"

On page 22, beginning on line 20 of the amendment, after "(2)" strike all material through "(3)" on line 33

Beginning on page 24, line 11 of the amendment, strike all of section 217

Representatives Schoesler, Miller, Ballard, Dyer and Carlson spoke in favor of adoption of the amendment to the committee amendment and Representatives Dellwo, Dorn, Karahalios and G. Cole spoke against it.

Representative Schoesler again spoke in favor of adoption of the amendment.

Representative Fuhrman demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment on page 20, beginning on line 13 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 36, Nays - 61, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Chappell, Cooke, Dyer, Edmondson, Foreman, Forner, Fuhrman, Hansen, Horn, Lisk, Long, Mielke, Miller, Morton, Padden, Reams, Schmidt, Schoesler, Sehlin, Sheahan, Shin, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 36.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Grant, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Mastin, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Rayburn, Riley, Roland, Romero, Rust, Scott, Sheldon, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 61.

Excused: Representative Springer - 1.

With the consent of the House, Representative Dyer withdrew amendment number 364. The motion was carried.

Representative R. Johnson moved adoption of the following amendment to the committee amendment:

On page 28, line 13, strike "resident of the state", and insert "public employee"

On page 28, line 15, after "plan for", strike "retirees" and insert "retired state employees"

On page 28, line 18, after "plans for", strike "retirees" and insert "all other retired public employees"

On page 28, line 25, after "income", strike "residents'", and insert "retired public employees'"

Representatives R. Johnson, Dellwo and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 31, line 9, after "Except", strike "to the extent provided in", and insert "for health benefits purchased with non-state funds as provided in".

Representative Dellwo spoke in favor of adoption of the amendment and the amendment was adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 52, after "individual" strike everything through "hospital" on line 6 and insert ", hospital or business entity"

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

With the consent of the House, Representative Jones withdrew amendment number 356.

Representative Vance moved that the amendment be adopted.

Representative Vance withdrew his motion. The amendment was withdrawn.

Representative Valle moved adoption of the following amendment to the committee amendment:

On page 89 of the amendment, after line 18, insert:

(4) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of two and one-half mills per cigarette for the period July 1, 1998, through June 30, 2000, and five mills per cigarette thereafter. All revenues collected during any month from this additional tax shall be deposited in the Washington health protection account under section 308 of this act by the twenty-fifth day of the following month."

On page 89 of the amendment, after line 28, insert:

NEW SECTION. Sec. 308. A new section is added to chapter 43.70 RCW to read as follows:

The Washington health protection account is established in the state treasury. Expenditures from the account may be used only for appropriations to the department of health for the purposes of tobacco use prevention and cessation programs. One-half of this money shall be used for programs that include advertising that uses diverse media types, print, radio, television, posters, and strives to reach all high-risk groups across the state and in local communities. The media campaign will educate the public on the health dangers of smoking. One-half of this money shall be used for cessation and shall be allocated to those programs that directly aid the individual in the pursuit of overcoming tobacco addiction."

Representatives Valle and Talcott spoke in favor of adoption of the amendment and Representative G. Fisher spoke against it. The amendment was not adopted.

Representative Rayburn moved adoption of the following amendment to the committee amendment:

Beginning on page 92, after line 29, strike all of section 311 and section 312.

Representatives Rayburn, Dyer, Padden, Lisk, Miller, Carlson and Ballard spoke in favor of adoption of the amendment and Representatives G. Fisher, G. Cole, Heavey, Peery, Appelwick, Wang, J. Kohl, and Wineberry spoke against it.

Representative Vance demanded an electronic roll call vote and the demand was sustained.

Representative Peery moved that House Rule 13 (C) rule be suspended and the House continue working past 10:00 p.m. The motion was carried.

Representative Dyer again spoke in favor of the amendment.

Representative Kremen demanded the previous question and the demand was sustained. demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment beginning on page 92 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 46, Nays - 49, Absent - 2, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Bray, Brough, Brumsickle, Carlson, Casada, Chandler, Chappell, Cooke, Dyer, Edmondson, Finkbeiner, Foreman, Forner, Fuhrman, Grant, Hansen, Horn, King, Kremen, Lisk, Ludwig, Mastin, Mielke, Miller, Morris, Morton, Padden, Rayburn, Reams, Schmidt, Schoesler, Sehlin, Sheahan, Sheldon, Shin, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven, Wood and Zellinsky - 46.

Voting nay: Representatives Anderson, Appelwick, Basich, Brown, Campbell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Fisher, G., Fisher, R., Flemming, Heavey, Holm, Jacobsen, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, Kohl, J., Leonard, Linville, Locke, Long, Meyers, R., Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Riley, Roland, Romero, Rust, Scott, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe and Mr. Speaker - 49.

Absent: Representatives Johanson and Lemmon - 2.

Excused: Representative Springer - 1.

Representative Morris moved adoption of the following amendment to the committee amendment:

On page 83 of the amendment, line 16, strike everything through line 16 on page 96, and insert:

"NEW SECTION. Sec. 301. A new section is added to chapter 48.14 RCW to read as follows:

(1) As used in this section, "taxpayer" means a health maintenance organization, as defined in RCW 48.46.020, a health care service contractor, as defined in RCW 48.44.010, or a certified health plan certified under section 433 of this act.

(2) Each taxpayer shall pay a tax on or before the first day of March of each year to the state treasurer through the insurance commissioner's office. The tax shall be equal to the total amount of all premiums and prepayments for health care services received by the taxpayer during the preceding calendar year multiplied by the rate of two percent.

(3) Taxpayers shall prepay their tax obligations under this section. The minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation for the preceding calendar year recomputed using the rate in effect for the current year. For the prepayment of taxes due during the first calendar year, the minimum amount of the prepayments shall be percentages of the taxpayer's tax obligation that would have been due had the tax been in effect during the previous calendar year. The tax prepayments shall be paid to the state treasurer through the commissioner's office by the due dates and in the following amounts:

(a) On or before June 15, forty-five percent;

(b) On or before September 15, twenty-five percent;

(4) For good cause demonstrated in writing, the commissioner may approve an amount smaller than the preceding calendar year's tax obligation as recomputed for calculating the health maintenance organization's prepayment obligations for the current tax year.

(5) Moneys collected under this section shall be deposited in the health services account under section 459 of this act.

Sec. 302. RCW 48.14.080 and 1949 c 190 s 21 are each amended to read as follows:

PREMIUM TAX IN LIEU OF OTHER FORMS. As to insurers other than title insurers, the taxes imposed by this title shall be in lieu of all other taxes, except taxes on real and tangible personal property ((and)), excise taxes on the sale, purchase or use of such property, and the tax imposed in RCW 82.04.260(15).

NEW SECTION. Sec. 303. A new section is added to chapter 82.04 RCW to read as follows:

This chapter does not apply to any health maintenance organization, health care service contractor, or certified health plan in respect to premiums or prepayments that are taxable under section 301 of this act.

Sec. 304. RCW 82.04.260 and 1991 c 272 s 15 are each amended to read as follows:

(1) Upon every person engaging within this state in the business of buying wheat, oats, dry peas, dry beans, lentils, triticale, corn, rye and barley, but not including any manufactured or processed products thereof, and selling the same at wholesale; the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of one one-hundredth of one percent.

(2) Upon every person engaging within this state in the business of manufacturing wheat into flour, barley into pearl barley, soybeans into soybean oil, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, or oil manufactured, multiplied by the rate of one-eighth of one percent.

(3) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of one-quarter of one percent.

(4) Upon every person engaging within this state in the business of manufacturing seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of one-eighth of one percent.

(5) Upon every person engaging within this state in the business of manufacturing by canning, preserving, freezing or dehydrating fresh fruits and vegetables; as to such persons the amount of tax with respect to such business shall be equal to the value of the products canned, preserved, frozen or dehydrated multiplied by the rate of three-tenths of one percent.

(6) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of forty-four one-hundredths of one percent.

(7) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of twenty-five one-hundredths of one percent through June 30, 1986, and one-eighth of one percent thereafter.

(8) Upon every person engaging within this state in the business of making sales, at retail or wholesale, of nuclear fuel assemblies manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the assemblies multiplied by the rate of twenty-five one-hundredths of one percent.

(9) Upon every person engaging within this state in the business of manufacturing nuclear fuel assemblies, as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured multiplied by the rate of twenty-five one-hundredths of one percent.

(10) Upon every person engaging within this state in the business of acting as a travel agent; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of twenty-five one-hundredths of one percent.

(11) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of thirty-three one-hundredths of one percent.

(12) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of thirty-three one hundredths of one percent. Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.

(13) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of fifteen percent.

(a) The rate specified in this subsection shall be reduced to ten percent on May 20, 1991.

(b) The rate specified in this subsection shall be further reduced to five percent on January 1, 1992.

If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.

(14) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with

respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of one percent.

(15) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation, as to such persons, the amount of tax with respect to such activities shall be equal to the gross income of the business multiplied by the rate of five-tenths of one percent through June 30, 1995, and one and five-tenths percent thereafter. The moneys collected under this subsection shall be deposited in the health services account created under section 459 of this act.

Sec. 305. RCW 82.04.4289 and 1981 c 178 s 2 are each amended to read as follows:

((In computing tax there may be deducted from the measure of tax)) This chapter does not apply to amounts derived as compensation for services rendered to patients or from sales of prescription drugs as defined in RCW 82.08.0281 furnished as an integral part of services rendered to patients by ((a hospital, as defined in chapter 70.41 RCW, which is operated as a nonprofit corporation,)) a kidney dialysis facility operated as a nonprofit corporation, ((whether or not operated in connection with a hospital,)) nursing homes, and homes for unwed mothers operated as religious or charitable organizations, but only if no part of the net earnings received by such an institution inures directly or indirectly, to any person other than the institution entitled to deduction hereunder. ((In no event shall any such deduction be allowed, unless the hospital building is entitled to exemption from taxation under the property tax laws of this state.))

NEW SECTION. Sec. 306. RCW 82.04.4288 and 1980 c 37 s 9 are each repealed.

Sec. 307. RCW 82.24.020 and 1989 c 271 s 504 are each amended to read as follows:

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

(2) Until July 1, 1995, an additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of one and one-half mills per cigarette. All revenues collected during any month from this additional tax shall be deposited in the drug enforcement and education account under RCW 69.50.520 by the twenty-fifth day of the following month.

(3) An additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of ten mills per cigarette through June 30, 1994, eleven and one-fourth mills per cigarette for the period July 1, 1994, through June 30, 1995, twenty mills per cigarette for the period July 1, 1995, through June 30, 1996, and twenty and one-half mills per cigarette thereafter. All revenues collected during any month from this additional tax shall be deposited in the Washington health services trust account created under section 358 of this act.

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

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

Sec. 308. RCW 82.24.080 and 1972 ex.s. c 157 s 4 are each amended to read as follows:

It is the intent and purpose of this chapter to levy a tax on all of the articles taxed herein, sold, used, consumed, handled, possessed, or distributed within this state and to collect the tax from the person who first sells, uses, consumes, handles, possesses (either physically or constructively, in accordance with RCW 82.24.020) or distributes them in the state. It is further the intent and purpose of this chapter that whenever any of the articles herein taxed is given away for advertising or any other purpose, it shall be taxed in the same manner as if it were sold, used, consumed, handled, possessed, or distributed in this state.

It is also the intent and purpose of this chapter that the tax shall be imposed at the time and place of the first taxable event occurring within this state: PROVIDED, HOWEVER, That failure to pay the tax with respect to a taxable event shall not prevent tax liability from arising by reason of a subsequent taxable event.

In the event of an increase in the rate of the tax imposed under this chapter, it is the intent of the legislature that the first person who sells, uses, consumes, handles, possesses, or distributes previously taxed articles after the effective date of the rate increase shall be liable for the additional tax represented by the rate increase, but the failure to pay the additional tax with respect to the first taxable event after the effective date of a rate increase shall not prevent tax liability for the additional tax from arising from a subsequent taxable event.

Sec. 309. RCW 82.26.020 and 1983 2nd ex.s. c 3 s 16 are each amended to read as follows:

(1) ((From and after June 1, 1971,)) There is levied and there shall be collected a tax upon the sale, use, consumption, handling, or distribution of all tobacco products in this state at the rate of forty-five percent of the wholesale sales price of such tobacco products. ((Such tax))

(2) Taxes under this section shall be imposed at the time the distributor (a) brings, or causes to be brought, into this state from without the state tobacco products for sale, (b) makes, manufactures, or fabricates tobacco products in this state for sale in this state, or (c) ships or transports tobacco products to retailers in this state, to be sold by those retailers.

(((2))) (3) An additional tax is imposed equal to ((the rate specified in RCW 82.02.030)) seven percent multiplied by the tax payable under subsection (1) of this section.

(4) An additional tax is imposed equal to the tax payable under subsection (1) of this section multiplied by the rate of eighty-five percent through June 30, 1994, ninety-five percent for the period July 1, 1994, through June 30, 1995, one hundred seventy percent for the period July 1, 1995, through June 30, 1996, and one hundred seventy-five percent thereafter. The moneys collected under this subsection shall be deposited in the Washington health services trust account created under section 358 of this act.

Sec. 310. RCW 82.08.150 and 1989 c 271 s 503 are each amended to read as follows:

(1) There is levied and shall be collected a tax upon each retail sale of spirits, or strong beer in the original package at the rate of fifteen percent of the selling price. The tax imposed in this subsection shall apply to all such sales including sales by the Washington state liquor stores and agencies, but excluding sales to class H licensees.

(2) There is levied and shall be collected a tax upon each sale of spirits, or strong beer in the original package at the rate of ten percent of the selling price on sales by Washington state liquor stores and agencies to class H licensees.

(3) There is levied and shall be collected an additional tax upon each retail sale of spirits in the original package at the rate of one dollar and seventy-two cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to class H licensees.

(4) An additional tax is imposed equal to ((the rate specified in RCW 82.02.030)) fourteen percent multiplied by the taxes payable under subsections (1), (2), and (3) of this section.

(5) Until July 1, 1995, an additional tax is imposed upon each retail sale of spirits in the original package at the rate of seven cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to class H licensees. All revenues collected during any month from this additional tax shall be deposited in the drug enforcement and education account under RCW 69.50.520 by the twenty-fifth day of the following month.

(6) An additional tax is imposed equal to the taxes payable under subsections (1), (2), and (3) of this section multiplied by the rate of eight and eight-tenths percent through June 30, 1995, fifty percent for the period July 1, 1995, through June 30, 1997, and seventy-five percent thereafter. All revenues collected during any month from this additional tax shall be deposited in the Washington health services trust account created under section 358 of this act.

(7) The tax imposed in RCW 82.08.020, as now or hereafter amended, shall not apply to sales of spirits or strong beer in the original package.

(((7))) (8) The taxes imposed in this section shall be paid by the buyer to the seller, and each seller shall collect from the buyer the full amount of the tax payable in respect to each taxable sale under this section. The taxes required by this section to be collected by the seller shall be stated separately from the selling price and for purposes of determining the tax due from the buyer to the seller, it shall be conclusively presumed that the selling price quoted in any price list does not include the taxes imposed by this section.

(((8))) (9) As used in this section, the terms, "spirits," "strong beer," and "package" shall have the meaning ascribed to them in chapter 66.04 RCW.

Sec. 311. RCW 82.02.030 and 1990 c 42 s 319 are each amended to read as follows:

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

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

On page 174, line 20, strike "1996" and insert "1995"

Representative Morris spoke in favor of adoption of the amendment and Representatives G. Fisher, Riley, Sommers and Forner spoke against it.

Representative Morris again spoke in favor of the amendment.

Representative Miller demanded an electronic roll call vote and the demand was sustained.

POINT OF ORDER

Representative Miller: Thank you Mr. Speaker, When we were under the call of the House, we have rules about voting we need to remind people before we come to the next vote that they need to be voting if they are here under the call of the House.

SPEAKER'S RULING

Mr. Speaker: Your point is well taken Representative Miller. I would also ask the members who were present but whose votes were not recorded to submit statement for the Journal.

ROLL CALL

The Clerk called the roll on adoption of the amendment beginning on page 83 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 10, Nays - 87, Absent - 0, Excused - 1.

Voting yea: Representatives Bray, Campbell, Grant, King, Ludwig, Mastin, Morris, Romero, Sheldon and Talcott - 10.

Voting nay: Representatives Anderson, Appelwick, Ballard, Ballasiotes, Basich, Brough, Brown, Brumsickle, Carlson, Casada, Chandler, Chappell, Cole, G., Conway, Cooke, Cothern, Dellwo, Dorn, Dunshee, Dyer, Edmondson, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Foreman, Forner, Fuhrman, Hansen, Heavey, Holm, Horn, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, Kohl, J., Kremen, Lemmon, Leonard, Linville, Lisk, Locke, Long, Meyers, R., Mielke, Miller, Morton, Myers, H., Ogden, Orr, Padden, Patterson, Peery, Pruitt, Quall, Rayburn, Reams, Riley, Roland, Rust, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Shin, Silver, Sommers, Stevens, Tate, Thibaudeau, Thomas, Valle, Vance, Van Luven, Veloria, Wang, Wineberry, Wolfe, Wood, Zellinsky and Mr. Speaker - 87.

Excused: Representative Springer - 1.

MOTION FOR RECONSIDERATION

Representative Long, having voted on the prevailing side, moved that the House immediately reconsider the vote by which the amendment by Representative Rayburn, beginning on page 92 of the committee amendment to Second Substitute Senate Bill No. 1503 failed to pass the House.

Representative Long spoke in favor of the motion and Representative Peery spoke against it.

Representative Miller demanded an oral roll call vote and the demand was sustained.

The Clerk called the roll on the motion for reconsideration of amendment number 352 and the motion was not carried by the following vote: 33-YEAS; 64-NAYS.

With the consent of the House, Representative R. Johnson withdrew amendments number 377 and 369.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 99, line 2, after "RCW" insert "and chapter 70.127 RCW,"

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative Dyer moved adoption of the following amendment to the committee amendment:

On page 100, beginning on line 1 of the amendment, after ""service,"" strike all material through "premium" on line 3, and insert "limited fees for service schedules, or similar method of limiting payments to health care providers"

Representative Dyer spoke in favor of adoption of the amendment and Representative Dellwo spoke against it. The amendment was not adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 101, line 4, after "years," strike "one" and insert "two"

On page 101, line 5, after "and" strike "one" and insert "two"

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

With the consent of the House, Representative Mastin withdrew amendment number 378.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 107, line 13, after "trusts", insert "and self-insured employee health benefits plans".

On page 107, line 15, after "entities", insert "and self-insured employee health benefits plans".

On page 107, line 17, after "trusts", insert "and benefits plans".

On page 107, line 17, after "legislature", insert "on or before December 1, 1994".

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 101, line 23, after "insurers," insert "practicing"

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 102, after line 2, insert:

"(d) The commission shall also appoint an organized labor advisory committee composed of seven representatives of employee organizations representing employees of public or private employers. The committee shall assist the commission in conducting the evaluation of Taft-Hartley health care trusts and self-insured employee health benefits plans, as provided in section 406(25) of this act, and shall advise the commission on issues related to the impact of this act on negotiated health benefits agreements and other employee health benefits plans."

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative R. Johnson moved adoption of the following amendment to the committee amendment:

On page 104, beginning on line 1, strike all of subsection (6)(a) and insert

"(6)(a) Establish for each year a community-rated maximum premium for the uniform benefits package that shall operate to control overall health care costs in the case that the limited sponsor contribution to a percentage of the lowest priced plan and other market reforms do not stimulate effective price competition and control costs. The premium cost of the uniform benefits package in 1995 shall be based upon an actuarial determination of the costs of providing the uniform benefits package, assuming cost savings that may result from reductions in cost shifting, the use of managed care, identification of cost-effective and clinically efficacious services, assuming cost increases that may result from the direct or indirect effect of changes in taxation, aging of the population, and availability and effectiveness of new medical technology, and any other factors deemed relevant by the commission. Beginning in 1996, the growth rate of the premium cost of the uniform benefits package for each certified health plan shall be allowed to increase by a rate no greater than the average growth rate in the cost of the package between 1990 and 1993 as actuarially determined, reduced by two percentage points per year until the growth rate is no greater than the five-year rolling average of growth in Washington per capita personal income, as determined by the office of financial management."

Representatives R. Johnson and Dellwo spoke in favor of adoption of the amendment and Representative Dyer spoke against it.

A division was called. The result of the division was 63-YEAS; 34-NAYS. The amendment was adopted.

Representative Appelwick moved adoption of the following amendment to the committee amendment:

On page 104, line 14, after "(b)" insert:

"In establishing the community rated maximum premium under this subsection, the commission shall endeavor to minimize any economic incentive to an employer to discriminate between prospective employees based upon whether or not they have dependents for whom coverage would be required.

(c)"

Representatives Appelwick, Dellwo and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

POINT OF INQUIRY

Representative Appelwick yielded to a question by Representative Dyer.

Representative Dyer: Thank you Mr. Speaker. This is the first time, I've hadn't had a chance to review it much. I've to have been concerned about this issue and appreciate the Representative's attempt to fix it. However, I'm confused as to how this would work with relation to the community rated maximum premiums how the commissions direction is going to action of the employer under the employer mandate. Could you explain?

Representative Appelwick: This is going to make premium recommendation, and it's going to make recommendation as to the percentage that the employer will pay under the mandate under the current bill. Basically, we are asking the commission when they are looking at that to consider the differential between the employer premium, if it recommends a separate employee premium and a separate dependent premium or whether they recommend a combined employer-dependent premium, so that they are looking at what a differential might be in those circumstances and trying to be neutral in its effect in employment practices.

Representative Sommers moved adoption of the following amendment to the amendment:

On page 104, after line 20, insert the following:

"(c) The level of expenditures for the uniform and supplemental benefits packages are conditioned upon the appropriation of funds specifically for this purpose."

Representatives Sommers, Dellwo, Dyer and Linville spoke in favor of adoption of the amendment to the committee amendment and the amendment was adopted.

Representative Karahalios moved adoption of the following amendment to the committee amendment:

On page 105, after line 17, insert

"(11) Monitor the increased application of technology as required by this act and take necessary action to ensure that such application is made in a cost effective and efficient manner and consistent with existing laws that protect individual privacy."

Representatives Karahalios, Dellwo and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

Representative L. Johnson moved adoption of the following amendment to the committee amendment:

On page 105, line 24, after "basis." strike the remainder of the subsection and insert "The Washington health care facilities authority and the commission shall develop jointly standards for evaluating and approving major capital expenditure financing through the Washington health care facilities authority, as authorized pursuant to chapter 70.37 RCW. By December 1, 1994, the commission and the authority shall submit jointly to the legislature such proposed standards. The commission and the authority shall, after legislative review, but no later than June 1, 1995, publish such standards. Upon publication, the authority may not approve financing for major capital expenditures unless approved by the commission."

Representatives L. Johnson and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

Representative Padden moved adoption of the following amendment to the committee amendment:

On page 109, after line 3, add a new section as follows

"NEW SECTION. Sec. 410. A new section is added to Title 48 RCW to read as follows:

(1) The individual medical account act program is established for state and school district employees. The state insurance commissioner shall administer this program and shall promulgate necessary rules pursuant to chapter 34.05 RCW. Employees as defined herein shall have the option of participating in the individual medical account program or receive the uniform benefits package through a certified health plan pursuant to this act.

(2) For the purposes of this section the following definitions apply;

(a) "Account holder" means the individual on whose behalf the individual medical account is established.

(b) "Dependent child" means any person under the age of twenty-one years or any person who is legally entitled or subject to a court order for the provision of proper and necessary subsistence, education, medical care, chiropractic care, or any other care necessary for their health, guidance, or well-being, and who is not otherwise emancipated, married or a member of the armed forces of the United States, or who is so mentally or physically incapacitated.

(c) "Individual medical account" means a trust created or organized to pay the eligible medical, chiropractic, dental, and long-term care expenses of the account holder.

(d) "Trustee" means a chartered state bank, savings and loan association or trust company authorized to act as a fiduciary; a national banking association or savings and loan association authorized to act as a fiduciary; or an insurance company.

(e) "Employee" means a state employee or school district employee.

(3) (a) For taxable years beginning on or after the effective date of this act, an employee shall be allowed to deposit contributions to an individual medical account. The amount of deposit for the first taxable year subsequent to the effective date of the act shall not exceed:

(i) Two thousand dollars for the account holder;

(ii) Two thousand dollars for the account holder and two thousand dollars for the spouse of the account holder;

(iii) Two thousand dollars for the account holder, two thousand dollars for the spouse of the account holder, and one thousand dollars for each dependent child of the account holder; or

(iv) Two thousand dollars for the account holder and one thousand dollars for each dependent child of the account holder.

(b) The maximum allowable amount of deposit for subsequent years shall be increased annually by a percentage equal to the previous year's increase in the national consumer price index.

