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NINETY-SEVENTH DAY




MORNING SESSION




House Chamber, Olympia, Saturday, April 19, 1997


             The House was called to order at 10:00 a.m. by the Speaker (Representative Dunn 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 Litia Shaw and Callie Bishop. Prayer was offered by Representative David Anderson.


             Representative Pennington assumed the chair.


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


MESSAGES FROM THE SENATE

April 18, 1997

Mr. Speaker:


             The Senate has failed to pass:

SUBSTITUTE HOUSE BILL NO. 1280,

and the same is herewith transmitted.

Mike O'Connell, Secretary


April 18, 1997

Mr. Speaker:


             The Senate has passed:

SUBSTITUTE HOUSE BILL NO. 1176,

HOUSE BILL NO. 1267,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1292,

HOUSE BILL NO. 1316,

HOUSE BILL NO. 1420,

SUBSTITUTE HOUSE BILL NO. 1513,

SUBSTITUTE HOUSE BILL NO. 1657,

SUBSTITUTE HOUSE BILL NO. 1757,

HOUSE BILL NO. 2011,

HOUSE BILL NO. 2117,

HOUSE BILL NO. 2267,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2276,

HOUSE JOINT RESOLUTION NO. 4208,

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             The Speaker assumed the chair.


SIGNED BY THE SPEAKER


             The Speaker announced he was signing:

HOUSE BILL NO. 1102,

HOUSE BILL NO. 1202,

HOUSE BILL NO. 1269,

HOUSE BILL NO. 1349,

HOUSE BILL NO. 1588,

SUBSTITUTE HOUSE BILL NO. 1726,

ENGROSSED HOUSE BILL NO. 1832,

SUBSTITUTE HOUSE BILL NO. 2090,

SUBSTITUTE HOUSE BILL NO. 2149,

HOUSE JOINT MEMORIAL NO. 4005,

HOUSE JOINT RESOLUTION NO. 4209,

SENATE BILL NO. 5353,

SENATE BILL NO. 5688,

SUBSTITUTE SENATE BILL NO. 5721,

SUBSTITUTE SENATE BILL NO. 5868,


             The Speaker called upon Representative Pennington to preside.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1008 with the following amendments:


             On page 5, line 19, after "vehicle" strike "other than a motor home,"


             On page 5, beginning on line 20, after "person" strike all material through plate" on line 23


             On page 10, beginning on line 17, strike all of Sections 13 and 14


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1008 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1008 as amended by the Senate.


             Representatives Fisher and K. Schmidt spoke in favor of passage of the bill.


MOTION


             On motion by Representatives Cairnes, Representatives B. Thomas, DeBolt, Mastin, Reams, Buck, McDonald, Carrell and Robertson were excused. On motion by Representative Constantine, Representative Kastama was excused.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1008 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 86, Nays - 3, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Cooke, Cooper, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 86.

             Voting nay: Representatives Conway, Costa and Sullivan - 3.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1008, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 7, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1019 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. Pursuant to chapter 43.155 RCW, the following project loans recommended by the public works board are authorized to be made with funds previously appropriated from the public works assistance account:

(1) City of Blaine--sanitary sewer project--construct new grit channel, chlorine contact chambers, and chlorination/dechlorination facility and sludge dewatering equipment. Replacement of rotating biological contactors and secondary clarifiers with sequencing batch reactors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,318,037

(2) City of Blaine--sanitary sewer project--replace sewer lines between peace portal drive and pump station no. 1 on Marine Drive, including nine manholes, curb and gutter removal, and roadway repair. . . . . . . . . . . . . $593,365

(3) City of Bremerton--sanitary sewer project--separating the combined sewer and storm water drainage systems, separating roof drains, and other measures to reduce overflows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$662,000

(4) City of Buckley--sanitary sewer project--reduce l/l problem by installing a sanitary sewer and storm pipe, conversion of existing sewer mains to storm water, and construction of an aerobic digester. . . . . . . . . .$1,200,000

(5) Covington Water District--domestic water project--provide facilities for dosing chemicals for disinfection and PH adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,596,000

(6) Grays Harbor County--sanitary sewer project--transitioning from failing individual on-site systems to and upgraded and expanding treatment facility with twenty-five mgd advanced secondary wastewater treatment facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$4,000,000

(7) City of Ilwaco--sanitary sewer project--replacement of side sewer lines in two city sewer basins in order to meet department of health compliance order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$193,500

(8) City of Ilwaco--domestic water project--install a steel forty-two thousand gallon aeration basin and a one hundred pound per day ozone generating and injection unit upstream from the existing water filter to improve water quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$477,000

(9) Mason County PUD No. 1--domestic water project--rehabilitation/improvements through the replacement of existing water system facilities, thereby supplying a reliable and safe source of potable water. . . . . . . .$1,551,870

(10) City of Medical Lake--sanitary sewer project--installation of an advanced wastewater treatment facility, consisting of a sequential batch reactor with rotary fine screens; grit chamber; equalization basin; effluent filters; batch aeration basins; ultraviolet radiation disinfection; ten thousand lineal feet of force main; one lift station and a composting facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$4,620,000

(11) City of Puyallup--sanitary sewer project--provide enhanced removal of pollutants from the community's wastewater to comply with a department of ecology order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,000,000

(12) City of Quincy--road project--repair/replacement of damaged portions of curb, gutter, and sidewalk; consisting of grading, drainage improvements, crushed rock base, asphalt concrete pavement, curb and gutter, sidewalk, and illumination. Replacement of malfunctioning railroad crossing signal system. . . . . . . . . . .$449,995

(13) Town of Rosalia--domestic water project--construct a new three hundred thousand gallon water reservoir, replacement of an antiquated booster pump station. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$216,900

(14) City of Seattle--bridge project--replace steel deck grating on the University and Fremont bridges, install truss protection railing, and rehabilitate the centerlock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,284,640

(15) City of Woodland--domestic water project--provide water collection laterals, transmission main, a new filtration plant with one hundred thousand gallon wet well storage, and filters that will enhance the existing well water source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,797,000

(16) Emergency Public Works Loans--as authorized by RCW 43.155.065. . . . . . . . . . . . . . . . . . . . . . . .$1,898,649

 

Section 1 total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,858,956


             NEW SECTION. Sec. 2. An appropriation of $25,000,000 for the biennium ending June 30, 1997, is hereby made from the public works assistance account to the department of community, trade, and economic development for the purposes of providing funds for the following project loans recommended by the public works board:

(1) City of Blaine--sanitary sewer project--replace seventy-year-old sewer system with new sanitary sewers

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $332,700

(2) City of Bonney Lake--domestic water project--installation of a new two million gallon reservoir to meet department of health requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $953,595

(3) Public Utility District No. 1 of Chelan County--domestic water--construction of a five hundred thousand gallon concrete reservoir and appurtenances, approximately two hundred lineal feet of eight-inch water main for connection to existing distribution system, and site restoration to comply with department of health requirements$390,950

(4) Coal Creek Utility District--domestic water project--replace approximately ten thousand six hundred lineal feet of water main and construct two water chlorination facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$747,425

(5) Covington Water District--domestic water project--replace approximately twenty-three thousand five hundred lineal feet of leaky distribution service lines and connections at Timberlane Estates. . . . . . . . . . . . . . . .$1,389,500

(6) Cross Valley Water District--domestic water project--construct a water treatment facility including appurtenances, buildings, and equipment for production wells no. 5, 6, and 10. . . . . . . . . . . . . . . . . . . . . .$945,770

(7) City of Duvall--domestic water project--replace two thousand three hundred lineal feet of ten-inch ac water main, install a backup generator, demolish and remove two fifty-five thousand gallon reservoirs and install a one thousand gpm pump station. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$298,491

(8) Fall City Water District--domestic water project--replace water lines on SE 48th, 328th Way SE, Preston-Fall City Road, also replace Heathercrest water tank, and service the Riverview Park. . . . . . . . . . . . . . . . . . . .$211,750

(9) Highline Water District--domestic water project--replacement of approximately twenty-three thousand seven hundred fifty lineal feet of water main to improve water quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,261,176

(10) City of Leavenworth--sanitary sewer--design and construct improvements to wastewater treatment plant and wastewater collection system; including seven hundred fifty thousand gallon oxidation ditch, a third clarifier, modification/improvements to return to activated sludge pumping, and an ultraviolet disinfection system$2,915,000

(11) City of Monroe--domestic water project--replace Ingraham Hill reservoir with a two million gallon water tank and a two million gallon water standpipe and booster pump station on the North Hill site to reduce environmental and health impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,420,000

(12) Olympic View Water and Sewer District--domestic water project--construct a new water filtration facility at Deer Creek for compliance with filtration and disinfection standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $919,345

(13) City of Renton--domestic water project--construction of corrosion control treatment facilities to treat water from wells WW 1, 2, 3, 8, and 9 and Springbrook Springs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$932,600

(14) City of Seattle--bridge project--bridge columns and substructure of the South Spokane Street Viaduct will be strengthened by adding seismic jacketing to all existing columns, in addition to increasing the size of the viaduct's bridge girder seats. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$456,885

(15) Southwest Suburban Sewer District--sanitary sewer project--replace and rehabilitate approximately eighteen thousand lineal feet of existing sanitary sewer lines, associated manholes, and side sewer connections in the Salmon Creek Drainage Basin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,100,000

(16) City of Spokane--bridge project--remove and replace two bridges in downtown Spokane including new water and sewer mains and a pedestrian/bicycle pathway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000,000

(17) City of Spokane--domestic water project--replaces eighty-five-year-old water transmission and ductile mains, including valves and casing under a rail line, also pavement removal, restoration, and traffic control measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,428,000

(18) City of University Place--road project--construct six-foot sidewalks, including handicap accessible curbs and gutters, and bicycle lanes on both sides of Grandview Drive. Also construct enclosed storm drainage system$1,882,000

(19) Val Vue Sewer District--sanitary sewer project--rehabilitation of approximately two thousand four hundred sixty-five lineal feet of failing sewer mains in the Rainier Vista area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $175,000

 

Section 2 total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,760,187

 

Total of sections 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$59,619,143


             Sec. 3. RCW 43.155.060 and 1988 c 93 s 2 are each amended to read as follows:

             In order to aid the financing of public works projects, the board may:

             (1) Make low-interest or interest-free loans to local governments from the public works assistance account or other funds and accounts for the purpose of assisting local governments in financing public works projects. The board may require such terms and conditions and may charge such rates of interest on its loans as it deems necessary or convenient to carry out the purposes of this chapter. Money received from local governments in repayment of loans made under this section shall be paid into the public works assistance account for uses consistent with this chapter.

             (2) Pledge money in the public works assistance account, or money to be received by the public works assistance account, to the repayment of all or a portion of the principal of or interest on obligations issued by local governments to finance public works projects. The board shall not pledge any amount greater than the sum of money in the public works assistance account plus money to be received from the payment of the debt service on loans made from that account, nor shall the board pledge the faith and credit or the taxing power of the state or any agency or subdivision thereof to the repayment of obligations issued by any local government.

             (3) Create such subaccounts in the public works assistance account as the board deems necessary to carry out the purposes of this chapter.

             (4) Provide a method for the allocation of loans and financing guarantees and the provision of technical assistance under this chapter.

             The board shall ensure that at the beginning of each fiscal quarter there is a sufficient cash balance in the public works assistance account to cover the disbursements anticipated during the quarter.

             All local public works projects aided in whole or in part under the provisions of this chapter shall be put out for competitive bids, except for emergency public works under RCW 43.155.065 for which the recipient jurisdiction shall comply with this requirement to the extent feasible and practicable. The competitive bids called for shall be administered in the same manner as all other public works projects put out for competitive bidding by the local governmental entity aided under this chapter.


             NEW SECTION. Sec. 4. 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 takes effect immediately."


             On page 1, line 2 of the title, after "board;" strike the remainder of the title and insert "amending RCW 43.155.060; creating new sections; making an appropriation; and declaring an emergency."


and the same are herewith transmitted.

Mike O'Connell, Secretary


             There being no objection, the House concurred in the Senate amendments to House Bill No.1019 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of House Bill No. 1019 as amended by the Senate.


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


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 1019 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             House Bill No. 1019, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 16, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1022 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. It is the intent of this legislation to establish necessary oversight by the legislature and the governor regarding long-range commitments made by the department of natural resources in its management of state trust lands, particularly commitments made with the federal government pursuant to the federal endangered species act. It is important to reserve the legislature's authority as ultimate trustee to set overall policy for the management of the lands of the state and to maintain a watchful eye on the decisions of the department affecting our trust lands.


             NEW SECTION. Sec. 2. The legislature shall exercise its appropriate authority as trustee over state trust lands by reviewing the existing habitat conservation plan for state forest lands. The legislature shall make its own determination as to whether the plan and the accompanying implementation agreement are in compliance with the state's fiduciary responsibilities and are, in fact, in the best interests of the trust beneficiaries. If the legislature finds that the habitat conservation plan and implementation agreement are in the best interests of the trust beneficiaries, the legislature shall so state either through legislation, joint memorial, or resolution. If the legislature has not made such a statement by March 15, 1998, the department of natural resources shall immediately exercise the provision in the habitat conservation plan implementation agreement terminating that agreement and plan. The department of natural resources shall notify the legislature immediately that it has taken this required action.


             NEW SECTION. Sec. 3. 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 takes effect immediately."


             On page 1, beginning on line 1 of the title, after "resources;" strike the remainder of the title and insert "creating new sections; and declaring an emergency."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No.1022 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1022 as amended by the Senate.


             Representatives Alexander and Regala spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1022 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 60, Nays - 29, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Backlund, Ballasiotes, Benson, Boldt, Bush, Cairnes, Carlson, Chandler, Clements, Cooke, Crouse, Delvin, Doumit, Dunn, Dyer, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kessler, Koster, Lambert, Linville, Lisk, McMorris, Mielke, Mitchell, Morris, Mulliken, Parlette, Pennington, Quall, Radcliff, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 60.

             Voting nay: Representatives Anderson, Appelwick, Blalock, Butler, Chopp, Cody, Cole, Constantine, Conway, Cooper, Costa, Dickerson, Dunshee, Fisher, Keiser, Kenney, Lantz, Mason, Murray, O'Brien, Ogden, Poulsen, Regala, Romero, Sommers, H., Tokuda, Veloria, Wolfe and Wood - 29.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1022, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 14, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1033 with the following amendments:


             On page 3, line 12, after "elevator" strike "for which registration or reporting is provided under a registration program administered under this section by an activated air pollution control authority"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No.1033 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1033 as amended by the Senate.


             Representatives Schoesler and Linville spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1033 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1033, as amended by the Senate, having received the constitutional majority, was declared passed.


             There being no objection, the House deferred consideration of Engrossed Substitute House Bill No. 1056 and the bill held it's place on the second reading calendar.


MESSAGE FROM THE SENATE

April 8, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1057 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 18.130.095 and 1995 c 336 s 6 are each amended to read as follows:

             (1)(a) The secretary, in consultation with the disciplining authorities, shall develop uniform procedural rules to respond to public inquiries concerning complaints and their disposition, active investigations, statement of charges, findings of fact, and final orders involving a licensee, applicant, or unlicensed person. The uniform procedural rules adopted under this subsection apply to all adjudicative proceedings conducted under this chapter and shall include provisions for ((the)) establishing time periods for initial assessment, investigation, charging, discovery, settlement, and adjudication of complaints, and shall include enforcement provisions for violations of the specific time periods by the department, the disciplining authority, and the respondent. A licensee must be notified upon receipt of a complaint, except when the notification would impede an effective investigation. At the earliest point of time the licensee must be allowed to submit a written statement about that complaint, which statement must be included in the file. Complaints filed after the effective date of this act are exempt from public disclosure under chapter 42.17 RCW until the complaint has been initially assessed and determined to warrant an investigation by the disciplining authority. Complaints determined not to warrant an investigation by the disciplining authority are no longer considered complaints, but must remain in the records and tracking system of the department. Information about complaints that did not warrant an investigation, including the existence of the complaint, may be released only upon receipt of a written public disclosure request or pursuant to an interagency agreement as provided in (b) of this subsection. Complaints determined to warrant no cause for action after investigation are subject to public disclosure, must include an explanation of the determination to close the complaint, and must remain in the records and tracking system of the department.

             (b) The secretary, on behalf of the disciplining authorities, shall enter into interagency agreements for the exchange of records, which may include complaints filed but not yet assessed, with other state agencies if access to the records will assist those agencies in meeting their federal or state statutory responsibilities. Records obtained by state agencies under the interagency agreements are subject to the limitations on disclosure contained in (a) of this subsection.

             (2) The uniform procedures for conducting investigations shall provide that prior to taking a written statement:

             (a) For violation of this chapter, the investigator shall inform such person, in writing of: (i) The nature of the complaint; (ii) that the person may consult with legal counsel at his or her expense prior to making a statement; and (iii) that any statement that the person makes may be used in an adjudicative proceeding conducted under this chapter; and

             (b) From a witness or potential witness in an investigation under this chapter, the investigator shall inform the person, in writing, that the statement may be released to the licensee, applicant, or unlicensed person under investigation if a statement of charges is issued.

             (3) Only upon the authorization of a disciplining authority identified in RCW 18.130.040(2)(b), the secretary, or his or her designee, may serve as the presiding officer for any disciplinary proceedings of the disciplining authority authorized under this chapter. Except as provided in RCW 18.130.050(8), the presiding officer shall not vote on or make any final decision. All functions performed by the presiding officer shall be subject to chapter 34.05 RCW. The secretary, in consultation with the disciplining authorities, shall adopt procedures for implementing this subsection.

             (4) The uniform procedural rules shall be adopted by all disciplining authorities listed in RCW 18.130.040(2), and shall be used for all adjudicative proceedings conducted under this chapter, as defined by chapter 34.05 RCW. The uniform procedural rules shall address the use of a presiding officer authorized in subsection (3) of this section to determine and issue decisions on all legal issues and motions arising during adjudicative proceedings.


             NEW SECTION. Sec. 2. A new section is added to chapter 42.17 RCW under the subchapter heading "public records" to read as follows:

             Complaints filed under chapter 18.130 RCW after the effective date of this act are exempt from disclosure under this chapter to the extent provided in RCW 18.130.095(1).


             NEW SECTION. Sec. 3. A new section is added to chapter 18.130 RCW to read as follows:

             This chapter does not affect the use of records, obtained from the secretary or the disciplining authorities, in any existing investigation or action by any state agency. Nor does this chapter limit any existing exchange of information between the secretary or the disciplining authorities and other state agencies."


             On page 1, line 2 of the title, after "act;" strike the remainder of the title and insert "amending RCW 18.130.095; adding a new section to chapter 42.17 RCW; and adding a new section to chapter 18.130 RCW."


and the same are herewith transmitted.

Mike O'Connell, Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No.1057 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1057 as amended by the Senate.


             Representatives Backlund and Cody spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1057 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1057, as amended by the Senate, having received the constitutional majority, was declared passed.


             There being no objection, the House deferred consideration of Engrossed Substitute House Bill No. 1057 and the bill held it's place on the calendar.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1190 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 43.88.090 and 1996 c 317 s 10 are each amended to read as follows:

             (1) For purposes of developing budget proposals to the legislature, the governor shall have the power, and it shall be the governor's duty, to require from proper agency officials such detailed estimates and other information in such form and at such times as the governor shall direct. The estimates for the legislature and the judiciary shall be transmitted to the governor and shall be included in the budget without revision. The estimates for state pension contributions shall be based on the rates provided in chapter 41.45 RCW. Copies of all such estimates shall be transmitted to the standing committees on ways and means of the house and senate at the same time as they are filed with the governor and the office of financial management.

             The estimates shall include statements or tables which indicate, by agency, the state funds which are required for the receipt of federal matching revenues. The estimates shall be revised as necessary to reflect legislative enactments and adopted appropriations and shall be included with the initial biennial allotment submitted under RCW 43.88.110. The estimates must reflect that the agency considered any alternatives to reduce costs or improve service delivery identified in the findings of a performance audit of the agency by the joint legislative audit and review committee. Nothing in this subsection requires performance audit findings to be published as part of the budget.

             (2) Each state agency shall define its mission and establish measurable goals for achieving desirable results for those who receive its services and the taxpayers who pay for those services. Each agency shall also develop clear strategies and timelines to achieve its goals. This section does not require an agency to develop a new mission or goals in place of identifiable missions or goals that meet the intent of this section. The mission and goals of each agency must conform to statutory direction and limitations.

             (3) For the purpose of assessing program performance, each state agency shall establish program objectives for each major program in its budget. The objectives must be consistent with the missions and goals developed under this section. The objectives must be expressed to the extent practicable in outcome-based, objective, and measurable form unless an exception to adopt a different standard is granted by the office of financial management and approved by the legislative committee on performance review. The office of financial management shall provide necessary professional and technical assistance to assist state agencies in the development of strategic plans that include the mission of the agency and its programs, measurable goals, strategies, and performance measurement systems.

             (4) Each state agency shall adopt procedures for continuous self-assessment of each program and activity, using the mission, goals, objectives, and measurements required under subsections (2) and (3) of this section.

             (5) It is the policy of the legislature that each agency's budget proposals must be directly linked to the agency's stated mission and program goals and objectives. Consistent with this policy, agency budget proposals must include integration of performance measures that allow objective determination of a program's success in achieving its goals. The office of financial management shall develop a plan to merge the budget development process with agency performance assessment procedures. The plan must include a schedule to integrate agency strategic plans and performance measures into agency budget requests and the governor's budget proposal over three fiscal biennia. The plan must identify those agencies that will implement the revised budget process in the 1997-1999 biennium, the 1999-2001 biennium, and the 2001-2003 biennium. In consultation with the legislative fiscal committees, the office of financial management shall recommend statutory and procedural modifications to the state's budget, accounting, and reporting systems to facilitate the performance assessment procedures and the merger of those procedures with the state budget process. The plan and recommended statutory and procedural modifications must be submitted to the legislative fiscal committees by September 30, 1996.

             (6) In the year of the gubernatorial election, the governor shall invite the governor-elect or the governor-elect's designee to attend all hearings provided in RCW 43.88.100; and the governor shall furnish the governor-elect or the governor-elect's designee with such information as will enable the governor-elect or the governor-elect's designee to gain an understanding of the state's budget requirements. The governor-elect or the governor-elect's designee may ask such questions during the hearings and require such information as the governor-elect or the governor-elect's designee deems necessary and may make recommendations in connection with any item of the budget which, with the governor-elect's reasons therefor, shall be presented to the legislature in writing with the budget document. Copies of all such estimates and other required information shall also be submitted to the standing committees on ways and means of the house and senate.


             Sec. 2. RCW 44.28.091 and 1996 c 288 s 14 are each amended to read as follows:

             (1) No later than nine months after the final performance audit has been transmitted by the joint committee to the appropriate standing committees of the house of representatives and the senate, the ((joint committee in consultation with the standing committees may)) agency or local government shall produce a preliminary compliance report on ((the agency's or local government's)) its compliance with the final performance audit recommendations and submit it to the joint committee. ((The agency or local government may attach its comments to the joint committee's preliminary compliance report as a separate addendum.)) At the request of the joint committee, the agency or local government shall periodically provide updates to the preliminary compliance report until the joint committee determines that the agency or local government has complied with the final performance audit recommendations to the joint committee's satisfaction.

             (2) ((Within three months after the issuance of the preliminary compliance report,)) The joint committee may hold ((at least one)) public hearings and receive public testimony ((regarding the findings and recommendations contained in the preliminary compliance report. The joint committee may waive the public hearing requirement if the preliminary compliance report demonstrates that the agency or local government is in compliance with the audit recommendations)) if the agency or local government is not making satisfactory progress in achieving compliance. The joint committee shall issue any final compliance report ((within four weeks after the public hearing or hearings)) after an agency or local government has satisfactorily complied with the final audit recommendations. The legislative auditor shall transmit the final compliance report in the same manner as a final performance audit is transmitted under RCW 44.28.088."


             On page 1, line 1 of the title, after "audits;" strike the remainder of the title and insert "and amending RCW 43.88.090 and 44.28.091."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No.1190 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1190 as amended by the Senate.


             Representatives Backlund and Scott spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1190 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1190, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 8, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1235 with the following amendments:


             On page 1, line 9, after "contract." insert "A consultant under such contract shall provide access to data generated under the contract to the contracting agency, the joint legislative audit and review committee, and the state auditor."


and the same are herewith transmitted.

Mike O'Connell, Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No.1235 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1235 as amended by the Senate.


             Representative Ogden spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1235 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1235, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 11, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1257 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. (1) The legislature finds that:

             (a) Thermal electric generation facilities play an important role in providing jobs for residents of the communities where such plants are located; and

             (b) Taxes paid by thermal electric generation facilities help to support schools and local and state government operations.

             (2) It is the intent of the legislature to assist thermal electric generation facilities placed in operation after December 31, 1969, and before July 1, 1975, to update their air pollution control equipment and abate pollution by extending certain tax exemptions and credits so that such plants may continue to play a long-term vital economic role in the communities where they are located.


             NEW SECTION. Sec. 2. A new section is added to chapter 82.08 RCW to read as follows:

             (1) For the purposes of this section, "air pollution control facilities" mean any treatment works, control devices and disposal systems, machinery, equipment, structures, property, property improvements, and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation.

             (2) The tax levied by RCW 82.08.020 does not apply to:

             (a) Sales of tangible personal property to a light and power business, as defined in RCW 82.16.010, for construction or installation of air pollution control facilities at a thermal electric generation facility; or

             (b) Sales of, cost of, or charges made for labor and services performed in respect to the construction or installation of air pollution control facilities.

             (3) The exemption provided under this section applies only to sales, costs, or charges:

             (a) Incurred for air pollution control facilities constructed or installed after the effective date of this act and used in a thermal electric generation facility placed in operation after December 31, 1969, and before July 1, 1975;

             (b) If the air pollution control facilities are constructed or installed to meet applicable regulatory requirements established under state or federal law, including the Washington clean air act, chapter 70.94 RCW; and

             (c) For which the purchaser provides the seller with an exemption certificate, signed by the purchaser or purchaser's agent, that includes a description of items or services for which payment is made, the amount of the payment, and such additional information as the department reasonably may require.

             (4) This section does not apply to sales of tangible personal property purchased or to sales of, costs of, or charges made for labor and services used for maintenance or repairs of pollution control equipment.

             (5) If production of electricity at a thermal electric generation facility for any calendar year after 2002 and before 2023 falls below a twenty percent annual capacity factor for the generation facility, all or a portion of the tax previously exempted under this section in respect to construction or installation of air pollution control facilities at the generation facility shall be due as follows:

 

Portion of previously

             Year event occurs                                                             exempted tax due

                      2003                                                                                           100%

                      2004                                                                                             95%

                      2005                                                                                             90%

                      2006                                                                                             85%

                      2007                                                                                             80%

                      2008                                                                                             75%

                      2009                                                                                             70%

                      2010                                                                                             65%

                      2011                                                                                             60%

                      2012                                                                                             55%

                      2013                                                                                             50%

                      2014                                                                                             45%

                      2015                                                                                             40%

                      2016                                                                                             35%

                      2017                                                                                             30%

                      2018                                                                                             25%

                      2019                                                                                             20%

                      2020                                                                                             15%

                      2021                                                                                             10%

                      2022                                                                                               5%

                      2023                                                                                               0%

 

             (6) Section 12 of this act applies to this section.


             NEW SECTION. Sec. 3. A new section is added to chapter 82.12 RCW to read as follows:

             (1) For the purposes of this section, "air pollution control facilities" mean any treatment works, control devices and disposal systems, machinery, equipment, structures, property, property improvements, and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation.

             (2) The provisions of this chapter do not apply in respect to the use of air pollution control facilities installed and used by a light and power business, as defined in RCW 82.16.010, in generating electric power.

             (3) The exemption provided under this section applies only to air pollution control facilities that are:

             (a) Constructed or installed after the effective date of this act and used in a thermal electric generation facility placed in operation after December 31, 1969, and before July 1, 1975; and

             (b) Constructed or installed to meet applicable regulatory requirements established under state or federal law, including the Washington clean air act, chapter 70.94 RCW.

             (4) This section does not apply to the use of tangible personal property for maintenance or repairs of the pollution control equipment.

             (5) If production of electricity at a thermal electric generation facility for any calendar year after 2002 and before 2023 falls below a twenty percent annual capacity factor for the generation facility, all or a portion of the tax previously exempted under this section in respect to construction or installation of air pollution control facilities at the generation facility shall be due according to the schedule provided in section 2(5) of this act.

             (6) Section 12 of this act applies to this section.


             NEW SECTION. Sec. 4. A new section is added to chapter 82.08 RCW to read as follows:

             (1) For the purposes of this section:

             (a) "Air pollution control facilities" means any treatment works, control devices and disposal systems, machinery, equipment, structure, property, property improvements, and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation; and

             (b) "Generation facility" means a coal-fired thermal electric generation facility placed in operation after December 3, 1969, and before July 1, 1975.

             (2) Beginning January 1, 1999, the tax levied by RCW 82.08.020 does not apply to sales of coal used to generate electric power at a generation facility operated by a business if the following conditions are met:

             (a) The owners must make an application to the department of revenue for a tax exemption;

             (b) The owners must make a demonstration to the department of ecology that the owners have made reasonable initial progress to install air pollution control facilities to meet applicable regulatory requirements established under state or federal law, including the Washington clean air act, chapter 70.94 RCW;

             (c) Continued progress must be made on the development of air pollution control facilities to meet the requirements of the permit; and

             (d) The generation facility must emit no more than ten thousand tons of sulfur dioxide during a previous consecutive twelve-month period.

             (3) During a consecutive twelve-month period, if the generation facility is found to be in violation of excessive sulfur dioxide emissions from a regional air pollution control authority or the department of ecology, the department of ecology shall notify the department of revenue and the owners of the generation facility shall lose their tax exemption under this section. The owners of a generation facility may reapply for the tax exemption when they have once again met the conditions of subsection (2)(d) of this section.

             (4) Section 12 of this act applies to this section.


             NEW SECTION. Sec. 5. A new section is added to chapter 82.08 RCW to read as follows:

             Any business that has received a tax exemption under section 4 of this act forfeits the exemption if, except for reasons or factors beyond the control of the owners or operator of the thermal electric generation facility, less than seventy percent of the coal consumed at the thermal electric generation facility during the previous calendar year was produced by a mine located in the same county as the facility or in a county contiguous to the county. The department of revenue may reinstate the exemption under section 4 of this act when the owners provide documentation that the seventy-percent requirement has been met during a subsequent calendar year. The definitions in section 4 of this act apply to this section.


             NEW SECTION. Sec. 6. A new section is added to chapter 82.12 RCW to read as follows:

             (1) For the purposes of this section:

             (a) "Air pollution control facilities" means any treatment works, control devices and disposal systems, machinery, equipment, structure, property, property improvements, and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation; and

             (b) "Generation facility" means a coal-fired thermal electric generation facility placed in operation after December 3, 1969, and before July 1, 1975.

             (2) Beginning January 1, 1999, the provisions of this chapter do not apply in respect to the use of coal to generate electric power at a generation facility operated by a business if the following conditions are met:

             (a) The owners must make an application to the department of revenue for a tax exemption;

             (b) The owners must make a demonstration to the department of ecology that the owners have made reasonable initial progress to install air pollution control facilities to meet applicable regulatory requirements established under state or federal law, including the Washington clean air act, chapter 70.94 RCW;

             (c) Continued progress must be made on the development of air pollution control facilities to meet the requirements of the permit; and

             (d) The generation facility must emit no more than ten thousand tons of sulfur dioxide during a previous consecutive twelve-month period.

             (3) During a consecutive twelve-month period, if the generation facility is found to be in violation of excessive sulfur dioxide emissions from a regional air pollution control authority or the department of ecology, the department of ecology shall notify the department of revenue and the owners of the generation facility shall lose their tax exemption under this section. The owners of a generation facility may reapply for the tax exemption when they have once again met the conditions of subsection (2)(d) of this section.

             (4) Section 12 of this act applies to this section.


             NEW SECTION. Sec. 7. A new section is added to chapter 82.12 RCW to read as follows:

             Any business that has received a tax exemption under section 6 of this act forfeits the exemption if, except for reasons or factors beyond the control of the owners or operator of the thermal electric generation facility, less than seventy percent of the coal consumed at the thermal electric generation facility during the previous calendar year was produced by a mine located in the same county as the facility or in a county contiguous to the county. The department of revenue may reinstate the exemption under section 6 of this act when the owners provide documentation that the seventy-percent requirement has been met during a subsequent calendar year. The definitions in section 6 of this act apply to this section.


             Sec. 8. RCW 43.79A.040 and 1996 c 253 s 409 are each amended to read as follows:

             (1) Money in the treasurer's trust fund may be deposited, invested and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

             (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

             (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

             (4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

             (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The agricultural local fund, the American Indian scholarship endowment fund, the Washington international exchange scholarship endowment fund, the energy account, the fair fund, the game farm alternative account, the grain inspection revolving fund, the rural rehabilitation account, ((and)) the self-insurance revolving fund, and the sulfur dioxide abatement account. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

             (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, and the local rail service assistance account.

             (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.


             NEW SECTION. Sec. 9. A new section is added to chapter 82.32 RCW to read as follows:

             An amount equal to all sales and use taxes paid under chapters 82.08, 82.12, and 82.14 RCW, that were obtained from the sales of coal to, or use of coal by, a business for use at a generation facility, and that meet the requirements of section 10 of this act, shall be deposited in the sulfur dioxide abatement account under section 10 of this act.