(c) Upon agreement between an employer and employee, an employer may contribute to the employee's individual medical account or continue to make contributions under the employee's existing health insurance policy or program, subject, however, to the restrictions in subsection (e)(i) of this section.

(d) The individual medical account shall be established as a trust under the laws of this state and placed with a trustee. The trustee shall:

(i) Purchase long-term care coverage for each account holder to cover all medical, chiropractic, dental, and long-term care expenses in excess of ten thousand dollars; and

(ii) Utilize the trust assets solely for the purpose of paying the medical, chiropractic, dental, and long-term care expenses of the account holder.

(e) Individual medical account funds may be withdrawn by the account holder at any time for any purpose, subject to the following restrictions and penalties:

(i) There shall be a distribution penalty for withdrawal of individual medical account funds by the account holder. Such penalty shall be 10 percent of the amount of interest earned as of the date of withdrawal on the account.

(ii) After an account holder reaches 60 years of age, withdrawals shall be permitted for medical, chiropractic, dental or long-term care expenses only, and may be withdrawn without penalty.

(f) Upon the death of the account holder, the account principle, as well as any interest accumulated thereon, shall be distributed to the decedent's estate as part of the estate."

Representatives Padden and Dyer spoke in favor of adoption of the amendment and Representatives L. Johnson and Dellwo spoke against it.

Representative Vance demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment on page 109 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 34, Nays - 63, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Cooke, Dyer, Edmondson, Foreman, Forner, Fuhrman, Horn, Lisk, Long, Mielke, Miller, Morton, Padden, Reams, Roland, Schmidt, Schoesler, Sehlin, Sheahan, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 34.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Grant, Hansen, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Mastin, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Rayburn, Riley, Romero, Rust, Scott, Sheldon, Shin, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 63.

Excused: Representative Springer - 1.

With the consent of the House, Representative Vance withdrew amendment number 362.

Representative Dyer moved adoption of the following amendment to the committee amendment:

On page 110, line 34, after "of," strike "health care liability risk management training" and insert "an insurer-designed health care liability risk management training program once every three years"

Representatives Dyer and Dellwo spoke in favor of adoption of the amendment to the amendment and the amendment was adopted.

Representative Dyer moved adoption of the following amendment to the committee amendment:

On page 115, line 36, after "if any" strike "and the reasons for the restrictions"

On page 117, line 30, after "(d)" strike all language through and including "(e)" on page 117, line 33.

Representative Dyer spoke in favor of adoption of the amendment and Representative L. Johnson spoke against it. The amendment was not adopted.

Representative L. Johnson moved adoption of the following amendment to the committee amendment:

On page 118, line 26, after "association", insert "and other employee organizations representing nurses".

On page 165, line 3, after "association", insert "and other employee organizations representing nurses".

Representatives L. Johnson and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

With the consent of the House, Representative Vance withdrew amendment number 375.

Representative Dyer moved adoption of the following amendment to the committee amendment:

On page 120, after line 10, insert the following:

"Sec. 422. RCW 7.70.030 and 1975-'76 2nd ex.s c 56 s 8 are each amended to read as follows:No award shall be made in any action or arbitration for damages for injury occurring as the result of health care which is provided after June 25, 1976, unless the plaintiff establishes one or more of the following propositions:

(1) That injury resulted from the failure of a health care provider to follow the accepted standard of care provided, however, that a health care provider, as a matter of law, follows the accepted standard of care if he or she follows a course of treatment accepted by recognized and competent health care professionals experienced in the treatment at issue, even if other recognized and competent health care professionals do not accept the course of treatment followed by the health care provider;

(2) That a health care provider promised the patient or his representative that the injury suffered would not occur;

(3) That injury resulted from health care to which the patient or his representative did not consent.

Unless otherwise provided in this chapter, the plaintiff shall have the burden of proving each fact essential to an award by a preponderance of the evidence."

Representative Dyer spoke in favor of adoption of the amendment and Representative L. Johnson and Appelwick spoke against it. The amendment was not adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 129, line 18, after "services" insert "identified in section 448 of this act"

On page 129, line 27, after "services" insert "identified in section 448 of this act"

POINT OF INQUIRY

Representative Dellwo yielded to a question by Representative Dyer.

Representative Dyer: Thank you Mr. Speaker. Representative Dellwo, there was some work in the committee to make sure that the Washington Dental Service was still allowed to participate in their usual manner because of their limited skill. Does this affect that at all?

Representative Dellwo: Thank you Mr. Speaker, This amendment is offered at their request. It corrects a technical problem so that they would be able to do that.

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and the amendment was adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

On page 129, line 30, strike Section 429 in its entirety and insert the following:

"NEW SECTION. Sec. 429. CONTRACTS BETWEEN CERTIFIED HEALTH PLANS AND HEALTH CARE PROVIDERS. (1) Balancing the need for health care reform and the need to protect health care providers, as a class and as individual providers, from improper exclusion presents a problem that can be satisfied with the creation of a process to ensure fair consideration of the inclusion of health care providers in managed care systems operated by certified health plans. It is therefore the intent of the legislature that the health services commission in developing rules in accordance with this section and the attorney general in monitoring the level of competition in the various geographic markets, balance the need for cost-effective and quality delivery of health services with the need for inclusion of both individual health care providers and classes of health care providers in managed care programs developed by certified health plans.

(2) All licensed health care providers licensed by the state, irrespective of the type or kind of practice, should be afforded the opportunity for inclusion in certified health plans consistent with the goals of health care reform.

The health services commission shall adopt rules requiring certified health plans to publish general criteria for the plan's selection or termination of health care providers. Such rules shall not require the disclosure of criteria deemed by the plan to be of a proprietary or competitive nature that would hurt the plan's ability to compete or to manage health services. Disclosure of criteria is proprietary or anticompetitive if revealing the criteria would have the tendency to cause health care providers to alter their practice pattern in a manner that would harm efforts to contain health care costs and is proprietary if revealing the criteria would cause the plan's competitors to obtain valuable business information.

If a certified health plan uses unpublished criteria to judge the quality and cost-effectiveness of a health care provider's practice under any specific program within the plan, the plan may not reject or terminate the provider participating in that program based upon such criteria until the provider has been informed of the criteria that his or her practice fails to meet and is given a reasonable opportunity to conform to such criteria.

(3)(a) Whenever a determination is made under subsection (b) that a plan's share of the market reaches a point where the plan's exclusion of health care providers from a program of the plan would result in the substantial inability of providers to continue their practice thereby unreasonably restricting consumer access to needed health services or whenever a certified health plan is the only plan within the relevant market, the certified health plan must allow all providers within the affected market to participate in the programs of the certified health plan. All such providers must meet the published criteria and requirements of the programs.

(b) The attorney general with the assistance of the insurance commissioner shall periodically analyze the market power of certified health plans to determine when the market share of any program of a certified health plan reaches a point where the plan's exclusion of health service providers from a program of the plan would result in the substantial inability of providers to continue their practice thereby unreasonably restricting consumer access to needed health services. In analyzing the market power of a certified health plan, the attorney general shall consider:

(i) The ease with which providers may obtain contracts with other plans;

(ii) The amount of the private pay and government employer business that is controlled by the certified health plan taking into account the selling of its provider network to self-insured employer plans;

(iii) The difficulty in establishing new competing plans in the relevant geographic market; and

(iv) The sufficiency of the number or type of providers under contract with the plan available to meet the needs of plan enrollees.

Notwithstanding the provisions of this subsection, if the certified health plan demonstrates to the satisfaction of the attorney general that health service utilization data and similar information shows that the inclusion of additional health service providers would substantially lessen the plan's ability to control health care costs and that the plan's procedures for selection of providers are not improperly exclusive of providers, the plan need not include additional providers within the plan's program.

(4) The health services commission shall adopt rules for the resolution of disputes between providers and certified health plans including disputes regarding the decision of a plan not to include the services of a provider.

(5) Nothing contained in this section shall be construed to require a plan to allow or continue the participation of a provider if the plan is a federally qualified health maintenance organization and the participation of the provider or providers would prevent the health maintenance organization from operating as a health maintenance organization in accordance with 42 U.S.C Sec. 300e."

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative Dellwo moved adoption of the following amendment to the committee amendment:

Beginning on page 142, line 6, strike sections 446 and 447 in their entirety and insert the following:

"NEW SECTION. Sec. 446. MANAGED COMPETITION FINDINGS AND INTENT. (1) The legislature recognizes that competition among health care providers, facilities, payers, and purchasers will yield the best allocation of health care resources, the lowest prices for health care, and the highest quality of health care when there exists a large number of buyers and sellers, easily comparable health care plans and services, minimal barriers to entry and exit into the health care market, and adequate information for buyers and sellers to base purchasing and production decisions. However, the legislature finds that purchasers of health care services and health care coverage do not have adequate information upon which to base purchasing decisions; that health care facilities and providers of health care services face legal and market disincentives to develop economies of scale or to provide the most cost-efficient and efficacious service; that health insurers, contractors, and health maintenance organizations face market disincentives in providing health care coverage to those Washington residents with the most need for health care coverage; and that potential competitors in the provision of health care coverage bear unequal burdens in entering the market for health care coverage.

(2) The legislature therefore intends to exempt from state anti-trust laws, and to provide immunity from federal anti-trust laws through the state action doctrine for activities approved under this chapter which might otherwise be constrained by such laws and intends to displace competition in the health care market: to contain the aggregate cost of health care services; to promote the development of comprehensive, integrated, and cost-effective health care delivery systems through cooperative activities among health care providers and facilities; to promote comparability of health care coverage; to improve the cost-effectiveness in providing health care coverage relative to health promotion, disease prevention, and the amelioration or cure of illness; to assure universal access to a publicly determined, uniform package of health care benefits; and to create reasonable equity in the distribution of funds, treatment, and medical risk among purchasers of health care coverage, payers of health care services, providers of health care services, health care facilities, and Washington residents. To these ends, any lawful action taken pursuant to chapter . . ., Laws of 1993 (this act) by any person or entity created or regulated by chapter . . ., Laws of 1993 (this act) are declared to be taken pursuant to state statute and in furtherance of the public purposes of the state of Washington.

(3) The legislature does not intend and unless explicitly permitted in accordance section 447 of this act or under rules adopted pursuant to chapter . . ., Laws of 1993 (this act), does not authorize any person or entity to engage in activities or to conspire to engage in activities that would constitute per se violations of state and federal anti-trust laws including but not limited to conspiracies or agreements:

(a) Among competing health care providers not to grant discounts, not to provide services, or to fix the price of their services;

(b) Among certified health plans as to the price or level of reimbursement for health care services;

(d) Among purchasers of certified health plan coverage to boycott a particular plan or class of plans;

(e) Among certified health plans to divide the market for health care coverage; or

(f) Among certified health plans and purchasers to attract or discourage enrollment of any Washington resident or groups of residents in a certified health plan based upon the perceived or actual risk of loss in including such resident or group of residents in a certified health plan or purchasing group.

NEW SECTION. Sec. 447. COMPETITIVE OVERSIGHT AND ANTI-TRUST IMMUNITY. (1) A certified health plan, health care facility, health care provider, or other person involved in the development, delivery, or marketing of health care or certified health plans may request, in writing, that the attorney general issue an informal opinion as to whether particular conduct is authorized by chapter . . ., Laws of 1993 (this act). The attorney general shall issue such opinion within thirty days of receipt of a written request for an opinion or within thirty days of receipt of any additional information requested by the attorney general necessary for rendering an opinion. If the attorney general concludes that such conduct is not authorized by chapter . . ., Laws of 1993 (this act), the person or organization making the request may petition the commission for review and approval of such conduct in accordance with subsection (3) of this section.

(2) With the approval of the attorney general, the health services commission:

(a) May authorize conduct by a certified health plan, health care facility, health care provider, or any other person that could tend to lessen competition in the relevant market upon a strong showing that the conduct is likely to achieve the policy goals of chapter . . ., Laws of 1993 (this act) and a more competitive alternative is impractical;

(b) Shall adopt rules governing conduct among providers, health care facilities, and certified health plans including rules governing provider and facility contracts with certified health plans, rules governing the use of "most favored nation" clauses and exclusive dealing clauses in such contracts, and rules providing that certified health plans in rural areas contract with a sufficient number and type of health care providers and facilities to ensure consumer access to local health care services;

(c) Shall adopt rules permitting health care providers within the service area of a plan to collectively negotiate the terms and conditions of contracts with a certified health plan including the ability of providers to meet and communicate for the purposes of these negotiations; and

(d) Shall adopt rules governing cooperative activities among health care facilities and providers.

(3) A certified health plan, health care facility, health care provider, or any other person involved in the development, delivery, and marketing of health services or certified health plans may file a written petition with the commission requesting approval of conduct that could tend to lessen competition in the relevant market. Such petition shall be filed in a form and manner prescribed by rule of the commission.

The commission shall issue a written decision approving or denying a petition filed under this section within ninety days of receipt of a properly completed written petition. The decision shall set forth findings as to benefits and disadvantages and conclusions as to whether the benefits outweigh the disadvantages.

(4) In authorizing conduct and adopting rules of conduct under this section, the commission with the advice of the attorney general, shall consider the benefits of such conduct in furthering the goals of health care reform including but not limited to:

(a) Enhancement of the quality of health services to consumers,

(b) Gains in cost efficiency of health services,

(d) Avoidance of duplication of health services resources; or

(e) And as to subsections (2)(b) and (c), (i) facilitates the exchange of information relating to performance expectations; (ii) simplifies the negotiation of delivery arrangements and relationships, and (iii) reduces the transactions costs on the part of certified health plans and providers in negotiating more cost effective delivery arrangements.

These benefits must outweigh disadvantages including and not limited to:

(i) Reduced competition among certified health plans, health care providers, or health care facilities,

(ii) Adverse impact on quality, availability or price of health care services to consumers, or

(iii) The availability of arrangements less restrictive to competition that achieve the same benefits.

(5) Conduct authorized by the commission shall be deemed taken pursuant to state statute and in the furtherance of the public purposes of the state of Washington.

(6) With the assistance of the attorney general's office, the commission shall actively supervise any conduct authorized under this section to determine whether such conduct or rules permitting certain conduct should be continued and whether a more competitive alternative is practical. The commission shall periodically review petitioned conduct through at least, annual progress reports from petitioners, annual or more frequent reviews by the commission which evaluate whether the conduct is consistent with the petition and whether the benefits continue to outweigh any disadvantages. If the commission determines that the likely benefits of any conduct approved through rule, petition, or otherwise by the commission no longer outweigh the disadvantages attributable to potential reduction in competition, the commission shall order a modification or discontinuance of such conduct. Conduct ordered discontinued by the commission shall no longer be deemed to be taken pursuant to state statute and in the furtherance of the public purposes of the state of Washington.

(7) Nothing contained in chapter . . ., Laws of 1993 (this act) is intended to in any way limit the ability of rural hospital districts to enter into cooperative agreements and contracts pursuant to RCW 70.44.450 and chapter 39.34 RCW."

Representatives Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative Sommers moved adoption of the following amendment to the committee amendment:

On page 145, line 26, after "expenditures." strike everything through "package." on line 29

Representatives Sommers and Dellwo spoke in favor of adoption of the amendment and it was adopted.

Representative Wineberry moved adoption of the following amendment to the committee amendment:

On page 145, line 35, after "children;" insert "chemical dependency services;"

Representatives Wineberry, Dellwo, Reams and Karahalios spoke in favor of adoption of the amendment and it was adopted.

Representative Karahalios moved adoption of the following amendment to the committee amendment:

On page 147, line 3, after "committee," strike "describing the economic impact on" and insert "surveying each individual small business to describe the economic impact on their"

Representatives Karahalios and Dellwo spoke in favor of adoption of the amendment and it was adopted.

With the consent of the House, Representative Karahalios withdrew amendment number 374.

Representative Sheldon moved adoption of the following amendment to the committee amendment:

On page 147, beginning on line 35 of the amendment, strike all of section 450

On page 154, beginning on line 34 of the amendment, strike all of section 456

On page 154, after line 33, insert the following:

"NEW SECTION. Sec. 456. (1) On or before December 31, 1994, the commission shall submit draft rules establishing the following to the legislature:

(a) The uniform benefits package and supplemental benefits packages as provided in sections 448 and 449 of this act;

(b) Enrollee and employer financial participation levels as provided in section 455 of this act;

(d) Medical risk adjustment mechanisms, to the extent that the commission has determined that there is a need for medical risk adjustment to certified health plans.

(2) Final adoption of the rules by the commission is conditioned upon legislative approval of the rules, as submitted or modified, by an act of law or concurrent resolution of the legislature."

Representatives Sheldon and Dyer spoke in favor of adoption of the amendment and Representatives Dellwo, L. Johnson and Wang spoke against it.

Representative Vance demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment beginning on page 147 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 47, Nays - 50, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Basich, Bray, Brough, Brumsickle, Campbell, Carlson, Casada, Chandler, Chappell, Cooke, Dyer, Edmondson, Finkbeiner, Foreman, Forner, Fuhrman, Grant, Hansen, Horn, Kremen, Lisk, Long, Ludwig, Mastin, Mielke, Miller, Morton, Padden, Rayburn, Reams, Riley, Roland, Schmidt, Schoesler, Sehlin, Sheahan, Sheldon, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 47.

Voting nay: Representatives Anderson, Appelwick, Brown, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Fisher, G., Fisher, R., Flemming, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Lemmon, Leonard, Linville, Locke, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Romero, Rust, Scott, Shin, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 50.

Excused: Representative Springer - 1.

Representative Shin moved adoption of the following amendment to the committee amendment:

On page 148, line 30, after "such coverage," strike "and".

On page 148, line 32, after "integrated" insert ", and the means through which family members can be supported in their role as informal caregivers for their parents, spouses or other relatives".

Representatives Shin, Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative R. Johnson moved adoption of the following amendment to the committee amendment:

On page 150, after line 14 of the amendment, insert the following:

"NEW SECTION. Sec. 452. The department of social and health services shall from July 1, 1993, to July 1, 1998, coordinate a pilot program entitled the Washington long-term care partnership, whereby private insurance and medicaid funds shall be used to finance long-term care. This program must allow for the exclusion of an individual's assets, as approved by the federal health care financing administration, in a determination of the individual's eligibility for medicaid; the amount of any medicaid payment; or any subsequent recovery by the state for a payment for medicaid services to the extent such assets are protected by a long-term care insurance policy or contract governed by chapter 48.84 RCW and meeting the criteria prescribed in this chapter.

NEW SECTION. Sec. 453. The department of social and health services shall seek approval and a waiver of appropriate federal medicaid regulations to allow the protection of an individual's assets as provided in this chapter. The department shall adopt all rules necessary to implement the Washington long-term care partnership program, which rules shall permit the exclusion of an individual's assets in a determination of medicaid eligibility to the extent that private long-term care insurance provides payment or benefits for services that medicaid would approve or cover for medicaid recipients.

NEW SECTION. Sec. 454. (1) The insurance commissioner shall adopt rules defining the criteria that long-term care insurance policies must meet to satisfy the requirements of this chapter. The rules shall provide that all long-term care insurance policies purchased for the purposes of this chapter:

(a) Be guaranteed renewable;

(b) Provide coverage for home and community-based services and nursing home care;

(c) Provide automatic inflation protection or similar coverage to protect the policyholder from future increases in the cost of long-term care;

(d) Not require prior hospitalization or confinement in a nursing home as a prerequisite to receiving long-term care benefits; and

(e) Contain at least a six-month grace period that permits reinstatement of the policy or contract retroactive to the date of termination if the policy or contract holder's nonpayment of premiums arose as a result of a cognitive impairment suffered by the policy or contract holder as certified by a physician.

(2) Insurers offering long-term care policies for the purposes of this chapter shall demonstrate to the satisfaction of the insurance commissioner that they:

(a) Have procedures to provide notice to each purchaser of the long-term care consumer education program;

(b) Offer case management services;

(c) Have procedures that provide for the keeping of individual policy records and procedures for the explanation of coverage and benefits identifying those payments or services available under the policy that meet the purposes of this chapter;

(d) Agree to provide the insurance commissioner, on or before September 1 of each year, an annual report containing the following information:

(i) The number of policies issued and of the policies issued, that number sorted by issue age;

(ii) To the extent possible, the financial circumstance of the individuals covered by such policies;

(iii) The total number of claims paid; and

(iv) Of the number of claims paid, the number paid for nursing home care, for home care services, and community-based services.

NEW SECTION. Sec. 455. The insurance commissioner, in conjunction with the department of social and health services, shall develop a consumer education program designed to educate consumers as to the need for long-term care, methods for financing long-term care, the availability of long-term care insurance, and the availability and eligibility requirements of the asset protection program provided under this chapter.

NEW SECTION. Sec. 456. By January 1 of each year, the insurance commissioner, in conjunction with the department of social and health services, shall report to the legislature on the progress of the asset protection program. The report shall include:

(1) The success of the agencies in implementing the program;

(2) The number of insurers offering long-term care policies meeting the criteria for asset protection;

(3) The number, age, and financial circumstances of individuals purchasing long-term care policies meeting the criteria for asset protection;

(4) The number of individuals seeking consumer information services;

(5) The extent and type of benefits paid by insurers offering policies meeting the criteria for asset protection;

(6) Estimates of the impact of the program on present and future medicaid expenditures;

(7) The cost-effectiveness of the program; and

(8) A determination regarding the appropriateness of continuing the program.

NEW SECTION. Sec. 457. Sections 452 through 456 of this act shall constitute a new chapter in Title 48 RCW."

Representatives R. Johnson, Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

With the consent of the House, Representative Dyer withdrew amendment number 363.

Representative Flemming moved adoption of the following amendment to the amendment:

On page 151, line 21 of the amendment, after "requirement" strike "may" and insert "shall"

On page 151, at the beginning of line 24 of the amendment, strike "and" and insert "or"

On page 154, line 17 of the amendment, after "requirement" strike "may" and insert "shall"

On page 154, line 20 of the amendment, after "Constitution" strike "and" and insert "or"

Representatives Flemming, Dellwo and Dyer spoke in favor of adoption of the amendment and it was adopted.

Representative Sheldon moved adoption of the following amendment to the committee amendment:

On page 153, line 33 of the amendment, after "employer" insert "of over fifty employees"

Representatives Sheldon, Dellwo, Mielke, Appelwick, Dyer, Ballard and Morton spoke in favor of adoption of the amendment and Representatives Jones, Dunshee, Kessler, Peery and J. Kohl spoke against it.

Representative Zellinsky demanded the previous question and the demand was sustained.

Representative Vance demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment on page 153, line 33 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 44, Nays - 53, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Chappell, Cooke, Dyer, Edmondson, Finkbeiner, Foreman, Forner, Fuhrman, Hansen, Horn, Johanson, Kremen, Lisk, Long, Mastin, Mielke, Miller, Morton, Padden, Rayburn, Reams, Roland, Schmidt, Schoesler, Sehlin, Sheahan, Sheldon, Shin, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven, Wood and Zellinsky - 44.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Fisher, G., Fisher, R., Flemming, Grant, Heavey, Holm, Jacobsen, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Lemmon, Leonard, Linville, Locke, Ludwig, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Riley, Romero, Rust, Scott, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe and Mr. Speaker - 53.

Excused: Representative Springer - 1.

Representative Sheldon moved adoption of the following amendment to the committee amendment:

Beginning on page 151, line 35 of the amendment, strike all of sections 455, 456, and 457

Representatives Sheldon, Dyer, Van Luven, Thibaudeau, Vance and Chandler spoke in favor of adoption of the amendment and Representatives Dellwo and L. Johnson spoke against it.

Representative R. Meyers assumed the chair.

Representative Vance demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment beginning on page 151, line 35 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 44, Nays - 53, Absent - 0, Excused - 1.

Voting yea: Representatives Ballard, Ballasiotes, Basich, Brough, Brumsickle, Carlson, Casada, Chandler, Chappell, Cooke, Dyer, Edmondson, Finkbeiner, Foreman, Forner, Fuhrman, Hansen, Holm, Johanson, Kremen, Lemmon, Lisk, Long, Mastin, Mielke, Miller, Morton, Padden, Rayburn, Reams, Roland, Schmidt, Schoesler, Sehlin, Sheahan, Sheldon, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 44.

Voting nay: Representatives Anderson, Appelwick, Bray, Brown, Campbell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Fisher, G., Fisher, R., Flemming, Grant, Heavey, Horn, Jacobsen, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Leonard, Linville, Locke, Ludwig, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Riley, Romero, Rust, Scott, Shin, Sommers, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 53.

Excused: Representative Springer - 1.

Representative Sheldon moved adoption of the following amendment to the committee amendment:

On page 154, after line 11, insert:

"However, employers employing less than one hundred qualified employees shall pay the amount resulting from application of the following formula on behalf of employees who work less than thirty hours during a week or one hundred twenty hours during a calendar month: The number of hours worked by the employee in a month is multiplied by the amount of a qualified employee's premium, and that amount is then divided by one hundred twenty."

Representatives Sheldon, Zellinsky, Mielke and Conway spoke in favor of adoption of the amendment and Representatives Dellwo and L. Johnson spoke against it.

Representative Sheldon again spoke in favor of the amendment.

A division was called. The result of the division were 47-YEAS; 50-NAYS. The amendment was not adopted.

Representative Sheldon moved adoption of the following amendment to the committee amendment:

On page 153, after line 8, insert:

"(d) If an employee working on a seasonal basis is a qualified employee of another employer, and therefore has uniform benefits package coverage through that primary employer, then the seasonal employer of the employee shall not be required to participate in the cost of the uniform benefits package for that employee."

On page 153, after line 32, insert:

On page 154, after line 16, insert:

Representatives Sheldon and Dellwo spoke in favor of adoption of the amendment and it was adopted.

Representative Heavey moved adoption of the following amendment to the committee amendment:

On page 161, after line 2 of the amendment, insert the following:

"(e) Request that the United States Congress amend the Internal Revenue Code to treat employee premium contributions to an employer sponsored health benefit plan as nontaxable income."

Representatives Heavey and Dellwo spoke in favor of adoption of the amendment and it was adopted.

Representative Campbell moved adoption of the following amendment to the committee amendment:

Beginning on page 167, line 1 of the amendment, strike all of sections 474 and 475 and insert the following:

"NEW SECTION. Sec. 474. WORKERS' COMPENSATION MEDICAL BENEFITS. On or before December 1, 1994, the health services commission, in coordination with the department of labor and industries and the workers' compensation advisory committee, shall complete a study related to the medical services component of the workers' compensation program of the department of labor and industries. The goal of the study is to determine whether and how the medical services component of the workers' compensation program can be modified to provide appropriate medical services to injured workers in a more cost-effective manner. In conducting the study, consideration shall be given to at least the following factors: Workers' choice of health care providers, twenty-four hour coverage, the relationship between rehabilitation and medical services, and the quasi-judicial system that overlays treatment. The study shall evaluate at least the following options:

(1) Whether the medical services component of the workers' compensation program should be maintained within the department of labor and industries, and its purchasing and other practices modified to control costs and increase efficacy of health services provided to injured workers;

(2) Whether the medical services component of the workers' compensation program should be administered by the health care authority as the state health services purchasing agent, pursuant to section 225 of this act. Any recommendation proposing that the state health services agent purchase injured workers' medical services shall assure that the uniform benefits package will provide benefits that are medically necessary under the workers' compensation program in 1993, including payment for medical determinations of disability under Title 51 RCW, and consider issues presented by twenty-four hour coverage and the use of managed care to provide medical services to injured workers;

(3) Whether the medical services component of the workers' compensation program should be included in the services offered by certified health plans through employer sponsorship as provided in chapter . . ., Laws of 1993 (this act). Any recommendation proposing the inclusion of workers' compensation medical services in the services offered by certified health plans shall assure that (a) no less than ninety-seven percent of state residents have access to the uniform benefits package as required in chapter . . ., Laws of 1993 (this act), (b) the uniform benefits package provides benefits that are medically necessary under the workers' compensation program in 1993, including payment for medical determinations of disability under Title 51 RCW, (c) time-loss benefits and rehabilitative services will not be reduced as a result of the transfer, and (d) the employees' share of the workers' compensation medical aid fund contribution will be returned to employees as increased wages."

Representatives Campbell and L. Johnson spoke in favor of adoption of the amendment and it was adopted.

MOTION FOR RECONSIDERATION

Representative G. Fisher, having voted on the prevailing side moved that the House reconsider amendment number 393 which failed to pass the House.

With the consent of the House, the motion for reconsideration was withdrawn.

Representative Fuhrman moved adoption of the following amendment to the committee amendment:

On page 174, beginning on line 13 of the amendment, strike all of section 485 and insert the following:

"NEW SECTION. Sec. 485. REFERENDUM. This act shall be submitted to the people for their adoption and ratification, or rejection, at the next succeeding general election to be held in this state, in accordance with Article II, section 1 of the state Constitution, as amended, and the laws adopted to facilitate the operation thereof.

NEW SECTION. Sec. 486. EFFECTIVE DATES. (1) Sections 231 through 254 of this act shall take effect July 1, 1994.

(2) Sections 301 through 303 of this act shall take effect January 1, 1996."

Representatives Fuhrman, Padden, Campbell, Vance, Ballard, Tate, Horn, Thomas and Morton spoke in favor of adoption of the amendment and Representative Dellwo spoke against it.

The Speaker assumed the chair.

Representative Vance demanded an electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the amendment to the amendment on page 147 of the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 35, Nays - 63, Absent - 0, Excused - 0.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Cooke, Dyer, Edmondson, Foreman, Forner, Fuhrman, Hansen, Horn, Johanson, Lisk, Long, Mielke, Miller, Morton, Padden, Reams, Schmidt, Schoesler, Sehlin, Sheahan, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 35.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Grant, Heavey, Holm, Jacobsen, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Mastin, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Rayburn, Riley, Roland, Romero, Rust, Scott, Sheldon, Shin, Sommers, Springer, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 63.

The Speaker declared the House to be at ease.

The Speaker called the House to order.

With the consent of the House, Representative Valle withdrew amendment number 393.

Representative Valle moved adoption of the following amendment to the committee amendment:

On page 89 of the amendment, after line 18, insert:

"(4) Effective July 1, 1998, an additional tax is imposed upon the sale, use, consumption, handling, possession, or distribution of all cigarettes, in an amount equal to the rate of two and one-half mills per cigarette effective July 1, 1998. Twenty percent of the revenues collected from this additional tax shall be deposited in the general fund and used only for appropriations to the department of health for the purposes of tobacco use prevention and cessation programs. The balance of revenues collected from this additional tax shall be deposited in the health services account created under section 460 of this act."

Representatives Valle and Flemming spoke in favor of adoption of the amendment and Representative Miller spoke against it.

A division was called. The result of the division were 43-YEAS; 55-NAYS. The amendment was not adopted.

Representative Dyer moved adoption of the following amendment to the committee amendment:

Strike everything after the enacting clause and insert the following:

"PART I. FINDINGS, GOALS, AND INTENT

NEW SECTION. Sec. 101. FINDINGS. The legislature finds that our health and financial security are jeopardized by our ever increasing demand for medical care and by current medical insurance and medical system practices. Current medical system practices encourage public demand for unneeded, ineffective, and sometimes dangerous medical treatments. These practices often result in unaffordable cost increases that far exceed ordinary inflation for essential care. Current total medical and health care expenditure rates should be sufficient to provide access to essential health and medical care interventions to all within a reformed, efficient system.

The legislature finds that too many of our state's residents are without medical insurance, that each year many individuals and families are forced into poverty because of serious illness, and that many must leave gainful employment to be eligible for publicly funded medical services. Additionally, thousands of citizens are at risk of losing adequate medical insurance, have had insurance canceled recently, or cannot afford to renew existing coverage.

The legislature finds that businesses find it difficult to pay for medical insurance and remain competitive in a global economy, and that individuals, the poor, and small businesses bear an inequitable medical insurance burden.

The legislature finds that persons of color have significantly higher rates of mortality, poor health outcomes, and substantially lower numbers and percentages of persons covered by health insurance than general population. It is intended that chapter ..., Laws of 1993 (this act) make provisions to address the special health care needs of these racial and ethnic populations in order to improve their health status.

The legislature finds that uncontrolled demand and expenditures for medical care are eroding the ability of families, businesses, communities, and governments to invest in other enterprises that promote health, maintain independence, and ensure continued economic welfare. Housing, nutrition, education, and the environment are all diminished as we invest ever increasing shares of wealth in medical treatments.

The legislature finds that while immediate steps must be taken, a long-term plan of reform is also needed.

NEW SECTION. Sec. 102. LEGISLATIVE INTENT AND GOALS. (1) The legislature intends that state government policy stabilize health services costs, assure access to essential services for all residents, actively address the health care needs of persons of color, improve the public's health, and reduce unwarranted health services costs to preserve the viability of nonmedical care businesses.

(2) The legislature intends that:

(a) Total health services costs be stabilized and controlled within a managed, competitive marketplace;

(b) State residents be enrolled in the certified health plan of their choice that meets state standards regarding affordability, accessibility, cost-effectiveness, and comprehensiveness;

(c) State residents be able to choose health services in a manner consistent with good health service management, quality assurance, and cost effectiveness;

(d) Individuals and businesses have the option to purchase any health or medical services they may choose in addition to those contained in the uniform benefits package;

(e) These goals be accomplished within a reformed system using private service providers and facilities in a way that allows consumers to choose among competing plans; and

(f) That a policy of facilitating communication and networking in the delivery, purchase, and provision of health services among the federal, state, local, and tribal governments be encouraged and accomplished by chapter . . ., Laws of 1993 (this act).

(3) Accordingly, the legislature intends that chapter . . ., Laws of 1993 (this act) provide both early implementation measures and a process for overall reform of the health services system.

PART II. EARLY IMPLEMENTATION

A. BASIC HEALTH PLAN EXPANSION

Sec. 201. RCW 70.47.010 and 1987 1st ex.s. c 5 s 3 are each amended to read as follows:

BASIC HEALTH PLAN--FINDINGS. (1) The legislature finds that:

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

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

(c) The use of managed health care systems has significant potential to reduce the growth of health care costs incurred by the people of this state generally, and by low-income pregnant women ((who are an especially vulnerable population, along with their children)), and at-risk children and adolescents who need greater access to managed health care.

(2) The purpose of this chapter is to provide or make more readily available necessary basic health care services in an appropriate setting to working persons and others who lack coverage, at a cost to these persons that does not create barriers to the utilization of necessary health care services. To that end, this chapter establishes a program to be made available to those residents ((under sixty-five years of age)) not ((otherwise)) eligible for medicare ((with gross family income at or below two hundred percent of the federal poverty guidelines)) or medical assistance who share in a portion of the cost or who pay the full cost of receiving basic health care services from a managed health care system.

(3) It is not the intent of this chapter to provide health care services for those persons who are presently covered through private employer-based health plans, nor to replace employer-based health plans. Further, it is the intent of the legislature to expand, wherever possible, the availability of private health care coverage and to discourage the decline of employer-based coverage.

(4) ((The program authorized under this chapter is strictly limited in respect to the total number of individuals who may be allowed to participate and the specific areas within the state where it may be established. All such restrictions or limitations shall remain in full force and effect until quantifiable evidence based upon the actual operation of the program, including detailed cost benefit analysis, has been presented to the legislature and the legislature, by specific act at that time, may then modify such limitations.))

(a) It is the purpose of this chapter to acknowledge the initial success of this program that has (i) assisted thousands of families in their search for affordable health care; (ii) demonstrated that low-income, uninsured families are willing to pay for their own health care coverage to the extent of their ability to pay; and (iii) proved that local health care providers are willing to enter into a public-private partnership as a managed care system.

(b) As a consequence, the legislature intends to extend an option to enroll to certain citizens below three hundred percent of the federal poverty guidelines within the state who reside in communities where the plan is operational and who collectively or individually wish to exercise the opportunity to purchase health care coverage through the basic health plan if the purchase is done at no cost to the state. It is also the intent of the legislature to allow employers and other financial sponsors to financially assist such individuals to purchase health care through the program. It is also the intent of the legislature to condition access to this plan for nonsubsidized enrollees upon the prior placement of subsidized enrollees, to the extent funding is available.

(c) The legislature directs that the basic health plan administrator identify enrollees who are likely to be eligible for medical assistance and assist these individuals in applying for and receiving medical assistance. The administrator and the department of social and health services shall implement a seamless system to coordinate eligibility determinations and benefit coverage for enrollees of the basic health plan and medical assistance recipients.

Sec. 202. RCW 70.47.020 and 1987 1st ex.s. c 5 s 4 are each amended to read as follows:

BASIC HEALTH PLAN--DEFINITIONS. As used in this chapter:

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

(2) "Administrator" means the Washington basic health plan administrator.

(3) "Managed health care system" means any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, or any combination thereof, that provides directly or by contract basic health care services, as defined by the administrator and rendered by duly licensed providers, on a prepaid capitated basis to a defined patient population enrolled in the plan and in the managed health care system. (4) "Subsidized enrollee" means an individual, or an individual plus the individual's spouse ((and/or)) or dependent children, ((all under the age of sixty-five and)) not ((otherwise)) eligible for medicare or medical assistance, who resides in an area of the state served by a managed health care system participating in the plan, whose gross family income at the time of enrollment does not exceed twice the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services, who chooses to obtain basic health care coverage from a particular managed health care system in return for periodic payments to the plan.

(5) "Nonsubsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children, not eligible for medicare, who resides in an area of the state served by a managed health care system participating in the plan, who chooses to obtain basic health care coverage from a particular managed health care system and who pays or on whose behalf is paid the full costs for participation in the plan, without any subsidy from the plan.

(6) "Subsidy" means the difference between the amount of periodic payment the administrator makes((, from funds appropriated from the basic health plan trust account,)) to a managed health care system on behalf of ((an)) a subsidized enrollee plus the administrative cost to the plan of providing the plan to that subsidized enrollee, and the amount determined to be the subsidized enrollee's responsibility under RCW 70.47.060(2).

(((6))) (7) "Premium" means a periodic payment, based upon gross family income ((and determined under RCW 70.47.060(2),)) which an ((enrollee)) individual, their employer or another financial sponsor makes to the plan as consideration for enrollment in the plan as a subsidized enrollee or a nonsubsidized enrollee.

(((7))) (8) "Rate" means the per capita amount, negotiated by the administrator with and paid to a participating managed health care system, that is based upon the enrollment of subsidized and nonsubsidized enrollees in the plan and in that system.

Sec. 203. RCW 70.47.030 and 1992 c 232 s 907 are each amended to read as follows:

ACCOUNTS. (1) The basic health plan trust account is hereby established in the state treasury. ((All)) Any nongeneral fund-state funds collected for this program shall be deposited in the basic health plan trust account and may be expended without further appropriation. Moneys in the account shall be used exclusively for the purposes of this chapter, including payments to participating managed health care systems on behalf of enrollees in the plan and payment of costs of administering the plan. ((After July 1, 1993, the administrator shall not expend or encumber for an ensuing fiscal period amounts exceeding ninety-five percent of the amount anticipated to be spent for purchased services during the fiscal year.))

(2) The basic health plan subscription account is created in the custody of the state treasurer. All receipts from amounts due from or on behalf of nonsubsidized enrollees shall be deposited into the account. Funds in the account shall be used exclusively for the purposes of this chapter, including payments to participating managed health care systems on behalf of nonsubsidized enrollees in the plan and payment of costs of administering the plan. The account is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures.

(3) The administrator shall take every precaution to see that none of the funds in the separate accounts created in this section or that any premiums paid either by subsidized or nonsubsidized enrollees are commingled in any way, except that the administrator may combine funds designated for administration of the plan into a single administrative account.

Sec. 204. RCW 70.47.040 and 1987 1st ex.s. c 5 s 6 are each amended to read as follows:

BASIC HEALTH PLAN--PROGRAM WITHIN STATE HEALTH CARE AUTHORITY. (1) The Washington basic health plan is created as an independent agency of the state. The administrative head and appointing authority of the plan shall be the administrator who shall be appointed by the governor, with the consent of the senate, and shall serve at the pleasure of the governor. The salary for this office shall be set by the governor pursuant to RCW 43.03.040. The administrator shall appoint a medical director. The ((administrator,)) medical director((,)) and up to five other employees of the plan shall be exempt from the civil service law, chapter 41.06 RCW.

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

(3) The administrator may appoint such technical or advisory committees as he or she deems necessary. The administrator shall appoint a standing technical advisory committee that is representative of health care professionals, health care providers, and those directly involved in the purchase, provision, or delivery of health care services, as well as consumers and those knowledgeable of the ethical issues involved with health care public policy. Individuals appointed to any technical or other advisory committee shall serve without compensation for their services as members, but may be reimbursed for their travel expenses pursuant to RCW 43.03.050 and 43.03.060.

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

(5) ((In the design, organization, and administration of the plan under this chapter, the administrator shall consider the report of the Washington health care project commission established under chapter 303, Laws of 1986. Nothing in this chapter requires the administrator to follow any specific recommendation contained in that report except as it may also be included in this chapter or other law)) Whenever feasible, the administrator shall reduce the administrative cost of operating the program by adopting joint policies or procedures applicable to both the basic health plan and employee health plans.

Sec. 205. RCW 70.47.060 and 1992 c 232 s 908 are each amended to read as follows:

ADMINISTRATOR'S POWERS AND DUTIES. The administrator has the following powers and duties:

(1) To design and from time to time revise a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, and other services that may be necessary for basic health care, which subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive in return for premium payments to the plan. The schedule of services shall emphasize proven preventive and primary health care and shall include all services necessary for prenatal, postnatal, and well-child care. However, ((for the period ending June 30, 1993,)) with respect to coverage for groups of subsidized enrollees who are eligible to receive prenatal and postnatal services through the medical assistance program under chapter 74.09 RCW, the administrator shall not contract for ((prenatal or postnatal)) such services ((that are provided under the medical assistance program under chapter 74.09 RCW)) except to the extent that such services are necessary over not more than a one-month period in order to maintain continuity of care after diagnosis of pregnancy by the managed care provider((, or except to provide any such services associated with pregnancies diagnosed by the managed care provider before July 1, 1992)). The schedule of services shall also include a separate schedule of basic health care services for children, eighteen years of age and younger, for those subsidized or nonsubsidized enrollees who choose to secure basic coverage through the plan only for their dependent children. In designing and revising the schedule of services, the administrator shall consider the guidelines for assessing health services under the mandated benefits act of 1984, RCW 48.42.080, and such other factors as the administrator deems appropriate.

(2)(a) To design and implement a structure of periodic premiums due the administrator from subsidized enrollees that is based upon gross family income, giving appropriate consideration to family size ((as well as)) and the ages of all family members. The enrollment of children shall not require the enrollment of their parent or parents who are eligible for the plan. The structure of periodic premiums shall be applied to subsidized enrollees entering the plan as individuals pursuant to subsection (9) of this section.

(b) To determine the periodic premiums due the administrator from nonsubsidized enrollees. Premiums due from nonsubsidized enrollees shall be in an amount equal to the cost charged by the managed health care system provider to the state for the plan plus the administrative cost of providing the plan to those enrollees and the appropriate premium tax as provided by law.

(3) To design and implement a structure of ((nominal)) copayments due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services.

(4) ((To design and implement, in concert with a sufficient number of potential providers in a discrete area, an enrollee financial participation structure, separate from that otherwise established under this chapter, that has the following characteristics:

(a) Nominal premiums that are based upon ability to pay, but not set at a level that would discourage enrollment;

(b) A modified fee-for-services payment schedule for providers;

(c) Coinsurance rates that are established based on specific service and procedure costs and the enrollee's ability to pay for the care. However, coinsurance rates for families with incomes below one hundred twenty percent of the federal poverty level shall be nominal. No coinsurance shall be required for specific proven prevention programs, such as prenatal care. The coinsurance rate levels shall not have a measurable negative effect upon the enrollee's health status; and

(d) A case management system that fosters a provider-enrollee relationship whereby, in an effort to control cost, maintain or improve the health status of the enrollee, and maximize patient involvement in her or his health care decision-making process, every effort is made by the provider to inform the enrollee of the cost of the specific services and procedures and related health benefits.

The potential financial liability of the plan to any such providers shall not exceed in the aggregate an amount greater than that which might otherwise have been incurred by the plan on the basis of the number of enrollees multiplied by the average of the prepaid capitated rates negotiated with participating managed health care systems under RCW 70.47.100 and reduced by any sums charged enrollees on the basis of the coinsurance rates that are established under this subsection.

(5))) To limit enrollment of persons who qualify for subsidies so as to prevent an overexpenditure of appropriations for such purposes. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists.

(5) To limit the payment of subsidies to subsidized enrollees, as defined in RCW 70.47.020.

(6) To adopt a schedule for the orderly development of the delivery of services and availability of the plan to residents of the state, subject to the limitations contained in RCW 70.47.080 or any act appropriating funds for the plan.

((In the selection of any area of the state for the initial operation of the plan, the administrator shall take into account the levels and rates of unemployment in different areas of the state, the need to provide basic health care coverage to a population reasonably representative of the portion of the state's population that lacks such coverage, and the need for geographic, demographic, and economic diversity.

Before July 1, 1988, the administrator shall endeavor to secure participation contracts with managed health care systems in discrete geographic areas within at least five congressional districts.))

(7) To solicit and accept applications from managed health care systems, as defined in this chapter, for inclusion as eligible basic health care providers under the plan. The administrator shall endeavor to assure that covered basic health care services are available to any enrollee of the plan from among a selection of two or more participating managed health care systems. In adopting any rules or procedures applicable to managed health care systems and in its dealings with such systems, the administrator shall consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among the several areas of the state. Contracts with participating managed health care systems shall ensure that basic health plan enrollees who become eligible for medicaid, may, at their option, continue to receive services from their existing providers within the managed health care system if such providers have entered into provider agreements with the department of social and health services.

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

(9) To accept applications from individuals residing in areas served by the plan, on behalf of themselves and their spouses and dependent children, for enrollment in the Washington basic health plan as subsidized or nonsubsidized enrollees, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and at least ((annually)) semiannually thereafter, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. ((An enrollee who remains current in payment of the sliding-scale premium, as determined under subsection (2) of this section, and whose gross family income has risen above twice the federal poverty level, may continue enrollment unless and until the enrollee's gross family income has remained above twice the poverty level for six consecutive months, by making payment at the unsubsidized rate required for the managed health care system in which he or she may be enrolled.)) No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or, subject to RCW 70.47.110, who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If, as a result of an eligibility review, the administrator determines that a subsidized enrollee's income exceeds twice the federal poverty level and that the enrollee knowingly failed to inform the plan of such increase in income, the administrator may bill the enrollee for the subsidy paid on the enrollee's behalf during the period of time that the enrollee's income exceeded twice the federal poverty level. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they will be allowed to re-enroll in the plan.

(10) To determine the rate to be paid to each participating managed health care system in return for the provision of covered basic health care services to enrollees in the system. Although the schedule of covered basic health care services will be the same for similar enrollees, the rates negotiated with participating managed health care systems may vary among the systems. In negotiating rates with participating systems, the administrator shall consider the characteristics of the populations served by the respective systems, economic circumstances of the local area, the need to conserve the resources of the basic health plan trust account, and other factors the administrator finds relevant.

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

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

(13))) To evaluate the effects this chapter has on private employer-based health care coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state.

(((14))) (13) To develop a program of proven preventive health measures and to integrate it into the plan wherever possible and consistent with this chapter.

(((15) To provide, consistent with available resources, technical assistance for rural health activities that endeavor to develop needed health care services in rural parts of the state)) (14) To endeavor to expand enrollment as much as possible to correspond to the proportion of persons of color in the community served using the best available data that estimates representation of persons of color and describe these efforts in its annual report.

Sec. 206. RCW 70.47.080 and 1987 1st ex.s. c 5 s 10 are each amended to read as follows:

ENROLLMENT. On and after July 1, 1988, the administrator shall accept for enrollment applicants eligible to receive covered basic health care services from the respective managed health care systems which are then participating in the plan. ((The administrator shall not allow the total enrollment of those eligible for subsidies to exceed thirty thousand.))

Thereafter, total ((enrollment shall not exceed the number established by the legislature in any act appropriating funds to the plan.

Before July 1, 1988, the administrator shall endeavor to secure participation contracts from managed health care systems in discrete geographic areas within at least five congressional districts of the state and in such manner as to allow residents of both urban and rural areas access to enrollment in the plan. The administrator shall make a special effort to secure agreements with health care providers in one such area that meets the requirements set forth in RCW 70.47.060(4))) subsidized enrollment shall not result in expenditures that exceed the total amount that has been made available by the legislature in any act appropriating funds to the plan. To the extent that new funding is appropriated for expansion, the administrator shall endeavor to secure participation contracts from managed health care systems in geographic areas of the state that are unserved by the plan at the time at which the new funding is appropriated.

The administrator shall at all times closely monitor growth patterns of enrollment so as not to exceed that consistent with the orderly development of the plan as a whole, in any area of the state or in any participating managed health care system. The annual or biennial enrollment limitations derived from operation of the plan under this section do not apply to nonsubsidized enrollees as defined in RCW 70.47.020(5).

B. EXPANDED MANAGED CARE FOR STATE EMPLOYEES

Sec. 207. RCW 41.05.011 and 1990 c 222 s 2 are each amended to read as follows:

DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.

(1) "Administrator" means the administrator of the authority.