             NEW SECTION. Sec. 10. A new section is added to chapter 70.94 RCW to read as follows:

             (1) The sulfur dioxide abatement account is created. All receipts from subsection (2) of this section must be deposited in the account. Expenditures in the account may be used only for the purposes of subsection (3) of this section. Only the director of revenue or the director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

             (2) Upon application by the owners of a generation facility, the department of ecology shall make a determination of whether the owners are making initial progress in the construction of air pollution control facilities. Evidence of initial progress may include, but is not limited to, engineering work, agreements to proceed with construction, contracts to purchase, or contracts for construction of air pollution control facilities. However, if the owners' progress is impeded due to actions caused by regulatory delays or by defensive litigation, certification of initial progress may not be withheld.

             Upon certification of initial progress by the department of ecology and after January 1, 1999, an amount equal to all sales and use taxes paid under chapters 82.08, 82.12, and 82.14 RCW, that were obtained from the sales of coal to, or use of coal by, a business for use at a generation facility shall be deposited in the account under section 9 of this act.

             By June 1st of each year during construction of the air pollution control facilities and during the verification period required in sections 4(2)(d) and 6(2)(d) of this act, the department of ecology shall make an assessment regarding the continued progress of the pollution control facilities. Evidence of continued progress may include, but is not limited to, acquisition of construction material, visible progress on construction, or other actions that have occurred that would verify progress under general construction time tables. The treasurer shall continue to deposit an amount equal to the tax revenues to the sulfur dioxide abatement account unless the department of ecology fails to certify that reasonable progress has been made during the previous year. The operator of a generation facility shall file documentation accompanying its combined monthly excise tax return that identifies all sales and use tax payments made by the owners for coal used at the generation facility during the reporting period.

             (3) When a generation facility emits no more than ten thousand tons of sulfur dioxide during a consecutive twelve-month period, the department of ecology shall certify this to the department of revenue and the state treasurer by the end of the following month. Within thirty days of receipt of certification under this subsection, the department of revenue shall approve the tax exemption application and the director or the director's designee shall authorize the release of any moneys in the sulfur dioxide abatement account to the operator of the generation facility. The operator shall disburse the payment among the owners of record according to the terms of their contractual agreement.

             (4)(a) If the department of revenue has not approved a tax exemption under sections 4 and 6 of this act by March 1, 2005, any moneys in the sulfur dioxide abatement account shall be transferred to the general fund and the appropriate local governments in accordance with chapter 82.14 RCW, and the sulfur dioxide abatement account shall cease to exist after March 1, 2005.

             (b) The dates in (a) of this subsection must be extended if the owners of a generation facility have experienced difficulties in complying with this section, or sections 4 through 7 and 9 of this act, due to actions caused by regulatory delays or by defensive litigation.

             (5) For the purposes of this section:

             (a) "Air pollution control facilities" means any treatment works, control devices and disposal systems, machinery, equipment, structure, property, property improvements and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation; and

             (b) "Generation facility" means a coal-fired thermal electric generation facility placed in operation after December 3, 1969, and before July 1, 1975.


             NEW SECTION. Sec. 11. A new section is added to chapter 84.36 RCW to read as follows:

             (1) Air pollution control equipment constructed or installed after the effective date of this act, by businesses engaged in the generation of electric energy at thermal electric generation facilities first placed in operation after December 31, 1969, and before July 1, 1975, shall be exempt from property taxation. The owners shall maintain the records in such a manner that the annual beginning and ending asset balance of the pollution control facilities and depreciation method can be identified.

             (2) For the purposes of this section, "air pollution control equipment" means any treatment works, control devices and disposal systems, machinery, equipment, structures, property, property improvements, and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation.

             (3) Section 12 of this act applies to this section.


             NEW SECTION. Sec. 12. A new section is added to chapter 82.32 RCW to read as follows:

             If a business is allowed an exemption under section 2, 3, 4, 6, or 11 of this act, and the business ceases operation of the facility for which the exemption is allowed, the business shall deposit into the displaced workers account established in section 13 of this act an amount equal to the fair market value of one-quarter of the total sulfur dioxide allowances authorized by federal law available to the facility at the time of cessation of operation of the generation facility as if the allowances were sold for a period of ten years following the time of cessation of operation of the generation facility. This section expires December 31, 2015.


             NEW SECTION. Sec. 13. A new section is added to chapter 50.12 RCW to read as follows:

             The displaced workers account is established. All moneys from section 12 of this act must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only to provide for compensation and retraining of displaced workers of the thermal electric generation facility and of the coal mine that supplied coal to the facility. The benefits from the account are in addition to all other compensation and retraining benefits to which the displaced workers are entitled under existing state law. The employment security department shall administer the distribution of moneys from the account.


             Sec. 14. RCW 80.04.130 and 1993 c 311 s 1 are each amended to read as follows:

             (1) Whenever any public service company shall file with the commission any schedule, classification, rule or regulation, the effect of which is to change any rate, charge, rental or toll theretofore charged, the commission shall have power, either upon its own motion or upon complaint, upon notice, to enter upon a hearing concerning such proposed change and the reasonableness and justness thereof, and pending such hearing and the decision thereon the commission may suspend the operation of such rate, charge, rental or toll for a period not exceeding ten months from the time the same would otherwise go into effect, and after a full hearing the commission may make such order in reference thereto as would be provided in a hearing initiated after the same had become effective. The commission shall not suspend a tariff that makes a decrease in a rate, charge, rental, or toll filed by a telecommunications company pending investigation of the fairness, justness, and reasonableness of the decrease when the filing does not contain any offsetting increase to another rate, charge, rental, or toll and the filing company agrees to not file for an increase to any rate, charge, rental, or toll to recover the revenue deficit that results from the decrease for a period of one year. The filing company shall file with any decrease sufficient information as the commission by rule may require to demonstrate the decreased rate, charge, rental, or toll is above the long run incremental cost of the service. A tariff decrease that results in a rate that is below long run incremental cost, or is contrary to commission rule or order, or the requirements of this chapter, shall be rejected for filing and returned to the company. The commission may prescribe a different rate to be effective on the prospective date stated in its final order after its investigation, if it concludes based on the record that the originally filed and effective rate is unjust, unfair, or unreasonable.

             For the purposes of this section, tariffs for the following telecommunications services, that temporarily waive or reduce charges for existing or new subscribers for a period not to exceed sixty days in order to promote the use of the services shall be considered tariffs that decrease rates, charges, rentals, or tolls:

             (a) Custom calling service;

             (b) Second access lines; or

             (c) Other services the commission specifies by rule.

             The commission may suspend any promotional tariff other than those listed in (a) through (c) of this subsection.

             The commission may suspend the initial tariff filing of any water company removed from and later subject to commission jurisdiction because of the number of customers or the average annual gross revenue per customer provisions of RCW 80.04.010. The commission may allow temporary rates during the suspension period. These rates shall not exceed the rates charged when the company was last regulated. Upon a showing of good cause by the company, the commission may establish a different level of temporary rates.

             (2) At any hearing involving any change in any schedule, classification, rule or regulation the effect of which is to increase any rate, charge, rental or toll theretofore charged, the burden of proof to show that such increase is just and reasonable shall be upon the public service company.

             (3) The implementation of mandatory local measured telecommunications service is a major policy change in available telecommunications service. The commission shall not accept for filing or approve, prior to June 1, 1998, a tariff filed by a telecommunications company which imposes mandatory local measured service on any customer or class of customers, except that, upon finding that it is in the public interest, the commission may accept for filing and approve a tariff that imposes mandatory measured service for a telecommunications company's extended area service or foreign exchange service. This subsection does not apply to land, air, or marine mobile service, or to pay telephone service, or to any service which has been traditionally offered on a measured service basis.

             (4) The implementation of Washington telephone assistance program service is a major policy change in available telecommunications service. The implementation of Washington telephone assistance program service will aid in achieving the stated goal of universal telephone service.

             (5) If a utility claims a sales or use tax exemption on the pollution control equipment for an electrical generation facility and abandons the generation facility before the pollution control equipment is fully depreciated, any tariff filing for a rate increase to recover abandonment costs for the pollution control equipment shall be considered unjust and unreasonable for the purposes of this section.


             NEW SECTION. Sec. 15. The department of revenue and the department of ecology may adopt rules to implement this act.


             NEW SECTION. Sec. 16. 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. 17. 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 takes effect immediately."


             On page 1, line 2 of the title, after "1975;" strike the remainder of the title and insert "amending RCW 43.79A.040 and 80.04.130; adding new sections to chapter 82.08 RCW; adding new sections to chapter 82.12 RCW; adding new sections to chapter 82.32 RCW; adding a new section to chapter 70.94 RCW; adding a new section to chapter 84.36 RCW; adding a new section to chapter 50.12 RCW; creating new sections; providing an expiration date; and declaring an emergency."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1257 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1257 as amended by the Senate.


             Representatives Mulliken and Dunshee spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1257 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1257, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1261 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. The legislature finds that many businesses have difficulty applying the small business credit under RCW 82.04.4451. Further, the legislature appreciates the valuable time and resources small businesses expend on calculating the amount of credit based upon a statutory formula. For the purpose of tax simplification, it is the intent of this act to direct the department of revenue to create a schedule, in standard increments, to replace required calculations for the small business credit. Each taxpayer can make reference to the taxpayer's tax range on the schedule and find the amount of the taxpayer's small business credit. Further, no taxpayer will owe a greater amount of tax nor will any taxpayer be responsible for a greater amount of taxes otherwise due.


             Sec. 2. RCW 82.04.4451 and 1994 sp.s. c 2 s 1 are each amended to read as follows:

             (1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due under this chapter, as provided in this section. The maximum credit for a taxpayer for a reporting period is thirty-five dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.

             (2) When the amount of tax otherwise due under this chapter is equal to or less than the maximum credit, a credit is allowed equal to the amount of tax otherwise due under this chapter.

             (3) When the amount of tax otherwise due under this chapter exceeds the maximum credit, a reduced credit is allowed equal to twice the maximum credit, minus the tax otherwise due under this chapter, but not less than zero.

             (4) The department may prepare a tax credit table consisting of tax ranges using increments of no more than five dollars and a corresponding tax credit to be applied to those tax ranges. The table shall be prepared in such a manner that no taxpayer will owe a greater amount of tax by using the table than would be owed by performing the calculation under subsections (1) through (3) of this section. A table prepared by the department under this subsection shall be used by all taxpayers in taking the credit provided in this section."


             On page 1, line 2 of the title, after "credit;" strike the remainder of the title and insert "amending RCW 82.04.4451; and creating a new section."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1261 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1261 as amended by the Senate.


             Representatives Mulliken and Dunshee spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1261 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1261, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 14, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1272 with the following amendments:


             Strike everything after the enacting clause and insert the following:

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

             (1) Voluntary water transfers between water users can reallocate water use in a manner that will result in more efficient use of water resources;

             (2) Voluntary water transfers can help alleviate water shortages, save capital outlays, reduce development costs, and provide an incentive for investment in water conservation efforts by water right holders; and

             (3) The state should expedite the administrative process for noncontested water transfers among water right holders, conveying greater operational control to water managers and water right holders.


             NEW SECTION. Sec. 2. The following definitions apply throughout this chapter, unless the context clearly requires otherwise.

             (1) "Board" means a water conservancy board created under this chapter.

             (2) "Commissioner" means a member of a water conservancy board.

             (3) "Department" means the department of ecology.

             (4) "Director" means the director of the department of ecology.


             NEW SECTION. Sec. 3. (1) The county legislative authority of a county may create a water conservancy board, subject to approval by the director, for the purpose of expediting voluntary water transfers within the county.

             (2) A water conservancy board may be initiated by: (a) A resolution of the county legislative authority; (b) a resolution presented to the county legislative authority calling for the creation of a board by the legislative authority of an irrigation district, public utility district that operates a public water system, a reclamation district, a city operating a public water system, or a water-sewer district that operates a public water system; (c) a resolution by the governing body of a cooperative or mutual corporation that operates a public water system serving one hundred or more accounts; (d) a petition signed by five or more water rights holders, including their addresses, who divert water for use within the county; or (e) any combination of (a) through (d) of this subsection. The resolution or petition must state the need for the board, include proposed bylaws or rules and procedures that will govern the operation of the board, identify the geographic boundaries where there is an initial interest in transacting water sales or transfers, and describe the proposed method for funding the operation of the board.

             (3) After receiving a resolution or petition to create a board, a county legislative authority shall determine its sufficiency. If the county legislative authority finds that the resolution or petition is sufficient, or if the county is initiating the creation of a board upon its own motion, it shall hold at least one public hearing on the proposed creation of the board. Notice of the hearing shall be published at least once in a newspaper of general circulation in the county not less than ten days nor more than thirty days before the date of the hearing. The notice shall describe the time, date, place, and purpose of the hearing, as well as the purpose of the board. Following the hearing, the county legislative authority may adopt a resolution approving the creation of the board if it finds that the board's creation is in the public interest.


             NEW SECTION. Sec. 4. (1) The county legislative authority shall forward a copy of the resolution or petition calling for the creation of the board, a copy of the resolution approving the creation of the board, and a summary of the public testimony presented at the public hearing to the director following the adoption of the resolution calling for the board's creation.

             (2) The director shall approve or deny the creation of a board within forty-five days after the county legislative authority has submitted all information required under subsection (1) of this section. The director must determine whether the creation of the board would further the purposes of this chapter and is in the public interest. The director shall include a description of the necessary training requirements for commissioners in the notice of approval sent to the county legislative authority.


             NEW SECTION. Sec. 5. The director of the department may, as deemed necessary by the director, adopt rules in accordance with chapter 34.05 RCW necessary to carry out this chapter, including minimum requirements for the training and continuing education of commissioners. Training courses for commissioners shall include an overview of state water law and hydrology. Prior to commissioners taking action on proposed water right transfers, the commissioners shall comply with training requirements that include state water law and hydrology.


             NEW SECTION. Sec. 6. A water conservancy board constitutes a public body corporate and politic and a separate unit of local government in the state. Each board shall consist of three commissioners appointed by the county legislative authority for six-year terms. The county legislative authority shall stagger the initial appointment of commissioners so that the first commissioners who are appointed shall serve terms of two, four, and six years, respectively, from the date of their appointment. All vacancies shall be filled for the unexpired term. The county legislative authority shall consider, but is not limited in appointing, nominations to the board by people or entities petitioning or requesting the creation of the board. However, the county legislative authority shall ensure that individual water right holders who divert water for use within the county are represented on the board. In making appointments to the board, the county legislative authority shall choose from among persons who are residents of the county or a county that is contiguous to the county that the water conservancy board is to serve. No commissioner may participate in board decisions until he or she has successfully completed the necessary training required under section 5 of this act. Commissioners shall serve without compensation, but are entitled to reimbursement for necessary travel expenses in accordance with RCW 43.03.050 and 43.03.060 and costs incident to training.


             NEW SECTION. Sec. 7. (1) A water conservancy board may acquire, purchase, hold, lease, manage, occupy, and sell real and personal property or any interest therein, enter into and perform all necessary contracts, appoint and employ necessary agents and employees and fix their compensation, employ contractors including contracts for professional services, sue and be sued, and do any and all lawful acts required and expedient to carry out the purposes of this chapter.

             (2) A board constitutes an independently funded entity, and may provide for its own funding as determined by the commissioners. The board may accept grants and may adopt fees for processing applications for transfers of water rights to fund the activities of the board. A board may not impose taxes or acquire property by the exercise of eminent domain.


             NEW SECTION. Sec. 8. A board shall operate on a county-wide basis, and shall have the following powers, in addition to any others granted in this chapter:

             (1) A board may establish a water transfer exchange through which all or part of the water that any person is entitled to use by reason of owning or holding a water right may be listed for sale or transfer. The board may approve water transfers involving a change in place of use, point of diversion or withdrawal, purpose of use, time of use, source of supply, quantity of use permitted, and the place of storage. Any water transfer approved by the board is subject to final approval by the director pursuant to section 11 of this act.

             (2) The board may approve the transfer of a water right or a water right claim filed under chapter 90.14 RCW that has not been adjudicated. The board shall make a tentative determination as to the validity and extent of the existing right, and may only approve transfers of those rights to the extent they are deemed valid by the board. Neither the board's approval of a transfer, nor the director's approval of the board's action constitutes an adjudication of the validity, priority, or quantity of the transferor's water right as between the transferor or the transferee and the state, or as between the transferor or the transferee and one or more water use claimants, and such approvals do not preclude or prejudice a subsequent challenge to the validity, priority, or quantity of the right in an adjudicatory proceeding. The tentative determination of a water right by a board does not preclude a different conclusion in a subsequent adjudication.

             (3) Water transfers approved by the board must remain within an existing category of beneficial use, and a transfer of water that is being used for agricultural applications is restricted to short-term or long-term leases.

             (4) Each board shall maintain and publish all information made available to it concerning water rights listed with the board and any application to the board for approval of a water transfer. Each board shall establish policies and procedures, consistent with applicable law, for the administration of a system of timely local approvals for water transfers under this chapter. The administration shall be performed exclusively by the board, but the department may provide technical assistance to the board.


             NEW SECTION. Sec. 9. (1) Applications to the board for transfers shall be made on a form provided by the department, and shall contain such additional information as may be required by the board in order to review and act upon the application. At a minimum, the application shall include information sufficient to establish to the board's satisfaction of the transferor's right to the quantity of water being transferred, and a description of any applicable limitations on the right to use water, including the point of diversion or withdrawal, place of use, source of supply, purpose of use, quantity of use permitted, time of use, period of use, and the place of storage.

             (2) The transferor and the transferee of any proposed water transfer may apply to a board for approval of the transfer if the water proposed to be transferred is currently diverted or used within the geographic boundaries of the county, or would be diverted or used within the geographic boundaries of the county if the transfer is approved. In the case of a proposed water transfer in which the water is currently diverted or would be diverted outside the geographic boundaries of the county, the board shall hold a public hearing in the county of the diversion or proposed diversion. The board shall provide for prominent publication of notice of such hearing in a newspaper of general circulation published in the county in which the hearing is to be held for the purpose of affording an opportunity for interested persons to comment upon the application.

             (3) After an application for a transfer is filed with the board, the board shall publish notice of the application in accordance with the publication requirements and send notice to state agencies as provided in RCW 90.03.280. Any person may submit comments to the board regarding the application. Any water right holder claiming detriment or injury to an existing water right may intervene in the application before the board pursuant to subsection (4) of this section. If a majority of the board determines that the application is complete, in accordance with the law and the transfer can be made without injury or detriment to existing water rights in accordance with RCW 90.03.380, the board shall issue the applicant a certificate conditionally approving the transfer, subject to review by the director.

             (4) If a water right holder claims a proposed transfer will cause an impairment to that right, the water right holder is entitled to a hearing before the board. The board shall receive such evidence as it deems material and necessary to determine the validity of the claim of impairment. If the party claiming the impairment establishes by a preponderance of the evidence that his or her water right will be impaired by the proposed transfer, the board may not approve the transfer unless the applicant and the impaired party agree upon compensation for the impairment.


             NEW SECTION. Sec. 10. (1) If an application for a transfer is proposed to transfer water from one irrigation district to another, approval of the transfer shall be conditioned upon receipt of the concurrence from each of the irrigation districts that the transfer will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts.

             (2) A transfer involving a change in place or use or a nonconsumptive use by an individual water user or users of water provided by an irrigation district need only receive the approval for the transfer from the board of directors of the irrigation district if the water continues within the irrigation district.


             NEW SECTION. Sec. 11. (1) If a transfer is approved by the board, the board shall submit a copy of the proposed certificate conditionally approving the transfer to the department for review. The board shall also submit a report summarizing any factual findings on which the board relied in deciding to approve the proposed transfer. The board shall also transmit notice by mail to any person who objected to the transfer or who requested notice.

             (2) The director shall review each proposed transfer conditionally approved by a board for compliance with state water transfer laws including RCW 90.03.380, 90.03.390, and 90.44.100, rules and guidelines adopted by the department, and other applicable law.

             (3) Any party to a transfer or a third party who alleges his or her water right will be impaired by the proposed transfer may file objections with the department. If objections to the transfer are filed with the department, the board shall forward the files and records upon which it based its decision to the department.

             (4) The director shall review the action of the board and affirm, reverse, or modify the action of the board within forty-five days of receipt. The forty-five day time period may be extended for an additional thirty days by the director, upon the consent of the parties to the transfer. If the director fails to act within this time period, the board's action is final. Upon approval of a water transfer by the action or nonaction of the director, the conditional certificate issued by the board is final and valid.


             NEW SECTION. Sec. 12. The decision of the director to approve an action to create a board, or to approve, deny, or modify a water transfer either by action or nonaction shall be appealable in the same manner as other water right decisions made pursuant to chapter 90.03 RCW.


             NEW SECTION. Sec. 13. Neither the county nor the department shall be subject to any cause of action or claim for damages arising out of transfers approved by a board under this chapter.


             NEW SECTION. Sec. 14. A person who, in good faith and without intent of circumventing water right relinquishment statutes, leases a water right under this chapter may not lose any portion of that water right by relinquishment due to the nonuse of the water by the lessee.


             NEW SECTION. Sec. 15. Nothing in this chapter eliminates or lessens the requirements necessary for the approval of interties.


             NEW SECTION. Sec. 16. (1) A commissioner of a water conservancy board who has an ownership interest in a water right subject to an application for approval of a transfer or change by the board, shall not participate in the board's review or decision upon the application.

             (2) A commissioner of a water conservancy board who also serves as an employee or upon the governing body of a municipally owned water system, shall not participate in the board's review or decision upon an application for the transfer or change of a water right in which that water system has or is proposed to have an ownership interest.


             NEW SECTION. Sec. 17. Water conservancy board activities are subject to the open public meetings act, chapter 42.30 RCW.


             NEW SECTION. Sec. 18. Nothing in this chapter affects transfers that may be otherwise approved under chapter 90.03 RCW.


             NEW SECTION. Sec. 19. The department shall report biennially by December 31st of each even-numbered year to the appropriate committees of the legislature on the boards formed or sought to be formed under the authority of this chapter, the transfer applications reviewed and other activities conducted by the boards, and the funding of such boards.


             NEW SECTION. Sec. 20. 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. 21. Sections 1 through 19 of this act constitute a new chapter in Title 90 RCW."


             On page 1, line 1 of the title, after "transfers;" strike the remainder of the title and insert "and adding a new chapter to Title 90 RCW."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1272 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1272 as amended by the Senate.


             Representatives Delvin and Linville spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1272 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1272, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1277 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. A new section is added to chapter 84.08 RCW to read as follows:

             (1) For purposes of this section, "tax information" means confidential income data and proprietary business information obtained by the department in the course of carrying out the duties now or hereafter imposed upon it in this title that has been communicated in confidence in connection with the assessment of property and that has not been publicly disseminated by the taxpayer, the disclosure of which would be either highly offensive to a reasonable person and not a legitimate concern to the public or would result in an unfair competitive disadvantage to the taxpayer.

             (2) Tax information is confidential and privileged, and except as authorized by this section, neither the department nor any other person may disclose tax information.

             (3) Subsection (2) of this section, however, does not prohibit the department from:

             (a) Disclosing tax information to any county assessor or county treasurer;

             (b) Disclosing tax information in a civil or criminal judicial proceeding or an administrative proceeding in respect to taxes or penalties imposed under this title or Title 82 RCW or in respect to assessment or valuation for tax purposes of the property to which the information or facts relate;

             (c) Disclosing tax information with the written permission of the taxpayer;

             (d) Disclosing tax information to the proper officer of the tax department of any state responsible for the imposition or collection of property taxes, or for the valuation of property for tax purposes, if the other state grants substantially similar privileges to the proper officers of this state;

             (e) Disclosing tax information that is also maintained by another Washington state or local governmental agency as a public record available for inspection and copying under chapter 42.17 RCW or is a document maintained by a court of record not otherwise prohibited from disclosure;

             (f) Disclosing tax information to a peace officer as defined in RCW 9A.04.110 or county prosecutor, for official purposes. The disclosure may be made only in response to a search warrant, subpoena, or other court order, unless the disclosure is for the purpose of criminal tax enforcement. A peace officer or county prosecutor who receives the tax information may disclose the tax information only for use in the investigation and a related court proceeding, or in the court proceeding for which the tax information originally was sought; or

             (g) Disclosing information otherwise available under chapter 42.17 RCW.

             (4) A violation of this section constitutes a gross misdemeanor.


             Sec. 2. RCW 84.40.020 and 1973 c 69 s 1 are each amended to read as follows:

             All real property in this state subject to taxation shall be listed and assessed every year, with reference to its value on the first day of January of the year in which it is assessed. Such listing and all supporting documents and records shall be open to public inspection during the regular office hours of the assessor's office: PROVIDED, That confidential income data is hereby exempted from public inspection ((pursuant to RCW 42.17.310)) as noted in RCW 42.17.260 and 42.17.310. All personal property in this state subject to taxation shall be listed and assessed every year, with reference to its value and ownership on the first day of January of the year in which it is assessed: PROVIDED, That if the stock of goods, wares, merchandise or material, whether in a raw or finished state or in process of manufacture, owned or held by any taxpayer on January 1 of any year does not fairly represent the average stock carried by such taxpayer, such stock shall be listed and assessed upon the basis of the monthly average of stock owned or held by such taxpayer during the preceding calendar year or during such portion thereof as the taxpayer was engaged in business.


             Sec. 3. RCW 84.40.340 and 1973 1st ex.s. c 74 s 1 are each amended to read as follows:

             For the purpose of verifying any list, statement, or schedule required to be furnished to the assessor by any taxpayer, any assessor or his trained and qualified deputy at any reasonable time may visit, investigate and examine any personal property, and for this purpose the records, accounts and inventories also shall be subject to any such visitation, investigation and examination which shall aid in determining the amount and valuation of such property. Such powers and duties may be performed at any office of the taxpayer in this state, and the taxpayer shall furnish or make available all such information pertaining to property in this state to the assessor although the records may be maintained at any office outside this state.

             Any information or facts obtained pursuant to this section shall be used by the assessor only for the purpose of determining the assessed valuation of the taxpayer's property: PROVIDED, That such information or facts shall also be made available to the department of revenue upon request for the purpose of determining any sales or use tax liability with respect to personal property, and except in a ((court action pertaining)) civil or criminal judicial proceeding or an administrative proceeding in respect to penalties imposed pursuant to RCW 84.40.130, to such sales or use taxes, or to the assessment or valuation for tax purposes of the property to which such information and facts relate, shall not be disclosed by the assessor or the department of revenue without the permission of the taxpayer to any person other than public officers or employees whose duties relate to valuation of property for tax purposes or to the imposition and collection of sales and use taxes, and any violation of this secrecy provision shall constitute a gross misdemeanor.


             Sec. 4. RCW 42.17.310 and 1996 c 305 s 2, 1996 c 253 s 302, 1996 c 191 s 88, and 1996 c 80 s 1 are each reenacted and amended to read as follows:

             (1) The following are exempt from public inspection and copying:

             (a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, or welfare recipients.

             (b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

             (c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by section 1 of this act, RCW 82.32.330, 84.40.020, or 84.40.340 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.

             (d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

             (e) Information revealing the identity of persons who are witnesses to or victims of crime or who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property. If at the time a complaint is filed the complainant, victim or witness indicates a desire for disclosure or nondisclosure, such desire shall govern. However, all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

             (f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

             (g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

             (h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

             (i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

             (j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

             (k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

             (l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

             (m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (i) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (ii) highway construction or improvement as required by RCW 47.28.070.

             (n) Railroad company contracts filed prior to July 28, 1991, with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

             (o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 43.163 RCW and chapter 53.31 RCW, and by persons pertaining to export projects pursuant to RCW 43.23.035.

             (p) Financial disclosures filed by private vocational schools under chapters 28B.85 and 28C.10 RCW.

             (q) Records filed with the utilities and transportation commission or attorney general under RCW 80.04.095 that a court has determined are confidential under RCW 80.04.095.

             (r) Financial and commercial information and records supplied by businesses or individuals during application for loans or program services provided by chapters 43.163, 43.160, 43.330, and 43.168 RCW, or during application for economic development loans or program services provided by any local agency.

             (s) Membership lists or lists of members or owners of interests of units in timeshare projects, subdivisions, camping resorts, condominiums, land developments, or common-interest communities affiliated with such projects, regulated by the department of licensing, in the files or possession of the department.

             (t) All applications for public employment, including the names of applicants, resumes, and other related materials submitted with respect to an applicant.

             (u) The residential addresses and residential telephone numbers of employees or volunteers of a public agency which are held by the agency in personnel records, employment or volunteer rosters, or mailing lists of employees or volunteers.

             (v) The residential addresses and residential telephone numbers of the customers of a public utility contained in the records or lists held by the public utility of which they are customers.

             (w)(i) The federal social security number of individuals governed under chapter 18.130 RCW maintained in the files of the department of health, except this exemption does not apply to requests made directly to the department from federal, state, and local agencies of government, and national and state licensing, credentialing, investigatory, disciplinary, and examination organizations; (ii) the current residential address and current residential telephone number of a health care provider governed under chapter 18.130 RCW maintained in the files of the department, if the provider requests that this information be withheld from public inspection and copying, and provides to the department an accurate alternate or business address and business telephone number. On or after January 1, 1995, the current residential address and residential telephone number of a health care provider governed under RCW 18.130.140 maintained in the files of the department shall automatically be withheld from public inspection and copying unless the provider specifically requests the information be released, and except as provided for under RCW 42.17.260(9).

             (x) Information obtained by the board of pharmacy as provided in RCW 69.45.090.

             (y) Information obtained by the board of pharmacy or the department of health and its representatives as provided in RCW 69.41.044, 69.41.280, and 18.64.420.

             (z) Financial information, business plans, examination reports, and any information produced or obtained in evaluating or examining a business and industrial development corporation organized or seeking certification under chapter 31.24 RCW.

             (aa) Financial and commercial information supplied to the state investment board by any person when the information relates to the investment of public trust or retirement funds and when disclosure would result in loss to such funds or in private loss to the providers of this information.

             (bb) Financial and valuable trade information under RCW 51.36.120.

             (cc) Client records maintained by an agency that is a domestic violence program as defined in RCW 70.123.020 or 70.123.075 or a rape crisis center as defined in RCW 70.125.030.

             (dd) Information that identifies a person who, while an agency employee: (i) Seeks advice, under an informal process established by the employing agency, in order to ascertain his or her rights in connection with a possible unfair practice under chapter 49.60 RCW against the person; and (ii) requests his or her identity or any identifying information not be disclosed.

             (ee) Investigative records compiled by an employing agency conducting a current investigation of a possible unfair practice under chapter 49.60 RCW or of a possible violation of other federal, state, or local laws prohibiting discrimination in employment.

             (ff) Business related information protected from public inspection and copying under RCW 15.86.110.

             (gg) Financial, commercial, operations, and technical and research information and data submitted to or obtained by the clean Washington center in applications for, or delivery of, program services under chapter 70.95H RCW.

             (hh) Information and documents created specifically for, and collected and maintained by a quality improvement committee pursuant to RCW 43.70.510, regardless of which agency is in possession of the information and documents.

             (ii) Personal information in files maintained in a data base created under RCW 43.07.360.

             (jj) Names of individuals residing in emergency or transitional housing that are furnished to the department of revenue or a county assessor in order to substantiate a claim for property tax exemption under RCW 84.36.043.

             (2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

             (3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

             (4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1277 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1277 as amended by the Senate.


             Representatives Mulliken and Dunshee spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1277 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1277, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 15, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1325 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. The legislature finds that nonprofit organizations provide a variety of social services that serve the needs of the citizens of Washington, including many services implemented under contract with state agencies. The legislature also finds that the efficiency and quality of these services may be enhanced by the provision of safe, reliable, and sound facilities, and that, in certain cases, it may be appropriate for the state to assist in the development of these facilities.


             NEW SECTION. Sec. 2. A new section is added to chapter 43.63A RCW to read as follows:

             If the legislature provides an appropriation to assist nonprofit organizations in acquiring, constructing, or rehabilitating facilities used for the delivery of nonresidential social services, the legislature may direct the department of community, trade, and economic development to establish a competitive process to prioritize applications for the assistance as follows:

             (1) The department shall conduct a state-wide solicitation of project applications from local governments, nonprofit organizations, and other entities, as determined by the department. The department shall evaluate and rank applications in consultation with a citizen advisory committee using objective criteria. At a minimum, applicants must demonstrate that the requested assistance will increase the efficiency or quality of the social services it provides to citizens. The evaluation and ranking process shall also include an examination of existing assets that applicants may apply to projects. Grant assistance under this section shall not exceed twenty-five percent of the total cost of the project. The nonstate portion of the total project cost may include, but is not limited to, land, facilities, and in-kind contributions.

             (2) The department shall submit a prioritized list of recommended projects to the legislature by November 1st following the effective date of the appropriation. The list shall include a description of each project, the amount of recommended state funding, and documentation of nonstate funds to be used for the project. The department shall not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects.

             (3) In contracts for grants authorized under this section the department shall include provisions which require that capital improvements shall be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities shall be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee shall repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant.

             (4) The department shall develop model contract provisions for compliance with subsection (3) of this section and shall distribute its recommendations to the appropriate legislative committees, the office of financial management, and to all state agencies which provide capital grants to nonstate entities.


             NEW SECTION. Sec. 3. A new section is added to chapter 43.88 RCW to read as follows:

             (1) Each state agency shall submit a report to the office of the state auditor listing each nongovernment entity that received over three hundred thousand dollars in state moneys during the previous fiscal year under contract with the agency for purposes related to the provision of social services. The report must be submitted by September 1 each year, and must be in a form prescribed by the office of the state auditor.