(2) "State purchased health care" or "health care" means medical and health care, pharmaceuticals, and medical equipment purchased with state and federal funds by the department of social and health services, the department of health, the basic health plan, the state health care authority, the department of labor and industries, the department of corrections, the department of veterans affairs, and local school districts.

(3) "Authority" means the Washington state health care authority.

(4) "Insuring entity" means an ((insurance carrier as defined in chapter 48.21 or 48.22)) insurer as defined in chapter 48.01 RCW, a health care service contractor as defined in chapter 48.44 RCW, or a health maintenance organization as defined in chapter 48.46 RCW.

(5) "Flexible benefit plan" means a benefit plan that allows employees to choose the level of health care coverage provided and the amount of employee contributions from among a range of choices offered by the authority.

(6) "Employee" includes all full-time and career seasonal employees of the state, whether or not covered by civil service; elected and appointed officials of the executive branch of government, including full-time members of boards, commissions, or committees; and includes any or all part-time and temporary employees under the terms and conditions established under this chapter by the authority; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature or of the legislative authority of any county, city, or town who are elected to office after February 20, 1970. "Employee" also includes employees of a county, municipality, or other political subdivision of the state if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205((, and employees of a school district if the board of directors of the school district seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority as provided in RCW 28A.400.350)).

(7) "Board" means the state employees' benefits board established under RCW 41.05.055.

C. HEALTH CARE PROVIDER CONFLICT OF INTEREST STANDARDS

Sec. 208. RCW 19.68.010 and 1973 1st ex.s. c 26 s 1 are each amended to read as follows:

It shall be unlawful for any person, firm, corporation or association, whether organized as a cooperative, or for profit or nonprofit, to pay, or offer to pay or allow, directly or indirectly, to any person licensed by the state of Washington to engage in the practice of medicine and surgery, drugless treatment in any form, dentistry, or pharmacy and it shall be unlawful for such person to request, receive or allow, directly or indirectly, a rebate, refund, commission, unearned discount or profit by means of a credit or other valuable consideration in connection with the referral of patients to any person, firm, corporation or association, or in connection with the furnishings of medical, surgical or dental care, diagnosis, treatment or service, on the sale, rental, furnishing or supplying of clinical laboratory supplies or services of any kind, drugs, medication, or medical supplies, or any other goods, services or supplies prescribed for medical diagnosis, care or treatment: PROVIDED, That ownership of a financial interest in any firm, corporation or association which furnishes any kind of clinical laboratory or other services prescribed for medical, surgical, or dental diagnosis shall not be prohibited under this section where (1) the referring practitioner affirmatively discloses to the patient in writing, the fact that such practitioner has a financial interest in such firm, corporation, or association; and (2) the referring practitioner provides the patient with a list of effective alternative facilities, informs the patient that he or she has the option to use one of the alternative facilities, and assures the patient that he or she will not be treated differently by the referring practitioner if the patient chooses one of the alternative facilities.

Any person violating the provisions of this section is guilty of a misdemeanor.

D. DATA COLLECTION

Sec. 209. RCW 70.170.100 and 1990 c 269 s 12 are each amended to read as follows:

(1) To promote the public interest consistent with the purposes of chapter . . ., Laws of 1993 (this act), the department is responsible for the development, implementation, and custody of a state-wide ((hospital)) health care data system, with policy direction and oversight to be provided by the Washington health services commission. As part of the design stage for development of the system, the department shall undertake a needs assessment of the types of, and format for, ((hospital)) health care data needed by consumers, purchasers, health care payers, ((hospitals)) providers, and state government as consistent with the intent of chapter . . ., Laws of 1993 (this act) ((chapter)). The department shall identify a set of ((hospital)) health care data elements and report specifications which satisfy these needs. The ((council)) Washington health services commission, created by section 301 of this act, shall review the design of the data system and ((may direct the department to)) establish a technical advisory committee on health data. The department shall contract with a private vendor for assistance in the design of the data system or for any part of the work to be performed under this section. The data elements, specifications, and other ((design)) distinguishing features of this data system shall be made available for public review and comment and shall be published, with comments, as the department's first data plan by ((January 1, 1990)) July 1, 1994.

(2) Subsequent to the initial development of the data system as published as the department's first data plan, revisions to the data system shall be considered ((through the department's development of a biennial data plan, as proposed to,)) with the oversight and policy guidance of the Washington health services commission or its technical advisory committee and funded by((,)) the legislature through the biennial appropriations process. ((Costs of data activities outside of these data plans except for special studies shall be funded through legislative appropriations.

(3))) In designing the state-wide ((hospital)) health care data system and any data plans, the department shall identify ((hospital)) health care data elements relating to ((both hospital finances)) health care costs, the quality of health care services, the outcomes of health care services, and ((the)) use of ((services by patients)) health care by consumers. Data elements ((relating to hospital finances)) shall be reported ((by hospitals)) as the Washington health services commission directs by reporters in conformance with a uniform ((system of)) reporting ((as specified by the department and shall)) system established by the department, which shall be adopted by reporters. "Reporter" means an individual or business entity, other than a hospital, required to be registered with the department of revenue for payment of taxes imposed under chapter 82.04 RCW or Title 48 RCW, that is primarily engaged in furnishing or insuring for medical, surgical, and other health services to persons. In the case of hospitals this includes data elements identifying each hospital's revenues, expenses, contractual allowances, charity care, bad debt, other income, total units of inpatient and outpatient services, and other financial information reasonably necessary to fulfill the purposes of chapter . . ., Laws of 1993 (this ((chapter)) act), for hospital activities as a whole and, as feasible and appropriate, for specified classes of hospital purchasers and payers. Data elements relating to use of hospital services by patients shall, at least initially, be the same as those currently compiled by hospitals through inpatient discharge abstracts ((and reported to the Washington state hospital commission)). The commission and the department shall encourage and permit reporting by electronic transmission or hard copy as is practical and economical to reporters.

(((4))) (3) The state-wide ((hospital)) health care data system shall be uniform in its identification of reporting requirements for ((hospitals)) reporters across the state to the extent that such uniformity is ((necessary)) useful to fulfill the purposes of chapter . . ., Laws of 1993 (this ((chapter)) act). Data reporting requirements may reflect differences ((in hospital size; urban or rural location; scope, type, and method of providing service; financial structure; or other pertinent distinguishing factors)) that involve pertinent distinguishing features as determined by the Washington health services commission by rule. So far as ((possible)) is practical, the data system shall be coordinated with any requirements of the trauma care data registry as authorized in RCW 70.168.090, the federal department of health and human services in its administration of the medicare program, ((and)) the state in its role of gathering public health statistics, or any other payer program of consequence so as to minimize any unduly burdensome reporting requirements imposed on ((hospitals)) reporters.

(((5))) (4) In identifying financial reporting requirements under the state-wide ((hospital)) health care data system, the department may require both annual reports and condensed quarterly reports from reporters, so as to achieve both accuracy and timeliness in reporting, but shall craft such requirements with due regard of the data reporting burdens of reporters.

(((6) In designing the initial state-wide hospital data system as published in the department's first data plan, the department shall review all existing systems of hospital financial and utilization reporting used in this state to determine their usefulness for the purposes of this chapter, including their potential usefulness as revised or simplified.

(7) Until such time as the state-wide hospital data system and first data plan are developed and implemented and hospitals are able to comply with reporting requirements, the department shall require hospitals to continue to submit the hospital financial and patient discharge information previously required to be submitted to the Washington state hospital commission. Upon publication of the first data plan, hospitals shall have a reasonable period of time to comply with any new reporting requirements and, even in the event that new reporting requirements differ greatly from past requirements, shall comply within two years of July 1, 1989.

(8))) (5) The ((hospital)) health care data collected ((and)), maintained, and studied by the department or the Washington health services commission shall only be available for retrieval in original or processed form to public and private requestors and shall be available within a reasonable period of time after the date of request. The cost of retrieving data for state officials and agencies shall be funded through the state general appropriation. The cost of retrieving data for individuals and organizations engaged in research or private use of data or studies shall be funded by a fee schedule developed by the department which reflects the direct cost of retrieving the data or study in the requested form.

(6) All persons subject to chapter . . ., Laws of 1993 (this act) shall comply with departmental or commission requirements established by rule in the acquisition of data.

Sec. 210. RCW 70.170.110 and 1989 1st ex.s. c 9 s 511 are each amended to read as follows:

The department shall provide, or may contract with a private entity to provide, ((hospital)) analyses and reports or any studies it chooses to conduct consistent with the purposes of chapter . . ., Laws of 1993 (this ((chapter)) act). Subject to the availability of funds and any policy direction that may be given by the Washington health services commission. ((Prior to release, the department shall provide affected hospitals with an opportunity to review and comment on reports which identify individual hospital data with respect to accuracy and completeness, and otherwise shall focus on aggregate reports of hospital performance.)) These studies, analyses, or reports shall include:

(1) Consumer guides on purchasing ((hospital care services and)) or consuming health care and publications providing verifiable and useful aggregate comparative information to ((consumers on hospitals and hospital services)) the public on health care services, their cost, and the quality of health care providers who participate in certified health plans;

(2) Reports for use by classes of purchasers, who purchase from certified health plans, health care payers, and providers as specified for content and format in the state-wide data system and data plan; ((and))

(3) Reports on relevant ((hospital)) health care policy ((issues)) including the distribution of hospital charity care obligations among hospitals; absolute and relative rankings of Washington and other states, regions, and the nation with respect to expenses, net revenues, and other key indicators; ((hospital)) provider efficiencies; and the effect of medicare, medicaid, and other public health care programs on rates paid by other purchasers of ((hospital)) health care; and

(4) Any other reports the commission or department deems useful to assist the public or purchasers of certified health plans in understanding the prudent and cost-effective use of all health services.

NEW SECTION. Sec. 211. A new section is added to chapter 70.170 RCW to read as follows:

Notwithstanding the provisions of chapter 42.17 RCW, any material contained within the state-wide health care data system or in the files of either the department or the Washington health services commission shall be subject to the following limitations: (1) Records obtained, reviewed by, or on file that contain information concerning medical treatment of individuals shall be exempt from public inspection and copying; and (2) any actuarial formulas, statistics, and assumptions submitted by a certified health plan to the commission or department upon request shall be exempt from public inspection and copying in order to preserve trade secrets or prevent unfair competition.

All persons and any public or private agencies or entities whatsoever subject to this chapter shall comply with any requirements established by rule relating to the acquisition or use of health services data and maintain the confidentiality of any information which may, in any manner, identify individual persons.

NEW SECTION. Sec. 212. A new section is added to chapter 70.170 RCW to read as follows:

The Washington health services commission shall have access to all health data presently available to the secretary of health. To the extent possible, the commission shall use existing data systems and coordinate among existing agencies. The department of health shall be the designated depository agency for all health data collected pursuant to chapter . . ., Laws of 1993 (this act). The following data sources shall be developed or made available:

(1) The commission shall coordinate with the secretary of health to utilize data collected by the state center for health statistics, including hospital charity care and related data, rural health data, epidemiological data, ethnicity data, social and economic status data, and other data relevant to the commission's responsibilities.

(2) The commission, in coordination with the department of health and the health science programs of the state universities shall develop procedures to analyze clinical and other health services outcome data, and conduct other research necessary for the specific purpose of assisting in the design of the uniform benefit package under chapter . . ., Laws of 1993 (this act).

(3) The commission shall establish cost data sources and shall require each certified health plan to provide the commission and the department of health with enrollee care and cost information, to include, but not be limited to: (a) Enrollee demographic data, including age, sex, and ethnicity; (b) provider identifier; (c) diagnosis; (d) health care services or procedures provided; (e) provider charges, if any; and (f) aggregated paid data. For the purposes of this subsection (3)(f), the commission shall assure that all data relating to amounts paid for health care services must be collected, compiled, and evaluated in a state-wide aggregated form. To protect a managed competitive health care market, the commission may not identify purchaser-specific or payer-specific information relating to amounts paid for health care services. The department shall establish by rule confidentiality standards to safeguard the information from inappropriate use or release.

NEW SECTION. Sec. 213. A new section is added to chapter 70.170 RCW to read as follows:

(1) The department is responsible for the implementation and custody of a state-wide personal health services data and information system. The data elements, specifications, and other design features of this data system shall be consistent with criteria adopted by the Washington health services commission. The department shall provide the commission with reasonable assistance in the development of these criteria, and shall provide the commission with periodic progress reports related to the implementation of the system or systems related to those criteria.

(2) The department shall coordinate the development and implementation of the personal health services data and information system with related private activities and with the implementation activities of the data sources identified by the commission. Data shall include, but not be limited to: (a) Enrollee demographic data, including age, sex, and ethnicity; (b) provider identifier; (c) diagnosis; (d) health services or procedures provided; (e) provider charges, if any; and (f) aggregated paid data. For the purposes of this subsection (2)(f), the commission shall assure that all data relating to amounts paid for health care services must be collected, compiled, and evaluated in a state-wide aggregated form. To protect a managed competitive health care market, the commission may not identify purchaser-specific or payer-specific information relating to amounts paid for health care services. The commission shall establish by rule, confidentiality standards to safeguard the information from inappropriate use or release. The department shall assist the commission in establishing reasonable time frames for the completion of the system development and system implementation.

E. DISCLOSURE OF HOSPITAL, NURSING HOME, AND PHARMACY CHARGES

NEW SECTION. Sec. 214. A new section is added to chapter 70.41 RCW to read as follows:

(1) The legislature finds that the spiraling costs of health care continue to surmount efforts to contain them, increasing at approximately twice the inflationary rate. The causes of this phenomenon are complex. By making physicians and other health care providers with hospital admitting privileges more aware of the cost consequences of health care services for consumers, these providers may be inclined to exercise more restraint in providing only the most relevant and cost-beneficial hospital services, with a potential for reducing the utilization of those services. The requirement of the hospital to inform physicians and other health care providers of the charges of the health care services that they order may have a positive effect on containing health costs. Further, the option of the physician or other health care provider to inform the patient of these charges may strengthen the necessary dialogue in the provider-patient relationship that tends to be diminished by intervening third-party payers.

(2) The chief executive officer of a hospital licensed under this chapter and the superintendent of a state hospital shall establish and maintain a procedure for disclosing to physicians and other health care providers with admitting privileges the charges of all health care services ordered for their patients. Copies of hospital charges shall be made available to any physician and/or other health care provider ordering care in hospital inpatient/outpatient services. The physician and/or other health care provider may inform the patient of these charges and may specifically review them. Hospitals are also directed to study methods for making daily charges available to prescribing physicians through the use of interactive software and/or computerized information thereby allowing physicians and other health care providers to review not only the costs of present and past services but also future contemplated costs for additional diagnostic studies and therapeutic medications.

NEW SECTION. Sec. 215. A new section is added to chapter 71.12 RCW to read as follows:

NEW SECTION. Sec. 216. A new section is added to chapter 18.68 RCW to read as follows:

The legislature finds that the spiraling costs of health care continue to surmount efforts to contain them, increasing at approximately twice the inflationary rate. One of the fastest growing segments of the health care expenditure involves prescription medications. By making physicians and other health care providers with prescriptive authority more aware of the cost consequences of health care treatments for consumers, these providers may be inclined to exercise more restraint in providing only the most relevant and cost-beneficial drug and medication treatments. The requirement of the pharmacy to inform physicians and other health care providers of the charges of prescription drugs and medications that they order may have a positive effect on containing health costs. Further, the option of the physician or other health care provider to inform the patient of these charges may strengthen the necessary dialogue in the provider-patient relationship that tends to be diminished by intervening third-party payers.

NEW SECTION. Sec. 217. A new section is added to chapter 18.68 RCW to read as follows:

The registered or licensed pharmacist of this chapter shall establish and maintain a procedure for disclosing to physicians and other health care providers with prescriptive authority information detailed by prescriber, of the cost and dispensation of all prescriptive medications prescribed by him or her for his or her patients on request. These charges should be made available on at least a quarterly basis for all requested patients and should include medication, dosage, number dispensed, and the cost of the prescription. Pharmacies may provide this information in a summary form for each prescribing physician for all patients rather than as individually itemized reports. All efforts should be made to utilize the existing computerized records and software to provide this information in the least costly format.

NEW SECTION. Sec. 218. A new section is added to chapter 18.51 RCW to read as follows:

(1) The legislature finds that the spiraling costs of nursing home care continue to surmount efforts to contain them, increasing at approximately twice the inflationary rate. The causes of this phenomenon are complex. By making nursing home facilities and care providers more aware of the cost consequences of care services for consumers, these providers may be inclined to exercise more restraint in providing only the most relevant and cost-beneficial services and care, with a potential for reducing the utilization of those services. The requirement of the nursing home to inform physicians, consumers, and other care providers of the charges of the services that they order may have a positive effect on containing health costs.

(2) The chief executive officer of a nursing home licensed under this chapter shall establish and maintain a procedure for disclosing to physicians, consumers, and other care providers the charges of all services to be ordered for residents. These charges shall be posted on the resident's bill and shall include total charges to date and an itemization of charges for each month.

NEW SECTION. Sec. 219. The department of health shall report to the legislature by December 31, 1994, with recommendations on any necessary revisions to sections 214 through 218 of this act, including their continued necessity and the appropriateness of their repeal.

F. HEALTH PROFESSIONAL SHORTAGES

Sec. 220. RCW 43.70.460 and 1992 c 113 s 2 are each amended to read as follows:

RETIRED PRIMARY CARE PROVIDERS--MALPRACTICE INSURANCE. (1) The department may establish a program to purchase and maintain liability malpractice insurance for retired ((physicians)) primary care providers who provide primary health care services at community clinics. The following conditions apply to the program:

(a) Primary health care services shall be provided at community clinics that are public or private tax-exempt corporations;

(b) Primary health care services provided at the clinics shall be offered to low-income patients based on their ability to pay;

(c) Retired ((physicians)) primary care providers providing health care services shall not receive compensation for their services; and

(d) The department shall contract only with a liability insurer authorized to offer liability malpractice insurance in the state.

(2) This section and RCW 43.70.470 shall not be interpreted to require a liability insurer to provide coverage to a ((physician)) primary care provider should the insurer determine that coverage should not be offered to a physician because of past claims experience or for other appropriate reasons.

(3) The state and its employees who operate the program shall be immune from any civil or criminal action involving claims against clinics or physicians that provided health care services under this section and RCW 43.70.470. This protection of immunity shall not extend to any clinic or ((physician)) primary care provider participating in the program.

(4) The department may monitor the claims experience of retired physicians covered by liability insurers contracting with the department.

(5) The department may provide liability insurance under chapter 113, Laws of 1992 only to the extent funds are provided for this purpose by the legislature.

Sec. 221. RCW 43.70.470 and 1992 c 113 s 3 are each amended to read as follows:

RETIRED PRIMARY CARE PROVIDERS--CONDITIONS. The department may establish by rule the conditions of participation in the liability insurance program by retired physicians at clinics utilizing retired physicians for the purposes of this section and RCW 43.70.460. These conditions shall include, but not be limited to, the following:

(1) The participating physician associated with the clinic shall hold a valid license to practice medicine and surgery as a physician under chapter 18.71 or 18.57 RCW, a physician assistant under chapter 18.36A, 18.71A, or 18.57A RCW, or an advanced registered nurse practitioner under chapter 18.88 RCW in this state and otherwise be in conformity with current requirements for licensure as a retired physician, including continuing education requirements;

(2) The participating physician shall limit the scope of practice in the clinic to primary care. Primary care shall be limited to noninvasive procedures and shall not include obstetrical care, or any specialized care and treatment. Noninvasive procedures include injections, suturing of minor lacerations, and incisions of boils or superficial abscesses;

(3) The provision of liability insurance coverage shall not extend to acts outside the scope of rendering medical services pursuant to this section and RCW 43.70.460;

(4) The participating physician shall limit the provision of health care services to primarily low-income persons provided that clinics may, but are not required to, provide means tests for eligibility as a condition for obtaining health care services;

(5) The participating physician shall not accept compensation for providing health care services from patients served pursuant to this section and RCW 43.70.460, nor from clinics serving these patients. "Compensation" shall mean any remuneration of value to the participating physician for services provided by the physician, but shall not be construed to include any nominal copayments charged by the clinic, nor reimbursement of related expenses of a participating physician authorized by the clinic in advance of being incurred; and

(6) The use of mediation or arbitration for resolving questions of potential liability may be used, however any mediation or arbitration agreement format shall be expressed in terms clear enough for a person with a sixth grade level of education to understand, and on a form no longer than one page in length.

G. SHORT-TERM HEALTH INSURANCE REFORM

NEW SECTION. Sec. 222. The legislature intends that, during the transition to a fully reformed health services system, certain health insurance practices be modified to increase access to health insurance coverage for some individuals and groups. The legislature recognizes that health insurance reform will not remedy the significant lack of access to coverage in Washington state without the implementation of strong cost control measures. The authority granted to the commissioner in chapter . . ., Laws of 1993 (this act) is in addition to any authority the commissioner currently has under Title 48 RCW to regulate insurers, health care service contractors, and health maintenance organizations.

NEW SECTION. Sec. 223. A new section is added to chapter 48.18 RCW to read as follows:

Every insurer upon canceling, denying, or refusing to renew any disability policy, shall, upon written request, directly notify in writing the applicant or insured, as the case may be, of the reasons for the action by the insurer and to any person covered under a group contract. Any benefits, terms, rates, or conditions of such a contract that are restricted, excluded, modified, increased, or reduced shall, upon written request, be set forth in writing and supplied to the insured and to any person covered under a group contract. The written communications required by this section shall be phrased in simple language that is readily understandable to a person of average intelligence, education, and reading ability.

Sec. 224. RCW 48.21.200 and 1983 c 202 s 16 and 1983 c 106 s 24 are each reenacted and amended to read as follows:

(1) No individual or group disability insurance policy, health care service contract, or health maintenance agreement which provides benefits for hospital, medical, or surgical expenses shall be delivered or issued for delivery in this state ((after September 8, 1975)) which contains any provision whereby the insurer, contractor, or health maintenance organization may reduce or refuse to pay such benefits otherwise payable thereunder solely on account of the existence of similar benefits provided under any ((individual)) disability insurance policy, ((or under any individual)) health care service contract, or health maintenance agreement.

(2) No individual or group disability insurance policy, health care service contract, or health maintenance agreement providing hospital, medical or surgical expense benefits and which contains a provision for the reduction of benefits otherwise payable or available thereunder on the basis of other existing coverages, shall provide that such reduction will operate to reduce total benefits payable below an amount equal to one hundred percent of total allowable expenses exclusive of copayments, deductibles, and other similar cost-sharing arrangements.

(3) The commissioner shall by rule establish guidelines for the application of this section, including:

(a) The procedures by which persons ((insured)) covered under such policies, contracts, and agreements are to be made aware of the existence of such a provision;

(b) The benefits which may be subject to such a provision;

(d) Establishment of the order of benefit determination; ((and))

(e) Exceptions necessary to maintain the integrity of policies, contracts, and agreements that may require the use of particular health care facilities or providers; and

(f) Reasonable claim administration procedures to expedite claim payments and prevent duplication of payments or benefits under such a provision((: PROVIDED, HOWEVER, That any group disability insurance policy which is issued as part of an employee insurance benefit program authorized by RCW 41.05.025(3) may exclude all or part of any deductible amounts from the definition of total allowable expenses for purposes of coordination of benefits within the plan and between such plan and other applicable group coverages: AND PROVIDED FURTHER, That any group disability insurance policy providing coverage for persons in this state may exclude all or part of any deductible amounts required by a group disability insurance policy from the definition of total allowable expenses for purposes of coordination of benefits between such policy and a group disability insurance policy issued as part of an employee insurance benefit program authorized by RCW 41.05.025(3).

(3) The provisions of this section shall apply to health care service contractor contracts and health maintenance organization agreements)).

NEW SECTION. Sec. 225. A new section is added to chapter 48.20 RCW to read as follows:

(1) After January 1, 1994, every disability insurer issuing coverage against loss arising from medical, surgical, hospital, or emergency care coverage shall waive any preexisting condition exclusion or limitation for persons who had similar coverage under a different policy, health care service contract, or health maintenance agreement in the three-month period immediately preceding the effective date of coverage under the new policy to the extent that such person has satisfied a waiting period under such preceding policy, contract, or agreement; however, if the person satisfied a twelve-month waiting period under such preceding policy, contract, or agreement, the insurer shall waive any preexisting condition exclusion or limitation. The insurer need not waive a preexisting condition exclusion or limitation under the new policy for coverage not provided under such preceding policy, contract, or agreement.

(2) The commissioner in consultation with insurers, health care service contractors, and health maintenance organizations shall study the effect of preexisting condition exclusions and limitations on the cost and availability of health care coverage and shall provide recommendations to the legislature on findings no later than January 1, 1994. No insurer, health care service contractor, or health maintenance organization may deny, exclude, or limit coverage for preexisting conditions for a period longer than that provided for in such rules after July 1, 1994.

(3) No disability insurer may waive or exclude any preexisting condition from coverage for more than a twelve-month period.

NEW SECTION. Sec. 226. A new section is added to chapter 48.21 RCW to read as follows:

(3) No disability insurer may waive or exclude any preexisting condition from coverage for more than a twelve-month period.

NEW SECTION. Sec. 227. A new section is added to chapter 48.44 RCW to read as follows:

(1) After January 1, 1994, every health care service contractor, except limited health care service contractors as defined under RCW 48.44.035, shall waive any preexisting condition exclusion or limitation for persons who had similar coverage under a different policy, health care service contract, or health maintenance agreement in the three-month period immediately preceding the effective date of coverage under the new contract to the extent that such person has satisfied a waiting period under such preceding policy, contract, or agreement; however, if the person satisfied a twelve-month waiting period under such preceding policy, contract, or agreement, the insurer shall waive any preexisting condition exclusion or limitation. The insurer need not waive a preexisting condition exclusion or limitation under the new policy for coverage not provided under such preceding policy, contract, or agreement.

(3) No health care service contractor may waive or exclude any preexisting condition from coverage for more than a twelve-month period.

NEW SECTION. Sec. 228. A new section is added to chapter 48.46 RCW to read as follows:

(1) After January 1, 1994, every health maintenance organization shall waive any preexisting condition exclusion or limitation for persons who had similar coverage under a different policy, health care service contract, or health maintenance agreement in the one-month period immediately preceding the effective date of coverage under the new agreement to the extent that such person has satisfied a waiting period under such preceding policy, contract, or agreement; however, if the person satisfied a twelve-month waiting period under such preceding policy, contract, or agreement, the insurer shall waive any preexisting condition exclusion or limitation. The insurer need not waive a preexisting condition exclusion or limitation under the new policy for coverage not provided under such preceding policy, contract, or agreement.

(3) No health maintenance organization may waive or exclude any preexisting condition from coverage for more than a twelve-month period.

Sec. 229. RCW 48.30.300 and 1975-'76 2nd ex.s. c 119 s 7 are each amended to read as follows:

Notwithstanding any provision contained in Title 48 RCW to the contrary:

(1) No person or entity engaged in the business of insurance in this state shall refuse to issue any contract of insurance or cancel or decline to renew such contract because of the sex or marital status, or the presence of any sensory, mental, or physical handicap of the insured or prospective insured. The amount of benefits payable, or any term, rate, condition, or type of coverage shall not be restricted, modified, excluded, increased or reduced on the basis of the sex or marital status, or be restricted, modified, excluded or reduced on the basis of the presence of any sensory, mental, or physical handicap of the insured or prospective insured. Subject to the provisions of subsection (2) of this section these provisions shall not prohibit fair discrimination on the basis of sex, or marital status, or the presence of any sensory, mental, or physical handicap when bona fide statistical differences in risk or exposure have been substantiated.

(2) With respect to disability policies issued or renewed on or after July 1, 1994, that provide coverage against loss arising from medical, surgical, hospital, or emergency care services:

(a) Policies shall guarantee continuity of coverage. Such provision, which shall be included in every policy, shall provide that:

(i) The policy may be canceled or nonrenewed without the prior written approval of the commissioner only for nonpayment of premium or as permitted under RCW 48.18.090; and

(ii) The policy may be canceled or nonrenewed because of a change in the physical or mental condition or health of a covered person only with the prior written approval of the commissioner. Such approval shall be granted only when the insurer has discharged its obligation to continue coverage for such person by obtaining coverage with another insurer, health care service contractor, or health maintenance organization, which coverage is comparable in terms of premiums and benefits as defined by rule of the commissioner.

(b) It is an unfair practice for a disability insurer to modify the coverage provided or rates applying to an in-force disability insurance policy and to fail to make such modification in all such issued and outstanding policies.

(i) Cease the sale of a policy form unless it has received prior written authorization from the commissioner and has offered all policyholders covered under such discontinued policy the opportunity to purchase comparable coverage without health screening; or

(ii) Engage in a practice that subjects policyholders to rate increases on discontinued policy forms unless such policyholders are offered the opportunity to purchase comparable coverage without health screening.

The insurer may limit an offer of comparable coverage without health screening to a period not less than thirty days from the date the offer is first made.

NEW SECTION. Sec. 230. A new section is added to chapter 48.44 RCW to read as follows:

(1) With respect to all health care service contracts issued or renewed on or after July 1, 1994, except limited health care service contracts as defined in RCW 48.44.035:

(a) Contracts shall guarantee continuity of coverage. Such provision, which shall be included in every contract, shall provide that:

(i) The contract may be canceled or nonrenewed without the prior written approval of the commissioner only for nonpayment of premiums, for violation of published policies of the contractor which have been approved by the commissioner, for persons who are entitled to become eligible for medicare benefits and fail to subscribe to a medicare supplement plan offered by the contractor, for failure of such subscriber to pay any deductible or copayment amount owed to the contractor and not the provider of health care services, for fraud, or for a material breach of the contract; and

(ii) The contract may be canceled or nonrenewed because of a change in the physical or mental condition or health of a covered person only with the prior written approval of the commissioner. Such approval shall be granted only when the contractor has discharged its obligation to continue coverage for such person by obtaining coverage with another insurer, health care service contractor, or health maintenance organization, which coverage is comparable in terms of premiums and benefits as defined by rule of the commissioner.

(b) It is an unfair practice for a contractor to modify the coverage provided or rates applying to an in-force contract and to fail to make such modification in all such issued and outstanding contracts.

(i) Cease the sale of a contract form unless it has received prior written authorization from the commissioner and has offered all subscribers covered under such discontinued contract the opportunity to purchase comparable coverage without health screening; or

(ii) Engage in a practice that subjects subscribers to rate increases on discontinued contract forms unless such subscribers are offered the opportunity to purchase comparable coverage without health screening.

(2) The health care service contractor may limit an offer of comparable coverage without health screening to a period not less than thirty days from the date the offer is first made.

NEW SECTION. Sec. 231. A new section is added to chapter 48.46 RCW to read as follows:

(1) With respect to all health maintenance agreements issued or renewed on or after July 1, 1994, and in addition to the restrictions and limitations contained in RCW 48.46.060(4):

(a) Agreements shall guarantee continuity of coverage. Such provision, which shall be included in every agreement, shall provide that the agreement may be canceled or nonrenewed because of a change in the physical or mental condition or health of a covered person only with the prior written approval of the commissioner. Such approval shall be granted only when the organization has discharged its obligation to continue coverage for such person by obtaining coverage with another insurer, health care service contractor, or health maintenance organization, which coverage is comparable in terms of premiums and benefits as defined by rule of the commissioner.

(b) It is an unfair practice for an organization to modify the coverage provided or rates applying to an in-force agreement and to fail to make such modification in all such issued and outstanding agreements.

(i) Cease the sale of an agreement form unless it has received prior written authorization from the commissioner and has offered all enrollees covered under such discontinued agreement the opportunity to purchase comparable coverage without health screening; or

(ii) Engage in a practice that subjects enrollees to rate increases on discontinued agreement forms unless such enrollees are offered the opportunity to purchase comparable coverage without health screening.

(2) The health maintenance organization may limit an offer of comparable coverage without health screening to a period not less than thirty days from the date the offer is first made.

Sec. 232. RCW 48.44.260 and 1979 c 133 s 3 are each amended to read as follows:

Every authorized health care service contractor, upon canceling, denying, or refusing to renew any individual health care service contract, shall, upon written request, directly notify in writing the applicant or ((insured)) subscriber, as the case may be, of the reasons for the action by the health care service contractor. Any benefits, terms, rates, or conditions of such a contract which are restricted, excluded, modified, increased, or reduced ((because of the presence of a sensory, mental, or physical handicap)) shall, upon written request, be set forth in writing and supplied to the ((insured)) subscriber. The written communications required by this section shall be phrased in simple language which is readily understandable to a person of average intelligence, education, and reading ability.

Sec. 233. RCW 48.46.380 and 1983 c 106 s 16 are each amended to read as follows:

Every authorized health maintenance organization, upon canceling, denying, or refusing to renew any individual health maintenance agreement, shall, upon written request, directly notify in writing the applicant or enrolled participant as appropriate, of the reasons for the action by the health maintenance organization. Any benefits, terms, rates, or conditions of such agreement which are restricted, excluded, modified, increased, or reduced ((because of the presence of a sensory, mental, or physical handicap)) shall, upon written request, be set forth in writing and supplied to the individual. The written communications required by this section shall be phrased in simple language which is readily understandable to a person of average intelligence, education, and reading ability.

NEW SECTION. Sec. 234. The following acts or parts of acts are each repealed:

(1) RCW 48.46.160 and 1975 1st ex.s. c 290 s 17; and

(2) RCW 48.46.905 and 1975 1st ex.s. c 290 s 25.

NEW SECTION. Sec. 235. RCW 48.44.410 and 1986 c 223 s 12 are each repealed, effective July 1, 1994.

NEW SECTION. Sec. 236. A new section is added to chapter 48.20 RCW to read as follows:

Whenever the provisions of this chapter governing the sale and content of disability insurance conflict with the provision of sections 301 through 306 and 328 through 347 of this act, sections 301 through 306 and 328 through 347 of this act shall control.

NEW SECTION. Sec. 237. A new section is added to chapter 48.21 RCW to read as follows:

NEW SECTION. Sec. 238. A new section is added to chapter 48.44 RCW to read as follows:

Whenever the provisions of this chapter governing the sale and content of health care service contracts conflict with the provision of sections 301 through 306 and 328 through 347 of this act, sections 301 through 306 and 328 through 347 of this act shall control.

NEW SECTION. Sec. 239. A new section is added to chapter 48.46 RCW to read as follows:

Whenever the provisions of this chapter governing the sale and content of health maintenance agreements conflict with the provision of sections 301 through 306 and 327 through 346 of this act, sections 301 through 306 and 327 through 346 of this act shall control.

H. LONG-TERM HEALTH CARE PARTNERSHIP

NEW SECTION. Sec. 240. The legislature recognizes that the elderly are the fastest-growing age group nation-wide and in Washington state, increasing in absolute terms and as a percentage of the total population. In addition, the older population itself is aging. The over eighty-five years of age group of elderly are growing faster than any other group. This is in large part due to the substantial advances in medical technology that have increased the elderly's life expectancy and have changed their prevalent causes of death. Living longer has meant that chronic conditions have become major causes of death, disability, and functional dependency. These conditions can effect the individual for years, impairing their ability to function and necessitating high use of long-term care and health care resources to manage, not cure, the conditions. On the average, the elderly's health care and long-term care utilization and expenditures are much greater than those of the nonelderly. While the elderly spend nearly three times the amount the population as a whole spends on health care, per capita, their largest source of out-of-pocket expenditures is for nursing home care. Currently, almost half of all the nursing home expenditures in the United States are financed by public tax dollars through the medicaid program. Almost all of the remaining expenditures nation-wide for nursing homes are financed privately and are primarily paid directly by individual out-of-pocket payments. Since private health insurance for long-term care has not been a major component of the financing for long-term care, the majority of the aged in our state face the risk of financial ruin from an extended nursing home stay.

The legislature finds that the aged in nursing homes often "spend down" their income and become dependent on tax-supported medicaid nursing home care. Approximately half of the people that medicaid pays for in nursing homes were not initially poor, but spent down their assets as a result of catastrophic nursing home bills. The current financing dilemma is likely to worsen. Additional demands are expected to be made on the long-term care system. At the same time, the public sector's ability to finance increased long-term care needs through tax-supported programs, will decline. The lack of elderly persons protected by private insurance further encourages them to seek medicaid eligibility, often by transferring their assets to family members. As a result, assets are lost that might be used advantageously to add to their income, for more appropriate housing, or for health and social services, to improve the quality of their lives, to prevent or delay institutional placement, and to prevent their becoming indigent.

The legislature further finds that the private long-term care insurance, as regulated and provided in this state, provides a proven and viable option for protecting many of our state's elderly from the devastating financial impact of a nursing home admission. If a sufficient quantity of long-term care policies were purchased, it could also reduce the state's large and growing burden for financing long-term care.

It is the purpose and intent of this chapter to provide a realistic approach to financing needed long-term care to the elderly by encouraging the private market to be an appealing and effective partner in long-term care financing and structuring linkages between private insurance options and access to an improved medicaid system. The approach will build upon the significant responsibilities and experience that we have developed in the finance and delivery of long-term care to address the challenge of coordinating the role of the private sector with rapidly changing public programs.

NEW SECTION. Sec. 241. The office of insurance commissioner shall, from July 1, 1993, to July 1, 2000, coordinate a pilot program entitled the Washington long-term care partnership, whereby private insurance and medicaid funds shall be combined to finance long-term care. This program will allow an individual to purchase a precertified long-term care insurance policy in an amount commensurate with his or her assets. Notwithstanding any provision of law, the resources of such an individual, to the extent such resources are equal to the amount of long-term care insurance benefit payments as provided in this section, shall not be considered by the department of social and health services in a determination of: (1) His or her eligibility for medicaid, (2) the amount of any medicaid payment, or (3) in any subsequent recovery by the state of a payment for medical services.

NEW SECTION. Sec. 242. The department of social and health services shall seek appropriate amendments to its medicaid regulations or any other regulations to allow protection of resources and income pursuant to section 240 of this act. The protection assets shall be provided, to the extent approved by the federal health care financing administration, for any purchaser of a precertified long-term care policy delivered, issued for delivery, or renewed from January 1, 1994, to December 31, 1999, inclusive, or the termination of the program, whichever is sooner. The projections shall last for the life of the purchaser. The department of social and health services shall count insurance benefit payments toward resource exclusion to the extent such payments are for: (1) Services medicaid approves or covers for its recipients; (2) the lower of the actual charge and the amount paid by the insurance company; (3) nursing home care or formal services delivered to those insured in the community as part of a care plan approved by a coordination assessment and monitoring agency approved by the department of social and health services; and (4) services provided after the individual meets the coverage requirements for long-term care benefits established by the department of social and health services for this program. The secretary of social and health services shall adopt rules, in accordance with current law, to implement the provisions of this chapter relating to determining eligibility of applicants for medicaid and the coverage requirements for long-term care benefits.

NEW SECTION. Sec. 243. The insurance commissioner may precertify only those long-term care insurance policies that: (1) Alert the purchaser to the availability of consumer information and public education provided by the department on aging and adult services pursuant to section 244 of this act; (2) offer the option of home and community-based services in lieu of nursing home care; (3) in all home care plans, offer case management services delivered by a coordination, assessment, and monitoring agency, approved by the department of social and health services or by a home health care agency separately licensed as a coordination, assessment, and monitoring agency under this chapter; (4) offer automatic inflation protection or optional periodic per diem upgrades until the insured begins to receive long-term care benefits; (5) provide for the keeping of records and an explanation of benefit reports on insurance payments that count toward medicaid resource exclusion; and (6) provide the management information and reports necessary to document the extent of medicaid resource protection offered and to evaluate the Washington long-term care partnership. No policy may be precertified if it requires prior hospitalization or a prior stay in a nursing home as a condition of providing long-term care benefits. The insurance commissioner shall adopt rules to carry out the precertification provisions of this chapter.

NEW SECTION. Sec. 244. The insurance commissioner shall require its senior health insurance department advisors program to educate consumers as to: (1) The need for long-term care; (2) mechanisms for financing such care; (3) the availability of long-term care insurance; and (4) the asset protection provided under this chapter. In addition the department of social and health services shall provide to the extent possible public information to assist individuals in choosing appropriate insurance coverage.

NEW SECTION. Sec. 245. The department of social and health services and the insurance commissioner shall seek the federal approvals necessary to carry out the purposes of this chapter. Each year, on January 1st, the insurance commissioner shall report to the legislature on the progress of the program. The report shall include: (1) The success in implementing the public and private partnership; (2) the number of policies precertified; (3) the number, age, and financial circumstances of individuals purchasing precertified policies; (4) the number of individuals seeking consumer information services; (5) the extent and type of benefits paid under precertified policies that could count toward medicaid resource protection; (6) estimates of impact on present and future medicaid expenditures; (7) the cost-effectiveness of the program; and (8) a determination regarding the appropriateness of continuing the program.

NEW SECTION. Sec. 246. Sections 240 through 245 of this act shall constitute a new chapter in Title 48 RCW.

I. UNIFORM ELECTRONIC CLAIMS PROCESSING

NEW SECTION. Sec. 247. A new section is added to chapter 48.20 RCW to read as follows:

APPLICATION TO DISABILITY INSURANCE POLICIES. (1) After January 1, 1995, all disability insurance policies that provide coverage for hospital or medical expenses shall use for all billing purposes in electronic format either the health care financing administration (HCFA) 1500 form, or its successor, or the uniform billing (UB) 82 form, or its successor. For billing purposes, this subsection does not apply to pharmacists, dentists, eyeglasses, transportation, or vocational services.

(2) As of January 1, 1995, the forms developed under section 256 of this act shall be used by providers of health care and carriers under this chapter.

NEW SECTION. Sec. 248. A new section is added to chapter 48.21 RCW to read as follows:

APPLICATION TO GROUP DISABILITY INSURANCE POLICIES. (1) After January 1, 1995, all group disability insurance policies that provide coverage for hospital or medical expenses shall use for all billing purposes in electronic format either the health care financing administration (HCFA) 1500 form, or its successor, or the uniform billing (UB) 82 form, or its successor. For billing purposes, this subsection does not apply to pharmacists, dentists, eyeglasses, transportation, or vocational services.

(2) As of January 1, 1995, the forms developed under section 256 of this act shall be used by providers of health care and carriers under this chapter.

NEW SECTION. Sec. 249. A new section is added to chapter 48.44 RCW to read as follows:

APPLICATION TO HEALTH CARE INSURANCE CONTRACTS. (1) After January 1, 1995, all health care insurance contracts that provide coverage for hospital or medical expenses shall use for all billing purposes in electronic format either the health care financing administration (HCFA) 1500 form, or its successor, or the uniform billing (UB) 82 form, or its successor. For billing purposes, this subsection does not apply to pharmacists, dentists, eyeglasses, transportation, or vocational services.

(2) As of January 1, 1995, the forms developed under section 256 of this act shall be used by providers of health care and carriers under this chapter.

NEW SECTION. Sec. 250. A new section is added to chapter 48.46 RCW to read as follows:

APPLICATION TO HEALTH MAINTENANCE AGREEMENTS. (1) After January 1, 1995, all health maintenance agreements that provide coverage for hospital or medical expenses shall use for all billing purposes in electronic format either the health care financing administration (HCFA) 1500 form, or its successor, or the uniform billing (UB) 82 form, or its successor. For billing purposes, this subsection does not apply to pharmacists, dentists, eyeglasses, transportation, or vocational services.

(2) As of January 1, 1995, the forms developed under section 256 of this act shall be used by providers of health care and carriers under this chapter.

NEW SECTION. Sec. 251. A new section is added to chapter 48.84 RCW to read as follows:

APPLICATION TO LONG-TERM CARE PROVIDERS. (1) After January 1, 1995, all providers of long-term care that provide coverage for hospital or medical expenses shall use for all billing purposes in electronic format either the health care financing administration (HCFA) 1500 form, or its successor, or the uniform bill (UB) 82 form, or its successor. For billing purposes, this subsection does not apply to pharmacists, dentists, eyeglasses, transportation, or vocational services.

(2) As of January 1, 1995, the forms developed under section 256 of this act shall be used by providers of health care and carriers under this chapter.

NEW SECTION. Sec. 252. A new section is added to chapter 41.05 RCW to read as follows:

APPLICATION TO STATE HEALTH CARE AUTHORITY. After July 1, 1995, the health care financing administration (HCFA) 1500 form, or its successor, and the uniform billing (UB) 82 form, or its successor, shall be used in electronic format for state-paid health care services provided through the health care authority. The forms developed under section 256 of this act shall be used for billing purposes for pharmacists, dentists, eyeglasses, transportation, or vocational services.

NEW SECTION. Sec. 253. A new section is added to chapter 74.09 RCW to read as follows:

APPLICATION TO THE MEDICAL ASSISTANCE PROGRAM. After July 1, 1995, the health care financing administration (HCFA) 1500 form, or its successor, and the uniform billing (UB) 82 form, or its successor, shall be used in electronic format for state-paid health care services provided by the department. The forms developed under section 256 of this act shall be used for billing purposes for pharmacists, dentists, eyeglasses, transportation, or vocational services.

NEW SECTION. Sec. 254. A new section is added to Title 51 RCW to read as follows:

APPLICATION TO LABOR AND INDUSTRIES. After July 1, 1995, the health care financing administration (HCFA) 1500 form, or its successor, and the uniform billing (UB) 82 form, or its successor, shall be used in electronic format for state-paid health care services provided under this title. The forms developed under section 256 of this act shall be used for billing purposes for pharmacists, dentists, eyeglasses, transportation, or vocational services.

NEW SECTION. Sec. 255. A new section is added to chapter 70.47 RCW to read as follows:

APPLICATION TO BASIC HEALTH PLAN. After July 1, 1995, the health care financing administration (HCFA) 1500 form, or its successor, and the uniform billing (UB) 82 form, or its successor, shall be used in electronic format for state-paid health care services provided under the basic health plan. The forms developed under section 256 of this act shall be used for billing purposes for pharmacists, dentists, eyeglasses, transportation, or vocational services.

NEW SECTION. Sec. 256. A new section is added to chapter 70.170 RCW to read as follows:

JOINT AGENCY RULES. By January 1, 1994, the council shall develop and adopt by rule electronic format billing forms to be used for pharmacists, dentists, eyeglasses, transportation, and vocational services. These forms shall be made available to providers of health care coverage licensed under chapters 48.20, 48.21, 48.44, 48.46, and 48.84 RCW.

NEW SECTION. Sec. 257. A new section is added to chapter 70.170 RCW to read as follows:

The council shall by rule adopt a uniform approach to health care claims processing, information requirements, definition of terms coding, and submission and payment mechanisms to be used by all providers and health care payers subject to this chapter.

PART III.

A. THE WASHINGTON HEALTH SERVICES COMMISSION

NEW SECTION. Sec. 301. CREATION OF COMMISSION--MEMBERSHIP--TERMS OF OFFICE--VACANCIES--SALARIES. (1) There is created an agency of state government to be known as the Washington health services commission. The commission shall consist of five members, appointed by the governor, with the consent of the senate. One member shall be designated by the governor as chair and shall serve at the pleasure of the governor. Of the initial members, one shall be appointed to a term of three years, one shall be appointed to a term of four years, and one shall be appointed to a term of five years. Thereafter, members shall be appointed to five-year terms. Vacancies shall be filled by appointment for the remainder of the unexpired term of the position being vacated.

(2) Members of the commission shall have no pecuniary interest in any business subject to regulation by the commission and shall be subject to chapter 42.18 RCW, the executive branch conflict of interest act.

(3) Members of the commission shall occupy their positions on a full-time basis and are exempt from the provisions of chapter 41.06 RCW. Commission members and the professional commission staff are subject to the public disclosure provisions of chapter 42.17 RCW. Members shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040. A majority of the members of the commission constitutes a quorum for the conduct of business.

NEW SECTION. Sec. 302. STAKEHOLDERS' COMMITTEE. (1)(a) In an effort to ensure effective participation in the commission's deliberations, the chair shall appoint a stakeholders' committee. The chair may also appoint ad hoc and special committees for a specified time period.

(b) The chair shall also appoint health services effectiveness panels for specified periods of time to provide technical guidance related to appropriate and effective health services, use of technology and practice guidelines, and development of the uniform benefits package. Panels should include technical experts, such as general practitioners, specialty physicians or providers, health service researchers, health ethicists, epidemiologists, and public health experts who reflect the state's ethnic and cultural diversity.

(2) Members of committees and panels shall serve without compensation for their services but shall be reimbursed for their expenses while attending meetings on behalf of the commission in accordance with RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 303. POWERS AND DUTIES OF THE CHAIR. The chair shall be the chief administrative officer and the appointing authority of the commission and has the following powers and duties:

(1) Direct and supervise the commission's administrative and technical activities in accordance with the provisions of this chapter and rules and policies adopted by the commission;

(2) Employ no more than ten full-time employees of the commission, representative of ethnic diversity, in accordance with chapter 41.06 RCW, and prescribe their duties;

(3) Enter into contracts on behalf of the commission;

(4) Accept and expend gifts, donations, grants, and other funds received by the commission;

(5) Delegate administrative functions of the commission to employees of the commission as the chair deems necessary to ensure efficient administration;

(6) Subject to approval of the commission, appoint advisory committees and undertake studies, research, and analysis necessary to support activities of the commission;

(7) Preside at meetings of the commission; and

(8) Perform such other administrative and technical duties as are consistent with chapter . . ., Laws of 1993 (this act) and the rules and policies of the commission.