             (2) The office of the state auditor shall select two groups of entities from the reports for audit as follows:

             (a) The first group shall be selected at random using a procedure prescribed by the office of the state auditor. The office of the state auditor shall ensure that the number of entities selected under this subsection (2)(a) each year is sufficient to ensure a statistically representative sample of all reported entities.

             (b) The second group shall be selected based on a risk assessment of entities conducted by the office of the state auditor in consultation with state agencies. The office of the state auditor shall consider, at a minimum, the following factors when conducting risk assessments: Findings from previous audits; decentralization of decision making and controls; turnover in officials and key personnel; changes in management structure or operations; and the presence of new programs, technologies, or funding sources.

             (3) Each entity selected under subsection (2) of this section shall be required to complete a comprehensive entity-wide audit in accordance with generally accepted government auditing standards. The audit shall determine, at a minimum, whether:

             (a) The financial statements of the entity are presented fairly in all material respects in conformity with generally accepted accounting principles;

             (b) The schedule of expenditures of state moneys is presented fairly in all material respects in relation to the financial statements taken as a whole;

             (c) Internal accounting controls exist and are effective; and

             (d) The entity has complied with laws, regulations, and contract and grant provisions that have a direct and material effect on performance of the contract and the expenditure of state moneys.

             (4) The office of the state auditor shall prescribe policies and procedures for the conduct of audits under this section. The office of the state auditor shall deem single audits completed in compliance with federal requirements to be in fulfillment of the requirements of this section if the audit meets the requirements of subsection (3)(a) through (d) of this section.

             (5) Completed audits must be delivered to the office of the state auditor and the state agency by April 1 in the year following the selection of the entity for audit. Entities must resolve any findings contained in the audit within six months of the delivery of the audit. Entities may not enter into new contracts with state agencies until all major audit findings are resolved.

             (6) Nothing in this section limits the authority of the state auditor to carry out statutorily and contractually prescribed powers and duties."


             On page 1, line 2 of the title, after "organizations;" strike the remainder of the title and insert "adding a new section to chapter 43.63A RCW; adding a new section to chapter 43.88 RCW; and creating a new section."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1325 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1325 as amended by the Senate.


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


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1325 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Substitute House Bill No. 1325, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 11, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1353 with the following amendments:

             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 47.12.140 and 1981 c 260 s 12 are each amended to read as follows:

             (((1) Except as otherwise provided in subsection (2) of this section,)) Whenever the department ((shall have)) has acquired any lands for ((highway)) transportation purposes, except state granted lands, upon which are located any structures, timber, or other thing of value attached to the land((, which)) that the department ((shall)) deems it best to sever from the land and sell as personal property, the same may be ((sold)) disposed of by one of the following means:

             (1) The department may sell the personal property at public auction after due notice ((thereof shall have)) has been given in accordance with general ((regulations)) rules adopted by the secretary. The department may set minimum prices that will be accepted for any item offered for sale at public auction as ((herein)) provided in this section and may prescribe terms or conditions of sale ((and, in the event that any)). If an item ((shall be)) is offered for sale at ((such)) the auction and ((for which)) no satisfactory bids ((shall be)) are received or ((for which)) the amount bid ((shall be)) is less than the minimum set by the department, ((it shall be lawful for)) the department ((to)) may sell ((such)) the item at private sale for the best price ((which)) that it deems obtainable, but ((at)) not less than the highest price bid at the public auction. The proceeds of all sales under this section ((shall)) must be placed in the motor vehicle fund.

             (2) The department may issue permits to residents of this state to remove specified quantities of standing or downed trees and shrubs, rock, sand, gravel, or soils ((which)) that have no market value in place and ((which)) that the department desires to be removed from state-owned lands ((which)) that are under the jurisdiction of the department. An applicant for ((such)) a permit must certify that the materials so removed are to be used by ((himself)) the applicant and that they will not be disposed of to any other person. Removal of materials ((pursuant to)) under the permit ((shall)) must be in accordance with ((such regulations as)) rules adopted by the department ((shall prescribe)). The fee for a permit ((shall be)) is two dollars and fifty cents, which ((shall)) fee must be deposited in the motor vehicle fund. The department may adopt ((regulations)) rules providing for special access to limited access facilities for the purpose of removal of materials ((pursuant to)) under permits authorized in this section.

             (3) The department may sell timber or logs to an abutting landowner for cash at full appraised value, but only after each other abutting owner (if any), as shown in the records of the county assessor, is notified in writing of the proposed sale. If more than one abutting owner requests in writing the right to purchase the timber within fifteen days after receiving notice of the proposed sale, the timber must be sold in accordance with subsection (1) of this section.

             (4) The department may sell timber or logs having an appraised value of one thousand dollars or less directly to interested parties for cash at the full appraised value without notice or advertising. If the timber is attached to state-owned land, the department shall issue a permit to the purchaser of the timber to allow for the removal of the materials from state land. The permit fee is two dollars and fifty cents."


             In line 2 of the title, after "lands;" strike the remainder of the title and insert "and amending RCW 47.12.140."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to House Bill No. 1353 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of House Bill No. 1353 as amended by the Senate.


             Representatives K. Schmidt and Fisher spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 1353 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             House Bill No. 1353, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE


Mr. Speaker:                                                                                                                                            April 8, 1997


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 1360 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. A new section is added to chapter 43.43 RCW to read as follows:

             Washington state patrol officers may engage in private law enforcement off-duty employment in uniform for private benefit, subject to guidelines adopted by the chief of the Washington state patrol. These guidelines must ensure that the integrity and professionalism of the Washington state patrol is preserved. Use of Washington state patrol officer's uniforms shall be considered de minimis use of state property.


             NEW SECTION. Sec. 2. A new section is added to chapter 4.92 RCW to read as follows:

             (1) The state of Washington is not liable for tortious conduct by Washington state patrol officers that occurs while such officers are engaged in private law enforcement off-duty employment.

             (2) Upon petition of the state any suit, for which immunity is granted to the state under subsection (1) of this section, shall be dismissed.

             (3) Washington state patrol officers engaged in private law enforcement off-duty employment shall notify, in writing, prior to such employment, anyone who employs Washington state patrol officers in private off-duty employment of the specific provisions of subsections (1) and (2) of this section."


             On page 1, line 2 of the title, after "officers;" strike the remainder of the title and insert "adding a new section to chapter 43.43 RCW; and adding a new section to chapter 4.92 RCW."


and the same are herewith transmitted.

Mike O'Connell, Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Substitute House Bill No. 1360 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1360 as amended by the Senate.


             Representatives K. Schmidt and Scott spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1360 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Engrossed Substitute House Bill No. 1360, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 1361 with the following amendments:


             On page 5, after line 21, insert the following:

             "Sec. 1. RCW 19.28.070 and 1986 c 156 s 4 are each amended to read as follows:

             The director of labor and industries of the state of Washington and the officials of all incorporated cities and towns where electrical inspections are required by local ordinances shall have power and it shall be their duty to enforce the provisions of this chapter in their respective jurisdictions. The director of labor and industries shall ((have power to)) appoint ((an)) a chief electrical inspector((, and such assistant inspectors as he shall deem necessary to assist him in the performance of his duties)) and may appoint other electrical inspectors as the director deems necessary to assist the director in the performance of the director's duties. The chief electrical inspector, subject to the review of the director, shall be responsible for providing the final interpretation of adopted state electrical standards, rules, and policies for the department and its inspectors, assistant inspectors, electrical plan examiners, and other individuals supervising electrical program personnel. If a dispute arises within the department regarding the interpretation of adopted state electrical standards, rules, or policies, the chief electrical inspector, subject to the review of the director, shall provide the final interpretation of the disputed standard, rule, or policy. All electrical inspectors appointed by the director of labor and industries shall have not less than: Four years experience as journeyman electricians in the electrical construction trade installing and maintaining electrical wiring and equipment, or two years electrical training in a college of electrical engineering of recognized standing and four years continuous practical electrical experience in installation work, or four years of electrical training in a college of electrical engineering of recognized standing and two years continuous practical electrical experience in electrical installation work; or four years experience as a journeyman electrician performing the duties of an electrical inspector employed by the department or a city or town with an approved inspection program under RCW 19.28.360, except that for work performed in accordance with the national electrical safety code and covered by this chapter, such inspections may be performed by a person certified as an outside journeyman lineman, under RCW 19.28.610(2), with four years experience or a person with four years experience as a certified outside journeyman lineman performing the duties of an electrical inspector employed by an electrical utility. Such state inspectors shall be paid such salary as the director of labor and industries shall determine, together with their travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended. As a condition of employment, inspectors hired exclusively to perform inspections in accordance with the national electrical safety code must possess and maintain certification as an outside journeyman lineman. The expenses of the director of labor and industries and the salaries and expenses of state inspectors incurred in carrying out the provisions of this chapter shall be paid entirely out of the electrical license fund, upon vouchers approved by the director of labor and industries."


             On page 1, line 2 of the title, after "19.28.520," strike "and 19.28.530" and insert "19.28.530, and 19.28.070"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Substitute House Bill No. 1361 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1361 as amended by the Senate.


             Representatives Clements and Conway spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1361 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 89, Nays - 0, Absent - 0, Excused - 9.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Regala, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 89.

             Excused: Representatives Buck, Carrell, DeBolt, Kastama, Mastin, McDonald, Reams, Robertson and Thomas, B. - 9.


             Engrossed Substitute House Bill No. 1361, as amended by the Senate, having received the constitutional majority, was declared passed.


             The Speaker assumed the chair.


MESSAGE FROM THE SENATE

April 18, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 2018 with the following amendments:


             Strike everything after the enacting clause and insert the following:

"HEALTH INSURANCE REFORM

PART I--CONSUMER PROTECTIONS


             NEW SECTION. Sec. 101. UTILIZATION REVIEW--INTENT. The legislature intends that the delivery of quality health care services to individuals in the state of Washington be consistent with a wise use of resources. It is therefore the purpose of this act to define standards for utilization review of health care services and to promote the delivery of health care in a cost-effective manner. The legislature reaffirms its commitment to improving health care services through encouraging the availability of effective and consistent utilization review throughout this state. The legislature believes that standards for utilization review will help assure quality oversight of individual case evaluations in this state.


             NEW SECTION. Sec. 102. A new section is added to chapter 48.43 RCW to read as follows:

             UTILIZATION REVIEW--REVIEW ORGANIZATION. (1) Beginning on January 1, 1998, every review organization that performs utilization review of inpatient and outpatient benefits for residents of this state shall meet the standards set forth in this section and section 103 of this act.

             (a) Review organizations shall comply with all applicable state and federal laws to protect confidentiality of enrollee medical records.

             (b) Any certification by a review organization as to the medical necessity or appropriateness of an admission, length of stay, extension of stay, or service or procedure must be made in accordance with medical standards or guidelines approved by a licensed physician.

             (c) Any determination by a review organization to deny an admission, length of stay, extension of stay, or service or procedure on the basis of medical necessity or appropriateness must be made by a licensed physician who has reasonable access to board certified specialty providers in making such determinations.

             (d) Review organizations shall make staff available to perform utilization review activities by toll-free or collect telephone, at least forty hours per week during normal business hours.

             (e) Review organizations shall have a phone system capable of accepting or recording, or both, incoming phone calls relating to utilization review during other than normal business hours and shall respond to these calls within two business days.

             (f) Review organizations shall maintain a documented utilization review program description and written utilization review criteria based on reasonable medical evidence. The program must include a method for reviewing and updating criteria. Review organizations shall make utilization review criteria available upon request to the participating provider involved in a specific case under review.

             (g) Review organizations shall designate a licensed physician to participate in utilization review program implementation.

             (2) The legislature finds that current utilization review accreditation commission and national committee for quality assurance utilization review standards meet or exceed the requirements of this section. Health carriers who continuously maintain such accreditation are hereby deemed in compliance with this section for their accredited health plans. The office of the insurance commissioner shall periodically examine the review organization accreditation standards of the utilization review accreditation commission and the national committee for quality assurance and report to the legislature to ensure that such standards continue to be substantially equivalent to or exceed the requirements of section 103 of this act.


             NEW SECTION. Sec. 103. A new section is added to chapter 48.43 RCW to read as follows:

             UTILIZATION REVIEW--STANDARDS. (1) Notification of an initial determination by the review organization to certify an admission, length of stay, extension of stay, or service or procedure must be mailed or otherwise communicated to the provider of record or the enrollee, or the enrollee's authorized representative, or both, within two business days of the determination and following the receipt of all information necessary to complete the review.

             (2) Notification of an initial determination by the review organization to deny an admission, length of stay, extension of stay, or service or procedure must be mailed or otherwise communicated to the provider of record or the enrollee, or the enrollee's authorized representative, or both, within one business day of the determination and following the receipt of all information necessary to complete the review.

             (3) Any notification of a determination to deny an admission, length of stay, extension of stay, or service or procedure must include:

             (a) The review organization's decision in clear terms and the rationale in sufficient detail for the enrollee to respond further to the review organization's decision; and

             (b) The procedures to initiate an appeal of an adverse determination.

             (4) Health care facilities and providers shall cooperate with the reasonable efforts of review organizations to ensure that all necessary enrollee information is available in a timely fashion by phone during normal business hours. Health care facilities and providers shall allow on-site review of medical records by review organizations. These provisions are subject to the requirements regarding health care information disclosure in chapter 70.02 RCW.


             NEW SECTION. Sec. 104. A new section is added to chapter 48.43 RCW to read as follows:

             UTILIZATION REVIEW--LIMITED RECORD ACCESS. In performing a utilization review, a review organization is limited to access to specific health care service information necessary to complete the review being performed relating to the covered person.


             NEW SECTION. Sec. 105. GRIEVANCE PROCEDURES--INTENT. The legislature is committed to the efficient use of state resources in promoting public health and protecting the rights of individuals in the state of Washington. The purpose of this act is to provide standards for the establishment and maintenance of procedures by health carriers to assure that covered persons have the opportunity for the appropriate resolution of their grievances, as defined in this act.


             NEW SECTION. Sec. 106. A new section is added to chapter 48.43 RCW to read as follows:

             GRIEVANCE PROCEDURES--STANDARDS. (1) Every health carrier shall use written procedures for receiving and resolving grievances from covered persons. At each level of review of a grievance, the health carrier shall include a person or persons with sufficient background and authority to deliberate the merits of the grievance and establish appropriate terms of resolution. The health carrier's medical director or designee shall be available to participate in the review of any grievance involving a clinical issue or issues. A grievance that includes an issue of clinical quality of care as determined by the health carrier's medical director or designee may be directed to the health carrier's quality assurance committee for review and comment. Nothing in this section alters any protections afforded under statutes relating to confidentiality and nondiscoverability of quality assurance activities and information.

             (2)(a) A complaint that is not submitted in writing may be resolved directly by the health carrier with the covered person, and is not considered a grievance subject to the review, recording, and reporting requirements of this section.

             (b) The health carrier is required to provide telephone access to covered persons for purposes of presenting a complaint for review. Each telephone number provided shall be toll free or collect within the health carrier's service area and provide reasonable access to the health carrier without undue delays during normal business hours.

             (3)(a) A grievance may be submitted by a covered person or a representative acting on behalf of the covered person through written authority to assure protection of the covered person's private information. Within three working days of receiving a grievance, the health carrier shall acknowledge in writing the receipt of the grievance and the department name and address where additional information may be submitted by the covered person or authorized representative of the covered person. The health carrier shall process the grievance in a reasonable length of time not to exceed thirty days from receipt of the written grievance. If the grievance involves the collection of information from sources external to the health carrier and its participating providers, the health carrier has an additional thirty days to process the covered person's grievance.

             (b) The health carrier shall provide the covered person, or authorized representative of the covered person, with a written determination of its review within the time frame specified in (a) of this subsection. The written determination shall contain at a minimum:

             (i) The health carrier's decision in clear terms and the rationale in sufficient detail for the covered person or authorized representative of the covered person to respond further to the health carrier's decision; and

             (ii) When the health carrier's decision is not wholly favorable to the covered person, a description of the process to obtain a second level grievance review of the decision, including the time frames required for submission of a request by the covered person or authorized representative of the covered person.

             (4)(a) A health carrier shall provide a second level grievance review for those covered persons who are dissatisfied with the first level grievance review decision and who submit a written request for review. The second level review process shall include an opportunity for the covered person or authorized representative of the covered person to appear in person before the representative or representatives of the health carrier. The covered person or authorized representative of the covered person must ask for a personal appearance in the written request for a second level review.

             (b) The health carrier shall process the grievance in a reasonable length of time, not to exceed thirty days from receipt of the request for a second level review. The time required to resolve the second level review may be extended for a specified period if mutually agreed upon by the covered person or authorized representative of the covered person and the health carrier.

             (c) A health carrier's procedures for conducting a second level review must include the following:

             (i) The second level review panel shall be comprised of representatives of the health carrier not otherwise participating in the first level review. If the grievance involves a clinical issue or issues, the health carrier shall appoint a health care professional with appropriate qualifications to assess the clinical considerations of the case who was not previously involved with the grievance under review and who has no financial interest in the outcome of the review;

             (ii) The review panel shall schedule the review meeting to reasonably accommodate the covered person or authorized representative of the covered person and not unreasonably deny a request for postponement of the review requested by the covered person or authorized representative of the covered person; and

             (iii) The health carrier shall notify the covered person or authorized representative of the covered person in writing at least fifteen days in advance of the scheduled review date unless a shorter time frame is agreed to by the health carrier and the covered person. The review meeting shall be held at a location within the health carrier's service area that is reasonably accessible to the covered person or authorized representative of the covered person. In cases where a face-to-face meeting is not practical for geographic reasons, a health carrier shall offer the covered person or authorized representative of the covered person the opportunity to communicate with the review panel, at the health carrier's expense, by conference call, video conferencing, or other appropriate technology as determined by the health carrier.

             (d) The health carrier shall issue a written decision to the covered person or authorized representative of the covered person within five working days of completing the review meeting. The decision shall include:

             (i) A statement of the health carrier's understanding of the nature of the grievance and all pertinent facts;

             (ii) The health carrier's decision in clear terms and the rationale for the review panel's decision; and

             (iii) Notice of the covered person's right to any further review by the health carrier.

             (e) Determination of a grievance at the final level review that is unfavorable to the covered person may be submitted by the covered person or authorized representative of the covered person to nonbinding mediation. Mediation shall be conducted under mediation rules similar to those of the American arbitration association, the center for public resources, the judicial arbitration and mediation service, RCW 7.70.100, or any other rules of mediation agreed to by the parties.

             (5) Each health carrier as defined in this chapter shall file with the commissioner its procedures for review and adjudication of grievances initiated by covered persons.

             (6) The health carrier shall maintain accurate records of each grievance to include the following:

             (a) A description of the grievance, the date received by the health carrier, and the name and identification number of the covered person; and

             (b) A statement as to which level of the grievance procedure the grievance has been brought, the date at which it was brought to each level, the decision reached at each level, and a summary description of the rationale for the decision.

             (7) Each health carrier shall make an annual report available to the commissioner. The report shall include for each type of health benefit plan offered by the health carrier: The number of covered lives; the total number of grievances received divided into the following categories: (a) Access, health carrier customer service, health care provider or facility service, and claim payment; (b) dispute resolution; (c) the number of grievances resolved at each level; and (d) the total number of decisions favorable and unfavorable to the covered person.

             (8) A notice of the availability and the requirements of the grievance procedure, including the address where a written grievance may be filed, shall be included in or attached to the policy, certificate, membership booklet, outline of coverage, or other evidence of coverage provided by the health carrier to its enrollees.

             (9) The notice shall include a toll-free or collect telephone number for a covered person to obtain verbal explanation of the grievance procedure.

             (10) A health carrier shall establish written procedures for the expedited review of a grievance involving a situation where the time to resolve a grievance according to the procedures set forth in this section would seriously jeopardize the life or health of a covered person. A request for an expedited review may be submitted orally or in writing by a covered person or authorized representative of the covered person. A health carrier's procedures for establishing an expedited review process shall include the following:

             (a) The health carrier shall appoint an appropriate health care professional to participate in expedited reviews and shall provide reasonable access to board-certified specialty providers as typically manage the issue under review.

             (b) A health carrier shall provide expedited review to all requests concerning an admission, availability of care, continued stay, or review of a health care service for a covered person who has received emergency services but has not been discharged from a facility.

             (c) All necessary information, including the health carrier's decision, shall be transmitted between the health carrier and the covered person or authorized representative of the covered person by telephone, facsimile, or the most expeditious method available as determined by the health carrier.

             (d) A health carrier shall make a decision and notify the covered person or authorized representative of the covered person as expeditiously as the medical condition of the covered person requires, but no more than two business days after the request for expedited review is received by the health carrier. If the expedited review is a concurrent review determination, the service shall be continued without liability to the covered person until the covered person or authorized representative of the covered person has been notified of the decision by the health carrier.

             (e) A health carrier shall provide written confirmation of its decision concerning an expedited review within two working days of providing notification of that decision to the enrollee, if the initial notification was not in writing. The written notification shall contain the provisions required in subsection (3) of this section pertaining to a first level grievance review.

             (f) In any case where the expedited review process does not resolve a difference of opinion between a health carrier and the covered person, the covered person or authorized representative of the covered person may request a second level grievance review. In conducting the second level grievance review, the health carrier shall adhere to time frames that are reasonable under the circumstances, but in no event to exceed the time frames specified in subsection (4) of this section pertaining to second level grievance review.

             (11) The legislature finds that current national committee for quality assurance grievance procedure standards meet or exceed the requirements of this section. Health carriers who continuously maintain such accreditation are hereby deemed in compliance with this section for their accredited health plans. The office of the insurance commissioner shall periodically examine the accreditation standards of the national committee for quality assurance and report to the legislature to ensure that such standards continue to be substantially equivalent to or exceed the requirements of this section.


             Sec. 107. RCW 48.43.055 and 1995 c 265 s 20 are each amended to read as follows:

             GRIEVANCE PROCEDURE FOR HEALTH CARE PROVIDERS. Each health carrier as defined under RCW 48.43.005 shall file with the commissioner its procedures for review and adjudication of complaints initiated by ((covered persons or)) a health care provider((s)). Procedures filed under this section shall provide a fair review for consideration of complaints. Every health carrier shall provide reasonable means whereby ((any person)) a health care provider aggrieved by actions of the health carrier may be heard in person or by their authorized representative on their written request for review. If the health carrier fails to grant or reject such request within thirty days after it is made, the complaining ((person)) provider may proceed as if the complaint had been rejected. A complaint that has been rejected by the health carrier may be submitted to nonbinding mediation. Mediation shall be conducted pursuant to mediation rules similar to those of the American arbitration association, the center for public resources, the judicial arbitration and mediation service, RCW 7.70.100, or any other rules of mediation agreed to by the parties.


             NEW SECTION. Sec. 108. GRIEVANCE PROCEDURES--REPEALER. RCW 48.46.100 and 1975 1st ex.s. c 290 s 11 are each repealed.


             NEW SECTION. Sec. 109. NETWORK ADEQUACY--INTENT. The legislature declares that it is in the public interest that health carriers utilizing provider networks use reasonable means of assessing that their provider networks are adequate to provide covered services to their enrollees. The legislature finds that empirical assessment of provider network adequacy is in developmental stages, and that rigid, formulaic approaches are unworkable and inhibit innovation and approaches tailored to meet the needs of varying communities and populations. The legislature therefore finds that, given these limitations, an assessment is needed to determine whether network adequacy requirements are needed and, if necessary, whether the type of measures used by current accreditation programs, such as the national committee on quality assurance, meets these needs.


             NEW SECTION. Sec. 110. NETWORK ADEQUACY--STUDY AND RESTRICTION. (1) The health care authority, in consultation with the office of the insurance commissioner, the department of social and health services, the department of health, consumers, providers, and health carriers, shall review the need for network adequacy requirements. The review must include an evaluation of the approaches used by the national committee on quality assurance and any similar, nationally recognized accreditation programs. The department shall submit its report and recommendations to the health care committees of the legislature by January 1, 1998, and include recommendations on:

             (a) Whether legislatively determined network adequacy requirements are necessary and advisable and the evidence to support this;

             (b) If standards are needed, to what extent such standards can be made consistent with the national committee on quality assurance standards, and whether national committee on quality assurance accredited carriers, or carriers accredited by other, nationally recognized accreditation programs, should be exempted from state review and requirements;

             (c) Whether and how the state could promote uniformity of approach across commercial purchaser requirements and state and federal agency requirements so as to assure adequate consumer access while promoting the most efficient use of public and private health care financial resources;

             (d) Means to assure that health carriers and health systems maintain the flexibility necessary to responsibly determine the best ways to meet the needs of the populations they serve while controlling the costs of the health care services provided;

             (e) Which types of health systems and health carriers should be subject to network adequacy requirements, if any; and

             (f) An objective estimate of the potential costs of such requirements and any recommended oversight functions.

             (2) No agency may engage in rule making relating to network adequacy until the legislature has reviewed the findings and recommendations of the study and has passed legislation authorizing the department of health or other appropriate agency to engage in rule making in this area in accordance with the policy direction set by the legislature.


             NEW SECTION. Sec. 111. A new section is added to chapter 48.43 RCW to read as follows:

             ACCESS PLAN REQUIREMENTS. (1) Beginning July 1, 1997, every health carrier, as defined in RCW 48.43.005, shall develop and update annually an access plan that meets the requirements of this section for each of the health care networks that the carrier offers in this state. The health carrier shall make the access plans available on its business premises and shall provide nonproprietary information to any interested party upon request. The carrier shall prepare an access plan prior to offering a health plan utilizing a substantially different health care network. The plan shall include, at least, the following:

             (a) The health carrier's network of providers and facilities by license, certification and registration type, and by geographic location;

             (b) The health carrier's process for monitoring and assuring on an ongoing basis the sufficiency of the provider network to meet the covered health care needs of its enrolled populations; and

             (c) The health carrier's methods for assessing the health care needs of covered persons and their satisfaction with services.

             (2) On or before August 1, 1997, each health carrier shall submit its access plan or plans to the Washington state health care authority for purposes of assisting the authority with its report and recommendations on network adequacy standards required under section 110 of this act.

             (3) The legislature finds that current national committee for quality assurance network adequacy standards meet or exceed the requirements of this section. Health carriers who continuously maintain such accreditation are hereby deemed in compliance with this section for their accredited health plans. The office of the insurance commissioner shall periodically examine the accreditation standards of the national committee for quality assurance and report to the legislature to ensure that such standards continue to be substantially equivalent to or exceed the requirements of this section.


             NEW SECTION. Sec. 112. A new section is added to chapter 74.09 RCW to read as follows:

             MEDICAL ASSISTANCE WAIVERS. To the extent that federal statutes or regulations, or provisions of waivers granted to the department of social and health services by the federal department of health and human services, include standards that differ from the minimums stated in sections 101 through 106, 109, and 111 of this act, those sections do not apply to contracts with health carriers awarded pursuant to RCW 74.09.522.

PART II--MARKETPLACE STABILITY


             NEW SECTION. Sec. 201. LEGISLATIVE INTENT. The legislature intends that individuals in the state of Washington have access to affordable individual health plan coverage. The legislature reaffirms its commitment to guaranteed issue and renewability, portability, and limitations on use of preexisting condition exclusions. The legislature also finds that the lack of incentives for individuals to purchase and maintain coverage independent of anticipated need for health care has contributed to soaring health care claims experience in many individual health plans. The legislature therefore intends that refinements be made to the state's individual market reform laws to provide needed incentives and to help assure that more affordable coverage is accessible to Washington residents.


             Sec. 202. RCW 48.43.005 and 1995 c 265 s 4 are each amended to read as follows:

             DEFINITIONS. Unless otherwise specifically provided, the definitions in this section apply throughout this chapter.

             (1) "Adjusted community rate" means the rating method used to establish the premium for health plans adjusted to reflect actuarially demonstrated differences in utilization or cost attributable to geographic region, age, family size, and use of wellness activities.

             (2) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.

             (3) "Basic health plan model plan" means a health plan as required in RCW 70.47.060(2)(d).

             (4) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time.

             (5) "Certification" means a determination by a review organization that an admission, extension of stay, or other health care service or procedure has been reviewed and, based on the information provided, meets the clinical requirements for medical necessity, appropriateness, level of care, or effectiveness under the auspices of the applicable health benefit plan.

             (6) "Concurrent review" means utilization review conducted during a patient's hospital stay or course of treatment.

             (7) "Covered person" or "enrollee" means a person covered by a health plan including an enrollee, subscriber, policyholder, beneficiary of a group plan, or individual covered by any other health plan.

             (((3))) (8) "Dependent" means, at a minimum, the enrollee's legal spouse and unmarried dependent children who qualify for coverage under the enrollee's health benefit plan.

             (9) "Eligible employee" means an employee who works on a full-time basis with a normal work week of thirty or more hours. The term includes a self-employed individual, including a sole proprietor, a partner of a partnership, and may include an independent contractor, if the self-employed individual, sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not work less than thirty hours per week and derives at least seventy-five percent of his or her income from a trade or business through which he or she has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form. Persons covered under a health benefit plan pursuant to the consolidated omnibus budget reconciliation act of 1986 shall not be considered eligible employees for purposes of minimum participation requirements of chapter 265, Laws of 1995.

             (((4))) (10) "Emergency medical condition" means the emergent and acute onset of a symptom or symptoms, including severe pain, that would lead a prudent layperson acting reasonably to believe that a health condition exists that requires immediate medical attention, if failure to provide medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy.

             (11) "Emergency services" means otherwise covered health care services medically necessary to evaluate and treat an emergency medical condition, provided in a hospital emergency department.

             (12) "Enrollee point-of-service cost-sharing" means amounts paid to health carriers directly providing services, health care providers, or health care facilities by enrollees and may include copayments, coinsurance, or deductibles.

             (((5))) (13) "Grievance" means a written complaint submitted by or on behalf of a covered person regarding: (a) Denial of payment for medical services or nonprovision of medical services included in the covered person's health benefit plan, or (b) service delivery issues other than denial of payment for medical services or nonprovision of medical services, including dissatisfaction with medical care, waiting time for medical services, provider or staff attitude or demeanor, or dissatisfaction with service provided by the health carrier.

             (14) "Health care facility" or "facility" means hospices licensed under chapter 70.127 RCW, hospitals licensed under chapter 70.41 RCW, rural health care facilities as defined in RCW 70.175.020, psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes licensed under chapter 18.51 RCW, community mental health centers licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment centers licensed under chapter 70.41 RCW, ambulatory diagnostic, treatment, or surgical facilities licensed under chapter 70.41 RCW, drug and alcohol treatment facilities licensed under chapter 70.96A RCW, and home health agencies licensed under chapter 70.127 RCW, and includes such facilities if owned and operated by a political subdivision or instrumentality of the state and such other facilities as required by federal law and implementing regulations.

             (((6))) (15) "Health care provider" or "provider" means:

             (a) A person regulated under Title 18 or chapter 70.127 RCW, to practice health or health-related services or otherwise practicing health care services in this state consistent with state law; or

             (b) An employee or agent of a person described in (a) of this subsection, acting in the course and scope of his or her employment.

             (((7))) (16) "Health care service" means that service offered or provided by health care facilities and health care providers relating to the prevention, cure, or treatment of illness, injury, or disease.

             (((8))) (17) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020.

             (((9))) (18) "Health plan" or "health benefit plan" means any policy, contract, or agreement offered by a health carrier to provide, arrange, reimburse, or pay for health care services except the following:

             (a) Long-term care insurance governed by chapter 48.84 RCW;

             (b) Medicare supplemental health insurance governed by chapter 48.66 RCW;

             (c) Limited health care services offered by limited health care service contractors in accordance with RCW 48.44.035;

             (d) Disability income;

             (e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical;

             (f) Workers' compensation coverage;

             (g) Accident only coverage;

             (h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan;

             (i) Employer-sponsored self-funded health plans; and

             (j) Dental only and vision only coverage.

             (((10) "Basic health plan services" means that schedule of covered health services, including the description of how those benefits are to be administered, that are required to be delivered to an enrollee under the basic health plan, as revised from time to time.))

             (19) "Material modification" means a change in the actuarial value of the health plan as modified of more than five percent but less than fifteen percent.

             (20) "Open enrollment" means the annual sixty-two day period during the months of July and August during which every health carrier offering individual health plan coverage must accept onto individual coverage any state resident within the carrier's service area regardless of health condition who submits an application in accordance with RCW 48.43.035(1).

             (((11))) (21) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage.

             (((12))) (22) "Premium" means all sums charged, received, or deposited by a health carrier as consideration for a health plan or the continuance of a health plan. Any assessment or any "membership," "policy," "contract," "service," or similar fee or charge made by a health carrier in consideration for a health plan is deemed part of the premium. "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing.

             (23) "Review organization" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, health care service contractor as defined in RCW 48.44.010, or health maintenance organization as defined in RCW 48.46.020, and entities affiliated with, under contract with, or acting on behalf of a health carrier to perform a utilization review.

             (((13))) (24) "Small employer" means any person, firm, corporation, partnership, association, political subdivision except school districts, or self-employed individual that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar quarter, employed no more than fifty eligible employees, with a normal work week of thirty or more hours, the majority of whom were employed within this state, and is not formed primarily for purposes of buying health insurance and in which a bona fide employer-employee relationship exists. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition. The term "small employer" includes a self-employed individual or sole proprietor. The term "small employer" also includes a self-employed individual or sole proprietor who derives at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year.

             (25) "Utilization review" means the prospective, concurrent, or retrospective assessment of the necessity and appropriateness of the allocation of health care resources and services of a provider or facility, given or proposed to be given to an enrollee or group of enrollees.