NEW SECTION. Sec. 304. POWERS AND DUTIES OF THE COMMISSION. The commission has the following powers and duties:

(1) Ensure that all residents of Washington state are enrolled in a managed care health plan to receive the uniform benefits package, that shall include a schedule of covered basic health care services, including physician services, inpatient and outpatient hospital services, prescription drugs and medications, prenatal and postnatal care, and other services that may be necessary for basic health care, regardless of age, sex, family structure, ethnicity, race, health condition, geographic location, employment, or economic status by July 1, 1998.

(2) Adopt necessary rules in accordance with chapter 34.05 RCW to carry out the purposes of chapter . . ., Laws of 1993 (this act), provided that an initial set of draft rules establishing at least the commission's organization structure, levels of and standards for certified health plan certification, must be submitted in draft form to appropriate committees of the legislature by December 1, 1994.

(3) Develop and implement, if necessary, one or more medical risk adjustment mechanisms to minimize financial incentives for certified health plans to enroll individuals who present lower health risks and avoid enrolling individuals who present higher health risks, and to minimize financial incentives for employer hiring practices that discriminate against individuals who present higher health risks.

(4) Design a mechanism to assure minors have access to confidential health care services as currently provided in RCW 70.24.110 and 71.34.030.

(5) Monitor the actual growth in total annual health services costs.

(6) Establish reporting requirements for health care facilities, and health care providers to periodically report to the commission regarding major capital expenditures. The commission shall review and monitor such reports and shall report to the legislature regarding major capital expenditures on at least an annual basis.

(7) Establish criteria that the Washington health care facilities authority shall use to authorize the issuance of bonds pursuant to chapter 70.37 RCW. Upon the publication of such criteria, the authority may not issue bonds without commission approval.

(8) Require all managed health care systems, health care service contractors, health maintenance organizations, disability insurers, certified health plans, any state-paid or administered health care program, and providers to use only health care financing administration-approved paper claim forms, ANSI X12, or a subsequent generation, electronic standards for the submission of electronic claims and drop out red ink, or other specialized ink, on paper claim forms to facilitate electronic scanning of claims.

(9) Adopt criteria and develop policy for personal health data and information systems as provided in chapter 70.170 RCW.

(10) Evaluate and monitor the extent to which racial and ethnic minorities have access and to receive health services within the state, and develop strategies to address barriers to access.

(11) Develop standards for the certification process to certify health plans to provide the uniform benefits package, according to the provisions for certified health plans under chapter . . ., Laws of 1993 (this act).

(12)(a) Monitor the progress of the United States congress as it deliberates reform of the health care system, to ascertain potential opportunities for enhancing Washington state's health care system.

(b) Develop a process whereby all residents, businesses, and government would make payments to certified health plans sufficient to assure access to basic and affordable health benefits for all the state's residents by July 1, 1998. The recommended process shall be consistent with existing federal law and be submitted to the legislature for its approval no later than December 1, 1994.

(13) Establish guidelines for providers dealing with terminal or static conditions, taking into consideration the ethics of providers, patient and family wishes, costs, and survival possibilities.

(14) Undertake or facilitate evaluations of health care reform, including analysis of fiscal and economic impacts including in-migration, the effectiveness of managed care and managed competition, and effects of reform on access and quality of service. Fiscal and economic impact analysis shall be conducted by the office of financial management.

(15) Evaluate the extent to which Taft-Hartley health care trusts provide benefits to certain individuals in the state; review the federal laws under which these joint employee-employer entities are organized; and make appropriate recommendations to the governor and the legislature about how these trusts can be brought under the provisions of chapter . . ., Laws of 1993 (this act) when it is fully implemented.

NEW SECTION. Sec. 305. CONFLICT OF INTEREST STANDARDS. The Washington health services commission established by section 301 of this act, in consultation with the secretary of health, and the health care disciplinary authorities under RCW 18.130.040(2)(b), shall establish standards and monetary penalties in rule prohibiting provider investments and referrals that present a conflict of interest resulting from inappropriate financial gain for the provider or his or her immediate family. These standards are not intended to inhibit the efficient operation of managed health care systems or certified health plans. The commission shall report to the health policy committees of the senate and house of representatives by December 1, 1994, on the development of the standards and any recommended statutory changes necessary to implement the standards.

NEW SECTION. Sec. 306. CONTINUOUS QUALITY IMPROVEMENT AND TOTAL QUALITY MANAGEMENT. To ensure the highest quality health services at the lowest total cost, the commission shall establish a total quality management system of continuous quality improvement. Such endeavor shall be based upon the recognized quality science for continuous quality improvement. The commission shall impanel a committee composed of persons from the private sector and related sciences who have broad knowledge and successful experiences in continuous quality improvement and total quality management applications. It shall be the responsibility of the committee to develop standards for a Washington state health services supplier certification process and recommend such standards to the commission for review and adoption. Once adopted, the commission shall establish a schedule, with full compliance no later than July 1, 1996, whereby all health service providers and health service facilities shall be certified prior to providing uniform benefits package services.

B. PRACTICE INDICATORS

NEW SECTION. Sec. 307. A new section is added to chapter 43.70 RCW to read as follows:

PRACTICE INDICATORS. The department of health shall consult with health care providers, purchasers, managed care delivery systems, certified health plans, health professional regulatory authorities under RCW 18.130.040, appropriate research and clinical experts, and consumers of health care services to identify specific practice areas where practice indicators and risk management protocols have been developed. Practice indicators shall be based upon expert consensus and best available scientific evidence. The department shall:

(1) Develop a definition of expert consensus and best available scientific evidence so that practice indicators can serve as a standard for excellence in the provision of health care services.

(2) Establish a process to identify and evaluate practice indicators and risk management protocols as they are developed by the appropriate professional, scientific, and clinical communities.

(3) Recommend the use of practice indicators and risk management protocols in quality assurance, utilization review, or provider payment to the health services commission.

C. HEALTH CARE LIABILITY REFORMS

Sec. 308. RCW 4.56.250 and 1986 c 305 s 301 are each amended to read as follows:

Notwithstanding the opinion of the state supreme court in Sofie v. Fibreboard Corp., 112 Wn.2d 636 (1989) the legislature still believes that controlling the cost of noneconomic damages must be a fundamental part of any health care reform. With the respect due our supreme court, a co-equal branch of our state government, the state legislature hereby amends RCW 4.56.250 to provide more information to the civil jury while reaffirming its belief in the constitutionality and appropriateness of RCW 4.56.250.

(1) As used in this section, the following terms have the meanings indicated unless the context clearly requires otherwise.

(a) "Economic damages" means objectively verifiable monetary losses, including medical expenses, loss of earnings, burial costs, loss of use of property, cost of replacement or repair, cost of obtaining substitute domestic services, loss of employment, and loss of business or employment opportunities.

(b) "Noneconomic damages" means subjective, nonmonetary losses, including, but not limited to pain, suffering, inconvenience, mental anguish, disability or disfigurement incurred by the injured party, emotional distress, loss of society and companionship, loss of consortium, injury to reputation and humiliation, and destruction of the parent-child relationship.

(d) "Average annual wage" means the average annual wage in the state of Washington as determined under RCW 50.04.355.

(2) In no action seeking damages for personal injury or death may a claimant recover a judgment for noneconomic damages exceeding an amount determined by multiplying 0.43 by the average annual wage and by the life expectancy of the person incurring noneconomic damages, as the life expectancy is determined by the life expectancy tables adopted by the insurance commissioner. For purposes of determining the maximum amount allowable for noneconomic damages, a claimant's life expectancy shall not be less than fifteen years. The limitation contained in this subsection applies to all claims for noneconomic damages made by a claimant who incurred bodily injury. Claims for loss of consortium, loss of society and companionship, destruction of the parent-child relationship, and all other derivative claims asserted by persons who did not sustain bodily injury are to be included within the limitation on claims for noneconomic damages arising from the same bodily injury.

(3) If a case is tried to a jury, the jury shall ((not)) be informed of the limitation contained in subsection (2) of this section.

NEW SECTION. Sec. 309. CERTIFICATE OF MERIT REQUIRED. (1) The claimant's attorney shall file the certificate specified in subsection (2) of this section within thirty days of filing or service, whichever occurs later, for any action for damages arising out of injuries resulting from health care by a health care provider, as defined in RCW 7.70.020.

(2) The certificate issued by the claimant's attorney shall declare:

(a) That the attorney has reviewed the facts of the case;

(b) That the attorney has consulted with at least one qualified expert who holds a license, certificate, or registration issued by this state or another state in the same profession as that of the defendant, who practices in the same specialty or subspecialty as the defendant, and whom the attorney reasonably believes is knowledgeable in the relevant issues involved in the particular action;

(d) That the expert is willing and available to testify to admissible facts or opinions; and

(e) That the attorney has concluded on the basis of such review and consultation that there is reasonable and meritorious cause for the filing of such action.

(3) Where a certificate is required under this section, and where there are multiple defendants, the certificate or certificates must state the attorney's conclusion that on the basis of review and expert consultation, there is reasonable and meritorious cause for the filing of such action as to each defendant.

(4) The provisions of this section are not applicable to a plaintiff who is not represented by an attorney.

(5) Violation of this section is grounds for either dismissal of the case or sanctions against the attorney, which may include an order to pay to the defendant or defendants the amount of reasonable expense incurred including a reasonable attorneys' fee, or both, as the court deems appropriate.

Sec. 310. RCW 18.72.400 and 1991 c 3 s 171 are each amended to read as follows:

(1) The secretary of health shall allocate all appropriated funds to accomplish the purposes of this chapter.

(2) Upon a showing by the secretary of health, on behalf of the medical disciplinary board, that expenditures in excess of levels authorized by legislative appropriation are necessary to meet unanticipated public demand for investigation of, and disciplinary action against, unsafe or impaired physicians or surgeons, the office of financial management may authorize necessary expenditures from the medical disciplinary account in excess of appropriated levels.

Sec. 311. RCW 43.70.320 and 1991 sp.s. c 13 s 18 are each amended to read as follows:

(1) There is created in the state treasury an account to be known as the health professions account. All fees received by the department for health professions licenses, registration, certifications, renewals, or examinations and the civil penalties assessed and collected by the department under RCW 18.130.190(4) shall be forwarded to the state treasurer who shall credit such moneys to the health professions account.

(2) All expenses incurred in carrying out the health professions licensing activities of the department shall be paid from the account as authorized by legislative appropriation. Upon a showing by the department, on behalf of an individual health profession regulatory board, that expenditures in excess of levels authorized by legislative appropriation are necessary to meet unanticipated public demand for investigation of, and disciplinary action against, unsafe or impaired health care practitioners, the office of financial management may authorize necessary expenditures from the health professions account in excess of appropriated levels. Any residue in the account shall be accumulated and shall not revert to the general fund at the end of the biennium.

(3) The secretary shall biennially prepare a budget request based on the anticipated costs of administering the health professions licensing activities of the department which shall include the estimated income from health professions fees.

Sec. 312. RCW 18.130.160 and 1986 c 259 s 8 are each amended to read as follows:

FINDING OF UNPROFESSIONAL CONDUCT--ORDERS--SANCTIONS--STAY--COSTS. Upon a finding that a license holder or applicant has committed unprofessional conduct or is unable to practice with reasonable skill and safety due to a physical or mental condition, the disciplining authority may issue an order providing for one or any combination of the following:

(1) Revocation of the license;

(2) Suspension of the license for a fixed or indefinite term;

(3) Restriction or limitation of the practice;

(4) Requiring the satisfactory completion of a specific program of remedial education or treatment;

(5) The monitoring of the practice by a supervisor approved by the disciplining authority;

(6) Censure or reprimand;

(7) Compliance with conditions of probation for a designated period of time;

(8) Payment of a fine for each violation of this chapter, not to exceed ((one)) five thousand dollars per violation. Funds received shall be placed in the health professions account;

(9) Denial of the license request;

(10) Corrective action;

(11) Refund of fees billed to and collected from the consumer.

Any of the actions under this section may be totally or partly stayed by the disciplining authority. In determining what action is appropriate, the disciplining authority must first consider what sanctions are necessary to protect or compensate the public. Only after such provisions have been made may the disciplining authority consider and include in the order requirements designed to rehabilitate the license holder or applicant. All costs associated with compliance with orders issued under this section are the obligation of the license holder or applicant.

Sec. 313. RCW 18.130.190 and 1991 c 3 s 271 are each amended to read as follows:

(1) The secretary shall investigate complaints concerning practice by unlicensed persons of a profession or business for which a license is required by the chapters specified in RCW 18.130.040. In the investigation of the complaints, the secretary shall have the same authority as provided the secretary under RCW 18.130.050. The secretary shall issue a cease and desist order to a person after notice and hearing and upon a determination that the person has violated this subsection. If the secretary makes a written finding of fact that the public interest will be irreparably harmed by delay in issuing an order, the secretary may issue a temporary cease and desist order. The cease and desist order shall not relieve the person so practicing or operating a business without a license from criminal prosecution therefor, but the remedy of a cease and desist order shall be in addition to any criminal liability. The cease and desist order is conclusive proof of unlicensed practice and may be enforced under RCW 7.21.060. This method of enforcement of the cease and desist order may be used in addition to, or as an alternative to, any provisions for enforcement of agency orders set out in chapter 34.05 RCW.

(2) The attorney general, a county prosecuting attorney, the secretary, a board, or any person may in accordance with the laws of this state governing injunctions, maintain an action in the name of this state to enjoin any person practicing a profession or business for which a license is required by the chapters specified in RCW 18.130.040 without a license from engaging in such practice or operating such business until the required license is secured. However, the injunction shall not relieve the person so practicing or operating a business without a license from criminal prosecution therefor, but the remedy by injunction shall be in addition to any criminal liability.

(3) Unlicensed practice of a profession or operating a business for which a license is required by the chapters specified in RCW 18.130.040, unless otherwise exempted by law, constitutes a gross misdemeanor. All fees, fines, forfeitures, and penalties collected or assessed by a court because of a violation of this section shall be remitted to the health professions account.

(4) In addition to the remedies provided in this section, the secretary is authorized to impose a civil penalty of up to five thousand dollars on a person engaged, without a license, in a profession or business for which a license is required by the chapters specified in RCW 18.130.040. The imposition of the civil penalty shall occur only upon a finding by the secretary, after affording an opportunity for a hearing, that there has been a failure or refusal to obtain a license as required in any of the chapters specified in RCW 18.130.040.

NEW SECTION. Sec. 314. A new section is added to chapter 18.130 RCW to read as follows:

MALPRACTICE INSURANCE COVERAGE MANDATE. Except to the extent that liability insurance is not available, every licensed health care practitioner whose services are included in the uniform benefits package, as determined by the health services commission by rule, and whose scope of practice includes independent practice, shall, as a condition of licensure and relicensure, be required to provide evidence of a minimum level of malpractice insurance coverage. On or before January 1, 1994, the department shall designate by rule:

(1) Those health professions whose scope of practice includes independent practice;

(2) For each health profession whose scope of practice includes independent practice, whether malpractice insurance is available; and

(3) If such insurance is available, the appropriate minimum level of mandated coverage.

NEW SECTION. Sec. 315. A new section is added to chapter 48.22 RCW to read as follows:

RISK MANAGEMENT TRAINING OF INDEPENDENT HEALTH CARE PRACTITIONERS. Effective July 1, 1994, a casualty insurer's issuance of a new medical malpractice policy or renewal of an existing medical malpractice policy to a physician or other independent health care practitioner shall be conditioned upon that practitioner's participation in, and completion of, health care liability risk management training. The risk management training shall provide information related to avoiding adverse health outcomes resulting from substandard practice and minimizing damages associated with the adverse health outcomes that do occur. For purposes of this section, "independent health care practitioners" means those health care practitioner licensing classifications designated by the department of health in rule pursuant to section 314 of this act.

NEW SECTION. Sec. 316. A new section is added to chapter 48.05 RCW to read as follows:

RISK MANAGEMENT TRAINING OF INDEPENDENT HEALTH CARE PRACTITIONERS. Effective July 1, 1994, each health care provider, facility, or health maintenance organization that self-insures for liability risks related to medical malpractice and employs physicians or other independent health care practitioners in Washington state shall condition each physician's and practitioner's liability coverage by that entity upon that physician's or practitioner's participation in risk management training offered by the provider, facility, or health maintenance organization to its employees. The risk management training shall provide information related to avoiding adverse health outcomes resulting from substandard practice and minimizing damages associated with those adverse health outcomes that do occur. For purposes of this section, "independent health care practitioner" means those health care practitioner licensing classifications designated by the department of health in rule pursuant to section 314 of this act.

Sec. 317. RCW 70.41.200 and 1991 c 3 s 336 are each amended to read as follows:

(1) Every hospital shall maintain a coordinated quality improvement program for the improvement of the quality of health care services rendered to patients and the identification and prevention of medical malpractice. The program shall include at least the following:

(a) The establishment of a quality ((assurance)) improvement committee with the responsibility to review the services rendered in the hospital, both retrospectively and prospectively, in order to improve the quality of medical care of patients and to prevent medical malpractice. The committee shall oversee and coordinate the quality improvement and medical malpractice prevention program and shall insure that information gathered pursuant to the program is used to review and to revise hospital policies and procedures((. At least one member of the committee shall be a member of the governing board of the hospital who is not otherwise affiliated with the hospital in an employment or contractual capacity));

(b) A medical staff privileges sanction procedure through which credentials, physical and mental capacity, and competence in delivering health care services are periodically reviewed as part of an evaluation of staff privileges;

(c) The periodic review of the credentials, physical and mental capacity, and competence in delivering health care services of all persons who are employed or associated with the hospital;

(d) A procedure for the prompt resolution of grievances by patients or their representatives related to accidents, injuries, treatment, and other events that may result in claims of medical malpractice;

(e) The maintenance and continuous collection of information concerning the hospital's experience with negative health care outcomes and incidents injurious to patients, patient grievances, professional liability premiums, settlements, awards, costs incurred by the hospital for patient injury prevention, and safety improvement activities;

(f) The maintenance of relevant and appropriate information gathered pursuant to (a) through (e) of this subsection concerning individual physicians within the physician's personnel or credential file maintained by the hospital;

(g) Education programs dealing with quality improvement, patient safety, injury prevention, staff responsibility to report professional misconduct, the legal aspects of patient care, improved communication with patients, and causes of malpractice claims for staff personnel engaged in patient care activities; and

(h) Policies to ensure compliance with the reporting requirements of this section.

(2) Any person who, in substantial good faith, provides information to further the purposes of the quality improvement and medical malpractice prevention program or who, in substantial good faith, participates on the quality ((assurance)) improvement committee shall not be subject to an action for civil damages or other relief as a result of such activity.

(3) Information and documents, including complaints and incident reports, created specifically for, and collected, and maintained ((about health care providers arising out of the matters that are under review or have been evaluated)) by a ((review)) quality improvement committee ((conducting quality assurance reviews)) are not subject to discovery or introduction into evidence in any civil action, and no person who was in attendance at a meeting of such committee or ((board)) who participated in the creation, collection, or maintenance of information or documents specifically for the committee shall be permitted or required to testify in any civil action as to the content of such proceedings or the documents and information prepared specifically for the committee. This subsection does not preclude: (a) In any civil action, the discovery of the identity of persons involved in the medical care that is the basis of the civil action whose involvement was independent of any quality improvement activity; (b) in any civil action, the testimony of any person concerning the facts which form the basis for the institution of such proceedings of which the person had personal knowledge acquired independently of such proceedings; (((b))) (c) in any civil action by a health care provider regarding the restriction or revocation of that individual's clinical or staff privileges, introduction into evidence information collected and maintained by quality ((assurance)) improvement committees regarding such health care provider; (((c))) (d) in any civil action, disclosure of the fact that staff privileges were terminated or restricted, including the specific restrictions imposed, if any and the reasons for the restrictions; or (((d))) (e) in any civil action, discovery and introduction into evidence of the patient's medical records required by regulation of the department of health to be made regarding the care and treatment received.

(4) The department of health shall adopt such rules as are deemed appropriate to effectuate the purposes of this section.

(5) The medical disciplinary board or the board of osteopathic medicine and surgery, as appropriate, may review and audit the records of committee decisions in which a physician's privileges are terminated or restricted. Each hospital shall produce and make accessible to the board the appropriate records and otherwise facilitate the review and audit. Information so gained shall not be subject to the discovery process and confidentiality shall be respected as required by subsection (3) of this section. Failure of a hospital to comply with this subsection is punishable by a civil penalty not to exceed two hundred fifty dollars.

(6) Violation of this section shall not be considered negligence per se.

Sec. 318. RCW 70.41.230 and 1991 c 3 s 337 are each amended to read as follows:

(1) Prior to granting or renewing clinical privileges or association of any physician or hiring a physician, a hospital or facility approved pursuant to this chapter shall request from the physician and the physician shall provide the following information:

(a) The name of any hospital or facility with or at which the physician had or has any association, employment, privileges, or practice;

(b) If such association, employment, privilege, or practice was discontinued, the reasons for its discontinuation;

(c) Any pending professional medical misconduct proceedings or any pending medical malpractice actions in this state or another state, the substance of the allegations in the proceedings or actions, and any additional information concerning the proceedings or actions as the physician deems appropriate;

(d) The substance of the findings in the actions or proceedings and any additional information concerning the actions or proceedings as the physician deems appropriate;

(e) A waiver by the physician of any confidentiality provisions concerning the information required to be provided to hospitals pursuant to this subsection; and

(f) A verification by the physician that the information provided by the physician is accurate and complete.

(2) Prior to granting privileges or association to any physician or hiring a physician, a hospital or facility approved pursuant to this chapter shall request from any hospital with or at which the physician had or has privileges, was associated, or was employed, the following information concerning the physician:

(a) Any pending professional medical misconduct proceedings or any pending medical malpractice actions, in this state or another state;

(b) Any judgment or settlement of a medical malpractice action and any finding of professional misconduct in this state or another state by a licensing or disciplinary board; and

(3) The medical disciplinary board shall be advised within thirty days of the name of any physician denied staff privileges, association, or employment on the basis of adverse findings under subsection (1) of this section.

(4) A hospital or facility that receives a request for information from another hospital or facility pursuant to subsections (1) and (2) of this section shall provide such information concerning the physician in question to the extent such information is known to the hospital or facility receiving such a request, including the reasons for suspension, termination, or curtailment of employment or privileges at the hospital or facility. A hospital, facility, or other person providing such information in good faith is not liable in any civil action for the release of such information.

(5) Information and documents, including complaints and incident reports, created specifically for, and collected, and maintained ((about health care providers arising out of the matters that are under review or have been evaluated)) by a ((review)) quality improvement committee ((conducting quality assurance reviews)) are not subject to discovery or introduction into evidence in any civil action, and no person who was in attendance at a meeting of such committee or ((board)) who participated in the creation, collection, or maintenance of information or documents specifically for the committee shall be permitted or required to testify in any civil action as to the content of such proceedings or the documents and information prepared specifically for the committee. This subsection does not preclude: (a) In any civil action, the discovery of the identity of persons involved in the medical care that is the basis of the civil action whose involvement was independent of any quality improvement activity; (b) in any civil action, the testimony of any person concerning the facts which form the basis for the institution of such proceedings of which the person had personal knowledge acquired independently of such proceedings; (((b))) (c) in any civil action by a health care provider regarding the restriction or revocation of that individual's clinical or staff privileges, introduction into evidence information collected and maintained by quality ((assurance)) improvement committees regarding such health care provider; (((c))) (d) in any civil action, disclosure of the fact that staff privileges were terminated or restricted, including the specific restrictions imposed, if any and the reasons for the restrictions; or (((d))) (e) in any civil action, discovery and introduction into evidence of the patient's medical records required by regulation of the department of health to be made regarding the care and treatment received.

(6) Hospitals shall be granted access to information held by the medical disciplinary board and the board of osteopathic medicine and surgery pertinent to decisions of the hospital regarding credentialing and recredentialing of practitioners.

(7) Violation of this section shall not be considered negligence per se.

NEW SECTION. Sec. 319. A new section is added to chapter 43.70 RCW to read as follows:

COORDINATED QUALITY IMPROVEMENT PROGRAM. (1)(a) Health care institutions and medical facilities, other than hospitals, that are licensed by the department, and certified health plans approved pursuant to section 331 of this act may maintain a coordinated quality improvement program for the improvement of the quality of health care services rendered to patients and the identification and prevention of medical malpractice as set forth in RCW 70.41.200.