             (((14))) (26) "Wellness activity" means an explicit program of an activity consistent with department of health guidelines, such as, smoking cessation, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education for the purpose of improving enrollee health status and reducing health service costs.

             (((15) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.))


             Sec. 203. RCW 48.43.025 and 1995 c 265 s 6 are each amended to read as follows:

             PREEXISTING CONDITION LIMITATIONS MODIFIED. (1) Except as otherwise specified in this section and in RCW 48.43.035:

             (a) No carrier may reject an individual for health plan coverage based upon preexisting conditions of the individual ((and)).

             (b) No carrier may deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that a carrier may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a health care provider recommended or provided treatment within three months before the effective date of coverage.

             (c) Every health carrier offering any individual health plan to any individual must allow open enrollment to eligible applicants into all individual health plans offered by the carrier during the full month of July of each year. The individual health plans exempt from guaranteed continuity under RCW 48.43.035(4) are exempt from this requirement. All applications for open enrollment coverage must be complete and postmarked to or received by the carrier in the months of July or August in any year following the effective date of this section. Coverage for these applicants must begin the first day of the next month subject to receipt of timely payment consistent with the terms of the policies.

             (d) At any time other than the open enrollment period specified in (c) of this subsection, a carrier may either decline to accept an applicant for enrollment or apply to such applicant's coverage a preexisting condition benefit waiting period not to exceed the amount of time remaining until the next open enrollment period, or three months, whichever is greater, provided that in either case all of the following conditions are met:

             (i) The applicant has not maintained coverage as required in (f) of this subsection;

             (ii) The applicant is not applying as a newly eligible dependent meeting the requirements of (g) of this subsection; and

             (iii) The carrier uses uniform health evaluation criteria and practices among all individual health plans it offers.

             (e) If a carrier exercises the options specified in (d) of this subsection it must advise the applicant in writing within ten business days of such decision. Notice of the availability of Washington state health insurance pool coverage and a brochure outlining the benefits and exclusions of the Washington state health insurance pool policy or policies must be provided in accordance with RCW 48.41.180 to any person rejected for individual health plan coverage, who has had any health condition limited or excluded through health underwriting or who otherwise meets requirements for notice in chapter 48.41 RCW. Provided timely and complete application is received by the pool, eligible individuals shall be enrolled in the Washington state health insurance pool in an expeditious manner as determined by the board of directors of the pool.

             (f) A carrier may not refuse enrollment at any time based upon health evaluation criteria to otherwise eligible applicants who have been covered for any part of the three-month period immediately preceding the date of application for the new individual health plan under a comparable group or individual health benefit plan with substantially similar benefits. For purposes of this subsection, in addition to provisions in RCW 48.43.015, the following publicly administered coverage shall be considered comparable health benefit plans: The basic health plan established by chapter 70.47 RCW; the medical assistance program established by chapter 74.09 RCW; and the Washington state health insurance pool, established by chapter 48.41 RCW, as long as the person is continuously enrolled in the pool until the next open enrollment period. If the person is enrolled in the pool for less than three months, she or he will be credited for that period up to three months.

             (g) A carrier must accept for enrollment all newly eligible dependents of an enrollee for enrollment onto the enrollee's individual health plan at any time of the year, provided application is made within sixty-three days of eligibility, or such longer time as provided by law or contract.

             (h) At no time are carriers required to accept for enrollment any individual residing outside the state of Washington, except for qualifying dependents who reside outside the carrier service area.

             (2) No carrier may avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification. A new or changed rate classification will be deemed an attempt to avoid the provisions of this section if the new or changed classification would substantially discourage applications for coverage from individuals or groups who are higher than average health risks. ((These)) The provisions of this section apply only to individuals who are Washington residents.


             Sec. 204. RCW 48.43.035 and 1995 c 265 s 7 are each amended to read as follows:

             GUARANTEED ISSUE AND CONTINUITY OF COVERAGE MODIFIED. (1) ((All)) Except as otherwise specified in this section and in RCW 48.43.025, every health carrier((s)) shall accept for enrollment any state resident within the carrier's service area and provide or assure the provision of all covered services regardless of age, sex, family structure, ethnicity, race, health condition, geographic location, employment status, socioeconomic status, other condition or situation, or the provisions of RCW 49.60.174(2). The insurance commissioner may grant a temporary exemption from this subsection, if, upon application by a health carrier the commissioner finds that the clinical, financial, or administrative capacity to serve existing enrollees will be impaired if a health carrier is required to continue enrollment of additional eligible individuals.

             (2) Except as provided in subsection (((5))) (6) of this section, all health plans shall contain or incorporate by endorsement a guarantee of the continuity of coverage of the plan. For the purposes of this section, a plan is "renewed" when it is continued beyond the earliest date upon which, at the carrier's sole option, the plan could have been terminated for other than nonpayment of premium. In the case of group plans, the carrier may consider the group's anniversary date as the renewal date for purposes of complying with the provisions of this section.

             (3) The guarantee of continuity of coverage required in health plans shall not prevent a carrier from canceling or nonrenewing a health plan for:

             (a) Nonpayment of premium;

             (b) Violation of published policies of the carrier approved by the insurance commissioner;

             (c) Covered persons entitled to become eligible for medicare benefits by reason of age who fail to apply for a medicare supplement plan or medicare cost, risk, or other plan offered by the carrier pursuant to federal laws and regulations;

             (d) Covered persons who fail to pay any deductible or copayment amount owed to the carrier and not the provider of health care services;

             (e) Covered persons committing fraudulent acts as to the carrier;

             (f) Covered persons who materially breach the health plan; ((or))

             (g) Change or implementation of federal or state laws that no longer permit the continued offering of such coverage; or

             (h) Cessation of a plan in accordance with subsection (5) or (7) of this section.

             (4) The provisions of this section do not apply in the following cases:

             (a) A carrier has zero enrollment on a product; ((or))

             (b) A carrier replaces a product and the replacement product is provided to all covered persons within that class or line of business, includes all of the services covered under the replaced product, and does not significantly limit access to the kind of services covered under the replaced product. The health plan may also allow unrestricted conversion to a fully comparable product; or

             (c) A carrier is withdrawing from a service area or from a segment of its service area because the carrier has demonstrated to the insurance commissioner that the carrier's clinical, financial, or administrative capacity to serve enrollees would be exceeded.

             (5) A health carrier may discontinue or materially modify a particular health plan, only if:

             (a) The health carrier provides notice to each covered person or group provided coverage of this type of such discontinuation or modification at least ninety days prior to the date of the discontinuation or modification of coverage;

             (b) The health carrier offers to each covered person provided coverage of this type the option to purchase any other health plan currently being offered by the health carrier to similar covered persons in the market category and geographic area; and

             (c) In exercising the option to discontinue or modify a particular health plan and in offering the option of coverage under (b) of this subsection, the health carrier acts uniformly without regard to any health-status related factor of covered persons or persons who may become eligible for coverage.

             (6) The provisions of this section do not apply to health plans deemed by the insurance commissioner to be unique or limited or have a short-term purpose, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

             (7) A health carrier may discontinue all health plan coverage in one or more of the following lines of business:

             (a)(i) Individual; or

             (ii)(A) Small group (1-50 eligible employees); and

             (B) Large group (51+ eligible employees);

             (b) Only if:

             (i) The health carrier provides notice to the office of the insurance commissioner and to each person covered by a plan within the line of business of such discontinuation at least one hundred eighty days prior to the expiration of coverage; and

             (ii) All plans issued or delivered in the state by the health carrier in such line of business are discontinued, and coverage under such plans in such line of business is not renewed; and

             (iii) The health carrier may not issue any health plan coverage in the line of business and state involved during the five-year period beginning on the date of the discontinuation of the last health plan not so renewed.

             (8) The portability provisions of RCW 48.43.015 continue to apply to all enrollees whose health insurance coverage is modified or discontinued pursuant to this section.

             (9) Nothing in this section modifies a health carrier's responsibility to offer the basic health plan model plan as required by RCW 70.47.060(2)(d).


             Sec. 205. RCW 48.43.045 and 1995 c 265 s 8 are each amended to read as follows:

             MODIFYING CARRIER REPORTING REQUIREMENTS. Every health plan delivered, issued for delivery, or renewed by a health carrier on and after January 1, 1996, shall:

             (1) Permit every category of health care provider to provide health services or care for conditions included in the basic health plan services to the extent that:

             (a) The provision of such health services or care is within the health care providers' permitted scope of practice; and

             (b) The providers agree to abide by standards related to:

             (i) Provision, utilization review, and cost containment of health services;

             (ii) Management and administrative procedures; and

             (iii) Provision of cost-effective and clinically efficacious health services.

             (2) Annually report the names and addresses of all officers, directors, or trustees of the health carrier during the preceding year, and the amount of wages, expense reimbursements, or other payments to such individuals. This requirement does not apply to a foreign or alien insurer regulated under chapter 48.20 or 48.21 RCW that files a supplemental compensation exhibit in its annual statement as required by law.


             Sec. 206. RCW 70.47.060 and 1995 c 266 s 1 and 1995 c 2 s 4 are each reenacted and amended to read as follows:

             MODEL PLAN DEFINED. 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. In addition, the administrator may offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive (([covered basic health care services])) covered basic health care services 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, 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 such services 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. 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.

             However, with respect to coverage for 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 such services except to the extent that the 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.

             (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 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 and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) 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 premium tax under RCW 48.14.0201.

             (c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee.

             (d) To develop, as an offering by ((all)) every health carrier((s)) providing coverage identical to the basic health plan, as configured on January 1, 1996, a basic health plan model plan ((benefits package)) with uniformity in enrollee cost-sharing requirements.

             (3) To design and implement a structure of enrollee cost sharing due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services.

             (4) 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. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator.

             (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.

             (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 medical assistance 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 on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. 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 reenroll in the plan.

             (10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes.

             (11) 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.

             (12) 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 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.

             (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) 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 funding, assistance for rural residents, underserved populations, and persons of color.


             Sec. 207. RCW 48.20.028 and 1995 c 265 s 13 are each amended to read as follows:

             TENURE DISCOUNTS--INDIVIDUAL DISABILITY COVERAGE. (1)(a) An insurer offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan subject to RCW 48.43.025 and 48.43.035. Nothing in this subsection shall preclude an insurer from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.20.390, 48.20.393, 48.20.395, 48.20.397, 48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

             (2) Premiums for health benefit plans for individuals shall be calculated using the adjusted community rating method that spreads financial risk across the carrier's entire individual product population. All such rates shall conform to the following:

             (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; ((and))

             (iv) Tenure discounts; and

             (v) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty.

             (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection.

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the family composition;

             (ii) Changes to the health benefit plan requested by the individual; or

             (iii) Changes in government requirements affecting the health benefit plan.

             (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent.

             (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.21.045.

             (4) As used in this section, "health benefit plan," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 208. RCW 48.44.022 and 1995 c 265 s 15 are each amended to read as follows:

             TENURE DISCOUNTS--HEALTH CARE SERVICE CONTRACTORS. (1)(a) A health care service contractor offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan, subject to the provisions in RCW 48.43.025 and 48.43.035. Nothing in this subsection shall preclude a contractor from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

             (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions:

             (a) The health care service contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; ((and))

             (iv) Tenure discounts; and

             (v) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty.

             (c) The health care service contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection.

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the family composition;

             (ii) Changes to the health benefit plan requested by the individual; or

             (iii) Changes in government requirements affecting the health benefit plan.

             (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent.

             (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.44.023.

             (4) As used in this section and RCW 48.44.023 "health benefit plan," "small employer," "basic health plan," "adjusted community rates," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 209. RCW 48.46.064 and 1995 c 265 s 17 are each amended to read as follows:

             TENURE DISCOUNTS--HEALTH MAINTENANCE ORGANIZATIONS. (1)(a) A health maintenance organization offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health ((services)) benefits that are required to be delivered to an individual enrolled in the basic health plan, subject to the provisions in RCW 48.43.025 and 48.43.035. Nothing in this subsection shall preclude a health maintenance organization from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, ((48.26.280 [48.46.280])) 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

             (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions:

             (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; ((and))

             (iv) Tenure discounts; and

             (v) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty.

             (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection.

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the family composition;

             (ii) Changes to the health benefit plan requested by the individual; or

             (iii) Changes in government requirements affecting the health benefit plan.

             (g) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (h) A tenure discount for continuous enrollment in the health plan of two years or more may be offered, not to exceed ten percent.

             (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.46.066.

             (4) As used in this section and RCW 48.46.066, "health benefit plan," "basic health plan," "adjusted community rate," "small employer," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 210. RCW 48.41.030 and 1989 c 121 s 1 are each amended to read as follows:

             HEALTH INSURANCE POOL--DEFINITIONS. As used in this chapter, the following terms have the meaning indicated, unless the context requires otherwise:

             (1) "Accounting year" means a twelve-month period determined by the board for purposes of record-keeping and accounting. The first accounting year may be more or less than twelve months and, from time to time in subsequent years, the board may order an accounting year of other than twelve months as may be required for orderly management and accounting of the pool.

             (2) "Administrator" means the entity chosen by the board to administer the pool under RCW 48.41.080.

             (3) "Board" means the board of directors of the pool.

             (4) "Commissioner" means the insurance commissioner.

             (5) "Health care facility" has the same meaning as in RCW 70.38.025.

             (6) "Health care provider" means any physician, facility, or health care professional, who is licensed in Washington state and entitled to reimbursement for health care services.

             (7) "Health care services" means services for the purpose of preventing, alleviating, curing, or healing human illness or injury.

             (8) "Health ((insurance)) coverage" means any group or individual disability insurance policy, health care service contract, and health maintenance agreement, except those contracts entered into for the provision of health care services pursuant to Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395 et seq. The term does not include short-term care, long-term care, dental, vision, accident, fixed indemnity, disability income contracts, civilian health and medical program for the uniform services (CHAMPUS), 10 U.S.C. 55, limited benefit or credit insurance, coverage issued as a supplement to liability insurance, insurance arising out of the worker's compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.

             (9) "Health plan" means any arrangement by which persons, including dependents or spouses, covered or making application to be covered under this pool, have access to hospital and medical benefits or reimbursement including any group or individual disability insurance policy; health care service contract; health maintenance agreement; uninsured arrangements of group or group-type contracts including employer self-insured, cost-plus, or other benefit methodologies not involving insurance or not governed by Title 48 RCW; coverage under group-type contracts which are not available to the general public and can be obtained only because of connection with a particular organization or group; and coverage by medicare or other governmental benefits. This term includes coverage through "health ((insurance)) coverage" as defined under this section, and specifically excludes those types of programs excluded under the definition of "health ((insurance)) coverage" in subsection (8) of this section.

             (10) (("Insured" means any individual resident of this state who is eligible to receive benefits from any member, or other health plan.

             (11))) "Medical assistance" means coverage under Title XIX of the federal Social Security Act (42 U.S.C., Sec. 1396 et seq.) and chapter 74.09 RCW.

             (((12))) (11) "Medicare" means coverage under Title XVIII of the Social Security Act, (42 U.S.C. Sec. 1395 et seq., as amended).

             (((13))) (12) "Member" means any commercial insurer which provides disability insurance, any health care service contractor, and any health maintenance organization licensed under Title 48 RCW. "Member" shall also mean, as soon as authorized by federal law, employers and other entities, including a self-funding entity and employee welfare benefit plans that provide health plan benefits in this state on or after May 18, 1987. "Member" does not include any insurer, health care service contractor, or health maintenance organization whose products are exclusively dental products or those products excluded from the definition of "health ((insurance)) coverage" set forth in subsection (8) of this section.

             (13) "Network provider" means a health care provider who has contracted in writing with the pool administrator to accept payment from and to look solely to the pool according to the terms of the pool health plans.

             (14) "Plan of operation" means the pool, including articles, by-laws, and operating rules, adopted by the board pursuant to RCW 48.41.050.

             (15) "Point of service plan" means a benefit plan offered by the pool under which a covered person may elect to receive covered services from network providers, or nonnetwork providers at a reduced rate of benefits.

             (16) "Pool" means the Washington state health insurance pool as created in RCW 48.41.040.

             (((16))) (17) "Substantially equivalent health plan" means a "health plan" as defined in subsection (9) of this section which, in the judgment of the board or the administrator, offers persons including dependents or spouses covered or making application to be covered by this pool an overall level of benefits deemed approximately equivalent to the minimum benefits available under this pool.


             Sec. 211. RCW 48.41.060 and 1989 c 121 s 3 are each amended to read as follows:

             HEALTH INSURANCE POOL--BOARD POWERS MODIFIED. The board shall have the general powers and authority granted under the laws of this state to insurance companies, health care service contractors, and health maintenance organizations, licensed or registered to ((transact)) offer or provide the kinds of ((insurance)) health coverage defined under this title. In addition thereto, the board may:

             (1) Enter into contracts as are necessary or proper to carry out the provisions and purposes of this chapter including the authority, with the approval of the commissioner, to enter into contracts with similar pools of other states for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions;

             (2) Sue or be sued, including taking any legal action as necessary to avoid the payment of improper claims against the pool or the coverage provided by or through the pool;

             (3) Establish appropriate rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas and any other actuarial functions appropriate to the operation of the pool. Rates shall not be unreasonable in relation to the coverage provided, the risk experience, and expenses of providing the coverage. Rates and rate schedules may be adjusted for appropriate risk factors such as age and area variation in claim costs and shall take into consideration appropriate risk factors in accordance with established actuarial underwriting practices consistent with Washington state small group plan rating requirements under RCW 48.20.028, 48.44.022, and 48.46.064;

             (4) Assess members of the pool in accordance with the provisions of this chapter, and make advance interim assessments as may be reasonable and necessary for the organizational or interim operating expenses. Any interim assessments will be credited as offsets against any regular assessments due following the close of the year;

             (5) Issue policies of ((insurance)) health coverage in accordance with the requirements of this chapter;

             (6) Appoint appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the pool, policy, and other contract design, and any other function within the authority of the pool; and

             (7) Conduct periodic audits to assure the general accuracy of the financial data submitted to the pool, and the board shall cause the pool to have an annual audit of its operations by an independent certified public accountant.


             Sec. 212. RCW 48.41.080 and 1989 c 121 s 5 are each amended to read as follows:

             HEALTH INSURANCE POOL--ADMINISTRATOR'S POWER MODIFIED. The board shall select an administrator from the membership of the pool whether domiciled in this state or another state through a competitive bidding process to administer the pool.

             (1) The board shall evaluate bids based upon criteria established by the board, which shall include:

             (a) The administrator's proven ability to handle ((accident and health insurance)) health coverage;

             (b) The efficiency of the administrator's claim-paying procedures;

             (c) An estimate of the total charges for administering the plan; and

             (d) The administrator's ability to administer the pool in a cost-effective manner.

             (2) The administrator shall serve for a period of three years subject to removal for cause. At least six months prior to the expiration of each three-year period of service by the administrator, the board shall invite all interested parties, including the current administrator, to submit bids to serve as the administrator for the succeeding three-year period. Selection of the administrator for this succeeding period shall be made at least three months prior to the end of the current three-year period.

             (3) The administrator shall perform such duties as may be assigned by the board including:

             (a) All eligibility and administrative claim payment functions relating to the pool;

             (b) Establishing a premium billing procedure for collection of premiums from ((insured)) covered persons. Billings shall be made on a periodic basis as determined by the board, which shall not be more frequent than a monthly billing;

             (c) Performing all necessary functions to assure timely payment of benefits to covered persons under the pool including:

             (i) Making available information relating to the proper manner of submitting a claim for benefits to the pool, and distributing forms upon which submission shall be made; ((and))

             (ii) Taking steps necessary to offer and administer managed care benefit plans; and

             (iii) Evaluating the eligibility of each claim for payment by the pool;

             (d) Submission of regular reports to the board regarding the operation of the pool. The frequency, content, and form of the report shall be as determined by the board;

             (e) Following the close of each accounting year, determination of net paid and earned premiums, the expense of administration, and the paid and incurred losses for the year and reporting this information to the board and the commissioner on a form as prescribed by the commissioner.

             (4) The administrator shall be paid as provided in the contract between the board and the administrator for its expenses incurred in the performance of its services.


             Sec. 213. RCW 48.41.110 and 1987 c 431 s 11 are each amended to read as follows:

             HEALTH INSURANCE POOL--BENEFITS MODIFIED. (1) The pool is authorized to offer one or more managed care plans of coverage. Such plans may, but are not required to, include point of service features that permit participants to receive in-network benefits or out-of-network benefits subject to differential cost shares. Covered persons enrolled in the pool on January 1, 1997, may continue coverage under the pool plan in which they are enrolled on that date. However, the pool may incorporate managed care features into such existing plans.

             (2) The administrator shall prepare a brochure outlining the benefits and exclusions of the pool policy in plain language. After approval by the board of directors, such brochure shall be made reasonably available to participants or potential participants. The health insurance policy issued by the pool shall pay only usual, customary, and reasonable charges for medically necessary eligible health care services rendered or furnished for the diagnosis or treatment of illnesses, injuries, and conditions which are not otherwise limited or excluded. Eligible expenses are the usual, customary, and reasonable charges for the health care services and items for which benefits are extended under the pool policy. Such benefits shall at minimum include, but not be limited to, the following services or related items:

             (a) Hospital services, including charges for the most common semiprivate room, for the most common private room if semiprivate rooms do not exist in the health care facility, or for the private room if medically necessary, but limited to a total of one hundred eighty inpatient days in a calendar year, and limited to thirty days inpatient care for mental and nervous conditions, or alcohol, drug, or chemical dependency or abuse per calendar year;

             (b) Professional services including surgery for the treatment of injuries, illnesses, or conditions, other than dental, which are rendered by a health care provider, or at the direction of a health care provider, by a staff of registered or licensed practical nurses, or other health care providers;

             (c) The first twenty outpatient professional visits for the diagnosis or treatment of one or more mental or nervous conditions or alcohol, drug, or chemical dependency or abuse rendered during a calendar year by one or more physicians, psychologists, or community mental health professionals, or, at the direction of a physician, by other qualified licensed health care practitioners, in the case of mental or nervous conditions, and rendered by a state certified chemical dependency program approved under chapter 70.96A RCW, in the case of alcohol, drug, or chemical dependency or abuse;

             (d) Drugs and contraceptive devices requiring a prescription;

             (e) Services of a skilled nursing facility, excluding custodial and convalescent care, for not more than one hundred days in a calendar year as prescribed by a physician;

             (f) Services of a home health agency;

             (g) Chemotherapy, radioisotope, radiation, and nuclear medicine therapy;

             (h) Oxygen;

             (i) Anesthesia services;

             (j) Prostheses, other than dental;

             (k) Durable medical equipment which has no personal use in the absence of the condition for which prescribed;

             (l) Diagnostic x-rays and laboratory tests;

             (m) Oral surgery limited to the following: Fractures of facial bones; excisions of mandibular joints, lesions of the mouth, lip, or tongue, tumors, or cysts excluding treatment for temporomandibular joints; incision of accessory sinuses, mouth salivary glands or ducts; dislocations of the jaw; plastic reconstruction or repair of traumatic injuries occurring while covered under the pool; and excision of impacted wisdom teeth;

             (n) Maternity care services, as provided in the managed care plan to be designed by the pool board of directors, and for which no preexisting condition waiting periods may apply;

             (o) Services of a physical therapist and services of a speech therapist;

             (((o))) (p) Hospice services;

             (((p))) (q) Professional ambulance service to the nearest health care facility qualified to treat the illness or injury; and

             (((q))) (r) Other medical equipment, services, or supplies required by physician's orders and medically necessary and consistent with the diagnosis, treatment, and condition.

             (((2))) (3) The board shall design and employ cost containment measures and requirements such as, but not limited to, care coordination, provider network limitations, preadmission certification, and concurrent inpatient review which may make the pool more cost-effective.

             (((3))) (4) The pool benefit policy may contain benefit limitations, exceptions, and ((reductions)) cost shares such as copayments, coinsurance, and deductibles that are consistent with managed care products, except that differential cost shares may be adopted by the board for nonnetwork providers under point of service plans. The pool benefit policy cost shares and limitations must be consistent with those that are generally included in health ((insurance)) plans ((and are)) approved by the insurance commissioner; however, no limitation, exception, or reduction may be ((approved)) used that would exclude coverage for any disease, illness, or injury.

             (5) The pool may not reject an individual for health plan coverage based upon preexisting conditions of the individual or deny, exclude, or otherwise limit coverage for an individual's preexisting health conditions; except that it may impose a three-month benefit waiting period for preexisting conditions for which medical advice was given, or for which a health care provider recommended or provided treatment, within three months before the effective date of coverage. The pool may not avoid the requirements of this section through the creation of a new rate classification or the modification of an existing rate classification.


             Sec. 214. RCW 48.41.200 and 1987 c 431 s 20 are each amended to read as follows:

             HEALTH INSURANCE POOL--RATE MODIFIED. The pool shall determine the standard risk rate by calculating the average group standard rate for groups comprised of up to ((ten)) fifty persons charged by the five largest members offering coverages in the state comparable to the pool coverage. In the event five members do not offer comparable coverage, the standard risk rate shall be established using reasonable actuarial techniques and shall reflect anticipated experience and expenses for such coverage. Maximum rates for pool coverage shall be one hundred fifty percent for the indemnity health plan and one hundred twenty-five percent for managed care plans of the rates established as applicable for group standard risks in groups comprised of up to ((ten)) fifty persons((. All rates and rate schedules shall be submitted to the commissioner for approval)).


             Sec. 215. RCW 48.41.130 and 1987 c 431 s 13 are each amended to read as follows:

             HEALTH INSURANCE POOL--SUBSTANTIAL EQUIVALENT CLARIFIED. All policy forms issued by the pool shall conform in substance to prototype forms developed by the pool, and shall in all other respects conform to the requirements of this chapter, and shall be filed with and approved by the commissioner before they are issued. The pool shall not issue a pool policy to any individual who, on the effective date of the coverage applied for, already has or would have coverage substantially equivalent to a pool policy as an insured or covered dependent, or who would be eligible for such coverage if he or she elected to obtain it at a lesser premium rate. However, coverage provided by the basic health plan, as established pursuant to chapter 70.47 RCW, shall not be deemed substantially equivalent for the purposes of this section.


             NEW SECTION. Sec. 216. A new section is added to chapter 48.44 RCW to read as follows:

             LOSS RATIOS--HEALTH CARE SERVICE CONTRACTORS. (1) For purposes of RCW 48.44.020(2)(d), benefits in a contract shall be deemed reasonable in relation to the amount charged provided that the anticipated loss ratio is at least:

             (a) Sixty-five percent for individual subscriber contract forms;

             (b) Seventy percent for franchise plan contract forms;

             (c) Eighty percent for group contract forms other than small group contract forms; and

             (d) Seventy-five percent for small group contract forms.

             (2) With the approval of the commissioner, contract, rider, and endorsement forms that provide substantially similar coverage may be combined for the purpose of determining the anticipated loss ratio.

             (3) A health care service contractor may charge the rate for prepayment of health care services in any contract identified in RCW 48.44.020(1) upon filing of the rate with the commissioner. If the commissioner disapproves the rate, the commissioner shall explain in writing the specific reasons for the disapproval. A health care service contractor may continue to charge such rate pending a final order in any hearing held under chapters 48.04 and 34.05 RCW, or if applicable, pending a final order in any appeal. Any amount charged that is determined in a final order on appeal to be unreasonable in relation to the benefits provided is subject to refund.

             (4) For the purposes of this section:

             (a) "Anticipated loss ratio" means the ratio of all anticipated claims or costs for the delivery of covered health care services including incurred but not reported claims and costs and medical management costs to premium minus any applicable taxes.

             (b) "Small group contract form" means a form offered to a small employer as defined in RCW 48.43.005(24).


             NEW SECTION. Sec. 217. A new section is added to chapter 48.46 RCW to read as follows:

             LOSS RATIOS--HEALTH MAINTENANCE ORGANIZATIONS. (1) For purposes of RCW 48.46.060(3)(d), benefits shall be deemed reasonable in relation to the amount charged provided that the anticipated loss ratio is at least:

             (a) Sixty-five percent for individual subscriber contract forms;

             (b) Seventy percent for franchise plan contract forms;

             (c) Eighty percent for group contract forms other than small group contract forms; and

             (d) Seventy-five percent for small group contract forms.

             (2) With the approval of the commissioner, contract, rider, and endorsement forms that provide substantially similar coverage may be combined for the purpose of determining the anticipated loss ratio.

             (3) A health maintenance organization may charge the rate for prepayment of health care services in any contract identified in RCW 48.46.060(1) upon filing of the rate with the commissioner. If the commissioner disapproves the rate, the commissioner shall explain in writing the specific reasons for the disapproval. A health maintenance organization may continue to charge such rate pending a final order in any hearing held under chapters 48.04 and 34.05 RCW, or if applicable, pending a final order in any appeal. Any amount charged that is determined in a final order on appeal to be unreasonable in relation to the benefits provided is subject to refund.

             (4) For the purposes of this section:

             (a) "Anticipated loss ratio" means the ratio of all anticipated claims or costs for the delivery of covered health care services including incurred but not reported claims and costs and medical management costs to premium minus any applicable taxes.

             (b) "Small group contract form" means a form offered to a small employer as defined in RCW 48.43.005(24).


             NEW SECTION. Sec. 218. A new section is added to chapter 48.21 RCW to read as follows:

             LOSS RATIOS--GROUPS' DISABILITY COVERAGE. The following standards and requirements apply to group and blanket disability insurance policy forms and manual rates:

             (1) Specified disease group insurance shall generate at least a seventy-five percent loss ratio regardless of the size of the group.

             (2) Group disability insurance, other than specified disease insurance, as to which the insureds pay all or substantially all of the premium shall generate loss ratios no lower than those set forth in the following table.

 

             Number of Certificate Holders                                         Minimum Overall

             at Issue, Renewal, or Rerating                                                Loss Ratio

 

                          9 or less                                                                          60%

                          10 to 24                                                                          65%

                          25 to 49                                                                          70%

                          50 to 99                                                                          75%

                          100 or more                                                                    80%

 

             (3) Group disability policy forms, other than for specified disease insurance, for issue to single employers insuring less than one hundred lives shall generate loss ratios no lower than those set forth in subsection (2) of this section for groups of the same size.

             (4) The calculating period may vary with the benefit and premium provisions. The company may be required to demonstrate the reasonableness of the calculating period chosen by the actuary responsible for the premium calculations.

             (5) A request for a rate increase submitted at the end of the calculating period shall include a comparison of the actual to the expected loss ratios and shall employ any accumulation of reserves in the determination of rates for the selected calculating period and account for the maintenance of such reserves for future needs. The request for the rate increase shall be further documented by the expected loss ratio for the new calculating period.

             (6) A request for a rate increase submitted during the calculating period shall include a comparison of the actual to the expected loss ratios, a demonstration of any contributions to or support from the reserves, and shall account for the maintenance of such reserves for future needs. If the experience justifies a premium increase it shall be deemed that the calculating period has prematurely been brought to an end. The rate increase shall further be documented by the expected loss ratio for the next calculating period.

             (7) The commissioner may approve a series of two or three smaller rate increases in lieu of one larger increase. These should be calculated to reduce the lapses and antiselection that often result from large rate increases. A demonstration of such calculations, whether for a single rate increase or a series of smaller rate increases, satisfactory to the commissioner, shall be attached to the filing.

             (8) Companies shall review their experience periodically and file appropriate rate revisions in a timely manner to reduce the necessity of later filing of exceptionally large rate increases.

             (9) The definitions in section 221 of this act and the provisions in section 220 of this act apply to this section.


             NEW SECTION. Sec. 219. A new section is added to chapter 48.20 RCW to read as follows:

             LOSS RATIOS--INDIVIDUAL DISABILITY COVERAGE. The following standards and requirements apply to individual disability insurance forms:

             (1) The overall loss ratio shall be deemed reasonable in relation to the premiums if the overall loss ratio is at least sixty percent over a calculating period chosen by the insurer and satisfactory to the commissioner.

             (2) The calculating period may vary with the benefit and renewal provisions. The company may be required to demonstrate the reasonableness of the calculating period chosen by the actuary responsible for the premium calculations. A brief explanation of the selected calculating period shall accompany the filing.

             (3) Policy forms, the benefits of which are particularly exposed to the effects of inflation and whose premium income may be particularly vulnerable to an eroding persistency and other similar forces, shall use a relatively short calculating period reflecting the uncertainties of estimating the risks involved. Policy forms based on more dependable statistics may employ a longer calculating period. The calculating period may be the lifetime of the contract for guaranteed renewable and noncancellable policy forms if such forms provide benefits that are supported by reliable statistics and that are protected from inflationary or eroding forces by such factors as fixed dollar coverages, inside benefit limits, or the inherent nature of the benefits. The calculating period may be as short as one year for coverages that are based on statistics of minimal reliability or that are highly exposed to inflation.

             (4) A request for a rate increase to be effective at the end of the calculating period shall include a comparison of the actual to the expected loss ratios, shall employ any accumulation of reserves in the determination of rates for the new calculating period, and shall account for the maintenance of such reserves for future needs. The request for the rate increase shall be further documented by the expected loss ratio for the new calculating period.

             (5) A request for a rate increase submitted during the calculating period shall include a comparison of the actual to the expected loss ratios, a demonstration of any contributions to and support from the reserves, and shall account for the maintenance of such reserves for future needs. If the experience justifies a premium increase it shall be deemed that the calculating period has prematurely been brought to an end. The rate increase shall further be documented by the expected loss ratio for the next calculating period.