(b) All such programs shall comply with the requirements of RCW 70.41.200(1)(a), (c), (d), (e), (f), (g), and (h) as modified to reflect the structural organization of the institution, facility, or certified health plan, unless an alternative quality improvement program substantially equivalent to RCW 70.41.200(1)(a) is developed. All such programs, whether complying with the requirement set forth in RCW 70.41.200(1)(a) or in the form of an alternative program, must be approved by the department before the discovery limitations provided in subsections (3) and (4) of this section shall apply. In reviewing plans submitted by licensed entities that are associated with physicians' offices, the department shall ensure that the discovery limitations of this section are applied only to information and documents related specifically to quality improvement activities undertaken by the licensed entity.

(2) Physician groups of ten or more physicians may maintain a coordinated quality improvement program for the improvement of the quality of health care services rendered to patients and the identification and prevention of medical malpractice as set forth in RCW 70.41.200. All such programs shall comply with the requirements of RCW 70.41.200(1)(a), (c), (d), (e), (f), (g), and (h) as modified to reflect the structural organization of the physician group. All such programs must be approved by the department before the discovery limitations provided in subsections (3) and (4) of this section shall apply.

(3) Any person who, in substantial good faith, provides information to further the purposes of the quality improvement and medical malpractice prevention program or who, in substantial good faith, participates on the quality improvement committee shall not be subject to an action for civil damages or other relief as a result of such activity.

(4) Information and documents, including complaints and incident reports, created specifically for, and collected, and maintained by a quality improvement committee are not subject to discovery or introduction into evidence in any civil action, and no person who was in attendance at a meeting of such committee or who participated in the creation, collection, or maintenance of information or documents specifically for the committee shall be permitted or required to testify in any civil action as to the content of such proceedings or the documents and information prepared specifically for the committee. This subsection does not preclude: (a) In any civil action, the discovery of the identity of persons involved in the medical care that is the basis of the civil action whose involvement was independent of any quality improvement activity; (b) in any civil action, the testimony of any person concerning the facts that form the basis for the institution of such proceedings of which the person had personal knowledge acquired independently of such proceedings; (c) in any civil action by a health care provider regarding the restriction or revocation of that individual's clinical or staff privileges, introduction into evidence information collected and maintained by quality improvement committees regarding such health care provider; (d) in any civil action, disclosure of the fact that staff privileges were terminated or restricted, including the specific restrictions imposed, if any and the reasons for the restrictions; or (e) in any civil action, discovery and introduction into evidence of the patient's medical records required by rule of the department of health to be made regarding the care and treatment received.

(5) The department of health shall adopt rules as are necessary to implement this section.

NEW SECTION. Sec. 320. MEDICAL MALPRACTICE REVIEW. (1) The administrator for the courts shall coordinate a collaborative effort to develop a voluntary system for review of medical malpractice claims by health services experts prior to the filing of a cause of action under chapter 7.70 RCW.

(2) The system shall have at least the following components:

(a) Review would be initiated, by agreement of the injured claimant and the health care provider, at the point at which a medical malpractice claim is submitted to a malpractice insurer or a self-insured health care provider.

(b) By agreement of the parties, an expert would be chosen from a pool of health services experts who have agreed to review claims on a voluntary basis.

(c) The mutually agreed upon expert would conduct an impartial review of the claim and provide his or her opinion to the parties.

(d) A pool of available experts would be established and maintained for each category of health care practitioner by the corresponding practitioner association, such as the Washington state medical association and the Washington state nurses association.

(3) The administrator for the courts shall seek to involve at least the following organizations in a collaborative effort to develop the informal review system described in subsection (2) of this section:

(a) The Washington defense trial lawyers association;

(b) The Washington state trial lawyers association;

(d) The Washington state nurses association;

(e) The Washington state hospital association;

(f) The Washington state physicians insurance exchange and association;

(g) The Washington casualty company;

(h) The doctor's agency;

(i) Group health cooperative of Puget Sound;

(j) The University of Washington;

(k) Washington osteopathic medical association;

(l) Washington state chiropractic association;

(m) Washington association of naturopathic physicians; and

(n) The department of health.

(4) On or before January 1, 1994, the administrator for the courts shall provide a report on the status of the development of the system described in this section to the governor and the appropriate committees of the senate and the house of representatives.

NEW SECTION. Sec. 321. A new section is added to chapter 7.70 RCW to read as follows:

MANDATORY MEDIATION OF HEALTH CARE MALPRACTICE CLAIMS. (1) All causes of action, whether based in tort, contract, or otherwise, for damages arising from injury occurring as a result of health care provided after the effective date of this section shall be subject to mandatory mediation prior to trial.

(2) The supreme court shall by rule adopt procedures to implement mandatory mediation of actions under this chapter. The rules shall address, at a minimum:

(a) Procedures for the appointment of, and qualifications of, mediators. A mediator shall have experience or expertise related to actions arising from injury occurring as a result of health care, and be a member of the state bar association who has been admitted to the bar for a minimum of five years or who is a retired judge. The parties may stipulate to a nonlawyer mediator. The court may prescribe additional qualifications of mediators. Mediators shall be compensated in the same amount and manner as judges pro tempore of the superior court unless the parties agree to a different amount or manner of compensation;

(b) The number of days following the filing of a claim under this chapter within which a mediator must be selected;

(c) The method by which a mediator is selected. The rule shall provide for designation of a mediator by the superior court if the parties are unable to agree upon a mediator;

(d) The number of days following the selection of a mediator within which a mediation conference must be held;

(e) A means by which mediation of an action under this chapter may be waived by a mediator who has determined that the claim is not appropriate for mediation; and

(f) Any other matters deemed necessary by the court.

(3) Mediators shall not impose discovery schedules upon the parties.

NEW SECTION. Sec. 322. A new section is added to chapter 7.70 RCW to read as follows:

MANDATORY MEDIATION OF HEALTH CARE MALPRACTICE. The making of a written, good faith request for mediation of a dispute related to damages for injury occurring as a result of health care provided prior to filing a cause of action under this chapter shall toll the statute of limitations provided in RCW 4.16.350.

NEW SECTION. Sec. 323. A new section is added to chapter 7.70 RCW to read as follows:

MANDATORY MEDIATION OF HEALTH CARE MALPRACTICE CLAIMS. Section 321 of this act may not be construed to abridge the right to trial by jury following an unsuccessful attempt at mediation.

Sec. 324. RCW 5.60.070 and 1991 c 321 s 1 are each amended to read as follows:

(1) If there is a court order to mediate ((or)), a written agreement between the parties to mediate, or if mediation is mandated under section 321 of this act, then any communication made or materials submitted in, or in connection with, the mediation proceeding, whether made or submitted to or by the mediator, a mediation organization, a party, or any person present, are privileged and confidential and are not subject to disclosure in any judicial or administrative proceeding except:

(a) When all parties to the mediation agree, in writing, to disclosure;

(b) When the written materials or tangible evidence are otherwise subject to discovery, and were not prepared specifically for use in and actually used in the mediation proceeding;

(d) When disclosure is mandated by statute;

(e) When the written materials consist of a written settlement agreement or other agreement signed by the parties resulting from a mediation proceeding;

(f) When those communications or written materials pertain solely to administrative matters incidental to the mediation proceeding, including the agreement to mediate; or

(g) In a subsequent action between the mediator and a party to the mediation arising out of the mediation.

(2) When there is a court order ((or)), a written agreement to mediate, or when mediation is mandated under section 321 of this act, as described in subsection (1) of this section, the mediator or a representative of a mediation organization shall not testify in any judicial or administrative proceeding unless:

(a) All parties to the mediation and the mediator agree in writing; or

(b) In an action described in subsection (1)(g) of this section.

NEW SECTION. Sec. 325. The legislature finds that in Sofie v. Fibreboard Corp., 112 Wn.2d 636 (1989), the Washington state supreme court struck down the limit on noneconomic damages enacted by the legislature in 1986, because the court found that the statutory limitation on noneconomic damages interfered with the jury's province to determine damages, and thus violated a plaintiff's constitutionally protected right to trial by jury.

The legislature further finds that reforms in existing law for actions involving fault are necessary and proper to avoid catastrophic economic consequences for state and local governmental entities as well as private individuals and businesses.

Therefore, the legislature declares that to remedy the economic inequities which may arise from Sofie, defendants in actions involving fault should be held financially liable in closer proportion to their respective degree of fault. To treat them differently is unfair and inequitable.

It is further the intent of the legislature to partially eliminate causes of action based on joint and several liability as provided by this act for the purpose of reducing costs associated with the civil justice system.

Sec. 326. RCW 4.22.070 and 1986 c 305 s 401 are each amended to read as follows:

(1) For the purposes of this section, the term "economic damages" means objectively verifiable monetary losses, including medical expenses, loss of earnings, burial costs, loss of use of property, cost of replacement or repair, cost of obtaining substitute domestic services, loss of employment, and loss of business or employment opportunities. "Economic damages" does not include subjective, nonmonetary losses such as pain and suffering, mental anguish, emotional distress, disability and disfigurement, inconvenience, injury to reputation, humiliation, destruction of the parent-child relationship, the nature and extent of an injury, loss of consortium, society, companionship, support, love, affection, care, services, guidance, training, instruction, and protection.

(2) In all actions involving fault of more than one entity, the trier of fact shall determine the percentage of the total fault which is attributable to every entity which caused the claimant's damages, including the claimant or person suffering personal injury or incurring property damage, defendants, third-party defendants, entities released by the claimant, entities immune from liability to the claimant and entities with any other individual defense against the claimant. Judgment shall be entered against each defendant except those who have been released by the claimant or are immune from liability to the claimant or have prevailed on any other individual defense against the claimant in an amount which represents that party's proportionate share of the claimant's total damages. The liability of each defendant shall be several only and shall not be joint except:

(a) A party shall be responsible for the fault of another person or for payment of the proportionate share of another party where both were acting in concert or when a person was acting as an agent or servant of the party.

(b) If the trier of fact determines that the claimant or party suffering bodily injury or incurring property damages was not at fault, the defendants against whom judgment is entered shall be jointly and severally liable for the sum of their proportionate shares of the claimant's ((total)) economic damages.

(((2))) (3) If a defendant is jointly and severally liable under one of the exceptions listed in subsections (1)(a) or (1)(b) of this section, such defendant's rights to contribution against another jointly and severally liable defendant, and the effect of settlement by either such defendant, shall be determined under RCW 4.22.040, 4.22.050, and 4.22.060.

(((3))) (4)(a) Nothing in this section affects any cause of action relating to hazardous wastes or substances or solid waste disposal sites.

(b) Nothing in this section shall affect a cause of action arising from the tortious interference with contracts or business relations.

(c) Nothing in this section shall affect any cause of action arising from the manufacture or marketing of a fungible product in a generic form which contains no clearly identifiable shape, color, or marking.

NEW SECTION. Sec. 327. A new section is added to chapter 4.24 RCW to read as follows:

No person may maintain a cause of action or receive an award of damages or imposition of a penalty based on the claim that, but for the intentional or negligent conduct of another, he or she or a child would have been aborted or otherwise not born.

The failure or refusal of a person to perform or have an abortion shall not be a defense in an action. The failure or refusal of a person to perform or have an abortion shall not be considered in awarding damages or imposing a penalty.

Nothing in this section shall preclude a cause of action for a claim based on the failure of a contraceptive method or sterilization procedure. Nothing in this section shall preclude a cause of action based on a claim that, but for the negligent conduct of another, tests or treatment would have been provided or would have been provided properly which would have made possible the prevention, cure, or amelioration of a disease, defect, deficiency, or handicap. Nothing in this section shall preclude a medical malpractice cause of action otherwise based on the intentional, reckless, or negligent conduct of another. Abortion shall not be considered a contraceptive method or a means of preventing, curing, or ameliorating a disease, defect, deficiency, or handicap.

D. HEALTH INSURANCE PURCHASING COOPERATIVES

NEW SECTION. Sec. 328. HEALTH INSURANCE PURCHASING COOPERATIVES--DESIGNATION OF REGIONS BY COMMISSION, INFORMATION SYSTEMS, MINIMUM STANDARDS, AND RULES. (1) The health service commission shall designate regions within the state in which competing health insurance purchasing cooperatives shall operate, based upon population, assuming that each cooperative must serve no less than one hundred thousand persons; geographic factors; market conditions; and other factors deemed appropriate by the commission. The commission may designate certain regions of the state as areas where only one cooperative may operate upon a determination that an insufficient population base exists within such region to efficiently support more than one cooperative.

(2) Every health insurance purchasing cooperative shall:

(a) Admit all individuals, public or private employers, or other groups wishing to participate in the cooperative consistent with the charter and bylaws of the cooperative as approved by the insurance commissioner;

(b) Make available for purchase by cooperative members health care programs offered by certified health plans operating within the cooperative's region;

(d) Provide for centralized enrollment and premium collection and distribution among certified health plans;

(e) Serve as an ombudsman for its members to resolve inquiries, complaints, or other concerns with certified health plans; and

(f) Consider ways in which they can develop, encourage, and provide incentives for employee wellness programs.

(3) Every health insurance purchasing cooperative may assist members in selecting certified health plans and for this purpose may devise a rating system or similar system to judge the quality and cost- effectiveness of certified health plans.

(4) Every health insurance purchasing cooperative shall bear the full cost of its operations, including the costs of participating in the information clearinghouse, through assessments upon its members. Such assessments shall be billed and accounted for separately from premiums collected and distributed for the purchase of the uniform benefits package or any other supplemental insurance or health services program.

(5) No health insurance purchasing cooperative may bear any financial risk for the delivery of uniform benefits package services, or for any other supplemental insurance or health services program.

(6) The commission may adopt rules necessary for the implementation of this section.

NEW SECTION. Sec. 329. LICENSING AND REGULATION OF HEALTH INSURANCE PURCHASING COOPERATIVES BY THE INSURANCE COMMISSIONER. (1) No person may operate a health insurance purchasing cooperative without having first obtained a certificate of authority from the insurance commissioner.

(2) Every proposed cooperative shall furnish notice to the insurance commissioner that shall:

(a) Identify the principal name and address of the cooperative;

(b) Furnish the names and addresses of the initial officers of the cooperative;

(d) Furnish copies of its proposed articles and bylaws; and

(e) Provide other information as prescribed by the insurance commissioner in consultation with the health services commission to verify that the cooperative is qualified and is managed by competent and trustworthy individuals.

(3) The commissioner shall approve applications for certificates in accordance with the order received. Once the maximum number of cooperatives have been issued certificates of authority in each region in accordance with the rules adopted by the health services commission, the insurance commissioner may not issue any new certificate until or unless a previously authorized cooperative surrenders or loses its certificate of authority.

(4) All funds representing premiums or return premiums received by a cooperative in its fiduciary capacity shall be accounted for and maintained in a separate account from all other funds. Each willful violation of this section constitutes a misdemeanor.

(5) Every cooperative shall keep at its principal address, a record of all transactions it has consummated on behalf of its members with certified health plans. All such records shall be kept available and open to the inspection of the insurance commissioner at any business time during a five-year period immediately after the date of completion of the transaction.

E. CERTIFIED HEALTH PLANS

NEW SECTION. Sec. 330. CERTIFIED HEALTH PLANS--REGISTRATION REQUIRED--PENALTY. (1) On or after July 1, 1997, no person or entity in this state shall, by mail or otherwise, sell the uniform benefits package as defined by the commission without being certified as a certified health plan by the insurance commissioner.

(2) On or after July 1, 1997, the uniform benefits package shall be purchased only from entities certified as certified health plans.

(3) On or after July 1, 1997, the uniform benefits package shall be the minimum benefits package of any certified health plan.

NEW SECTION. Sec. 331. HEALTH PLAN CERTIFICATION STANDARDS. A certified health plan shall:

(1) Provide the benefits included in the uniform benefits package to enrolled Washington residents for a premium not to exceed the maximum established by the commission, or provider charges that exceed the maximum charges established by the commission. Certified health plans shall utilize community-rating principles in determining rates and premiums for the uniform benefits package. The community-rating principles required by this section shall allow adjustments for age, geography, and gender. Certified health plans may also allow favorable premium adjustments attributable to wellness and preventive programs, nonsmoking, and other factors approved by the commission;

(2) Accept for enrollment any state resident within the plan's service area and provide or assure the provision of all services within the uniform benefits package regardless of factors referenced in RCW 49.60.020, including age, sex, family structure, ethnicity, race, health condition, geographic location, employment status, socioeconomic status, or other condition or situation;

(3) If the plan provides benefits through contracts with, ownership of, or management of health care facilities and contracts with or employs health care providers, demonstrate to the satisfaction of the insurance commissioner in consultation with the department of health and the commission that its facilities and personnel are adequate to provide the benefits prescribed in the uniform benefits package to enrolled Washington residents, and that it is financially capable of providing such residents with, or has made adequate contractual arrangements with health care providers and facilities to provide enrollees with such benefits. Nothing in this chapter prohibits a certified health plan from offering the uniform benefits package where such obligations are protected by the Washington life and disability insurance guaranty association in place of the provider contracts otherwise required under section 338 of this act;

(4) Comply with portability of benefits requirements prescribed by the insurance commissioner;

(5) Provide all enrollees with instruction and informational materials to increase individual and family awareness of injury and illness prevention; encourage assumption of personal responsibility for protecting personal health; and stimulate discussion about the use and limits of medical care in improving the health of individuals and communities;

(6) Include in all of its contracts issued for uniform benefits package coverage a subrogation provision that allows the certified health plan to recover the costs of uniform benefits package services incurred to care for an enrollee injured by a negligent third party. The costs recovered shall be limited to:

(a) If the certified health plan has not intervened in the action by an injured enrollee against a negligent third party, then the amount of costs the certified health plan can recover shall be limited to the excess remaining after the enrollee has been fully compensated for his or her loss minus a proportionate share of the enrollee's costs and fees in bringing the action. The proportionate share shall be determined by:

(i) The fees and costs approved by the court in which the action was initiated; or

(ii) The written agreement between the attorney and client that established fees and costs when fees and costs are not addressed by the court.

When fees and costs have been approved by a court, after notice to the certified health plan, the certified health plan shall have the right to be heard on the matter of attorneys' fees and costs or its proportionate share;

(b) If the certified health plan has intervened in the action by an injured enrollee against a negligent third party, then the amount of costs the certified health plan can recover shall be the excess remaining after the enrollee has been fully compensated for his or her loss or the amount of the plan's incurred costs, whichever is less;

(7) Establish and maintain a grievance procedure approved by the commissioner, to provide a reasonable and effective resolution of complaints initiated by enrollees concerning any matter relating to the provision of benefits under the uniform benefits package, access to health care services, and quality of services. Each certified health plan shall respond to complaints filed with the insurance commissioner within fifteen working days. The insurance commissioner in consultation with the commission shall establish standards for grievance procedures and resolution; and

(8) Comply with the provisions of chapter 48.30 RCW prohibiting unfair and deceptive acts and practices to the extent such provisions are not modified or superseded by the provisions of chapter . . ., Laws of 1993 (this act) and be prohibited from offering or supplying incentives that would have the effect of avoiding the requirements of subsection (2) of this section.

NEW SECTION. Sec. 332. CERTIFIED HEALTH PLANS--REGISTRATION REQUIRED--PENALTY. (1) No person or entity in this state may, by mail or otherwise, act or hold himself or herself out to be a certified health plan as defined by the commission without being registered with the insurance commissioner.

(2) Anyone violating subsection (1) of this section is liable for a fine not to exceed ten thousand dollars and imprisonment not to exceed six months for each instance of such violation.

NEW SECTION. Sec. 333. ELIGIBILITY REQUIREMENTS FOR CERTIFICATE OF REGISTRATION--APPLICATION REQUIREMENTS. Any corporation, cooperative group, partnership, association, or groups of health professionals licensed by the state of Washington, public hospital district, or public institutions of higher education are entitled to a certificate from the insurance commissioner as a certified health plan if it:

(1) Submits an application for certification as a certified health plan, which shall be verified by an officer or authorized representative of the applicant, being in a form as the insurance commissioner prescribes in consultation with the health services commission;

(2) Meets the minimum net worth requirements set forth in section 339 of this act and the funding reserve requirements set forth in section 340 of this act;

(3) A certified health plan may establish the geographic boundaries in which they will obligate themselves to deliver the services required under the uniform benefits package and include such information in their application for certification, but the commissioner shall review such boundaries and may disapprove, in conformance to guidelines adopted by the commission, those which have been clearly drawn to be exclusionary within a health care catchment area.

NEW SECTION. Sec. 334. ISSUANCE OF CERTIFICATE--GROUNDS FOR REFUSAL. The commissioner shall issue a certificate as a certified health plan to an applicant within one hundred twenty days of such filing unless the commissioner notifies the applicant within such time that such application is not complete and the reasons therefor; or that the commissioner is not satisfied that:

(1) The basic organization document of the applicant permits the applicant to conduct business as a certified health plan;

(2) The applicant has demonstrated the intent and ability to assure that the health services will be provided in a manner to assure both their availability and accessibility;

(3) The organization is financially responsible and may be reasonably expected to meet its obligations to its enrolled participants.

NEW SECTION. Sec. 335. PREMIUMS AND ENROLLEE PAYMENT AMOUNTS--FILING OF PREMIUMS AND ENROLLEE PAYMENT AMOUNTS--ADDITIONAL CHARGES PROHIBITED. (1) The insurance commissioner shall verify that the certified health plans charge no more than the maximum premium during the course of financial and market conduct examinations or more frequently if justified in the opinion of the insurance commissioner or upon request by the health services commission.

(2) The certified health plans shall file the premium schedules with the insurance commissioner, within thirty days of establishment by the health services commission.

NEW SECTION. Sec. 336. ANNUAL STATEMENT FILING--CONTENTS--PENALTY FOR FAILURE TO FILE--ACCURACY REQUIRED. (1) Every certified health plan shall annually not later than March 1 of the calendar year, file with the insurance commissioner a statement verified by at least two of its principal officers showing its financial condition as of December 31 of the preceding year.

(2) Such annual report shall be in such form as the insurance commissioner shall prescribe and shall include:

(a) A financial statement of the certified health plan, including its balance sheet and receipts and disbursements for the preceding year;

(b) A report of the names and addresses of all officers, directors, or trustees of the certified health plan during the preceding year, and the amount of wages, expense reimbursements, or other payments to such individuals. For partnership and professional service corporations, a report shall be made for partners or shareholders as to any compensation or expense reimbursement received by them for services, other than for services and expenses relating directly for patient care;

(c) The number of residents enrolled and terminated during the report period. Additional information regarding the enrollment and termination pattern for a certified health plan may be required by the commissioner to demonstrate compliance with the open enrollment and free access requirements of chapter . . ., Laws of 1993 (this act). The insurance commissioner shall specify additional information to be reported, which may include but not be limited to age, sex, location, and health status information;

(d) Such other information relating to the performance of the certified health plan or the health care facilities or providers with which it has contracted as reasonably necessary to the proper and effective administration of this chapter in accordance with rules;

(e) Disclosure of any financial interests held by officers and directors in any providers associated with the certified health plan or provider of the certified health plan.

(3) The commissioner may require quarterly reporting of financial information, such information to be furnished in a format prescribed by the commissioner in consultation with the commission.

(4) The commissioner may for good reason allow a reasonable extension of time within which such annual statement shall be filed.

(5) The commissioner may suspend or revoke the certificate of a certified health plan for failing to file its annual statement when due or during any extension of time therefor that the commissioner, for good cause, may grant.

(6) The commissioner shall publish and make available to the health services commission an annual summary report of at least the information required in subsections (2) and (3) of this section.

(7) No person may knowingly file with any public official or knowingly make, publish, or disseminate any financial statement of a certified health plan that does not accurately state the certified health plan's financial condition.

NEW SECTION. Sec. 337. PENALTY FOR VIOLATIONS. A certified health plan that, or person who, violates any provision of this chapter is guilty of a gross misdemeanor, unless the penalty is otherwise specifically provided.

NEW SECTION. Sec. 338. PROVIDER CONTRACTS--ENROLLED RESIDENT'S LIABILITY, COMMISSIONER'S REVIEW. (1) Subject to subsection (2) of this section, every contract between a certified health plan and its providers of health care services shall be in writing and shall set forth that in the event the certified health plan fails to pay for health care services as set forth in the uniform benefits package, the enrollee is not liable to the provider for any sums owed by the certified health plan. Every such contract shall provide that this requirement shall survive termination of the contract.

(2) The provisions of subsection (1) of this section shall not apply to emergency care from a provider who is not a contracting provider with the certified health plan, or to emergent and urgently needed out-of-area services.

(3) The certified health plan shall file the contracts with the insurance commissioner for approval thirty days prior to use.

NEW SECTION. Sec. 339. MINIMUM NET WORTH--REQUIREMENTS TO MAINTAIN--DETERMINATION OF AMOUNT. (1) Every certified health plan must maintain a minimum net worth equal to the greater of:

(a) One million dollars; or

(b) Two percent of annual premium revenues as reported on the most recent annual financial statement filed with the insurance commissioner on the first one hundred fifty million dollars of premium and one percent of annual premium on the premium in excess of one hundred fifty million dollars; or

(c) An amount equal to the sum of three months' uncovered expenditures as reported on the most recent financial statement filed with the commissioner.