             (6) The commissioner may approve a series of two or three smaller rate increases in lieu of one large increase. These should be calculated to reduce lapses and anti-selection that often result from large rate increases. A demonstration of such calculations, whether for a single rate increase or for a series of smaller rate increases, satisfactory to the commissioner, shall be attached to the filing.

             (7) Companies shall review their experience periodically and file appropriate rate revisions in a timely manner to reduce the necessity of later filing of exceptionally large rate increases.


             NEW SECTION. Sec. 220. A new section is added to chapter 48.20 RCW to read as follows:

             LOSS RATIOS--DISABILITY COVERAGE EXEMPTIONS. Sections 218 and 219 of this act apply to all insurers and to every disability insurance policy form filed for approval in this state after the effective date of this section, except:

             (1) Additional indemnity and premium waiver forms for use only in conjunction with life insurance policies;

             (2) Medicare supplement policy forms that are regulated by chapter 48.66 RCW;

             (3) Credit insurance policy forms issued pursuant to chapter 48.34 RCW;

             (4) Group policy forms other than:

             (a) Specified disease policy forms;

             (b) Policy forms, other than loss of income forms, as to which all or substantially all of the premium is paid by the individuals insured thereunder;

             (c) Policy forms, other than loss of income forms, for issue to single employers insuring less than one hundred employees;

             (5) Policy forms filed by health care service contractors or health maintenance organizations;

             (6) Policy forms initially approved, including subsequent requests for rate increases and modifications of rate manuals.


             NEW SECTION. Sec. 221. A new section is added to chapter 48.20 RCW to read as follows:

             LOSS RATIOS--DISABILITY COVERAGE DEFINITIONS. (1) The "expected loss ratio" is a prospective calculation and shall be calculated as the projected "benefits incurred" divided by the projected "premiums earned" and shall be based on the actuary's best projections of the future experience within the "calculating period."

             (2) The "actual loss ratio" is a retrospective calculation and shall be calculated as the "benefits incurred" divided by the "premiums earned," both measured from the beginning of the "calculating period" to the date of the loss ratio calculations.

             (3) The "overall loss ratio" shall be calculated as the "benefits incurred" divided by the "premiums earned" over the entire "calculating period" and may involve both retrospective and prospective data.

             (4) The "calculating period" is the time span over which the actuary expects the premium rates, whether level or increasing, to remain adequate in accordance with his or her best estimate of future experience and during which the actuary does not expect to request a rate increase.

             (5) The "benefits incurred" is the "claims incurred" plus any increase, or less any decrease, in the "reserves."

             (6) The "claims incurred" means:

             (a) Claims paid during the accounting period; plus

             (b) The change in the liability for claims that have been reported but not paid; plus

             (c) The change in the liability for claims that have not been reported but which may reasonably be expected.

             The "claims incurred" does not include expenses incurred in processing the claims, home office or field overhead, acquisition and selling costs, taxes or other expenses, contributions to surplus, or profit.

             (7) The "reserves," as referred to in sections 218 and 219 of this act include:

             (a) Active life disability reserves;

             (b) Additional reserves whether for a specific liability purpose or not;

             (c) Contingency reserves;

             (d) Reserves for select morbidity experience; and

             (e) Increased reserves that may be required by the commissioner.

             (8) The "premiums earned" means the premiums, less experience credits, refunds, or dividends, applicable to an accounting period whether received before, during, or after such period.

             (9) Renewal provisions are defined as follows:

             (a) "Guaranteed renewable" means renewal cannot be declined by the insurance company for any reason, but the insurance company can revise rates on a class basis.

             (b) "Noncancellable" means renewal cannot be declined nor can rates be revised by the insurance company.

PART III--BENEFITS AND SERVICE DELIVERY


             NEW SECTION. Sec. 301. A new section is added to chapter 48.43 RCW to read as follows:

             EMERGENCY MEDICAL SERVICES. (1) When conducting a review of the necessity and appropriateness of emergency services or making a benefit determination for emergency services:

             (a) A health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. In addition, a health carrier shall not require prior authorization of such services provided prior to the point of stabilization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. With respect to care obtained from a nonparticipating hospital emergency department, a health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson would have reasonably believed that use of a participating hospital emergency department would result in a delay that would worsen the emergency, or if a provision of federal, state, or local law requires the use of a specific provider or facility. In addition, a health carrier shall not require prior authorization of such services provided prior to the point of stabilization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed and that use of a participating hospital emergency department would result in a delay that would worsen the emergency.

             (b) If an authorized representative of a health carrier authorizes coverage of emergency services, the health carrier shall not subsequently retract its authorization after the emergency services have been provided, or reduce payment for an item or service furnished in reliance on approval, unless the approval was based on a material misrepresentation about the covered person's health condition made by the provider of emergency services.

             (c) Coverage of emergency services may be subject to applicable copayments, coinsurance, and deductibles, and a health carrier may impose reasonable differential cost-sharing arrangements for emergency services rendered by nonparticipating providers, if such differential between cost-sharing amounts applied to emergency services rendered by participating provider versus nonparticipating provider does not exceed fifty dollars. Differential cost sharing for emergency services may not be applied when a covered person presents to a nonparticipating hospital emergency department rather than a participating hospital emergency department when the health carrier requires preauthorization for postevaluation or poststabilization emergency services if:

             (i) Due to circumstances beyond the covered person's control, the covered person was unable to go to a participating hospital emergency department in a timely fashion without serious impairment to the covered person's health; or

             (ii) A prudent layperson possessing an average knowledge of health and medicine would have reasonably believed that he or she would be unable to go to a participating hospital emergency department in a timely fashion without serious impairment to the covered person's health.

             (d) If a health carrier requires preauthorization for postevaluation or poststabilization services, the health carrier shall provide access to an authorized representative twenty-four hours a day, seven days a week, to facilitate review. In order for postevaluation or poststabilization services to be covered by the health carrier, the provider or facility must make a documented good faith effort to contact the covered person's health carrier within thirty minutes of stabilization, if the covered person needs to be stabilized. The health carrier's authorized representative is required to respond to a telephone request for preauthorization from a provider or facility within thirty minutes. Failure of the health carrier to respond within thirty minutes constitutes authorization for the provision of immediately required medically necessary postevaluation and poststabilization services, unless the health carrier documents that it made a good faith effort but was unable to reach the provider or facility within thirty minutes after receiving the request.

             (e) A health carrier shall immediately arrange for an alternative plan of treatment for the covered person if a nonparticipating emergency provider and health plan cannot reach an agreement on which services are necessary beyond those immediately necessary to stabilize the covered person consistent with state and federal laws.

             (2) Nothing in this section is to be construed as prohibiting the health carrier from requiring notification within the time frame specified in the contract for inpatient admission or as soon thereafter as medically possible but no less than twenty-four hours. Nothing in this section is to be construed as preventing the health carrier from reserving the right to require transfer of a hospitalized covered person upon stabilization. Follow-up care that is a direct result of the emergency must be obtained in accordance with the health plan's usual terms and conditions of coverage. All other terms and conditions of coverage may be applied to emergency services.

PART IV--MISCELLANEOUS


             NEW SECTION. Sec. 401. WICKLINE CLAUSE STUDY. (1) There is some question regarding who should be liable when a health carrier or other third-party payer refuses to pay for or provide health services recommended by a health care provider and the patient suffers injury as a result of not receiving the recommended care. This issue typically arises in managed care systems, which integrate the financing and delivery of health care services to covered persons through selected providers. Contracts between a health carrier and a provider may address potential liability issues regarding the relationship between the carrier and the provider. Some contracts shift potential liability for a health carrier's decision not to pay for recommended health services to the provider or patient through what are commonly referred to as "Wickline clauses." These clauses generally state it is a medical decision between the provider and patient as to whether the patient receives services that the carrier refuses to cover; this ignores the fact that the decision not to provide coverage influences the decision of the patient whether to receive the recommended care. The legislature intends to review the policy questions raised by this issue, particularly to what extent the carrier should be able to avoid liability for its decisions by insulating itself through its contracts with providers.

             (2) A joint task force on Wickline clauses shall review the practice of contractually assigning or avoiding potential liability for decisions by a health carrier or other third-party payer not to pay for health care services recommended by a health care provider. The task force shall be comprised of two members of the house of representatives appointed by the speaker of the house, one from each major caucus, two members of the senate appointed by the president of the senate, one from each major caucus, and eight persons appointed by the legislative members of the task force. The eight nonlegislative persons on the task force shall consist of: Two representatives of health care providers; two representatives of health care consumers; two representatives of health carriers; and two representatives of self-funded health plans. The legislative members shall organize and administer the task force. Staffing shall be provided by the office of program research and senate committee services.

             (3) The task force shall report to the health care committees of the legislature by December 1, 1997. The report shall discuss the policy issues regarding Wickline clauses and the more general issue of potential liability for decisions of a health carrier and others not to cover health care recommended by the provider. The report may contain recommendations for the legislature to consider.


             NEW SECTION. Sec. 402. COMMON TITLE. This act shall be known as the consumer assistance and insurance market stabilization act.


             NEW SECTION. Sec. 403. Part headings and section captions used in this act are not part of the law.


             NEW SECTION. Sec. 404. SEVERABILITY CLAUSE. 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. 405. EFFECTIVE DATES. (1) Sections 104 through 108 and 301 of this act take effect January 1, 1998.

             (2) Section 111 of 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 takes effect July 1, 1997.

             (3) Section 205 of 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 takes effect immediately."


             On page 1, line 1 of the title, after "reform;" strike the remainder of the title and insert "amending RCW 48.43.055, 48.43.005, 48.43.025, 48.43.035, 48.43.045, 48.20.028, 48.44.022, 48.46.064, 48.41.030, 48.41.060, 48.41.080, 48.41.110, 48.41.200, and 48.41.130; reenacting and amending RCW 70.47.060; adding new sections to chapter 48.43 RCW; adding a new section to chapter 74.09 RCW; adding a new section to chapter 48.44 RCW; adding a new section to chapter 48.46 RCW; adding a new section to chapter 48.21 RCW; adding new sections to chapter 48.20 RCW; creating new sections; repealing RCW 48.46.100; providing effective dates; and declaring an emergency."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Substitute House Bill No. 2018 and pass the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 2018 as amended by the Senate.


             Representative Dyer spoke in favor of passage of the bill.


             Representatives Cody and Conway spoke against the passage of the bill.


MOTION


             On motion by Representative Kessler, Representative Ogden was excused.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2018 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 61, Nays - 30, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Backlund, Ballasiotes, Benson, Boldt, Bush, Cairnes, Carlson, Carrell, Chandler, Clements, Cooke, Crouse, Delvin, Dunn, Dyer, Grant, Hankins, Hickel, Honeyford, Huff, Johnson, Kessler, Koster, Lambert, Lantz, Linville, Lisk, McMorris, Mielke, Mitchell, Morris, Mulliken, Parlette, Pennington, Quall, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 61.

             Voting nay: Representatives Appelwick, Blalock, Butler, Chopp, Cody, Cole, Constantine, Conway, Cooper, Costa, Dickerson, Doumit, Dunshee, Fisher, Gardner, Gombosky, Hatfield, Keiser, Kenney, Mason, Murray, O'Brien, Poulsen, Regala, Romero, Sommers, H., Tokuda, Veloria, Wolfe and Wood - 30.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Engrossed Substitute House Bill No. 2018, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 16, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 1111 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 401. (1) If a person placed surface or ground water to beneficial use before January 1, 1993, for irrigation, stock watering, or domestic use supplied by a public water supply system with one hundred fifty or fewer service connections for which a permit or certificate was not issued by the department or its predecessors, the person or the public water supply system, or their respective successors may continue to use water in the amount that has been beneficially used as provided in subsection (3) of this section if:

             (a) The person or the public water supply system files with the department a statement of claim during the period beginning September 1, 1997, and ending midnight June 30, 1998, using the standard form prescribed by RCW 90.14.051; and

             (b) The person or public water supply system has applied the water to beneficial use to the full extent stated in the statement of claim during at least one of the five years preceding the date the statement is filed and the person attests to having done so on the statement.

             (2) The person or public water supply system must file with the statement of claim evidence that the quantity of water described in the claim was used beneficially before January 1, 1993, and during one of the five years preceding the date the statement was filed in the form of any two of the following:

             (a) A statement signed by two persons other than the person filing the statement of claim verifying that the claimant beneficially used the water before January 1, 1993, and during one of the five years preceding the date the statement was filed as described in the statement of claim;

             (b) A copy of a dated photograph clearly demonstrating the presence of grass or a crop requiring irrigation in the amounts asserted in the statement of claim or of livestock requiring water in such amounts; or records of receipts of the sale of crops by the person or the person's successor indicating that irrigation in the amount claimed was required to produce the crops;

             (c) Receipts or records of irrigation or stockwatering equipment purchases or repairs associated with the water use specified in the statement of claim;

             (d) Water well construction records identifying the date the well specified in the statement of claim as the point of withdrawal was constructed;

             (e) Records of electricity bills directly associated with the withdrawal of water as specified in the statement of claim;

             (f) Personal records such as photographs, journals, or correspondence indicating the use of water as asserted in the statement of claim.

             (3) Public water supply systems must, in addition to the requirements of subsection (2) of this section, provide evidence of service connections existing and using water as of January 1, 1993, including documentation that the homes were built and occupied.


             NEW SECTION. Sec. 402. If the claimant has not already filed an application for a water right under RCW 90.30.250 or 90.44.060 for the water use stated in the statement of claim, the claimant shall file such an application with the claimant's statement of claim. A claimant who has filed both a statement of claim and an application for a water right has standing to assert a claim of a water right in a general adjudication under RCW 90.03.110 for the water use stated in the statement of claim. The statement of claim shall be reviewed by the court as provided in section 4 of this act.


             NEW SECTION. Sec. 403. A person may continue to use water described in the statement of claim until one of the following occurs:

             (1) The department makes its final decision granting or denying the water right application filed by the applicant as provided in section 2 of this act; or

             (2) If the department has not made a final decision on the water right application, a court of competent jurisdiction issues a decree pursuant to a general adjudication under RCW 90.03.200 that defines or denies the claimant's right to appropriate water as provided in section 4 of this act.


             NEW SECTION. Sec. 404. The department or the court may authorize the continued use of water under section 3 of this act only if the claimant meets the requirements of RCW 90.03.247 through 90.03.330, chapter 90.44 RCW, and RCW 90.54.020. If the department finds that the applicable requirements are met, it shall grant the water right application and issue a certificate under RCW 90.03.330 authorizing the person to use that quantity of water that had been put to beneficial use, not to exceed that quantity requested in the application or documented in the statement of claim under section 1 of this act, whichever is less. If in a general adjudication the court finds that the requirements are met, it shall confirm such use of water in a decree issued under RCW 90.03.200 and the department shall issue a certificate under RCW 90.03.240. The court may not confirm a right in excess of the quantity of water that was applied to beneficial use as documented in the statement of claim under section 1 of this act or the quantity requested in the application for a water right, whichever is less. The priority date of any right issued by the department or confirmed by a court shall be the date a water right application authorizing the use of water was filed with the department.


             NEW SECTION. Sec. 405. If the department or the court denies the claimant's use of water under section 4 of this act, the claimant must cease the use of the water. A decision by the department or a court limiting or denying a claimant's right to continue using water does not constitute a compensable taking under state or federal law because such claimants have no continuing legal right to use water.


             NEW SECTION. Sec. 406. Sections 1 through 8 of this act do not apply to or authorize any use of water that was the subject of a water right application filed with the department, where the department denied such application.


             NEW SECTION. Sec. 407. A continuing use of water authorized under sections 1 through 8 of this act do not affect or impair in any respect whatsoever a water right existing before September 1, 1997. Sections 1 through 8 of this act do not limit the ability of a senior water right holder to take legal action against any other water user to prevent impairment of his or her water right. A right granted under sections 1 through 8 of this act may be junior in every respect to a right with a more senior date of priority. Any right granted under sections 1 through 8 of this act may only be exercised in a manner that does not impair or interfere with a water right that is senior to it. The filing of a statement of claim under this section does not constitute an adjudication of any claim to the right to the use of waters as between the claimant and the state, or as between one or more water use claimants. A statement of claim filed under this section shall be admissible in a general adjudication of water rights as prima facie evidence of the times of use and the quantity of water the claimant was withdrawing or diverting to the same extent as is provided by RCW 90.14.081 for a statement of claim in the water rights claims registry on the effective date of this section.


             NEW SECTION. Sec. 408. This section does not apply to ground water in an area that is, during the period established by section 1(2) of this act, the subject of a general adjudication proceeding for water rights in superior court under RCW 90.03.110 through 90.03.245 and the proceeding applies to ground water rights. This section does not apply to surface water in an area that is, during the period established by section 1(2) of this act, the subject of a general adjudication proceeding for water rights in superior court under RCW 90.03.110 through 90.03.245 and the proceeding applies to surface water rights.


             NEW SECTION. Sec. 409. Sections 1 through 8 of this act do not apply to rights embodied in a water right permit or certificate issued by the department of ecology or its predecessors, a water right represented by a claim in the water rights claims registry, created under RCW 90.14.111, before September 1, 1997, or a water right exempted from permit and application requirements by RCW 90.44.050.


             NEW SECTION. Sec. 410. Sections 1 through 8 of this act do not apply to claims for the use of water in a ground water area or subarea for which a management program adopted by the department by rule and in effect on the effective date of this section establishes acreage expansion limitations for the use of ground water.


             NEW SECTION. Sec. 411. Sections 1 through 10 of this act are each added to chapter 90.03 RCW."


             On page 1, line 1 of the title, after "rights;" strike the remainder of the title and insert "adding new sections to chapter 90.03 RCW."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


MOTION


             Representative Linville moved that the House not concur in the Senate amendments to Engrossed Substitute House Bill No. 1111, and asked the Senate for a conference thereon.


             Representative Linville spoke in favor of adoption of the motion. Representative Chandler spoke against adoption of the motion. The motion was not adopted.


             There being no objection, the House did not concurred in the Senate amendments to Engrossed Substitute House Bill No. 1111, and asked the Senate to recede therefrom.


MESSAGE FROM THE SENATE

April 16, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1118 with the following amendments:


             On page 5, at the beginning of line 35, strike all material through "at" and insert "Between the effective date of this section and"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concurred in the Senate amendments to Substitute House Bill No. 1118, and asked the Senate to recede therefrom.


MESSAGE FROM THE SENATE

April 7, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1418 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 401. RCW 79.64.030 and 1993 c 460 s 2 are each amended to read as follows:

             Funds in the account derived from the gross proceeds of leases, sales, contracts, licenses, permits, easements, and rights of way issued by the department and affecting school lands, university lands, ((agricultural college lands,)) scientific school lands, normal school lands, capitol building lands, or institutional lands shall be ((pooled and)) expended by the department solely for the purpose of defraying the costs and expenses necessarily incurred in managing and administering ((all of the trust lands enumerated in this section)) state lands of the same trust. Such funds may be used for similar costs and expenses in managing and administering other lands managed by the department provided that such expenditures that have been or may be made on such other lands shall be repaid to the resource management cost account together with interest at a rate determined by the board of natural resources.

             An accounting shall be made annually of the accrued expenditures from the ((pooled)) trust funds in the account. In the event the accounting determines that expenditures have been made from moneys derived from certain trust lands for the benefit of another trust or other lands, such expenditure shall be considered a debt and an encumbrance against the property or trust funds benefited, including property held under chapter 76.12 RCW. The results of the accounting shall be reported to the legislature at the next regular session. The state treasurer is authorized, upon request of the department, to transfer funds between the forest development account and the resource management cost account solely for purpose of repaying loans pursuant to this section.


             Sec. 402. RCW 79.01.136 and 1979 ex.s. c 109 s 5 are each amended to read as follows:

             Before any state lands are offered for sale, or lease, or are assigned, the department of natural resources may establish the fair market value of those authorized improvements not owned by the state. In the event that agreement cannot be reached between the state and the lessee on the fair market value, such valuation shall be submitted to a review board of appraisers. The board shall be as follows: One member to be selected by the lessee and his or her expense shall be borne by the lessee; one member selected by the state and his or her expense shall be borne by the state; these members so selected shall mutually select a third member and his or her expenses shall be shared equally by the lessee and the state. The majority decision of this appraisal review board shall be binding on both parties. For this purpose "fair market value" is defined as: The highest price in terms of money which a property will bring in a competitive and open market under all conditions of a fair sale, the buyer and seller, each prudently knowledgeable and assuming the price is not affected by undue stimulus. All damages and wastes committed upon such lands and other obligations due from the lessee shall be deducted from the appraised value of the improvements((: PROVIDED, That)). However, the department of natural resources on behalf of the respective trust may purchase at fair market value those improvements if it appears to be in the best interest of the state ((from the RMCA of the general fund)). Payment for the improvements may be made with funds held on behalf of the trust in the resource management cost account established under RCW 79.64.020.


             Sec. 403. RCW 79.64.010 and 1967 ex.s. c 63 s 1 are each amended to read as follows:

             Unless a different meaning is plainly required by the context, the following words and phrases as hereinafter used in this chapter shall have the following meanings:

             (1) "Account" means the resource management cost account in the state general fund.

             (2) "Department" means the department of natural resources.

             (3) "Board" means the board of natural resources of the department of natural resources.

             (4) "Rule" means rule as ((the same)) that term is defined by RCW 34.05.010.

             (5) The definitions set forth in RCW 79.01.004 shall be applicable.

             (6) "Agricultural college lands" means all public lands awarded to the state of Washington under section 16 of the Omnibus Enabling Act (25 Stat. 180) and all lands acquired as the result of the sale or exchange of the lands.


             Sec. 404. RCW 79.64.020 and 1993 c 460 s 1 are each amended to read as follows:

             A resource management cost account in the state treasury is hereby created to be used solely for the purpose of defraying the costs and expenses necessarily incurred by the department in managing and administering public lands, and the making and administering of leases, sales, contracts, licenses, permits, easements, and rights of way on or with respect to such lands as authorized under the provisions of this title. Appropriations from the account to the department shall be expended for no other purposes. The resource management cost account may receive and accept funds that are to be used for such purposes from any source. Funds in the account produced by a trust may be appropriated or transferred by the legislature ((for the benefit of all of the trusts from which the funds were derived)) only for the benefit of the trust.


             NEW SECTION. Sec. 405. A new section is added to chapter 79.64 RCW to read as follows:

             No part of the gross proceeds from leases, sales, contracts, licenses, permits, easements, and rights of way on or relating to the agricultural college lands may be used to defray costs or expenses incurred in managing and administering the lands, and all such gross proceeds shall be made available to the beneficiary of the agricultural college lands.


             Sec. 406. RCW 79.64.040 and 1981 2nd ex.s. c 4 s 3 are each amended to read as follows:

             The board shall determine the amount deemed necessary in order to achieve the purposes of this chapter and shall provide by rule for the deduction of this amount from the gross proceeds of all leases, sales, contracts, licenses, permits, easements, and rights of way issued by the department and affecting public lands other than the agricultural college lands. Moneys received with respect to such lands as deposits from successful bidders, advance payments, and security under RCW 79.01.132 and 79.01.204 prior to December 1, 1981, which have not been subjected to deduction under this section are not subject to deduction under this section. The deductions authorized under this section shall in no event exceed twenty-five percent of the total sum received by the department in connection with any one transaction pertaining to public lands other than second class tide and shore lands and the beds of navigable waters, and fifty percent of the total gross proceeds received by the department pertaining to second class tide and shore lands and the beds of navigable waters.


             NEW SECTION. Sec. 407. 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 takes effect July 1, 1997."


             On page 1, line 3 of the title, after "lands;" strike the remainder of the title and insert "amending RCW 79.64.030, 79.01.136, 79.64.010, 79.64.020, and 79.64.040; adding a new section to chapter 79.64 RCW; providing an effective date; and declaring an emergency."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concurred in the Senate amendments to Substitute House Bill No. 1418, and asked the Senate to recede therefrom.


MESSAGE FROM THE SENATE

April 14, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1729 with the following amendments:


             On page 2, line 37 , after "discharged" insert "directly"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


MOTION


             Representative Linville moved that the House concur in the Senate amendments to Substitute House Bill No. 1729.

 

             Representative Linville spoke in favor of adoption of the motion.


             Representative Chandler spoke against adoption of the motion. The motion was not adopted.


             There being no objection, the House did not concurred in the Senate amendments to Substitute House Bill No. 1729, and asked the Senate to recede therefrom.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1819 with the following amendments:


             On page 2, line 33, strike "federal or"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concurred in the Senate amendments to House Bill No. 1819, and asked the Senate to recede therefrom.


MESSAGE FROM THE SENATE

April 7, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1054 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 401. RCW 28B.10.821 and 1996 c 107 s 1 are each amended to read as follows:

             The state educational trust fund is hereby established in the state treasury. The primary purpose of the trust is to pledge state-wide available college student assistance to needy or disadvantaged students, especially middle and high school youth, considered at-risk of dropping out of secondary education who participate in board-approved early awareness and outreach programs and who enter any accredited Washington institution of postsecondary education within two years of high school graduation.

             The board shall deposit refunds and recoveries of student financial aid funds expended in the prior ((biennia)) fiscal period in such account. The board may also deposit moneys that have been contributed from other state, federal, or private sources.

             Expenditures from the fund shall be for financial aid to needy or disadvantaged students. The board may annually expend such sums from the fund as may be necessary to fulfill the purposes of this section, including not more than three percent for the costs to administer aid programs supported by the fund. All earnings of investments of balances in the state educational trust fund shall be credited to the trust fund. Expenditures from the fund shall not be subject to appropriation but are subject to allotment procedures under chapter 43.88 RCW."


             On page 1, line 1 of the title, after "fund;" strike the remainder of the title and insert "and amending RCW 28B.10.821."


and the same are herewith transmitted.

Mike O'Connell, Secretary


             There being no objection, the House did not concur in the Senate amendments to House Bill No. 1054, and asked the Senate for a Conference thereon.


APPOINTMENT OF CONFEREES


             The Speaker appointed Representatives Carlson, Dunn and Mason as Conferees on House Bill No. 1054.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1388 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 401. RCW 72.65.220 and 1994 c 271 s 1001 are each amended to read as follows:

             (1) The department may establish, relocate, or contract for the operation of a work release or other community-based facility only after public notifications and local public meetings have been completed consistent with this section.

             (2) The department and other state agencies ((that have responsibility)) responsible for siting ((the department's)) department-owned or operated facilities shall establish a process for early and continuous public participation in establishing or relocating work release or other community-based facilities. This process shall include public meetings in the local communities affected, opportunities for written and oral comments, and wide dissemination of proposals and alternatives((.

             (2) The department may establish or relocate a work release or other community-based facility only after holding local public meetings and providing public notification to local communities consistent with this chapter.

             (3))), including at least the following:

             (a) When the department has selected three or fewer sites for final consideration ((for site selection)) of a department-owned or operated work release or other community-based facility, the department shall make public notification ((shall be given)) and conduct public hearings ((shall be held)) in the ((final three or fewer)) local communities ((where the siting is proposed)) of the final three or fewer proposed sites. ((Additional notification and a)) An additional public hearing after public notification shall also be conducted in the local community selected as the final proposed site((, prior to completion of the siting process. All hearings and notifications shall be consistent with this chapter)).

             (((4) Throughout this process the department shall provide notification to)) (b) Notifications required under this section shall be provided to the following:

             (i) All newspapers of general circulation in the local area and all local radio stations, television stations, and cable networks((.));

             (((5) Notice shall also be provided to)) (ii) Appropriate school districts, private schools, kindergartens, city and county libraries, and all other local government offices within a one-half mile radius of the proposed ((facility.)) site or sites;

             (((6) In addition, the department shall also provide notice to)) (iii) The local chamber of commerce, local economic development agencies, and any other local organizations that request such notification from the department((.)); and

             (((7) Notification in writing shall be provided to)) (iv) In writing to all residents and/or property owners within a one-half mile radius of the proposed site or sites.

             (3) When the department contracts for the operation of a work release or other community-based facility that is not owned by the department, the department shall require as part of its contract that the contracting entity comply with the same public notification and public hearing requirements as provided in this section."


             On page 1, line 1 of the title, after "programs;" strike the remainder of the title and insert "and amending RCW 72.65.220."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concur in the Senate amendments to House Bill No. 1388 and asked the Senate for a conference thereon.


APPOINTMENT OF CONFEREES


             The Speaker appointed Representatives Ballasiotes, Radcliff and Conway as Conferees on House Bill No. 1388.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1581 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 13.40.160 and 1995 c 395 s 7 are each amended to read as follows:

             (1) When the respondent is found to be a serious offender, the court shall commit the offender to the department for the standard range of disposition for the offense, as indicated in option A of schedule D-3, RCW 13.40.0357 except as provided in subsections (5) and (6) of this section.

             If the court concludes, and enters reasons for its conclusion, that disposition within the standard range would effectuate a manifest injustice the court shall impose a disposition outside the standard range, as indicated in option B of schedule D-3, RCW 13.40.0357. The court's finding of manifest injustice shall be supported by clear and convincing evidence.

             A disposition outside the standard range shall be determinate and shall be comprised of confinement or community supervision, or a combination thereof. When a judge finds a manifest injustice and imposes a sentence of confinement exceeding thirty days, the court shall sentence the juvenile to a maximum term, and the provisions of RCW 13.40.030(2) shall be used to determine the range. A disposition outside the standard range is appealable under RCW 13.40.230 by the state or the respondent. A disposition within the standard range is not appealable under RCW 13.40.230.

             (2) Where the respondent is found to be a minor or first offender, the court shall order that the respondent serve a term of community supervision as indicated in option A or option B of schedule D-1, RCW 13.40.0357 except as provided in subsections (5) and (6) of this section. If the court determines that a disposition of community supervision would effectuate a manifest injustice the court may impose another disposition under option C of schedule D-1, RCW 13.40.0357. Except as provided in subsection (5) of this section, a disposition other than a community supervision may be imposed only after the court enters reasons upon which it bases its conclusions that imposition of community supervision would effectuate a manifest injustice. When a judge finds a manifest injustice and imposes a sentence of confinement exceeding thirty days, the court shall sentence the juvenile to a maximum term, and the provisions of RCW 13.40.030(2) shall be used to determine the range. The court's finding of manifest injustice shall be supported by clear and convincing evidence.

             Except for disposition of community supervision or a disposition imposed pursuant to subsection (5) of this section, a disposition may be appealed as provided in RCW 13.40.230 by the state or the respondent. A disposition of community supervision or a disposition imposed pursuant to subsection (5) of this section may not be appealed under RCW 13.40.230.

             (3) Where a respondent is found to have committed an offense for which the respondent declined to enter into a diversion agreement, the court shall impose a term of community supervision limited to the conditions allowed in a diversion agreement as provided in RCW 13.40.080(2).

             (4) If a respondent is found to be a middle offender:

             (a) The court shall impose a determinate disposition within the standard range(s) for such offense, as indicated in option A of schedule D-2, RCW 13.40.0357 except as provided in subsections (5) and (6) of this section. If the standard range includes a term of confinement exceeding thirty days, commitment shall be to the department for the standard range of confinement; or

             (b) If the middle offender has less than 110 points, the court shall impose a determinate disposition of community supervision and/or up to thirty days confinement, as indicated in option B of schedule D-2, RCW 13.40.0357 in which case, if confinement has been imposed, the court shall state either aggravating or mitigating factors as set forth in RCW 13.40.150. If the middle offender has 110 points or more, the court may impose a disposition under option A and may suspend the disposition on the condition that the offender serve up to thirty days of confinement and follow all conditions of community supervision. If the offender violates any condition of the disposition including conditions of a probation bond, the court may impose sanctions pursuant to RCW 13.40.200 or may revoke the suspension and order execution of the disposition. The court shall give credit for any confinement time previously served if that confinement was for the offense for which the suspension is being revoked.

             (c) Only if the court concludes, and enters reasons for its conclusions, that disposition as provided in subsection (4)(a) or (b) of this section would effectuate a manifest injustice, the court shall sentence the juvenile to a maximum term, and the provisions of RCW 13.40.030(2) shall be used to determine the range. The court's finding of manifest injustice shall be supported by clear and convincing evidence.

             (d) A disposition pursuant to subsection (4)(c) of this section is appealable under RCW 13.40.230 by the state or the respondent. A disposition pursuant to subsection (4)(a) or (b) of this section is not appealable under RCW 13.40.230.

             (5) When a serious, middle, or minor first offender is found to have committed a sex offense, other than a sex offense that is also a serious violent offense as defined by RCW 9.94A.030, and has no history of a prior sex offense, the court, on its own motion or the motion of the state or the respondent, may order an examination to determine whether the respondent is amenable to treatment.

             The report of the examination shall include at a minimum the following: The respondent's version of the facts and the official version of the facts, the respondent's offense history, an assessment of problems in addition to alleged deviant behaviors, the respondent's social, educational, and employment situation, and other evaluation measures used. The report shall set forth the sources of the evaluator's information.

             The examiner shall assess and report regarding the respondent's amenability to treatment and relative risk to the community. A proposed treatment plan shall be provided and shall include, at a minimum:

             (a)(i) Frequency and type of contact between the offender and therapist;

             (ii) Specific issues to be addressed in the treatment and description of planned treatment modalities;

             (iii) Monitoring plans, including any requirements regarding living conditions, lifestyle requirements, and monitoring by family members, legal guardians, or others;

             (iv) Anticipated length of treatment; and

             (v) Recommended crime-related prohibitions.

             The court on its own motion may order, or on a motion by the state shall order, a second examination regarding the offender's amenability to treatment. The evaluator shall be selected by the party making the motion. The defendant shall pay the cost of any second examination ordered unless the court finds the defendant to be indigent in which case the state shall pay the cost.

             After receipt of reports of the examination, the court shall then consider whether the offender and the community will benefit from use of this special sex offender disposition alternative and consider the victim's opinion whether the offender should receive a treatment disposition under this section. If the court determines that this special sex offender disposition alternative is appropriate, then the court shall impose a determinate disposition within the standard range for the offense, and the court may suspend the execution of the disposition and place the offender on community supervision for up to two years. As a condition of the suspended disposition, the court may impose the conditions of community supervision and other conditions, including up to thirty days of confinement and requirements that the offender do any one or more of the following:

             (b)(i) Devote time to a specific education, employment, or occupation;

             (ii) Undergo available outpatient sex offender treatment for up to two years, or inpatient sex offender treatment not to exceed the standard range of confinement for that offense. A community mental health center may not be used for such treatment unless it has an appropriate program designed for sex offender treatment. The respondent shall not change sex offender treatment providers or treatment conditions without first notifying the prosecutor, the probation counselor, and the court, and shall not change providers without court approval after a hearing if the prosecutor or probation counselor object to the change;

             (iii) Remain within prescribed geographical boundaries and notify the court or the probation counselor prior to any change in the offender's address, educational program, or employment;

             (iv) Report to the prosecutor and the probation counselor prior to any change in a sex offender treatment provider. This change shall have prior approval by the court;

             (v) Report as directed to the court and a probation counselor;

             (vi) Pay all court-ordered legal financial obligations, perform community service, or any combination thereof;

             (vii) Make restitution to the victim for the cost of any counseling reasonably related to the offense; ((or))

             (viii) Comply with the conditions of any court-ordered probation bond; or

             (ix) The court shall order that the offender may not attend the public or approved private elementary, middle, or high school attended by the victim or the victim's siblings. The parents or legal guardians of the offender are responsible for transportation or other costs associated with the offender's change of school that would otherwise be paid by the school district. The court shall send notice of the disposition and restriction on attending the same school as the victim or victim's siblings to the public or approved private school the juvenile will attend, if known, or if unknown, to the approved private schools and the public school district board of directors of the district in which the juvenile resides or intends to reside. This notice must be sent at the earliest possible date but not later than ten calendar days after entry of the disposition.

             The sex offender treatment provider shall submit quarterly reports on the respondent's progress in treatment to the court and the parties. The reports shall reference the treatment plan and include at a minimum the following: Dates of attendance, respondent's compliance with requirements, treatment activities, the respondent's relative progress in treatment, and any other material specified by the court at the time of the disposition.

             At the time of the disposition, the court may set treatment review hearings as the court considers appropriate.

             Except as provided in this subsection (5), after July 1, 1991, examinations and treatment ordered pursuant to this subsection shall only be conducted by sex offender treatment providers certified by the department of health pursuant to chapter 18.155 RCW. A sex offender therapist who examines or treats a juvenile sex offender pursuant to this subsection does not have to be certified by the department of health pursuant to chapter 18.155 RCW if the court finds that: (A) The offender has already moved to another state or plans to move to another state for reasons other than circumventing the certification requirements; (B) no certified providers are available for treatment within a reasonable geographical distance of the offender's home; and (C) the evaluation and treatment plan comply with this subsection (5) and the rules adopted by the department of health.

             If the offender violates any condition of the disposition or the court finds that the respondent is failing to make satisfactory progress in treatment, the court may revoke the suspension and order execution of the disposition or the court may impose a penalty of up to thirty days' confinement for violating conditions of the disposition. The court may order both execution of the disposition and up to thirty days' confinement for the violation of the conditions of the disposition. The court shall give credit for any confinement time previously served if that confinement was for the offense for which the suspension is being revoked.

             For purposes of this section, "victim" means any person who has sustained emotional, psychological, physical, or financial injury to person or property as a direct result of the crime charged. "Victim" may also include a known parent or guardian of a victim who is a minor child unless the parent or guardian is the perpetrator of the offense.

             (6) RCW 13.40.193 shall govern the disposition of any juvenile adjudicated of possessing a firearm in violation of RCW 9.41.040(1)(((e))) (b)(iii) or any crime in which a special finding is entered that the juvenile was armed with a firearm.

             (7) Whenever a juvenile offender is entitled to credit for time spent in detention prior to a dispositional order, the dispositional order shall specifically state the number of days of credit for time served.

             (8) Except as provided for in subsection (4)(b) or (5) of this section or RCW 13.40.125, the court shall not suspend or defer the imposition or the execution of the disposition.

             (9) In no case shall the term of confinement imposed by the court at disposition exceed that to which an adult could be subjected for the same offense.


             Sec. 2. RCW 13.40.215 and 1995 c 324 s 1 are each amended to read as follows:

             (1)(a) Except as provided in subsection (2) of this section, at the earliest possible date, and in no event later than thirty days before discharge, parole, or any other authorized leave or release, or before transfer to a community residential facility, the secretary shall send written notice of the discharge, parole, authorized leave or release, or transfer of a juvenile found to have committed a violent offense, a sex offense, or stalking, to the following:

             (i) The chief of police of the city, if any, in which the juvenile will reside;

             (ii) The sheriff of the county in which the juvenile will reside; and

             (iii) The approved private schools and the common school district board of directors of the district in which the juvenile intends to reside or the approved private school or public school district in which the juvenile last attended school, whichever is appropriate, except when it has been determined by the department that the juvenile is twenty-one years old; is not required to return to school under chapter 28A.225 RCW; or will be in the community for less than seven consecutive days on approved leave and will not be attending school during that time.

             (b) After the effective date of this act, the department shall send a written notice to approved private and public schools under the same conditions identified in subsection (1)(a)(iii) of this section when a juvenile adjudicated of any offense is transferred to a community residential facility.

             (c) The same notice as required by (a) of this subsection shall be sent to the following, if such notice has been requested in writing about a specific juvenile:

             (i) The victim of the offense for which the juvenile was found to have committed or the victim's next of kin if the crime was a homicide;

             (ii) Any witnesses who testified against the juvenile in any court proceedings involving the offense; and

             (iii) Any person specified in writing by the prosecuting attorney.

Information regarding victims, next of kin, or witnesses requesting the notice, information regarding any other person specified in writing by the prosecuting attorney to receive the notice, and the notice are confidential and shall not be available to the juvenile. The notice to the chief of police or the sheriff shall include the identity of the juvenile, the residence where the juvenile will reside, the identity of the person, if any, responsible for supervising the juvenile, and the time period of any authorized leave.

             (((c))) (d) The thirty-day notice requirements contained in this subsection shall not apply to emergency medical furloughs.

             (((d))) (e) The existence of the notice requirements in this subsection will not require any extension of the release date in the event the release plan changes after notification.

             (2)(a) If a juvenile found to have committed a violent offense, a sex offense, or stalking escapes from a facility of the department, the secretary shall immediately notify, by the most reasonable and expedient means available, the chief of police of the city and the sheriff of the county in which the juvenile resided immediately before the juvenile's arrest. If previously requested, the secretary shall also notify the witnesses and the victim of the offense which the juvenile was found to have committed or the victim's next of kin if the crime was a homicide. If the juvenile is recaptured, the secretary shall send notice to the persons designated in this subsection as soon as possible but in no event later than two working days after the department learns of such recapture.

             (b) The secretary may authorize a leave, for a juvenile found to have committed a violent offense, a sex offense, or stalking, which shall not exceed forty-eight hours plus travel time, to meet an emergency situation such as a death or critical illness of a member of the juvenile's family. The secretary may authorize a leave, which shall not exceed the time medically necessary, to obtain medical care not available in a juvenile facility maintained by the department. Prior to the commencement of an emergency or medical leave, the secretary shall give notice of the leave to the appropriate law enforcement agency in the jurisdiction in which the juvenile will be during the leave period. The notice shall include the identity of the juvenile, the time period of the leave, the residence of the juvenile during the leave, and the identity of the person responsible for supervising the juvenile during the leave. If previously requested, the department shall also notify the witnesses and victim of the offense which the juvenile was found to have committed or the victim's next of kin if the offense was a homicide.

             In case of an emergency or medical leave the secretary may waive all or any portion of the requirements for leaves pursuant to RCW 13.40.205 (2)(a), (3), (4), and (5).

             (3) If the victim, the victim's next of kin, or any witness is under the age of sixteen, the notice required by this section shall be sent to the parents or legal guardian of the child.

             (4) The secretary shall send the notices required by this chapter to the last address provided to the department by the requesting party. The requesting party shall furnish the department with a current address.

             (5) Upon discharge, parole, or other authorized leave or release, a convicted juvenile sex offender shall not attend a public or approved private elementary, middle, or high school that is attended by a victim or a sibling of a victim of the sex offender. The parents or legal guardians of the convicted juvenile sex offender shall be responsible for transportation or other costs associated with or required by the sex offender's change in school that otherwise would be paid by a school district. Upon discharge, parole, or other authorized leave or release of a convicted juvenile sex offender, the secretary shall send written notice of the discharge, parole, or other authorized leave or release and the requirements of this subsection to the common school district board of directors of the district in which the sex offender intends to reside or the district in which the sex offender last attended school, whichever is appropriate. The secretary shall send a similar notice to any approved private school the juvenile will attend, if known, or if unknown, to the approved private schools within the district the juvenile resides or intends to reside.

             (6) For purposes of this section the following terms have the following meanings:

             (a) "Violent offense" means a violent offense under RCW 9.94A.030;

             (b) "Sex offense" means a sex offense under RCW 9.94A.030;

             (c) "Stalking" means the crime of stalking as defined in RCW 9A.46.110;

             (d) "Next of kin" means a person's spouse, parents, siblings, and children.


             Sec. 3 RCW 28A.225.225 and 1995 c 52 s 3 are each amended to read as follows:

             (1) All districts accepting applications from nonresident students or from students receiving home-based instruction for admission to the district's schools shall consider equally all applications received. Each school district shall adopt a policy establishing rational, fair, and equitable standards for acceptance and rejection of applications by June 30, 1990. The policy may include rejection of a nonresident student((s)) if:

             (a) Acceptance of ((these)) a nonresident student((s)) would result in the district experiencing a financial hardship;

             (b) The student's disciplinary records indicate a history of violent or disruptive behavior or gang membership; or

             (c) The student has been expelled or suspended from a public school for more than ten consecutive days. Any policy allowing for readmission of expelled or suspended students under this subsection (1)(c) must apply uniformly to both resident and nonresident applicants.

             For purposes of subsection (1)(b) of this section, "gang" means a group which: (a) Consists of three or more persons; (b) has identifiable leadership; and (c) on an ongoing basis, regularly conspires and acts in concert mainly for criminal purposes.

             (2) The district shall provide to applicants written notification of the approval or denial of the application in a timely manner. If the application is rejected, the notification shall include the reason or reasons for denial and the right to appeal under RCW 28A.225.230(3).


             Sec. 4. RCW 28A.600.010 and 1990 c 33 s 496 are each amended to read as follows:

             Every board of directors, unless otherwise specifically provided by law, shall:

             (1) Enforce the rules ((and regulations)) prescribed by the superintendent of public instruction and the state board of education for the government of schools, pupils, and certificated employees.

             (2) Adopt and make available to each pupil, teacher and parent in the district reasonable written rules ((and regulations)) regarding pupil conduct, discipline, and rights, including but not limited to short-term suspensions as referred to in RCW 28A.305.160 and ((long-term)) suspensions in excess of ten consecutive days. Such rules ((and regulations)) shall not be inconsistent with any of the following: Federal statutes and regulations, state statutes, common law ((or)), the rules ((and regulations)) of the superintendent of public instruction ((or)), and the state board of education ((and)). The board's rules shall include such substantive and procedural due process guarantees as prescribed by the state board of education under RCW 28A.305.160. Commencing with the 1976-77 school year, when such rules ((and regulations)) are made available to each pupil, teacher, and parent, they shall be accompanied by a detailed description of rights, responsibilities, and authority of teachers and principals with respect to the discipline of pupils as prescribed by state statutory law, superintendent of public instruction, and state board of education rules ((and regulations)) and rules and regulations of the school district.

             For the purposes of this subsection, computation of days included in "short-term" and "long-term" suspensions shall be determined on the basis of consecutive school days.

             (3) Suspend, expel, or discipline pupils in accordance with RCW 28A.305.160.


             Sec. 5. RCW 28A.600.420 and 1995 c 335 s 304 are each amended to read as follows:

             (1) Any elementary or secondary school student who is determined to have carried a firearm onto, or to have possessed a firearm on, public elementary or secondary school premises, public school-provided transportation, or areas of facilities while being used exclusively by public schools, shall be expelled from school for not less than one year under RCW 28A.600.010. The superintendent of the school district, educational service district, state school for the deaf, or state school for the blind may modify the expulsion of a student on a case-by-case basis.

             (2) For purposes of this section, "firearm" means a firearm as defined in 18 U.S.C. Sec. 921, and a "firearm" as defined in RCW 9.41.010.

             (3) This section shall be construed in a manner consistent with the individuals with disabilities education act, 20 U.S.C. Sec. 1401 et seq.

             (4) Nothing in this section prevents a public school district, educational service district, the state school for the deaf, or the state school for the blind if it has expelled a student from such student's regular school setting from providing educational services to the student in an alternative setting.

             (5) This section does not apply to:

             (a) Any student while engaged in military education authorized by school authorities in which rifles are used but not other firearms; or

             (b) Any student while involved in a convention, showing, demonstration, lecture, or firearms safety course authorized by school authorities in which the rifles of collectors or instructors are handled or displayed but not other firearms; or

             (c) Any student while participating in a rifle competition authorized by school authorities.

             (6) A school district may suspend or expel a student for up to one year subject to subsections (1), (3), (4), and (5) of this section, if the student acts with malice as defined under RCW 9A.04.110 and displays an instrument that appeared to be a firearm, on public elementary or secondary school premises, public school-provided transportation, or areas of facilities while being used exclusively by public schools.


             NEW SECTION. Sec. 6. 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."


             On page 1, line 1 of the title, after "schools;" strike the remainder of the title and insert "amending RCW 13.40.160, 13.40.215, 28A.225.225, 28A.600.010, and 28A.600.420; and prescribing penalties."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concur in the Senate amendments to House Bill No. 1581, and asked the Senate for a Conference thereon.


APPOINTMENT OF CONFEREES


             The Speaker appointed Representatives Sterk, Radcliff and Quall as Conferees on House Bill No. 1581.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1924 with the following amendments:


             On page 21, after line 31, insert the following:

             "Sec. 3. RCW 9A.44.130 and 1996 c 275 s 11 are each amended to read as follows:


             (1) Any adult or juvenile residing in this state who has been found to have committed or has been convicted of any sex offense, or who has been found not guilty by reason of insanity under chapter 10.77 RCW of committing any sex offense, shall register with the county sheriff for the county of the person's residence.

             (2) The person shall provide the county sheriff with the following information when registering: (a) Name; (b) address; (c) date and place of birth; (d) place of employment; (e) crime for which convicted; (f) date and place of conviction; (g) aliases used; and (h) social security number.

             (3)(a) Sex offenders shall register within the following deadlines. For purposes of this section the term "conviction" refers to adult convictions and juvenile adjudications for sex offenses:

             (i) SEX OFFENDERS IN CUSTODY. Sex offenders who committed a sex offense on, before, or after February 28, 1990, and who, on or after July 28, 1991, are in custody, as a result of that offense, of the state department of corrections, the state department of social and health services, a local division of youth services, or a local jail or juvenile detention facility, must register within twenty-four hours from the time of release with the county sheriff for the county of the person's residence. The agency that has jurisdiction over the offender shall provide notice to the sex offender of the duty to register. Failure to register within twenty-four hours of release constitutes a violation of this section and is punishable as provided in subsection (7) of this section.

             (ii) SEX OFFENDERS NOT IN CUSTODY BUT UNDER STATE OR LOCAL JURISDICTION. Sex offenders, who, on July 28, 1991, are not in custody but are under the jurisdiction of the indeterminate sentence review board or under the department of correction's active supervision, as defined by the department of corrections, the state department of social and health services, or a local division of youth services, for sex offenses committed before, on, or after February 28, 1990, must register within ten days of July 28, 1991. A change in supervision status of a sex offender who was required to register under this subsection (3)(a)(ii) as of July 28, 1991, shall not relieve the offender of the duty to register or to reregister following a change in residence. The obligation to register shall only cease pursuant to RCW 9A.44.140.

             (iii) SEX OFFENDERS UNDER FEDERAL JURISDICTION. Sex offenders who, on or after July 23, 1995, as a result of that offense are in the custody of the United States bureau of prisons or other federal or military correctional agency for sex offenses committed before, on, or after February 28, 1990, must register within twenty-four hours from the time of release with the county sheriff for the county of the person's residence. Sex offenders who, on July 23, 1995, are not in custody but are under the jurisdiction of the United States bureau of prisons, United States courts, United States parole commission, or military parole board for sex offenses committed before, on, or after February 28, 1990, must register within ten days of July 23, 1995. A change in supervision status of a sex offender who was required to register under this subsection (3)(a)(iii) as of July 23, 1995, shall not relieve the offender of the duty to register or to reregister following a change in residence. The obligation to register shall only cease pursuant to RCW 9A.44.140.

             (iv) SEX OFFENDERS WHO ARE CONVICTED BUT NOT CONFINED. Sex offenders who are convicted of a sex offense on or after July 28, 1991, for a sex offense that was committed on or after February 28, 1990, but who are not sentenced to serve a term of confinement immediately upon sentencing, shall report to the county sheriff to register immediately upon completion of being sentenced.

             (v) SEX OFFENDERS WHO ARE NEW RESIDENTS OR RETURNING WASHINGTON RESIDENTS. Sex offenders who move to Washington state from another state or a foreign country that are not under the jurisdiction of the state department of corrections, the indeterminate sentence review board, or the state department of social and health services at the time of moving to Washington, must register within thirty days of establishing residence or reestablishing residence if the person is a former Washington resident. The duty to register under this subsection applies to sex offenders convicted under the laws of another state or a foreign country, federal or military statutes, or Washington state for offenses committed on or after February 28, 1990. Sex offenders from other states or a foreign country who, when they move to Washington, are under the jurisdiction of the department of corrections, the indeterminate sentence review board, or the department of social and health services must register within twenty-four hours of moving to Washington. The agency that has jurisdiction over the offender shall notify the offender of the registration requirements before the offender moves to Washington.

             (vi) SEX OFFENDERS FOUND NOT GUILTY BY REASON OF INSANITY. Any adult or juvenile who has been found not guilty by reason of insanity under chapter 10.77 RCW of committing a sex offense on, before, or after February 28, 1990, and who, on or after July 23, 1995, is in custody, as a result of that finding, of the state department of social and health services, must register within twenty-four hours from the time of release with the county sheriff for the county of the person's residence. The state department of social and health services shall provide notice to the adult or juvenile in its custody of the duty to register. Any adult or juvenile who has been found not guilty by reason of insanity of committing a sex offense on, before, or after February 28, 1990, but who was released prior to July 23, 1995, shall be required to register within twenty-four hours of receiving notice of this registration requirement. The state department of social and health services shall make reasonable attempts within available resources to notify offenders who were released prior to July 23, 1995. Failure to register within twenty-four hours of release, or of receiving notice, constitutes a violation of this section and is punishable as provided in subsection (7) of this section.

             (b) Failure to register within the time required under this section constitutes a per se violation of this section and is punishable as provided in subsection (7) of this section. The county sheriff shall not be required to determine whether the person is living within the county.

             (c) An arrest on charges of failure to register, service of an information, or a complaint for a violation of this section, or arraignment on charges for a violation of this section, constitutes actual notice of the duty to register. Any person charged with the crime of failure to register under this section who asserts as a defense the lack of notice of the duty to register shall register immediately following actual notice of the duty through arrest, service, or arraignment. Failure to register as required under this subsection (c) constitutes grounds for filing another charge of failing to register. Registering following arrest, service, or arraignment on charges shall not relieve the offender from criminal liability for failure to register prior to the filing of the original charge.

             (d) The deadlines for the duty to register under this section do not relieve any sex offender of the duty to register under this section as it existed prior to July 28, 1991.

             (4)(a) If any person required to register pursuant to this section changes his or her residence address within the same county, the person must send written notice of the change of address to the county sheriff at least fourteen days before moving. If any person required to register pursuant to this section moves to a new county, the person must send written notice of the change of address at least fourteen days before moving to the county sheriff in the new county of residence and must register with that county sheriff within twenty-four hours of moving. The person must also send written notice within ten days of the change of address in the new county to the county sheriff with whom the person last registered. If any person required to register pursuant to this section moves out of Washington state, the person must also send written notice within ten days of moving to the new state or a foreign country to the county sheriff with whom the person last registered in Washington state.

             (b) It is an affirmative defense to a charge that the person failed to send a notice at least fourteen days in advance of moving as required under (a) of this subsection that the person did not know the location of his or her new residence at least fourteen days before moving. The defendant must establish the defense by a preponderance of the evidence and, to prevail on the defense, must also prove by a preponderance that the defendant sent the required notice within twenty-four hours of determining the new address.

             (5) The county sheriff shall obtain a photograph of the individual and shall obtain a copy of the individual's fingerprints.

             (6) "Sex offense" for the purpose of RCW 9A.44.130, 10.01.200, 43.43.540, 70.48.470, and 72.09.330 means any offense defined as a sex offense by RCW 9.94A.030 and any violation of RCW 9.68A.090 or 9A.44.096 as well as any gross misdemeanor that is, under chapter 9A.28 RCW, a criminal attempt, criminal solicitation, or criminal conspiracy to commit an offense that is classified as a sex offense under RCW 9.94A.030.

             (7) A person who knowingly fails to register or who moves without notifying the county sheriff as required by this section is guilty of a class C felony if the crime for which the individual was convicted was a ((class A)) felony or a federal or out-of-state conviction for an offense that under the laws of this state would be a((class A)) felony. If the crime was other than a ((class A)) felony or a federal or out-of-state conviction for an offense that under the laws of this state would be other than a ((class A)) felony, violation of this section is a gross misdemeanor."


             On page 21, after line 31, insert the following:

             "Sec. 3. RCW 9.94A.030 and 1996 c 289 s 1 and 1996 c 275 s 5 are each reenacted and amended to read as follows:

             Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

             (1) "Collect," or any derivative thereof, "collect and remit," or "collect and deliver," when used with reference to the department of corrections, means that the department is responsible for monitoring and enforcing the offender's sentence with regard to the legal financial obligation, receiving payment thereof from the offender, and, consistent with current law, delivering daily the entire payment to the superior court clerk without depositing it in a departmental account.

             (2) "Commission" means the sentencing guidelines commission.

             (3) "Community corrections officer" means an employee of the department who is responsible for carrying out specific duties in supervision of sentenced offenders and monitoring of sentence conditions.

             (4) "Community custody" means that portion of an inmate's sentence of confinement in lieu of earned early release time or imposed pursuant to RCW 9.94A.120 (6), (8), or (10) served in the community subject to controls placed on the inmate's movement and activities by the department of corrections.

             (5) "Community placement" means that period during which the offender is subject to the conditions of community custody and/or postrelease supervision, which begins either upon completion of the term of confinement (postrelease supervision) or at such time as the offender is transferred to community custody in lieu of earned early release. Community placement may consist of entirely community custody, entirely postrelease supervision, or a combination of the two.

             (6) "Community service" means compulsory service, without compensation, performed for the benefit of the community by the offender.

             (7) "Community supervision" means a period of time during which a convicted offender is subject to crime-related prohibitions and other sentence conditions imposed by a court pursuant to this chapter or RCW 16.52.200(6) or 46.61.524. For first-time offenders, the supervision may include crime-related prohibitions and other conditions imposed pursuant to RCW 9.94A.120(5). For purposes of the interstate compact for out-of-state supervision of parolees and probationers, RCW 9.95.270, community supervision is the functional equivalent of probation and should be considered the same as probation by other states.

             (8) "Confinement" means total or partial confinement as defined in this section.

             (9) "Conviction" means an adjudication of guilt pursuant to Titles 10 or 13 RCW and includes a verdict of guilty, a finding of guilty, and acceptance of a plea of guilty.

             (10) "Court-ordered legal financial obligation" means a sum of money that is ordered by a superior court of the state of Washington for legal financial obligations which may include restitution to the victim, statutorily imposed crime victims' compensation fees as assessed pursuant to RCW 7.68.035, court costs, county or interlocal drug funds, court-appointed attorneys' fees, and costs of defense, fines, and any other financial obligation that is assessed to the offender as a result of a felony conviction. Upon conviction for vehicular assault while under the influence of intoxicating liquor or any drug, RCW 46.61.522(1)(b), or vehicular homicide while under the influence of intoxicating liquor or any drug, RCW 46.61.520(1)(a), legal financial obligations may also include payment to a public agency of the expense of an emergency response to the incident resulting in the conviction, subject to the provisions in RCW 38.52.430.

             (11) "Crime-related prohibition" means an order of a court prohibiting conduct that directly relates to the circumstances of the crime for which the offender has been convicted, and shall not be construed to mean orders directing an offender affirmatively to participate in rehabilitative programs or to otherwise perform affirmative conduct.

             (12)(a) "Criminal history" means the list of a defendant's prior convictions, whether in this state, in federal court, or elsewhere. The history shall include, where known, for each conviction (i) whether the defendant has been placed on probation and the length and terms thereof; and (ii) whether the defendant has been incarcerated and the length of incarceration.

             (b) "Criminal history" shall always include juvenile convictions for sex offenses and serious violent offenses and shall also include a defendant's other prior convictions in juvenile court if: (i) The conviction was for an offense which is a felony or a serious traffic offense and is criminal history as defined in RCW 13.40.020(9); (ii) the defendant was fifteen years of age or older at the time the offense was committed; and (iii) with respect to prior juvenile class B and C felonies or serious traffic offenses, the defendant was less than twenty-three years of age at the time the offense for which he or she is being sentenced was committed.

             (13) "Day fine" means a fine imposed by the sentencing judge that equals the difference between the offender's net daily income and the reasonable obligations that the offender has for the support of the offender and any dependents.

             (14) "Day reporting" means a program of enhanced supervision designed to monitor the defendant's daily activities and compliance with sentence conditions, and in which the defendant is required to report daily to a specific location designated by the department or the sentencing judge.

             (15) "Department" means the department of corrections.

             (16) "Determinate sentence" means a sentence that states with exactitude the number of actual years, months, or days of total confinement, of partial confinement, of community supervision, the number of actual hours or days of community service work, or dollars or terms of a legal financial obligation. The fact that an offender through "earned early release" can reduce the actual period of confinement shall not affect the classification of the sentence as a determinate sentence.

             (17) "Disposable earnings" means that part of the earnings of an individual remaining after the deduction from those earnings of any amount required by law to be withheld. For the purposes of this definition, "earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonuses, or otherwise, and, notwithstanding any other provision of law making the payments exempt from garnishment, attachment, or other process to satisfy a court-ordered legal financial obligation, specifically includes periodic payments pursuant to pension or retirement programs, or insurance policies of any type, but does not include payments made under Title 50 RCW, except as provided in RCW 50.40.020 and 50.40.050, or Title 74 RCW.

             (18) "Drug offense" means:

             (a) Any felony violation of chapter 69.50 RCW except possession of a controlled substance (RCW 69.50.401(d)) or forged prescription for a controlled substance (RCW 69.50.403);

             (b) Any offense defined as a felony under federal law that relates to the possession, manufacture, distribution, or transportation of a controlled substance; or

             (c) Any out-of-state conviction for an offense that under the laws of this state would be a felony classified as a drug offense under (a) of this subsection.

             (19) "Escape" means:

             (a) Escape in the first degree (RCW 9A.76.110), escape in the second degree (RCW 9A.76.120), willful failure to return from furlough (RCW 72.66.060), willful failure to return from work release (RCW 72.65.070), or willful failure to be available for supervision by the department while in community custody (RCW 72.09.310); or

             (b) Any federal or out-of-state conviction for an offense that under the laws of this state would be a felony classified as an escape under (a) of this subsection.

             (20) "Felony traffic offense" means:

             (a) Vehicular homicide (RCW 46.61.520), vehicular assault (RCW 46.61.522), eluding a police officer (RCW 46.61.024), or felony hit-and-run injury-accident (RCW 46.52.020(4)); or

             (b) Any federal or out-of-state conviction for an offense that under the laws of this state would be a felony classified as a felony traffic offense under (a) of this subsection.

             (21) "Fines" means the requirement that the offender pay a specific sum of money over a specific period of time to the court.

             (22)(a) "First-time offender" means any person who is convicted of a felony (i) not classified as a violent offense or a sex offense under this chapter, or (ii) that is not the manufacture, delivery, or possession with intent to manufacture or deliver a controlled substance classified in schedule I or II that is a narcotic drug, nor the manufacture, delivery, or possession with intent to deliver methamphetamine, its salts, isomers, and salts of its isomers as defined in RCW 69.50.206(d)(2), nor the selling for profit of any controlled substance or counterfeit substance classified in schedule I, RCW 69.50.204, except leaves and flowering tops of marihuana, and except as provided in (b) of this subsection, who previously has never been convicted of a felony in this state, federal court, or another state, and who has never participated in a program of deferred prosecution for a felony offense.

             (b) For purposes of (a) of this subsection, a juvenile adjudication for an offense committed before the age of fifteen years is not a previous felony conviction except for adjudications of sex offenses and serious violent offenses.

             (23) "Most serious offense" means any of the following felonies or a felony attempt to commit any of the following felonies, as now existing or hereafter amended:

             (a) Any felony defined under any law as a class A felony or criminal solicitation of or criminal conspiracy to commit a class A felony;

             (b) Assault in the second degree;

             (c) Assault of a child in the second degree;

             (d) Child molestation in the second degree;

             (e) Controlled substance homicide;

             (f) Extortion in the first degree;

             (g) Incest when committed against a child under age fourteen;

             (h) Indecent liberties;

             (i) Kidnapping in the second degree;

             (j) Leading organized crime;

             (k) Manslaughter in the first degree;

             (l) Manslaughter in the second degree;

             (m) Promoting prostitution in the first degree;

             (n) Rape in the third degree;

             (o) Robbery in the second degree;

             (p) Sexual exploitation;

             (q) Vehicular assault;

             (r) Vehicular homicide, when proximately caused by the driving of any vehicle by any person while under the influence of intoxicating liquor or any drug as defined by RCW 46.61.502, or by the operation of any vehicle in a reckless manner;

             (s) Any other class B felony offense with a finding of sexual motivation, as "sexual motivation" is defined under this section;

             (t) Any other felony with a deadly weapon verdict under RCW 9.94A.125;

             (u) Any felony offense in effect at any time prior to December 2, 1993, that is comparable to a most serious offense under this subsection, or any federal or out-of-state conviction for an offense that under the laws of this state would be a felony classified as a most serious offense under this subsection;

             (v)(i) A prior conviction for indecent liberties under RCW 9A.88.100(1) (a), (b), and (c), chapter 260, Laws of 1975 1st ex. sess. as it existed until July 1, 1979, RCW 9A.44.100(1) (a), (b), and (c) as it existed from July 1, 1979, until June 11, 1986, and RCW 9A.44.100(1) (a), (b), and (d) as it existed from June 11, 1986, until July 1, 1988;

             (ii) A prior conviction for indecent liberties under RCW 9A.44.100(1)(c) as it existed from June 11, 1986, until July 1, 1988, if: (A) The crime was committed against a child under the age of fourteen; or (B) the relationship between the victim and perpetrator is included in the definition of indecent liberties under RCW 9A.44.100(1)(c) as it existed from July 1, 1988, through the effective date of this section or RCW 9A.44.100(1) (d) or (e) as it existed from July 25, 1993, through the effective date of this section.

             (24) "Nonviolent offense" means an offense which is not a violent offense.

             (25) "Offender" means a person who has committed a felony established by state law and is eighteen years of age or older or is less than eighteen years of age but whose case has been transferred by the appropriate juvenile court to a criminal court pursuant to RCW 13.40.110. Throughout this chapter, the terms "offender" and "defendant" are used interchangeably.

             (26) "Partial confinement" means confinement for no more than one year in a facility or institution operated or utilized under contract by the state or any other unit of government, or, if home detention or work crew has been ordered by the court, in an approved residence, for a substantial portion of each day with the balance of the day spent in the community. Partial confinement includes work release, home detention, work crew, and a combination of work crew and home detention as defined in this section.

             (27) "Persistent offender" is an offender who:

             (a)(i) Has been convicted in this state of any felony considered a most serious offense; and

             (ii) Has, before the commission of the offense under (a) of this subsection, been convicted as an offender on at least two separate occasions, whether in this state or elsewhere, of felonies that under the laws of this state would be considered most serious offenses and would be included in the offender score under RCW 9.94A.360; provided that of the two or more previous convictions, at least one conviction must have occurred before the commission of any of the other most serious offenses for which the offender was previously convicted; or

             (b)(i) Has been convicted of (A) rape in the first degree, rape in the second degree, or indecent liberties by forcible compulsion; (B) murder in the first degree, murder in the second degree, kidnapping in the first degree, kidnapping in the second degree, assault in the first degree, assault in the second degree, or burglary in the first degree, with a finding of sexual motivation; or (C) an attempt to commit any crime listed in this subsection (27)(b)(i); and

             (ii) Has, before the commission of the offense under (b)(i) of this subsection, been convicted as an offender on at least one occasion, whether in this state or elsewhere, of an offense listed in (b)(i) of this subsection.

             (28) "Postrelease supervision" is that portion of an offender's community placement that is not community custody.