(2)(a) In determining net worth, no debt may be considered fully subordinated unless the subordination clause is in a form acceptable to the commissioner. An interest obligation relating to the repayment of a subordinated debt must be similarly subordinated.

(b) The interest expenses relating to the repayment of a fully subordinated debt may not be considered uncovered expenditures.

(c) A subordinated debt incurred by a note meeting the requirements of this section, and otherwise acceptable to the insurance commissioner, may not be considered a liability and shall be recorded as equity.

(3) Every certified health plan shall, in determining liabilities, include an amount estimated in the aggregate to provide for unearned premiums and for the payment of claims for health care expenditures that have been incurred, whether reported or unreported, that are unpaid and for which such organization is or may be liable and to provide for the expense of adjustment or settlement of such claims.

The claims shall be computed in accordance with rules adopted by the insurance commissioner in consultation with the health services commission.

NEW SECTION. Sec. 340. FUNDED RESERVE REQUIREMENTS. (1) Each certified health plan obtaining certification from the insurance commissioner under sections 330 through 345 of this act shall provide and maintain a funded reserve of one hundred fifty thousand dollars. The funded reserve shall be deposited with the insurance commissioner or with any organization acceptable to the commissioner in the form of cash, securities eligible for investment under chapter 48.13 RCW, approved surety bond, or any combination of these, and must be equal to or exceed one hundred fifty thousand dollars. The funded reserve shall be established as an assurance that the uncovered expenditures obligations of the certified health plan to the enrolled Washington residents shall be performed.

(2) All income from reserves on deposit with the commissioner shall belong to the depositing certified health plan and shall be paid to it as it becomes available.

(3) Funded reserves required by this section shall be considered an asset in determining the plan's net worth.

NEW SECTION. Sec. 341. EXAMINATION OF CERTIFIED HEALTH PLANS, POWERS OF COMMISSIONER, DUTIES OF PLANS, INDEPENDENT AUDIT REPORTS. (1) The insurance commissioner shall make an examination of the operations of a certified health plan as often as the commissioner deems it necessary in order to assure the financial security and health and safety of the enrolled residents. The insurance commissioner shall make an examination of a certified health plan not less than once every three calendar years.

(2) Every certified health plan shall submit its books and records relating to its operation for financial condition and market conduct examinations and in every way facilitate them. The quality or appropriateness of medical services and systems shall be examined by the department of health except that the insurance commissioner may review such areas to the extent that such items impact the financial condition or the market conduct of the certified health plan. For the purpose of the examinations the insurance commissioner may issue subpoenas, administer oaths, and examine the officers and principals of the certified health plans concerning their business.

(3) The insurance commissioner may elect to accept and rely on audit reports made by an independent certified public accountant for the certified health plan in the course of that part of the insurance commissioner's examination covering the same general subject matter as the audit. The commissioner may incorporate the audit report in his or her report of the examination.

(4) Certified health plans shall be equitably assessed to cover the cost of financial condition and market conduct examinations, the costs of adopting rules, and the costs of enforcing the provisions of this chapter. The assessments shall be levied not less frequently than once every twelve months and shall be in an amount expected to fund the examinations, adoption of rules, and enforcement of the provisions of this chapter including a reasonable margin for cost variations. The assessments shall be established by rules adopted by the commissioner in consultation with the health services commission but may not exceed five and one-half cents per month per resident enrolled in the certified health plan. The minimum assessment shall be one thousand dollars. Assessment receipts shall be deposited in the insurance commissioner's regulatory account in the state treasury and shall be used for the purpose of funding the examinations authorized in subsection (1) of this section. Assessments received shall be used to pay a pro rata share of the costs, including overhead of regulating certified health plans. Amounts remaining in the separate account at the end of a biennium shall be applied to reduce the assessments in succeeding biennia.

NEW SECTION. Sec. 342. INSOLVENCY--COMMISSIONER'S DUTIES, CONTINUATION OF BENEFITS, ALLOCATION OF COVERAGE. (1) In the event of insolvency of a certified health plan and upon order of the commissioner, all other certified health plans shall offer the enrolled Washington residents of the insolvent certified health plan the opportunity to enroll in a solvent certified health plan. Enrollment shall be without prejudice for any preexisting condition and shall be continuous provided the resident enrolls in the new certified health plan within thirty days of the date of insolvency and otherwise complies with the certified health plan's managed care procedures within the thirty-day open enrollment period.

(2) The insurance commissioner, in consultation with the health services commission, shall establish guidelines for the equitable distribution of the insolvent certified health plan's enrollees to the remaining certified health plans. The guidelines may include limitations to enrollment based on financial conditions, provider delivery network, administrative capabilities of the certified health plan, and other reasonable measures of the certified health plan's ability to provide benefits to the newly enrolled residents.

(3) Each certified health plan shall have a plan for handling insolvency that allows for continuation of benefits for the duration of the coverage period for which premiums have been paid and continuation of benefits to enrolled Washington residents who are confined on the date of insolvency in an inpatient facility until their discharge or transfer to a new certified health plan as provided in subsection (1) of this section. The plan shall be approved by the insurance commissioner at the time of certification and shall be submitted for review and approval on an annual basis. The commissioner shall approve such a plan if it includes:

(a) Insurance to cover the expenses to be paid for continued benefits after insolvency;

(b) Provisions in provider contracts that obligate the provider to provide services for the duration of the period after the certified health plan's insolvency for which premium payment has been made and until the enrolled participant is transferred to a new certified health plan in accordance with subsection (1) of this section. Such extension of coverage shall not obligate the provider of service beyond thirty days following the date of insolvency;

(d) Acceptable letters of credit or approved surety bonds; or

(e) Other arrangements the insurance commissioner and certified health plan mutually agree are appropriate to assure that benefits are continued.

NEW SECTION. Sec. 343. FINANCIAL FAILURE, SUPERVISION OF COMMISSIONER--PRIORITY OF DISTRIBUTION OF ASSETS. (1) Any rehabilitation, liquidation, or conservation of a certified health plan shall be deemed to be the rehabilitation, liquidation, or conservation of an insurance company and shall be conducted under the supervision of the insurance commissioner under the law governing the rehabilitation, liquidation, or conservation of insurance companies. The insurance commissioner may apply for an order directing the insurance commissioner to rehabilitate, liquidate, or conserve a certified health plan upon one or more of the grounds set forth in RCW 48.31.030, 48.31.050, and 48.31.080. Enrolled residents shall have the same priority in the event of liquidation or rehabilitation as the law provides to policyholders of an insurer.

(2) For purposes of determining the priority of distribution of general assets, claims of enrolled residents shall have the same priority as established by RCW 48.31.280 for policyholders of insurance companies.

(3) A provider who is obligated by statute or agreement to hold enrolled residents harmless from liability for services provided under and covered by a certified health plan shall have a priority of distribution of the general assets immediately following that of enrolled residents as described in this section, and immediately proceeding the priority of distribution described in RCW 48.31.280(2)(e).

NEW SECTION. Sec. 344. GRIEVANCE PROCEDURE. A certified health plan shall establish and maintain a grievance procedure approved by the commissioner, to provide a reasonable and effective resolution of complaints initiated by enrolled Washington residents concerning any matter relating to the provision of benefits under the uniform benefits package, access to health care services, and quality of services. Each certified health plan shall respond to complaints filed with the insurance commissioner within twenty working days. The insurance commissioner in consultation with the health care commission shall establish standards for grievance procedures and resolution.

NEW SECTION. Sec. 345. EXEMPTION. The provisions of sections 330 through 344 of this act do not apply to any disability insurance company, health care service contractor, or health maintenance organization authorized to do business in Washington.

NEW SECTION. Sec. 346. ENFORCEMENT AUTHORITY OF COMMISSIONER. For the purposes of chapter . . ., Laws of 1993 (this act), the insurance commissioner shall have the same powers and duties of enforcement as are provided in Title 48 RCW.

F. STATE RESIDENT PARTICIPATION

NEW SECTION. Sec. 347. INDIVIDUAL PARTICIPATION. (1) All residents of the state of Washington are required to participate in a certified health plan no later than July 1, 1998. This participation requirement may be waived if imposition of the requirement would constitute a violation of the freedom of religion provisions set forth in the First Amendment, United States Constitution and Article I, section 11 of the state Constitution. Residents of the state of Washington who work in another state for an out-of-state employer shall be deemed to have satisfied the requirements of this section if they receive health insurance coverage through such employer.

(2) The commission shall monitor the enrollment of individuals into certified health plans and shall make public periodic reports concerning the number of persons enrolled and not enrolled, the reasons why individuals are not enrolled, recommendations to reduce the number of persons not enrolled, and recommendations regarding enforcement of this provision.

G. EXCLUSIONS AND STUDIES

NEW SECTION. Sec. 348. CODE REVISIONS AND WAIVERS. (1) The commission shall consider the analysis of state and federal laws that would need to be repealed, amended, or waived to implement chapter . . ., Laws of 1993 (this act), and report its recommendations, with proposed revisions to the Revised Code of Washington, to the governor, and appropriate committees of the legislature by January 1, 1994.

(2) The governor, in consultation with the commission, shall take the following steps in an effort to receive waivers or exemptions from federal statutes necessary to fully implement chapter . . ., Laws of 1993 (this act) to include, but not be limited to:

(a) Negotiate with the United States congress and the federal department of health and human services, health care financing administration to obtain a statutory or regulatory waiver of provisions of the medicaid statute, Title XIX of the federal social security act that currently constitute barriers to full implementation of provisions of chapter . . ., Laws of 1993 (this act) related to access to health services for low-income residents of Washington state. Such waivers shall include any waiver needed to implement managed care programs. Waived provisions may include and are not limited to: Categorical eligibility restrictions related to age, disability, blindness, or family structure; income and resource limitations tied to financial eligibility requirements of the federal aid to families with dependent children and supplemental security income programs; administrative requirements regarding single state agencies, choice of providers, and fee for service reimbursement programs; and other limitations on health services provider payment methods.

(b) Negotiate with the United States congress and the federal department of health and human services, health care financing administration to obtain a statutory or regulatory waiver of provisions of the medicare statute, Title XVIII of the federal social security act that currently constitute barriers to full implementation of provisions of chapter . . ., Laws of 1993 (this act) related to access to health services for elderly and disabled residents of Washington state. Such waivers shall include any waivers needed to implement managed care programs. Waived provisions include and are not limited to: Beneficiary cost-sharing requirements; restrictions on scope of services; and limitations on health services provider payment methods.

(c) Negotiate with the United States congress and the federal department of health and human services to obtain any statutory or regulatory waivers of provisions of the United States public health services act necessary to ensure integration of federally funded community and migrant health clinics and other health services funded through the public health services act into the health services system established pursuant to chapter . . ., Laws of 1993 (this act). The commission shall request in the waiver that funds from these sources continue to be allocated to federally funded community and migrant health clinics to the extent that such clinics' patients are not yet enrolled in certified health plans.

(3) On or before December 1, 1995, the commission shall report the following to the governor and appropriate committees of the legislature:

(a) The status of its efforts to obtain the waivers provided in subsection (2) of this section;

(b) The extent to which chapter . . ., Laws of 1993 (this act) can be implemented, given the status of waivers requested or granted.

H. WORKERS' COMPENSATION

NEW SECTION. Sec. 349. WORKERS' COMPENSATION MEDICAL BENEFITS. (1) On or before January 1, 1995, the department of labor and industries, in coordination with the commission, and the workers' compensation advisory committee, shall complete a study related to the medical services component of the workers' compensation program of the department of labor and industries. The goal of the study shall be to determine whether and how the medical services component of the workers' compensation program can be modified to provide appropriate medical services to injured workers in a more cost-effective manner. In conducting the study, consideration shall be given to at least the following factors: Workers' choice of health care providers, twenty-four hour coverage, the required benefits structure, necessary statute changes, the use of managed care to provide medical services to injured workers, the quasi-judicial system that overlays treatment, and the relationship between return to work efforts, medical services, and disability prevention. The study shall evaluate at least the following options:

(a) Whether the medical services component of the workers' compensation program should be maintained within the department of labor and industries, and its purchasing and other practices modified to control costs and increase efficacy of health services provided to injured workers;

(b) Whether the medical services component of the workers' compensation program should be administered by the health care authority;

(c) Whether the medical services component of the workers' compensation program should be included in the services offered by certified health plans through employer sponsorship as provided in chapter ..., Laws of 1993 (this act). Any recommendation proposing the inclusion of workers' compensation medical services in the services offered by certified health plans shall assure that (i) no less than ninety-seven percent of state residents have access to the uniform benefits package as required in chapter . . ., Laws of 1993 (this act), (ii) the uniform benefits package provides benefits which are medically necessary under the workers' compensation program in 1993, including payment for medical determinations of disability under Title 51 RCW, (iii) time loss benefits and rehabilitative services will not be reduced as a result of the transfer, and (iv) the employees' share of the workers' compensation medical aid fund contribution will be returned to employees as increased wages.

(2) The department of labor and industries may immediately implement pilot projects to assess the effects of purchasing the medical aid component of workers' compensation through managed care arrangements on the cost, quality comparability, and employer/employee satisfaction with various consolidation proposals. In completing these pilot projects, the department shall be granted exemptions from the requirements of Title 51 RCW which may prohibit implementation of the pilot projects. The projects shall conclude no later than January 1, 1995.

(3) The department of labor and industries shall present the recommendations to the governor and the appropriate committees of the legislature by January 1, 1995.

I. MISCELLANEOUS

NEW SECTION. Sec. 350. SHORT TITLE. This act may be known and cited as the Washington health services act of 1993.

Sec. 351. RCW 42.17.2401 and 1991 c 200 s 404 are each amended to read as follows:

For the purposes of RCW 42.17.240, the term "executive state officer" includes:

(1) The chief administrative law judge, the director of agriculture, the administrator of the office of marine safety, the administrator of the Washington basic health plan, the director of the department of services for the blind, the director of the state system of community and technical colleges, the director of community development, the secretary of corrections, the director of ecology, the commissioner of employment security, the chairman of the energy facility site evaluation council, the director of the energy office, the secretary of the state finance committee, the director of financial management, the director of fisheries, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of general administration, the secretary of health, the administrator of the Washington state health care authority, the executive secretary of the health care facilities authority, the executive secretary of the higher education facilities authority, the director of the higher education personnel board, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the executive secretary of the indeterminate sentence review board, the director of the department of information services, the director of the interagency committee for outdoor recreation, the executive director of the state investment board, the director of labor and industries, the director of licensing, the director of the lottery commission, the director of the office of minority and women's business enterprises, the director of parks and recreation, the director of personnel, the executive director of the public disclosure commission, the director of retirement systems, the director of revenue, the secretary of social and health services, the chief of the Washington state patrol, the executive secretary of the board of tax appeals, the director of trade and economic development, the secretary of transportation, the secretary of the utilities and transportation commission, the director of veterans affairs, the director of wildlife, the president of each of the regional and state universities and the president of The Evergreen State College, each district and each campus president of each state community college;

(2) Each professional staff member of the office of the governor;

(3) Each professional staff member of the legislature; and

(4) Central Washington University board of trustees, board of trustees of each community college, each member of the state board for community and technical colleges ((education)), state convention and trade center board of directors, committee for deferred compensation, Eastern Washington University board of trustees, Washington economic development finance authority, The Evergreen State College board of trustees, forest practices appeals board, forest practices board, gambling commission, Washington health care facilities authority, each member of the Washington health services commission, higher education coordinating board, higher education facilities authority, higher education personnel board, horse racing commission, state housing finance commission, human rights commission, indeterminate sentence review board, board of industrial insurance appeals, information services board, interagency committee for outdoor recreation, state investment board, liquor control board, lottery commission, marine oversight board, oil and gas conservation committee, Pacific Northwest electric power and conservation planning council, parks and recreation commission, personnel appeals board, personnel board, board of pilotage (([commissioners])) commissioners, pollution control hearings board, public disclosure commission, public pension commission, shorelines hearing board, ((state)) public employees' benefits board, board of tax appeals, transportation commission, University of Washington board of regents, utilities and transportation commission, Washington state maritime commission, Washington public power supply system executive board, Washington State University board of regents, Western Washington University board of trustees, and wildlife commission.

Sec. 352. RCW 43.20.050 and 1992 c 34 s 4 are each amended to read as follows:

(1) The state board of health shall provide a forum for the development of public health policy in Washington state. It is authorized to recommend to the secretary means for obtaining appropriate citizen and professional involvement in all public health policy formulation and other matters related to the powers and duties of the department. It is further empowered to hold hearings and explore ways to improve the health status of the citizenry.

(a) At least every five years, the state board shall convene regional forums to gather citizen input on public health issues.

(b) Every two years, in coordination with the development of the state biennial budget, the state board shall prepare the state public health report that outlines the health priorities of the ensuing biennium. The report shall:

(i) Consider the citizen input gathered at the ((health)) forums;

(ii) Be developed with the assistance of local health departments;

(iii) Be based on the best available information collected and reviewed according to RCW 43.70.050 and recommendations from the council;

(iv) Be developed with the input of state health care agencies. At least the following directors of state agencies shall provide timely recommendations to the state board on suggested health priorities for the ensuing biennium: The secretary of social and health services, the health care authority administrator, the insurance commissioner, the superintendent of public instruction, the director of labor and industries, the director of ecology, and the director of agriculture;

(v) Be used by state health care agency administrators in preparing proposed agency budgets and executive request legislation;

(vi) Be submitted by the state board to the governor by ((June)) January 1 of each even-numbered year for adoption by the governor. The governor, no later than ((September)) March 1 of that year, shall approve, modify, or disapprove the state public health report.

(c) In fulfilling its responsibilities under this subsection, the state board ((shall)) may create ad hoc committees or other such committees of limited duration as necessary. ((Membership should include legislators, providers, consumers, bioethicists, medical economics experts, legal experts, purchasers, and insurers, as necessary.))

(2) In order to protect public health, the state board of health shall:

(a) Adopt rules necessary to assure safe and reliable public drinking water and to protect the public health. Such rules shall establish requirements regarding:

(i) The design and construction of public water system facilities, including proper sizing of pipes and storage for the number and type of customers;

(ii) Drinking water quality standards, monitoring requirements, and laboratory certification requirements;

(iii) Public water system management and reporting requirements;

(iv) Public water system planning and emergency response requirements;

(v) Public water system operation and maintenance requirements;

(vi) Water quality, reliability, and management of existing but inadequate public water systems; and

(vii) Quality standards for the source or supply, or both source and supply, of water for bottled water plants.

(b) Adopt rules and standards for prevention, control, and abatement of health hazards and nuisances related to the disposal of wastes, solid and liquid, including but not limited to sewage, garbage, refuse, and other environmental contaminants; adopt standards and procedures governing the design, construction, and operation of sewage, garbage, refuse and other solid waste collection, treatment, and disposal facilities;

(c) Adopt rules controlling public health related to environmental conditions including but not limited to heating, lighting, ventilation, sanitary facilities, cleanliness and space in all types of public facilities including but not limited to food service establishments, schools, institutions, recreational facilities and transient accommodations and in places of work;

(d) Adopt rules for the imposition and use of isolation and quarantine;

(e) Adopt rules for the prevention and control of infectious and noninfectious diseases, including food and vector borne illness, and rules governing the receipt and conveyance of remains of deceased persons, and such other sanitary matters as admit of and may best be controlled by universal rule; and

(f) Adopt rules for accessing existing data bases for the purposes of performing health related research.

(3) The state board may delegate any of its rule-adopting authority to the secretary and rescind such delegated authority.

(4) All local boards of health, health authorities and officials, officers of state institutions, police officers, sheriffs, constables, and all other officers and employees of the state, or any county, city, or township thereof, shall enforce all rules adopted by the state board of health. In the event of failure or refusal on the part of any member of such boards or any other official or person mentioned in this section to so act, he shall be subject to a fine of not less than fifty dollars, upon first conviction, and not less than one hundred dollars upon second conviction.

(5) The state board may advise the secretary on health policy issues pertaining to the department of health and the state.

NEW SECTION. Sec. 353. RCW 18.32.675 and 1935 c 112 s 19 are each repealed.

NEW SECTION. Sec. 354. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 355. SAVINGS CLAUSE. The enactment of this act does not have the effect of terminating, or in any way modifying, any obligation or any liability, civil or criminal, which was already in existence on the effective date of this act.

NEW SECTION. Sec. 356. CAPTIONS. Captions used in this act do not constitute any part of the law.

NEW SECTION. Sec. 357. CODIFICATION. Sections 301 through 306, 327 through 345, and 347 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 358. RESERVATION OF LEGISLATIVE AUTHORITY. The legislature reserves the right to amend or repeal all or any part of this act at any time and there shall be no vested private right of any kind against such amendment or repeal. All the rights, privileges, or immunities conferred by this act or any acts done pursuant thereto shall exist subject to the power of the legislature to amend or repeal this act at any time.

NEW SECTION. Sec. 359. EFFECTIVE DATE CLAUSE. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately."

Representatives Dyer and Vance spoke in favor of adoption of the amendment and Representative Dellwo spoke against it.

Representative Fuhrman an demanded electronic roll call vote and the demand was sustained.

ROLL CALL

The Clerk called the roll on adoption of the striking amendment to the committee amendment to Engrossed Second Substitute Senate Bill No. 5304 and the amendment was not adopted by the following vote: Yeas - 37, Nays - 61, Absent - 0, Excused - 0.

Voting yea: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Cooke, Dyer, Edmondson, Finkbeiner, Foreman, Forner, Fuhrman, Grant, Horn, Lisk, Long, Mastin, Mielke, Miller, Morton, Padden, Rayburn, Reams, Schmidt, Schoesler, Sehlin, Sheahan, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven and Wood - 37.

Voting nay: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Fisher, G., Fisher, R., Flemming, Hansen, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Kremen, Lemmon, Leonard, Linville, Locke, Ludwig, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Riley, Roland, Romero, Rust, Scott, Sheldon, Shin, Sommers, Springer, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe, Zellinsky and Mr. Speaker - 61.

The committee amendment as amended was adopted.

On motion of Representative Peery, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

Representatives Flemming, Dellwo, L. Johnson, Appelwick, Karahalios, Ogden, Veloria, Jones and Conway spoke in favor of passage of the bill.

POINT OF PERSONAL PRIVILEGE

Representative Dyer: My compliments to the Representative from the third district. No one can say that he hasn't suffered sling and arrows of outrageous fortune and continued to work very hard on this process. We have our philosophical differences in the legislation, but we can not argue that the staff and the chairman under his direction has maintained a fair and equitable process for the hearing of even opposing views and I thank you for that.

Representatives Dyer, Brough, Forner and Edmondson spoke against passage of the bill.

Representative Vance demanded an oral roll call vote and the demand was sustained.

Representative Zellinsky demanded the previous question and the demand was sustained.

The Speaker stated the question before the House to be final passage of Engrossed Second Substitute Senate Bill No. 5304.

ROLL CALL

The Clerk called the roll on final passage of Engrossed Second Substitute Senate Bill No. 5304 and the bill as amended by the House and the bill passed the House by the following vote: Yeas - 56, Nays - 42, Absent - 0, Excused - 0.

Voting yea: Representatives Anderson, Appelwick, Basich, Bray, Brown, Campbell, Chappell, Cole, G., Conway, Cothern, Dellwo, Dorn, Dunshee, Eide, Finkbeiner, Fisher, G., Fisher, R., Flemming, Heavey, Holm, Jacobsen, Johanson, Johnson, L., Johnson, R., Jones, Karahalios, Kessler, King, Kohl, J., Lemmon, Leonard, Linville, Locke, Ludwig, Meyers, R., Morris, Myers, H., Ogden, Orr, Patterson, Peery, Pruitt, Quall, Riley, Romero, Rust, Shin, Sommers, Springer, Thibaudeau, Valle, Veloria, Wang, Wineberry, Wolfe and Mr. Speaker - 56.

Voting nay: Representatives Ballard, Ballasiotes, Brough, Brumsickle, Carlson, Casada, Chandler, Cooke, Dyer, Edmondson, Foreman, Forner, Fuhrman, Grant, Hansen, Horn, Kremen, Lisk, Long, Mastin, Mielke, Miller, Morton, Padden, Rayburn, Reams, Roland, Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sheldon, Silver, Stevens, Talcott, Tate, Thomas, Vance, Van Luven, Wood and Zellinsky - 42.

Engrossed Second Substitute Senate Bill No. 5304, as amended by the House, having received the constitutional majority, was declared passed.

On motion of Representative Peery, the call of the House was dissolved.

There being no objection, the House advanced to the eleventh order of business.

MOTION

On motion of Representative Peery, the House adjourned until 12:00 p.m., Friday April 9, 1993.

BRIAN EBERSOLE, Speaker

ALAN THOMPSON, Chief Clerk