             (29) "Restitution" means the requirement that the offender pay a specific sum of money over a specific period of time to the court as payment of damages. The sum may include both public and private costs. The imposition of a restitution order does not preclude civil redress.

             (30) "Serious traffic offense" means:

             (a) Driving while under the influence of intoxicating liquor or any drug (RCW 46.61.502), actual physical control while under the influence of intoxicating liquor or any drug (RCW 46.61.504), reckless driving (RCW 46.61.500), or hit-and-run an attended vehicle (RCW 46.52.020(5)); or

             (b) Any federal, out-of-state, county, or municipal conviction for an offense that under the laws of this state would be classified as a serious traffic offense under (a) of this subsection.

             (31) "Serious violent offense" is a subcategory of violent offense and means:

             (a) Murder in the first degree, homicide by abuse, murder in the second degree, assault in the first degree, kidnapping in the first degree, or rape in the first degree, assault of a child in the first degree, or an attempt, criminal solicitation, or criminal conspiracy to commit one of these felonies; or

             (b) Any federal or out-of-state conviction for an offense that under the laws of this state would be a felony classified as a serious violent offense under (a) of this subsection.

             (32) "Sentence range" means the sentencing court's discretionary range in imposing a nonappealable sentence.

             (33) "Sex offense" means:

             (a) A felony that is a violation of chapter 9A.44 RCW or RCW 9A.64.020 or 9.68A.090 or a felony that is, under chapter 9A.28 RCW, a criminal attempt, criminal solicitation, or criminal conspiracy to commit such crimes;

             (b) A felony with a finding of sexual motivation under RCW 9.94A.127 or 13.40.135; or

             (c) Any federal or out-of-state conviction for an offense that under the laws of this state would be a felony classified as a sex offense under (a) of this subsection.

             (34) "Sexual motivation" means that one of the purposes for which the defendant committed the crime was for the purpose of his or her sexual gratification.

             (35) "Total confinement" means confinement inside the physical boundaries of a facility or institution operated or utilized under contract by the state or any other unit of government for twenty-four hours a day, or pursuant to RCW 72.64.050 and 72.64.060.

             (36) "Transition training" means written and verbal instructions and assistance provided by the department to the offender during the two weeks prior to the offender's successful completion of the work ethic camp program. The transition training shall include instructions in the offender's requirements and obligations during the offender's period of community custody.

             (37) "Victim" means any person who has sustained emotional, psychological, physical, or financial injury to person or property as a direct result of the crime charged.

             (38) "Violent offense" means:

             (a) Any of the following felonies, as now existing or hereafter amended: Any felony defined under any law as a class A felony or an attempt to commit a class A felony, criminal solicitation of or criminal conspiracy to commit a class A felony, manslaughter in the first degree, manslaughter in the second degree, indecent liberties if committed by forcible compulsion, kidnapping in the second degree, arson in the second degree, assault in the second degree, assault of a child in the second degree, extortion in the first degree, robbery in the second degree, vehicular assault, and vehicular homicide, when proximately caused by the driving of any vehicle by any person while under the influence of intoxicating liquor or any drug as defined by RCW 46.61.502, or by the operation of any vehicle in a reckless manner;

             (b) Any conviction for a felony offense in effect at any time prior to July 1, 1976, that is comparable to a felony classified as a violent offense in (a) of this subsection; and

             (c) Any federal or out-of-state conviction for an offense that under the laws of this state would be a felony classified as a violent offense under (a) or (b) of this subsection.

             (39) "Work crew" means a program of partial confinement consisting of civic improvement tasks for the benefit of the community of not less than thirty-five hours per week that complies with RCW 9.94A.135. The civic improvement tasks shall have minimal negative impact on existing private industries or the labor force in the county where the service or labor is performed. The civic improvement tasks shall not affect employment opportunities for people with developmental disabilities contracted through sheltered workshops as defined in RCW 82.04.385. Only those offenders sentenced to a facility operated or utilized under contract by a county or the state are eligible to participate on a work crew. Offenders sentenced for a sex offense as defined in subsection (33) of this section are not eligible for the work crew program.

             (40) "Work ethic camp" means an alternative incarceration program designed to reduce recidivism and lower the cost of corrections by requiring offenders to complete a comprehensive array of real-world job and vocational experiences, character-building work ethics training, life management skills development, substance abuse rehabilitation, counseling, literacy training, and basic adult education.

             (41) "Work release" means a program of partial confinement available to offenders who are employed or engaged as a student in a regular course of study at school. Participation in work release shall be conditioned upon the offender attending work or school at regularly defined hours and abiding by the rules of the work release facility.

             (42) "Home detention" means a program of partial confinement available to offenders wherein the offender is confined in a private residence subject to electronic surveillance."


             On page 1, line 2 of the title, after ".320" strike all material through "120" and insert ", 9.94A.120, and 9.94A.130"


             On page 1, line 2 of the title, after "9.94A.320" strike "and 9.94A.120" and insert ", 9.94A.120, and 9.94A.030"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concur in the Senate amendments to House Bill No. 1924, and asked the Senate for a Conference thereon.


APPOINTMENT OF CONFEREES


             The Speaker appointed Representatives Ballasiotes, Koster and Costa as Conferees on House Bill No. 1924.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 2279 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 70.47.015 and 1995 c 265 s 1 are each amended to read as follows:

             (1) The legislature finds that the basic health plan has been an effective program in providing health coverage for uninsured residents. Further, since 1993, substantial amounts of public funds have been allocated for subsidized basic health plan enrollment.

             (2) It is the intent of the legislature that the basic health plan enrollment be expanded expeditiously, consistent with funds available in the health services account, with the goal of two hundred thousand adult subsidized basic health plan enrollees and one hundred thirty thousand children covered through expanded medical assistance services by June 30, 1997, with the priority of providing needed health services to children in conjunction with other public programs.

             (3) Effective January 1, 1996, basic health plan enrollees whose income is less than one hundred twenty-five percent of the federal poverty level shall pay at least a ten-dollar premium share.

             (4) No later than July 1, 1996, the administrator shall implement procedures whereby hospitals licensed under chapters 70.41 and 71.12 RCW, health carrier, rural health care facilities regulated under chapter 70.175 RCW, and community and migrant health centers funded under RCW 41.05.220, may expeditiously assist patients and their families in applying for basic health plan or medical assistance coverage, and in submitting such applications directly to the health care authority or the department of social and health services. The health care authority and the department of social and health services shall make every effort to simplify and expedite the application and enrollment process.

             (5) No later than July 1, 1996, the administrator shall implement procedures whereby health insurance agents and brokers, licensed under chapter 48.17 RCW, may expeditiously assist patients and their families in applying for basic health plan or medical assistance coverage, and in submitting such applications directly to the health care authority or the department of social and health services. Brokers and agents ((shall be entitled to)) may receive a commission for each individual sale of the basic health plan to anyone not ((at anytime previously)) signed up within the previous five years and a commission for each group sale of the basic health plan, if funding for this purpose is provided in a specific appropriation to the health care authority. No commission shall be provided upon a renewal. Commissions shall be determined based on the estimated annual cost of the basic health plan, however, commissions shall not result in a reduction in the premium amount paid to health carriers. For purposes of this section "health carrier" is as defined in RCW 48.43.005. The administrator may establish: (a) Minimum educational requirements that must be completed by the agents or brokers; (b) an appointment process for agents or brokers marketing the basic health plan; or (c) standards for revocation of the appointment of an agent or broker to submit applications for cause, including untrustworthy or incompetent conduct or harm to the public. The health care authority and the department of social and health services shall make every effort to simplify and expedite the application and enrollment process.


             Sec. 2. RCW 70.47.060 and 1995 c 266 s 1 and 1995 c 2 s 4 are each reenacted and amended to read as follows:

             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. In addition, the administrator may, to the extent that funds are available, offer as basic health plan services chemical dependency services, mental health services and organ transplant services; however, no one service or any combination of these three services shall increase the actuarial value of the basic health plan benefits by more than five percent excluding inflation, as determined by the office of financial management. All subsidized and nonsubsidized enrollees in any participating managed health care system under the Washington basic health plan shall be entitled to receive (([covered basic health care services])) covered basic health care services 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, 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 such services 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. 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.

             However, with respect to coverage for 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 such services except to the extent that the 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.

             (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 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 and to the share of the cost of the plan due from subsidized enrollees entering the plan as employees pursuant to subsection (10) 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 premium tax under RCW 48.14.0201.

             (c) An employer or other financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of a subsidized or nonsubsidized enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator((, but in no case shall the payment made on behalf of the enrollee exceed the total premiums due from the enrollee)).

             (d) To develop, as an offering by all health carriers providing coverage identical to the basic health plan, a model plan benefits package with uniformity in enrollee cost-sharing requirements.

             (3) To design and implement a structure of enrollee cost sharing due a managed health care system from subsidized and nonsubsidized enrollees. The structure shall discourage inappropriate enrollee utilization of health care services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary health care services.

             (4) 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. The level of subsidy provided to persons who qualify may be based on the lowest cost plans, as defined by the administrator.

             (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.

             (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 medical assistance 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 on a reasonable schedule defined by the authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. 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 reenroll in the plan.

             (10) To accept applications from business owners on behalf of themselves and their employees, spouses, and dependent children, as subsidized or nonsubsidized enrollees, who reside in an area served by the plan. The administrator may require all or the substantial majority of the eligible employees of such businesses to enroll in the plan and establish those procedures necessary to facilitate the orderly enrollment of groups in the plan and into a managed health care system. The administrator may require that a business owner pay at least an amount equal to what the employee pays after the state pays its portion of the subsidized premium cost of the plan on behalf of each employee enrolled in the plan. Enrollment is limited to those not eligible for medicare who wish to enroll in the plan and choose to obtain the basic health care coverage and services from a managed care system participating in the plan. The administrator shall adjust the amount determined to be due on behalf of or from all such enrollees whenever the amount negotiated by the administrator with the participating managed health care system or systems is modified or the administrative cost of providing the plan to such enrollees changes.

             (11) 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.

             (12) 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 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.

             (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) 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 funding, assistance for rural residents, underserved populations, and persons of color.


             NEW SECTION. Sec. 3. 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 takes effect July 1, 1997."


             On page 1, line 1 of the title, after "plan;" strike the remainder of the title and insert "amending RCW 70.47.015; reenacting and amending RCW 70.47.060; providing an effective date; and declaring an emergency."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House did not concur in the Senate amendments to Substitute House Bill No. 2279, and asked the Senate for a Conference thereon.


APPOINTMENT OF CONFEREES


             The Speaker appointed Representatives Huff, Backlund and Murray as Conferees on Substitute House Bill No. 2279.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 1085 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. A new section is added to chapter 28A.600 RCW to read as follows:

             (1) All instructional materials, including teacher's manuals, films, tapes, or other supplementary material which will be used in connection with any test, questionnaire, survey, analysis, or evaluation in a school, shall be available for inspection by the parents or legal guardians of the students, and by any member of the school board.

             (2) Absent prior consent of a student who is an adult or an emancipated minor, or absent prior written consent of a parent or legal guardian of a student who is an unemancipated minor, a student may not be required to submit to a test, questionnaire, survey, analysis, or evaluation that reveals information concerning the student's or the student's parents':

             (a) Personal beliefs or practices regarding political affiliations;

             (b) Mental or psychological problems potentially embarrassing to the student or to the student's family;

             (c) Sexual behavior and attitudes;

             (d) Illegal, antisocial, self-incriminating, and demeaning behavior;

             (e) Critical appraisals of other individuals with whom the students have a close family relationship;

             (f) Legally recognized privileged or analogous relationships, such as those of lawyers, physicians, and ministers;

             (g) Income level, except as required by law to determine eligibility for participation in a program or to receive financial assistance under the program.

             (3) Educational agencies shall give parents and students effective notice of their rights under this section prior to administering a test, questionnaire, survey, analysis, or evaluation that meets the criteria of subsection (2) of this section.

             (4) Prior to administration of a test, questionnaire, survey, analysis, or evaluation that meets the criteria of subsection (2) of this section, the school board must be given the opportunity to hear a presentation about the proposed test, questionnaire, survey, analysis, or evaluation. Each member of the school board must be notified in writing of plans to administer a test, questionnaire, survey, analysis, or evaluation that meets the criteria of subsection (2) of this section. Notification must occur prior to a regularly scheduled meeting of the school board before administration of a test, questionnaire, survey, analysis, or evaluation that meets the criteria of subsection (2) of this section."


             On page 1, line 1 of the title, after "survey;" strike the remainder of the title and insert "and adding a new section to chapter 28A.600 RCW."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Substitute House Bill No. 1085 and passed the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1085 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1085 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 54, Nays - 37, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Backlund, Ballasiotes, Benson, Boldt, Bush, Cairnes, Carlson, Carrell, Chandler, Clements, Cooke, Crouse, Delvin, Dunn, Dyer, Hankins, Hickel, Honeyford, Huff, Johnson, Koster, Lambert, Lisk, McMorris, Mielke, Mitchell, Mulliken, O'Brien, Parlette, Pennington, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 54.

             Voting nay: Representatives Anderson, Appelwick, Blalock, Butler, Chopp, Cody, Cole, Constantine, Conway, Cooper, Costa, Dickerson, Doumit, Dunshee, Fisher, Gardner, Gombosky, Grant, Hatfield, Keiser, Kenney, Kessler, Lantz, Linville, Mason, Morris, Murray, Poulsen, Quall, Regala, Romero, Scott, Sommers, H., Tokuda, Veloria, Wolfe and Wood - 37.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Engrossed Substitute House Bill No. 1085, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 1110 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             NEW SECTION. Sec. 1. WAC 173-563-015 as it existed prior to the effective date of this section is void.


             Sec. 2. RCW 90.54.050 and 1988 c 47 s 7 are each amended to read as follows:

             In conjunction with the programs provided for in RCW 90.54.040(1), whenever it appears necessary to the director in carrying out the policy of this chapter, the department may by rule adopted pursuant to chapter 34.05 RCW:

             (1) Reserve and set aside waters for beneficial utilization in the future, and

             (2) When sufficient information and data are lacking to allow for the making of sound decisions, withdraw various waters of the state from additional appropriations until such data and information are available. Before proposing the adoption of rules to withdraw waters of the state from additional appropriation, the department shall consult with the standing committees of the house of representatives and the senate having jurisdiction over water resource management issues.

             Prior to the adoption of a rule under this section, the department shall conduct a public hearing in each county in which waters relating to the rule are located. The public hearing shall be preceded by a notice placed in a newspaper of general circulation published within each of said counties. Rules adopted hereunder shall be subject to review in accordance with the provisions of RCW ((34.05.538 or)) 34.05.240.

             ((No new rules or changes to existing rules to reserve or set aside water may be adopted pursuant to this section, as provided in RCW 90.54.022(5).))"


             On page 1, line 1 of the title, after "resources;" strike the remainder of the title and insert "amending RCW 90.54.050; and creating a new section."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Substitute House Bill No. 1110 and passed the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1110 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1110 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 73, Nays - 18, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Clements, Cody, Cole, Conway, Cooke, Crouse, Delvin, Dickerson, Dunn, Dyer, Fisher, Gardner, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Koster, Lambert, Lantz, Linville, Lisk, McMorris, Mielke, Mitchell, Mulliken, Parlette, Pennington, Quall, Radcliff, Reams, Regala, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 73.

             Voting nay: Representatives Anderson, Appelwick, Chopp, Constantine, Cooper, Costa, Doumit, Dunshee, Gombosky, Kessler, Mason, Morris, Murray, O'Brien, Poulsen, Romero, Scott and Tokuda - 18.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Engrossed Substitute House Bill No. 1110, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed SECOND SUBSTITUTE HOUSE BILL NO. 1191 with the following amendments:


             On page 6, beginning on line 12, strike all material down through and including line 15


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


MOTION


             Representative Cody moved that the House not concur in the Senate amendments to Second Substitute House Bill No. 1191, and ask the Senate for a Conference thereon.


             Representative Cody spoke in favor of adoption of the motion.


             Representative Backlund spoke against the adoption of the motion.


             Division was demanded. The Speaker divided the House. The results of the division was 51-YEAS; 39-NAYS. The motion was not adopted.


             There being no objection, the House concurred in the Senate amendments to Second Substitute House Bill No. 1191 and passed the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Second Substitute House Bill No. 1191 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Second Substitute House Bill No. 1191 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 62, Nays - 29, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Backlund, Ballasiotes, Benson, Boldt, Bush, Cairnes, Carlson, Carrell, Chandler, Clements, Cody, Cooke, Costa, Crouse, Delvin, Dunn, Dyer, Grant, Hankins, Hickel, Honeyford, Huff, Johnson, Keiser, Koster, Lambert, Lantz, Linville, Lisk, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, Parlette, Pennington, Quall, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sump, Talcott, Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 62.

             Voting nay: Representatives Anderson, Appelwick, Blalock, Butler, Chopp, Cole, Constantine, Conway, Cooper, Dickerson, Doumit, Dunshee, Fisher, Gardner, Gombosky, Hatfield, Kenney, Kessler, Mason, O'Brien, Poulsen, Regala, Romero, Scott, Sullivan, Tokuda, Veloria, Wolfe and Wood - 29.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Second Substitute House Bill No. 1191, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1367 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 28A.335.180 and 1991 c 116 s 1 are each amended to read as follows:

             (1) Notwithstanding any other provision of law, school districts, educational service districts, or any other state or local governmental agency concerned with education, when declaring texts and other books, equipment, materials or relocatable facilities as surplus, shall, prior to other disposal thereof, serve notice in writing in a newspaper of general circulation in the school district and to any public school district or private school in Washington state annually requesting such a notice, that the same is available for sale, rent, or lease to public school districts or approved private schools, at depreciated cost or fair market value, whichever is greater: PROVIDED, That students wishing to purchase texts pursuant to RCW 28A.320.230(2) shall have priority as to such texts. Such districts or agencies shall not otherwise sell, rent or lease such surplus property to any person, firm, organization, or nongovernmental agency for at least thirty days following publication of notice in a newspaper of general circulation in the school district.

             (2) In lieu of complying with subsection (1) of this section, school districts and educational service districts may elect to grant surplus personal property to a federal, state, or local governmental entity, or to indigent persons, at no cost on the condition the property be used for preschool through twelfth grade educational purposes, or elect to loan surplus personal property to a nonreligious, nonsectarian private entity on the condition the property be used for the preschool through twelfth grade education of members of the public on a nondiscriminatory basis.


             Sec. 2. RCW 43.19.1919 and 1991 c 216 s 2 are each amended to read as follows:

             Except as provided in section 1 of this act and RCW 43.19.1920, the division of purchasing shall sell or exchange personal property belonging to the state for which the agency, office, department, or educational institution having custody thereof has no further use, at public or private sale, and cause the moneys realized from the sale of any such property to be paid into the fund from which such property was purchased or, if such fund no longer exists, into the state general fund: PROVIDED, Sales of capital assets may be made by the division of purchasing and a credit established in central stores for future purchases of capital items as provided for in RCW 43.19.190 through 43.19.1939, as now or hereafter amended: PROVIDED FURTHER, That personal property, excess to a state agency, including educational institutions, shall not be sold or disposed of prior to reasonable efforts by the division of purchasing to determine if other state agencies have a requirement for such personal property. Such determination shall follow sufficient notice to all state agencies to allow adequate time for them to make their needs known. Surplus items may be disposed of without prior notification to state agencies if it is determined by the director of general administration to be in the best interest of the state. The division of purchasing shall maintain a record of disposed surplus property, including date and method of disposal, identity of any recipient, and approximate value of the property: PROVIDED, FURTHER, That this section shall not apply to personal property acquired by a state organization under federal grants and contracts if in conflict with special title provisions contained in such grants or contracts.

             This section does not apply to property under RCW 27.53.045."


             On page 1, line 1 of the title, after "property;" strike the remainder of the title and insert "and amending RCW 28A.335.180 and 43.19.1919."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to House Bill No. 1367 and passed the bill as amended by the Senate.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of House Bill No. 1367 as amended by the Senate.


             Representatives Johnson and Cole spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 1367 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 91, Nays - 0, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 91.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             House Bill No. 1367, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 15, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1372 with the following attached amendment(s):


             Strike everything after the enacting clause and insert the following:

             "NEW SECTION. Sec. 1. The Washington advanced college tuition payment program is established to help make higher education affordable and accessible to all citizens of the state of Washington by offering a savings incentive that will protect purchasers and beneficiaries against rising tuition costs. The program is designed to encourage savings and enhance the ability of Washington citizens to obtain financial access to institutions of higher education. In addition, the program encourages elementary and secondary school students to do well in school as a means of preparing for and aspiring to higher education attendance. This program is intended to promote a well-educated and financially secure population to the ultimate benefit of all citizens of the state of Washington.


             NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.

             (1) "Academic year" means the regular nine-month, three-quarter, or two-semester period annually occurring between July 1st and June 30th.

             (2) "Account" means the Washington advanced college tuition payment program account established for the deposit of all money received by the board from eligible purchasers and interest earnings on investments of funds in the account, as well as for all expenditures on behalf of eligible beneficiaries for the redemption of tuition units.

             (3) "Board" means the higher education coordinating board as defined in chapter 28B.80 RCW.

             (4) "Committee on advanced tuition payment" or "committee" means a committee of the following members or their designees: The state treasurer, the director of the office of financial management, and the chair of the higher education coordinating board.

             (5) "Governing body" means the entity empowered by the legislature to administer the Washington advanced college tuition payment program.

             (6) "Contractual obligation" means a legally binding contract of the state with the purchaser and the beneficiary establishing that purchases of tuition units will be worth the same number of tuition units at the time of redemption as they were worth at the time of the purchase.

             (7) "Eligible beneficiary" means the person for whom the tuition unit will be redeemed for attendance at an institution of higher education. The beneficiary is that person named by the purchaser at the time that a tuition unit contract is accepted by the board. With the exception of tuition unit contracts purchased by qualified organizations as future scholarships, the beneficiary must reside in the state of Washington or otherwise be a resident of the state of Washington at the time the tuition unit contract is accepted by the board.

             (8) "Eligible purchaser" means an individual or organization that has entered into a tuition unit contract with the board for the purchase of tuition units for an eligible beneficiary.

             (9) "Full-time tuition charges" means resident tuition charges at a state institution of higher education for enrollments between ten credits and eighteen credit hours per academic term.

             (10) "Institution of higher education" means an institution that offers education beyond the secondary level and is accredited by a nationally recognized accrediting association or is licensed to do business in the state in which it is located.

             (11) "Investment board" means the state investment board as defined in chapter 43.33A RCW.

             (12) "State institution of higher education" means institutions of higher education as defined in RCW 28B.10.016.

             (13) "Tuition and fees" means tuition and services and activities fees as defined in RCW 28B.15.020 and 28B.15.041 rounded to the nearest whole dollar. The maximum tuition and fees charges recognized for beneficiaries enrolled in a state technical college shall be equal to the tuition and fees for the community college system.

             (14) "Tuition unit contract" means a contract between an eligible purchaser and the board, or a successor agency appointed for administration of this chapter, for the purchase of tuition units for a specified beneficiary that may be redeemed at a later date for an equal number of tuition units.

             (15) "Unit purchase price" means the minimum cost to purchase one tuition unit for an eligible beneficiary. Generally, the minimum purchase price is one percent of the weighted average tuition and fees for the current year, rounded to the nearest whole dollar, adjusted for the costs of administration and adjusted to ensure the actuarial soundness of the account.

             (16) "Weighted average tuition" shall be calculated as the sum of the undergraduate tuition and services and activities fees for each four-year state institution of higher education, multiplied by the respective full-time equivalent student enrollment at each institution divided by the sum total of undergraduate full-time equivalent student enrollments of all four-year state institutions of higher education, rounded to the nearest whole dollar.

             (17) "Weighted average tuition unit" is the value of the weighted average tuition and fees divided by one hundred. The weighted average is the basis upon which tuition benefits are calculated for graduate program enrollments and for attendance at nonstate institutions of higher education and is the basis for any refunds provided from the program.


             NEW SECTION. Sec. 3. (1) The Washington advanced college tuition payment program shall be administered by the committee on advanced tuition payment which shall be chaired by the representative from the higher education coordinating board. The committee shall be supported by staff of the board.

             (2) The committee shall assess the administration and projected financial solvency of the program and make a recommendation to the legislature by the end of the second year after the effective date of this section as to disposition of the further administration of the program.

             (3)(a) The Washington advanced college tuition payment program shall consist of the sale of tuition units, which may be redeemed by the beneficiary at a future date for an equal number of tuition units regardless of any increase in the price of tuition, that may have occurred in the interval.

             (b) Each purchase shall be worth a specific number of or fraction of tuition units at each state institution of higher education as determined by the board.

             (c) The number of tuition units necessary to pay for a full year's, full-time tuition and fee charges at a state institution of higher education shall be set by the board at the time a purchaser enters into a tuition unit contract.

             (d) The governing body may limit the number of tuition units purchased by any one purchaser or on behalf of any one beneficiary, however, no limit may be imposed that is less than that necessary to achieve four years of full-time, undergraduate tuition charges at a state institution of higher education. The governing body also may, at its discretion, limit the number of participants, if needed, to ensure the actuarial soundness and integrity of the program.

             (4)(a) No tuition unit may be redeemed until two years after the purchase of the unit. Units may be redeemed for enrollment at any institution of higher education.

             (b) Units redeemed at a nonstate institution of higher education or for graduate enrollment shall be redeemed at the current weighted average tuition unit in effect at the time of redemption.

             (5) The governing body shall determine the conditions under which the tuition benefit may be transferred to another family member. In permitting such transfers, the governing body may not allow the tuition benefit to be bought, sold, bartered, or otherwise exchanged for goods and services by either the beneficiary or the purchaser.

             (6) The governing body shall administer the Washington advanced college tuition payment program in a manner reasonably designed to be actuarially sound, such that the assets of the trust will be sufficient to defray the obligations of the trust including the costs of administration. The governing body may, at its discretion, discount the minimum purchase price for certain kinds of purchases such as those from families with young children, as long as the actuarial soundness of the account is not jeopardized.

             (7) The governing body shall annually determine current value of a tuition unit and the value of the weighted average tuition unit.

             (8) The governing body shall promote, advertise, and publicize the Washington advanced college tuition payment program.

             (9) In addition to any other powers conferred by this chapter, the governing body may:

             (a) Impose reasonable limits on the number of tuition units or units that may be used in any one year;

             (b) Determine and set any time limits, if necessary, for the use of benefits under this chapter;

             (c) Impose and collect administrative fees and charges in connection with any transaction under this chapter;

             (d) Appoint and use advisory committees as needed to provide program direction and guidance;

             (e) Formulate and adopt all other policies and rules necessary for the efficient administration of the program;

             (f) Consider the addition of an advanced payment program for room and board contracts and also consider a college savings program;

             (g) Purchase insurance from insurers licensed to do business in the state, to provide for coverage against any loss in connection with the account's property, assets, or activities or to further insure the value of the tuition units;

             (h) Make, execute, and deliver contracts, conveyances, and other instruments necessary to the exercise and discharge of its powers and duties under this chapter;

             (i) Contract for the provision for all or part of the services necessary for the management and operation of the program with other state or nonstate entities authorized to do business in the state;

             (j) Contract for other services or for goods needed by the board in the conduct of its business under this chapter;

             (k) Employ all personnel as necessary to carry out its responsibilities under this chapter and to fix the compensation of these persons;

             (l) Contract with financial consultants, actuaries, auditors, and other consultants as necessary to carry out its responsibilities under this chapter;

             (m) Solicit and accept cash donations and grants from any person, governmental agency, private business, or organization; and

             (n) Perform all acts necessary and proper to carry out the duties and responsibilities of this program under this chapter.


             NEW SECTION. Sec. 4. The governing body may, at its discretion, allow an organization to purchase tuition units for future use as scholarships. Such organizations electing to purchase tuition units for this purpose must enter into a contract with the governing body which, at a minimum, ensures that the scholarship shall be freely given by the purchaser to a scholarship recipient. For such purchases, the purchaser need not name a beneficiary until four months before the date when the tuition units are first expected to be used.

             The governing body shall formulate and adopt such rules as are necessary to determine which organizations may qualify to purchase tuition units for scholarships under this section. The governing body also may consider additional rules for the use of tuition units if purchased as scholarships.

             The governing body may establish a scholarship fund with moneys from the Washington advanced college tuition payment program account. A scholarship fund established under this authority shall be administered by the higher education coordinating board and shall be provided to students who demonstrate financial need. Financial need is not a criterion that any other organization need consider when using tuition units as scholarships. The board also may establish its own corporate-sponsored scholarship fund under this chapter.


             NEW SECTION. Sec. 5. The Washington advanced college tuition payment program is an essential state governmental function. Contracts with eligible participants shall be contractual obligations legally binding on the state as set forth in this chapter. If, and only if, the moneys in the account are projected to be insufficient to cover the state's contracted expenses for a given biennium, then the legislature shall appropriate to the account the amount necessary to cover such expenses.

             The tuition and fees charged by a state institution of higher education to an eligible beneficiary for a current enrollment shall be paid by the account to the extent the beneficiary has remaining unused tuition units for the appropriate school. The tuition and fees charged to a beneficiary for graduate level enrollments or by a nonstate institution of higher education shall be paid by the account to the extent that the beneficiary has remaining weighted average tuition units.


             NEW SECTION. Sec. 6. (1) The Washington advanced college tuition payment program account is created in the custody of the state treasurer. The account shall be a discrete nontreasury account retaining its interest earnings in accordance with RCW 43.79A.040.

             (2) The governing body shall deposit in the account all money received for the program. The account shall be self-sustaining and consist of payments received from purchasers of tuition units and funds received from other sources, public or private. With the exception of investment and operating costs associated with the investment of money by the investment board paid under RCW 43.33A.160 and 43.84.160, the account shall be credited with all investment income earned by the account. Disbursements from the account are exempt from appropriations and the allotment provisions of chapter 43.88 RCW. Money used for program administration is subject to the allotment and budgetary controls of chapter 43.88 RCW, but no appropriation is required for expenditures.

             (3) The assets of the account may be spent for the purpose of making payments to institutions of higher education on behalf of the qualified beneficiaries, making refunds, transfers, or direct payments upon the termination of the Washington advanced college tuition payment program, and paying the costs of administration of the program. Disbursements from the account shall be made only on the authorization of the board.


             NEW SECTION. Sec. 7. (1) The investment board has the full power to invest, reinvest, manage, contract, sell, or exchange investment money in the account. All investment and operating costs associated with the investment of money shall be paid pursuant to RCW 43.33A.160 and 43.84.160. With the exception of these expenses, the earnings from the investment of the money shall be retained by the account.

             (2) All investments made by the investment board shall be made with the exercise of that degree of judgment and care pursuant to RCW 43.33A.140 and the investment policy established by the state investment board.

             (3) As deemed appropriate by the investment board, money in the account may be commingled for investment with other funds subject to investment by the board.

             (4) The authority to establish all policies relating to the account, other than the investment policies as set forth in subsections (1) through (3) of this section, resides with the board. With the exception of expenses of the investment board set forth in subsection (1) of this section, disbursements from the account shall be made only on the authorization of the governing body, and money in the account may be spent only for the purposes of the program as specified in this chapter.

             (5) The investment board shall routinely consult and communicate with the governing body on the investment policy, earnings of the trust, and related needs of the program.


             NEW SECTION. Sec. 8. The governing body shall annually evaluate, and cause to be evaluated by a nationally recognized actuary, the soundness of the account and determine the additional assets needed, if any, to defray the obligations of the account.

             If funds are not sufficient to ensure the actuarial soundness of the account, the governing body shall adjust the price of subsequent tuition credit purchases to ensure its soundness.

             If there are insufficient numbers of new purchases to ensure the actuarial soundness of the account, the governing body shall request such funds from the legislature as are required to ensure the integrity of the program. Funds may be appropriated directly to the account or appropriated under the condition that they be repaid at a later date. The repayment shall be made at such time that the account is again determined to be actuarially sound.


             NEW SECTION. Sec. 9. (1) In the event that the state determines that the program is not financially feasible, or for any other reason, the state may declare the discontinuance of the program. At the time of such declaration, the governing body will cease to accept any further tuition unit contracts or purchases.

             (2) The remaining tuition units for all beneficiaries who have either enrolled in higher education or who are within four years of graduation from a secondary school shall be honored until such tuition units have been exhausted, or for ten fiscal years from the date that the program has been discontinued, whichever comes first. All other contract holders shall receive a refund equal to the value of the current weighted average tuition units in effect at the time that the program was declared discontinued.

             (3) At the end of the ten-year period, any tuition units remaining unused by currently active beneficiaries enrolled in higher education shall be refunded at the value of the current weighted average tuition unit in effect at the end of that ten-year period.

             (4) At the end of the ten-year period, all other funds remaining in the account not needed to make refunds or to pay for administrative costs shall be deposited to the state general fund.

             (5) The governing body may make refunds under other exceptional circumstances as it deems fit, however, no tuition units may be honored after the end of the tenth fiscal year following the declaration of discontinuance of the program.


             NEW SECTION. Sec. 10. (1) The committee, in planning and devising the program, shall consult with the investment board, the state treasurer, the state actuary, the office of financial management, and the institutions of higher education.

             (2) The governing body may seek the assistance of the state agencies named in subsection (1) of this section, private financial institutions, and any other qualified party with experience in the areas of accounting, actuary, risk management, or investment management to assist with preparing an accounting of the program and ensuring the fiscal soundness of the account.

             (3) State agencies and public institutions of higher education shall fully cooperate with the governing body in matters relating to the program in order to ensure the solvency of the account and ability of the governing body to meet outstanding commitments.


             NEW SECTION. Sec. 11. This chapter shall not be construed as a promise that any beneficiary shall be granted admission to any institution of higher education, will earn any specific or minimum number of academic credits, or will graduate from any such institution. In addition, this chapter shall not be construed as a promise of either course or program availability.

             Participation in this program does not guarantee an eligible beneficiary the right to resident tuition and fees. To qualify for resident and respective tuition subsidies, the eligible beneficiary must meet the applicable provisions of RCW 28B.15.011 through 28B.15.015.

             This chapter shall not be construed to imply that the redemption of tuition units shall be equal to any value greater than the undergraduate tuition and services and activities fees at a state institution of higher education as computed under this chapter. Eligible beneficiaries will be responsible for payment of any other fee that does not qualify as a services and activities fee including, but not limited to, any expenses for tuition surcharges, tuition overload fees, laboratory fees, equipment fees, book fees, rental fees, room and board charges, or fines.


             NEW SECTION. Sec. 12. (1) The intent of the Washington advanced college tuition payment program is to redeem tuition units for attendance at an institution of higher education. Refunds shall be issued under specific conditions that may include the following:

             (a) Certification that the beneficiary, who is eighteen years of age or older, will not attend an institution of higher education, will result in a refund not to exceed ninety-five percent of the current weighted average tuition and fees in effect at the time of such certification. No more than one hundred tuition units may be refunded per year to any individual making this certification. The refund shall be made no sooner than ninety days after such certification, less any administrative processing fees assessed by the governing body. The governing body may, at its discretion, impose a greater penalty;

             (b) If there is certification of the death or disability of the beneficiary, the refund shall be equal to one hundred percent of any remaining unused tuition units valued at the current weighted average tuition units at the time that such certification is submitted to the board, less any administrative processing fees assessed by the board;

             (c) If there is certification by the student of graduation or program completion, the refund may be as great as one hundred percent of any remaining unused weighted average tuition units at the time that such certification is submitted to the governing body, less any administrative processing fees assessed by the governing body. The governing body may, at its discretion, impose a penalty if needed to comply with federal tax rules;

             (d) Certification of other tuition and fee scholarships, which will cover the cost of tuition for the eligible beneficiary. The refund shall be equal to one hundred percent of the current weighted average tuition units in effect at the time of the refund request, plus any administrative processing fees assessed by the governing body. The refund under this subsection may not exceed the value of the scholarship;

             (e) Incorrect or misleading information provided by the purchaser or beneficiaries may result in a refund of the purchaser's investment, less any administrative processing fees assessed by the governing body. The value of the refund will not exceed the actual dollar value of the purchaser's contributions; and

             (f) The governing body may determine other circumstances qualifying for refunds of remaining unused tuition units and may determine the value of that refund.

             (2) With the exception of subsection (1)(b) and (e) of this section no refunds may be made before the beneficiary is at least eighteen years of age.


             Sec. 13. RCW 43.79A.040 and 1996 c 253 s 409 are each amended to read as follows:

             (1) Money in the treasurer's trust fund may be deposited, invested and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

             (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

             (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

             (4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

             (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the Washington international exchange scholarship endowment fund, the energy account, the fair fund, the game farm alternative account, the grain inspection revolving fund, the rural rehabilitation account, and the self-insurance revolving fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

             (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, and the local rail service assistance account.

             (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.


             NEW SECTION. Sec. 14. Sections 1 through 12 of this act constitute a new chapter in Title 28B RCW."


             On page 1, line 2 of the title, after "program;" strike the remainder of the title and insert "amending RCW 43.79A.040; and adding a new chapter to Title 28B RCW."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Second Substitute House Bill No. 1372, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Second Substitute House Bill No. 1372 as amended by the Senate.


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


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 1372 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 90, Nays - 1, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 90.

             Voting nay: Representative Sherstad - 1.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Engrossed Second Substitute House Bill No. 1372, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 15, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1387 with the following amendments:


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 48.20.028 and 1995 c 265 s 13 are each amended to read as follows:

             (1)(a) An insurer offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude an insurer from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.20.390, 48.20.393, 48.20.395, 48.20.397, 48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

             (2) Premiums for health benefit plans for individuals shall be calculated using the adjusted community rating method that spreads financial risk across the carrier's entire individual product population. All such rates shall conform to the following:

             (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; and

             (iv) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty.

             (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection.

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the family composition;

             (ii) Changes to the health benefit plan requested by the individual; or

             (iii) Changes in government requirements affecting the health benefit plan.

             (g) The frequency of filing of rate adjustments for new and renewing individuals is limited to once every six months.

             (((g))) (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.21.045.

             (4) As used in this section, "health benefit plan," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 2. RCW 48.21.045 and 1995 c 265 s 14 are each amended to read as follows:

             (1)(a) An insurer offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude an insurer from offering, or a small employer from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits in the basic health plan shall clearly disclose these differences to the small employer in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.21.130, 48.21.140, 48.21.141, 48.21.142, 48.21.144, 48.21.146, 48.21.160 through 48.21.197, 48.21.200, 48.21.220, 48.21.225, 48.21.230, 48.21.235, 48.21.240, 48.21.244, 48.21.250, 48.21.300, 48.21.310, or 48.21.320 if: (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii) the health benefit plan is offered to employers with not more than twenty-five employees.

             (2) Nothing in this section shall prohibit an insurer from offering, or a purchaser from seeking, benefits in excess of the basic health plan services. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

             (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

             (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; and

             (iv) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

             (c) The insurer shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (3).

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the enrollment of the small employer;

             (ii) Changes to the family composition of the employee;

             (iii) Changes to the health benefit plan requested by the small employer; or

             (iv) Changes in government requirements affecting the health benefit plan.

             (g) The frequency of filing of rate adjustments for new and renewing small employers is limited to once every six months.

             (((g))) (h) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

             (((h))) (i) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (((i))) (j) Adjusted community rates established under this section shall pool the medical experience of all small groups purchasing coverage.

             (4) The health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state. Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

             (5)(a) Except as provided in this subsection, requirements used by an insurer in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

             (b) An insurer shall not require a minimum participation level greater than:

             (i) One hundred percent of eligible employees working for groups with three or less employees; and

             (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

             (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

             (d) An insurer may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

             (6) An insurer must offer coverage to all eligible employees of a small employer and their dependents. An insurer may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. An insurer may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

             (7) As used in this section, "health benefit plan," "small employer," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 3. RCW 48.44.022 and 1995 c 265 s 15 are each amended to read as follows:

             (1)(a) A health care service contractor offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a contractor from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

             (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions:

             (a) The health care service contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; and

             (iv) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty.

             (c) The health care service contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection.

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the family composition;

             (ii) Changes to the health benefit plan requested by the individual; or

             (iii) Changes in government requirements affecting the health benefit plan.

             (g) The frequency of filing of rate adjustments for new and renewing individuals is limited to once every six months.

             (((g))) (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.44.023.

             (4) As used in this section and RCW 48.44.023 "health benefit plan," "small employer," "basic health plan," "adjusted community rates," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 4. RCW 48.44.023 and 1995 c 265 s 16 are each amended to read as follows:

             (1)(a) A health care services contractor offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a contractor from offering, or a small employer from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits in the basic health plan shall clearly disclose these differences to the small employer in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if: (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii) the health benefit plan is offered to employers with not more than twenty-five employees.

             (2) Nothing in this section shall prohibit a health care service contractor from offering, or a purchaser from seeking, benefits in excess of the basic health plan services. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

             (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

             (a) The contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; and

             (iv) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

             (c) The contractor shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (3).

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the enrollment of the small employer;

             (ii) Changes to the family composition of the employee;

             (iii) Changes to the health benefit plan requested by the small employer; or

             (iv) Changes in government requirements affecting the health benefit plan.

             (g) The frequency of filing of rate adjustments for new and renewing small employers is limited to once every six months.

             (((g))) (h) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

             (((h))) (i) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (((i))) (j) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage.

             (4) The health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state. Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

             (5)(a) Except as provided in this subsection, requirements used by a contractor in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

             (b) A contractor shall not require a minimum participation level greater than:

             (i) One hundred percent of eligible employees working for groups with three or less employees; and

             (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

             (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

             (d) A contractor may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

             (6) A contractor must offer coverage to all eligible employees of a small employer and their dependents. A contractor may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. A contractor may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.


             Sec. 5. RCW 48.46.064 and 1995 c 265 s 17 are each amended to read as follows:

             (1)(a) A health maintenance organization offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a health maintenance organization from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, ((48.26.280 [48.46.280])) 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

             (2) Premium rates for health benefit plans for individuals shall be subject to the following provisions:

             (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; and

             (iv) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments which shall begin with age twenty and end with age sixty-five. Individuals under the age of twenty shall be treated as those age twenty.

             (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection.

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the family composition;

             (ii) Changes to the health benefit plan requested by the individual; or

             (iii) Changes in government requirements affecting the health benefit plan.

             (g) The frequency of filing of rate adjustments for new and renewing individuals is limited to once every six months.

             (((g))) (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.46.066.

             (4) As used in this section and RCW 48.46.066, "health benefit plan," "basic health plan," "adjusted community rate," "small employer," and "wellness activities" mean the same as defined in RCW 48.43.005.


             Sec. 6. RCW 48.46.066 and 1995 c 265 s 18 are each amended to read as follows:

             (1)(a) A health maintenance organization offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a health maintenance organization from offering, or a small employer from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits in the basic health plan shall clearly disclose these differences to the small employer in a brochure approved by the commissioner.

             (b) A health benefit plan shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530 if: (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii) the health benefit plan is offered to employers with not more than twenty-five employees.

             (2) Nothing in this section shall prohibit a health maintenance organization from offering, or a purchaser from seeking, benefits in excess of the basic health plan services. All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

             (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

             (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

             (i) Geographic area;

             (ii) Family size;

             (iii) Age; and

             (iv) Wellness activities.

             (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five. Employees under the age of twenty shall be treated as those age twenty.

             (c) The health maintenance organization shall be permitted to develop separate rates for individuals age sixty-five or older for coverage for which medicare is the primary payer and coverage for which medicare is not the primary payer. Both rates shall be subject to the requirements of this subsection (3).

             (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

             (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

             (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

             (i) Changes to the enrollment of the small employer;

             (ii) Changes to the family composition of the employee;

             (iii) Changes to the health benefit plan requested by the small employer; or

             (iv) Changes in government requirements affecting the health benefit plan.

             (g) The frequency of filing of rate adjustments for new and renewing small employers is limited to once every six months.

             (((g))) (h) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

             (((h))) (i) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

             (((i))) (j) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage.

             (4) The health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state. Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

             (5)(a) Except as provided in this subsection, requirements used by a health maintenance organization in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

             (b) A health maintenance organization shall not require a minimum participation level greater than:

             (i) One hundred percent of eligible employees working for groups with three or less employees; and

             (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

             (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

             (d) A health maintenance organization may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

             (6) A health maintenance organization must offer coverage to all eligible employees of a small employer and their dependents. A health maintenance organization may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group. A health maintenance organization may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.


             NEW SECTION. 7. If specific funding in the amount of two hundred six thousand dollars for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 1997, in the omnibus appropriations act, this act is null and void."


             On page 1, line 2 of the title, after "benefits;" strike the remainder of the title and insert "amending RCW 48.20.028, 48.21.045, 48.44.022, 48.44.023, 48.46.064, and 48.46.066; and creating a new section."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1387, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1387 as amended by the Senate.


             Representative L. Thomas spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1387 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 61, Nays - 30, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Backlund, Ballasiotes, Benson, Boldt, Bush, Cairnes, Carlson, Carrell, Chandler, Clements, Cooke, Crouse, Delvin, Doumit, Dunn, Dyer, Gardner, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kessler, Koster, Lambert, Linville, Lisk, McMorris, Mielke, Mitchell, Mulliken, Murray, Parlette, Pennington, Quall, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sump, Talcott, Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 61.

             Voting nay: Representatives Appelwick, Blalock, Butler, Chopp, Cody, Cole, Constantine, Conway, Cooper, Costa, Dickerson, Dunshee, Fisher, Gombosky, Keiser, Kenney, Lantz, Mason, Morris, O'Brien, Poulsen, Regala, Romero, Scott, Sommers, H., Sullivan, Tokuda, Veloria, Wolfe and Wood - 30.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Substitute House Bill No. 1387, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed SECOND SUBSTITUTE HOUSE BILL NO. 1392 with the following attached amendment(s):


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 7.68.140 and 1975 1st ex.s. c 176 s 6 are each amended to read as follows:

             Information contained in the claim files and records of victims, under the provisions of this chapter, shall be deemed confidential and shall not be open to public inspection: PROVIDED, That, except as limited by state or federal statutes or regulations, such information may be provided to public employees in the performance of their official duties: PROVIDED FURTHER, That except as otherwise limited by state or federal statutes or regulations a claimant or a representative of a claimant, be it an individual or an organization, may review a claim file or receive specific information therefrom upon the presentation of the signed authorization of the claimant: PROVIDED FURTHER, That physicians treating or examining victims claiming benefits under this chapter or physicians giving medical advice to the department regarding any claim may, at the discretion of the department and as not otherwise limited by state or federal statutes or regulations, inspect the claim files and records of such victims, and other persons may, when rendering assistance to the department at any stage of the proceedings on any matter pertaining to the administration of this chapter, inspect the claim files and records of such victims at the discretion of the department and as not otherwise limited by state or federal statutes or regulations.


             Sec. 2. RCW 42.17.310 and 1996 c 305 s 2, 1996 c 253 s 302, 1996 c 191 s 88, and 1996 c 80 s 1 are each reenacted and amended to read as follows:

             (1) The following are exempt from public inspection and copying:

             (a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, or welfare recipients.

             (b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

             (c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.

             (d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

             (e) Information revealing the identity of persons who are witnesses to or victims of crime or who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property. If at the time a complaint is filed the complainant, victim or witness indicates a desire for disclosure or nondisclosure, such desire shall govern. However, all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

             (f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

             (g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

             (h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

             (i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

             (j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

             (k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

             (l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

             (m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (i) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (ii) highway construction or improvement as required by RCW 47.28.070.

             (n) Railroad company contracts filed prior to July 28, 1991, with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

             (o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 43.163 RCW and chapter 53.31 RCW, and by persons pertaining to export projects pursuant to RCW 43.23.035.

             (p) Financial disclosures filed by private vocational schools under chapters 28B.85 and 28C.10 RCW.

             (q) Records filed with the utilities and transportation commission or attorney general under RCW 80.04.095 that a court has determined are confidential under RCW 80.04.095.

             (r) Financial and commercial information and records supplied by businesses or individuals during application for loans or program services provided by chapters 43.163, 43.160, 43.330, and 43.168 RCW, or during application for economic development loans or program services provided by any local agency.

             (s) Membership lists or lists of members or owners of interests of units in timeshare projects, subdivisions, camping resorts, condominiums, land developments, or common-interest communities affiliated with such projects, regulated by the department of licensing, in the files or possession of the department.

             (t) All applications for public employment, including the names of applicants, resumes, and other related materials submitted with respect to an applicant.

             (u) The residential addresses and residential telephone numbers of employees or volunteers of a public agency which are held by the agency in personnel records, employment or volunteer rosters, or mailing lists of employees or volunteers.

             (v) The residential addresses and residential telephone numbers of the customers of a public utility contained in the records or lists held by the public utility of which they are customers.

             (w)(i) The federal social security number of individuals governed under chapter 18.130 RCW maintained in the files of the department of health, except this exemption does not apply to requests made directly to the department from federal, state, and local agencies of government, and national and state licensing, credentialing, investigatory, disciplinary, and examination organizations; (ii) the current residential address and current residential telephone number of a health care provider governed under chapter 18.130 RCW maintained in the files of the department, if the provider requests that this information be withheld from public inspection and copying, and provides to the department an accurate alternate or business address and business telephone number. On or after January 1, 1995, the current residential address and residential telephone number of a health care provider governed under RCW 18.130.140 maintained in the files of the department shall automatically be withheld from public inspection and copying unless the provider specifically requests the information be released, and except as provided for under RCW 42.17.260(9).

             (x) Information obtained by the board of pharmacy as provided in RCW 69.45.090.

             (y) Information obtained by the board of pharmacy or the department of health and its representatives as provided in RCW 69.41.044, 69.41.280, and 18.64.420.

             (z) Financial information, business plans, examination reports, and any information produced or obtained in evaluating or examining a business and industrial development corporation organized or seeking certification under chapter 31.24 RCW.

             (aa) Financial and commercial information supplied to the state investment board by any person when the information relates to the investment of public trust or retirement funds and when disclosure would result in loss to such funds or in private loss to the providers of this information.

             (bb) Financial and valuable trade information under RCW 51.36.120.

             (cc) Client records maintained by an agency that is a domestic violence program as defined in RCW 70.123.020 or 70.123.075 or a rape crisis center as defined in RCW 70.125.030.

             (dd) Information that identifies a person who, while an agency employee: (i) Seeks advice, under an informal process established by the employing agency, in order to ascertain his or her rights in connection with a possible unfair practice under chapter 49.60 RCW against the person; and (ii) requests his or her identity or any identifying information not be disclosed.

             (ee) Investigative records compiled by an employing agency conducting a current investigation of a possible unfair practice under chapter 49.60 RCW or of a possible violation of other federal, state, or local laws prohibiting discrimination in employment.

             (ff) Business related information protected from public inspection and copying under RCW 15.86.110.

             (gg) Financial, commercial, operations, and technical and research information and data submitted to or obtained by the clean Washington center in applications for, or delivery of, program services under chapter 70.95H RCW.

             (hh) Information and documents created specifically for, and collected and maintained by a quality improvement committee pursuant to RCW 43.70.510, regardless of which agency is in possession of the information and documents.

             (ii) Personal information in files maintained in a data base created under RCW 43.07.360.

             (jj) Records maintained by the board of industrial insurance appeals that are related to appeals of crime victims' compensation claims filed with the board under RCW 7.68.110.

             (2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

             (3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

             (4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld."


             On page 1, line 1 of the title, after "program;" strike the remainder of the title and insert "amending RCW 7.68.140; and reenacting and amending RCW 42.17.310."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Second Substitute House Bill No. 1392, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Second Substitute House Bill No. 1392 as amended by the Senate.


             Representatives Ballasiotes and Costa spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Second Substitute House Bill No. 1392 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 91, Nays - 0, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 91.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Second Substitute House Bill No. 1392, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1398 with the following attached amendment(s):


             On page 1, line 4, insert the following:

             "Sec. 1. RCW 2.08.064 and 1993 sp.s. c 14 s 1 are each amended to read as follows:

              There shall be in the counties of Benton and Franklin jointly, five judges of the superior court; in the county of Clallam, two judges of the superior court; in the county of Jefferson, one judge of the superior court; in the county of Snohomish, ((thirteen)) fifteen judges of the superior court; in the counties of Asotin, Columbia and Garfield jointly, one judge of the superior court; in the county of Cowlitz, four judges of the superior court; in the counties of Klickitat and Skamania jointly, one judge of the superior court.


             NEW SECTION. Sec. 2. The additional judicial positions created for the county of Snohomish under section 1 of this act are effective January 1, 1998, but the actual starting dates for these positions may be established by the Snohomish county council upon request of the superior court and by the recommendation of the Snohomish county executive."


             Renumber the sections consecutively and correct any internal references accordingly


             On page 1, line 9, before "judges" strike "nineteen" and insert ((nineteen)) twenty four"


             On page 1, line 10, strike Section 2 and insert the following:

             "NEW SECTION. Sec. 4. (1) The additional judicial positions created by section 3 of this act for the county of Spokane take effect upon the effective date of this act, but the actual starting dates for these positions may be established by the Spokane county commissioners upon the request of the superior court.

             (2) The additional positions created by section 3 of this act for the county of Pierce, take effect as follows: One additional judicial position is effective January 1, 1998; two positions are effective January 1, 1999; and two positions are effective January 1, 2000. The actual starting dates for these positions may be established by the Pierce county council upon request of the superior court and by recommendation of the Pierce county executive."


             On page 1, line 1 of the title, before "2.08.061" insert "2.08.064 and"


             On page 1, line 2 of the title, after "creating" strike "a new section" and insert "new sections"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to House Bill No. 1398, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of House Bill No. 1398 as amended by the Senate.


             Representatives Sheahan and Constantine spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 1398 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 91, Nays - 0, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 91.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             House Bill No. 1398, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 15, 1997

Mr. Speaker:


             The Senate has passed ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1423 with the following attached amendment(s):


             On page 1, line 7, after "((twelve)) strike "fourteen" and insert "sixteen".

 

On page 2, line 1 after "appoint' strike "two" and insert "four".


             On page 2, line 1, after "peace officers" strike all material through "officers." on line 3, and insert "with the rank of sergeant or below and are currently serving as a training officer."


             On page 2, after line 8 strike all material down to and including the period on page 3, line 14


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Engrossed Second Substitute House Bill No. 1423, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Engrossed Second Substitute House Bill No. 1423 as amended by the Senate.


             Representatives Sterk and Costa spoke in favor of passage of the bill.


COLLOQUY


             Representative Costa: Will the gentleman from the Eighth District yield to a question? In the definition of training officer, what was the legislative intent?


             Representative Delvin: It is intended that the definition of training officer should be construed in the broadest possible sense (ie. Field training officers, defensive tactics instructors, EVOC instructors, amongst a variety of others). This definition does not necessarily mean an officer currently assigned to a training center assignment. But is should include training officers who have experience as instructors for Washington State Criminal Justice Training Center.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 1423 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 90, Nays - 1, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 90.

             Voting nay: Representative O'Brien - 1.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Engrossed Second Substitute House Bill No. 1423, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 7, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1433 with the following amendment(s):


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 43.17.360 and 1996 c 261 s 2 are each amended to read as follows:

             (1) The department of social and health services and other state agencies may lease real property and improvements thereon to a consortium of three or more counties in order for the counties to construct or otherwise acquire correctional facilities for juveniles or adults.

             (2) A lease governed by subsection (1) of this section shall not charge more than one dollar per year for the land value and facilities value, during the initial term of the lease, but the lease may include provisions for payment of any reasonable operation and maintenance expenses incurred by the state.

             The initial term of a lease governed by subsection (1) of this section shall not exceed twenty years, except as provided in subsection (4) of this section. A lease renewed under subsection (1) of this section after the initial term shall charge the fair rental value for the land and ((facilities, and may)) improvements other than those improvements paid for by a contracting consortium. The renewed lease may also include provisions for payment of any reasonable operation and maintenance expenses incurred by the state. For the purposes of this subsection, fair rental value shall be determined by the commissioner of public lands in consultation with the department and shall not include the value of any improvements paid for by a contracting consortium.

             (3) The net proceeds generated from any lease entered or renewed under subsection (1) of this section involving land and facilities on the grounds of eastern state hospital shall be used solely for the benefit of eastern state hospital programs for the long-term care needs of patients with mental disorders. These proceeds shall not supplant or replace funding from traditional sources for the normal operations and maintenance or capital budget projects. It is the intent of this subsection to ensure that eastern state hospital receives the full benefit intended by this section, and that such effect will not be diminished by budget adjustments inconsistent with this intent.

             (4) The initial term of a lease under subsection (1) of this section entered into after January 1, 1996, and involving the grounds of Eastern State hospital, shall not exceed fifty years. This subsection applies retroactively, and the department shall modify any existing leases to comply with the terms of this subsection. No other terms of a lease modified by this subsection may be modified unless both parties agree.


             NEW SECTION. Sec. 2. 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. 3. 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 takes effect immediately."


             On page 1, line 2 of the title, after "facilities;" strike the remainder of the title and insert "amending RCW 43.17.360; and declaring an emergency."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 1433, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of Substitute House Bill No. 1433 as amended by the Senate.


             Representatives Sump and Sullivan spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 1433 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 90, Nays - 1, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 90.

             Voting nay: Representative Fisher - 1.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             Substitute House Bill No. 1433, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 10, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1457 with the following attached amendment(s):


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 46.09.070 and 1986 c 206 s 4 are each amended to read as follows:

             (1) Application for annual or temporary ORV use permits shall be made to the department or its authorized agent in such manner and upon such forms as the department shall prescribe and shall state the name and address of each owner of the off-road vehicle.

             (2) An application for an annual permit shall be signed by at least one owner, and shall be accompanied by a fee of five dollars. Upon receipt of the annual permit application and the application fee, the off-road vehicle shall be assigned a use permit number tag or decal, which shall be affixed to the off-road vehicle in a manner prescribed by the department. The annual permit is valid for a period of one year and is renewable each year in such manner as the department may prescribe for an additional period of one year upon payment of a renewal fee of five dollars.

             Any person acquiring an off-road vehicle for which an annual permit has been issued who desires to continue to use the permit must, within fifteen days of the acquisition of the off-road vehicle, make application to the department or its authorized agent for transfer of the permit, and the application shall be accompanied by a transfer fee of one dollar and twenty-five cents.

             (3) A temporary use permit is valid for sixty days. Application for a temporary permit shall be accompanied by a fee of two dollars. The permit shall be carried on the vehicle at all times during its operation in the state.

             (4) Except as provided in RCW 46.09.050, any out-of-state operator of an off-road vehicle shall, when operating in this state, comply with this chapter, and if an ORV use permit is required under this chapter, the operator shall obtain an annual or temporary permit and tag.


             Sec. 2. RCW 46.10.040 and 1996 c 164 s 1 are each amended to read as follows:

             Application for registration shall be made to the department in the manner and upon forms the department prescribes, and shall state the name and address of each owner of the snowmobile to be registered, and shall be signed by at least one such owner, and shall be accompanied by an annual registration fee to be established by the commission, after consultation with the committee and any state-wide snowmobile user groups. The fee shall be fifteen dollars pending action by the commission to increase the fee. The commission shall increase the fee by two dollars and fifty cents effective September 30, 1996, and the commission shall increase the fee by another two dollars and fifty cents effective September 30, 1997. After the fee increase effective September 30, 1997, the commission shall not increase the fee. Upon receipt of the application and the application fee, the snowmobile shall be registered and a registration number assigned, which shall be affixed to the snowmobile in a manner provided in RCW 46.10.070.

             The registration provided in this section shall be valid for a period of one year. At the end of the period of registration, every owner of a snowmobile in this state shall renew his or her registration in the manner the department prescribes, for an additional period of one year, upon payment of the annual registration fee as determined by the commission.

             Any person acquiring a snowmobile already validly registered under the provisions of this chapter must, within ten days of the acquisition or purchase of the snowmobile, make application to the department for transfer of the registration, and the application shall be accompanied by a transfer fee of one dollar and twenty-five cents.

             A snowmobile owned by a resident of another state or Canadian province where registration is not required by law may be issued a nonresident registration permit valid for not more than sixty days. Application for the permit shall state the name and address of each owner of the snowmobile to be registered and shall be signed by at least one owner and shall be accompanied by a registration fee of five dollars. The registration permit shall be carried on the vehicle at all times during its operation in this state.

             The registration fees provided in this section shall be in lieu of any personal property or excise tax heretofore imposed on snowmobiles by this state or any political subdivision thereof, and no city, county, or other municipality, and no state agency shall hereafter impose any other registration or license fee on any snowmobile in this state.

             The department shall make available a pair of uniform decals consistent with the provisions of RCW 46.10.070. In addition to the registration fee provided in this section the department shall charge each applicant for registration the actual cost of the decal. The department shall make available replacement decals for a fee equivalent to the actual cost of the decals.


             Sec. 3. RCW 46.12.010 and 1979 c 158 s 132 are each amended to read as follows:

             It shall be unlawful for any person to operate any vehicle in this state under a certificate of license registration of this state without securing and having in full force and effect a certificate of ownership therefor that contains the name of the registered owner exactly as it appears on the certificate of license registration and it shall further be unlawful for any person to sell or transfer any vehicle without complying with all the provisions of this chapter relating to certificates of ownership and license registration of vehicles: PROVIDED, No certificate of title need be obtained for a vehicle owned by a manufacturer or dealer and held for sale, even though incidentally moved on the highway or used for purposes of testing and demonstration, or a vehicle used by a manufacturer solely for testing: PROVIDED, That a security interest in a vehicle held as inventory by a manufacturer or dealer shall be perfected in accordance with RCW 62A.9-302(1) and no endorsement on the certificate of title shall be necessary for perfection: AND PROVIDED FURTHER, That nothing in this title shall be construed to prevent any person entitled thereto from securing a certificate of ownership upon a vehicle ((other than a travel trailer or camper)) without securing a certificate of license registration and vehicle license plates, when, in the judgment of the director of licensing, it is proper to do so.


             Sec. 4. RCW 46.12.080 and 1979 ex.s. c 113 s 1 are each amended to read as follows:

             Any person holding the certificate of ((license registration)) ownership for a motorcycle or any vehicle registered by its motor number in which there has been installed a new or different motor than that with which it was issued certificates of ownership and license registration shall forthwith and within five days after such installation forward and surrender such certificates to the department, together with an application for issue of corrected certificates of ownership and license registration and a fee of one dollar and twenty-five cents, and a statement of the disposition of the former motor. The possession by any person of any such certificates for such vehicle in which a new or different motor has been installed, after five days following such installation, shall be prima facie evidence of a violation of the provisions of this chapter and shall constitute a misdemeanor.


             Sec. 5. RCW 46.12.170 and 1994 c 262 s 6 are each amended to read as follows:

             If, after a certificate of ownership is issued, a security interest is granted on the vehicle described therein, the registered owner or secured party shall, within ten days thereafter, present an application to the department, to which shall be attached the certificate of ownership last issued covering the vehicle, or such other documentation as may be required by the department, which application shall be upon a form ((provided)) approved by the department and shall be accompanied by a fee of one dollar and twenty-five cents in addition to all other fees. The department, if satisfied that there should be a reissue of the certificate, shall note such change upon the vehicle records and issue to the secured party a new certificate of ownership.

             Whenever there is no outstanding secured obligation and no commitment to make advances and incur obligations or otherwise give value, the secured party must assign the certificate of ownership to the debtor or the debtor's assignee and transmit the certificate to the department with an accompanying fee of one dollar and twenty-five cents in addition to all other fees. The department shall then issue a new certificate of ownership and transmit it to the owner. If the affected secured party fails to either assign or transmit the certificate of ownership to the department within ten days after proper demand, that secured party shall be liable to the debtor for one hundred dollars, and in addition for any loss caused to the debtor by such failure.


             NEW SECTION. Sec. 6. A new section is added to chapter 46.16 RCW to read as follows:

             If a certificate of license registration is lost, stolen, mutilated, or destroyed or becomes illegible, the registered owner or owners, as shown by the records of the department, shall promptly make application for and may obtain a duplicate upon tender of one dollar and twenty-five cents in addition to all other fees and upon furnishing information satisfactory to the department. The duplicate of the license registration shall contain the legend, "duplicate."

             A person recovering an original certificate of license registration for which a duplicate has been issued shall promptly surrender the original certificate to the department.


             Sec. 7. RCW 46.12.181 and 1994 c 262 s 7 are each amended to read as follows:

             If a certificate of ownership ((or a certificate of license registration)) is lost, stolen, mutilated, or destroyed or becomes illegible, the first priority secured party or, if none, the owner or legal representative of the owner named in the certificate, as shown by the records of the department, shall promptly make application for and may obtain a duplicate upon tender of one dollar and twenty-five cents in addition to all other fees and upon furnishing information satisfactory to the department. The duplicate certificate of ownership ((or license registration)) shall contain the legend, "((This is a)) duplicate ((certificate))." It shall be ((mailed)) provided to the first priority secured party named in it or, if none, to the owner.

             A person recovering an original certificate of ownership ((or title registration)) for which a duplicate has been issued shall promptly surrender the original certificate to the department.


             Sec. 8. RCW 46.16.210 and 1994 c 262 s 9 are each amended to read as follows:

             (1) Upon receipt of the application and proper fee for original vehicle license, the director shall make a recheck of the application and in the event that there is any error in the application it may be returned to the county auditor or other agent to effectively secure the correction of such error, who shall return the same corrected to the director.

             (2) Application for the renewal of a vehicle license shall be made to the director or his agents, including county auditors, by the registered owner on a form prescribed by the director. The application must be accompanied by the certificate of registration for the last registration period in which the vehicle was registered in Washington unless the applicant submits a preprinted application mailed from Olympia, and the payment of such license fees and excise tax as may be required by law. Such application shall be handled in the same manner and the fees transmitted to the state treasurer in the same manner as in the case of an original application. Any such application which upon validation becomes a renewal certificate need not have entered upon it the name of the lien holder, if any, of the vehicle concerned.

             (3) Persons expecting to be out of the state during the normal ((forty-five day)) renewal period of a vehicle license may secure renewal of such vehicle license and have license plates or tabs preissued by making application to the director or his agents upon forms prescribed by the director. The application must be accompanied by the certificate of registration for the last registration period in which the vehicle was registered in Washington and be accompanied by such license fees, and excise tax as may be required by law.

             (4) Application for the annual renewal of a vehicle license number plate to the director or ((his)) the director's agents shall not be required for those vehicles owned, rented, or leased by the state of Washington, or by any county, city, town, school district, or other political subdivision of the state of Washington or a governing body of an Indian tribe located within this state and recognized as a governmental entity by the United States department of the interior.


             Sec. 9. RCW 46.16.220 and 1991 c 339 s 20 are each amended to read as follows:

             Vehicle licenses and vehicle license number plates may be renewed for the subsequent registration year ((on and after the forty-fifth day prior to the end of)) up to eighteen months before the current ((registration year)) expiration date and must be used and displayed from the date of issue or from the day of the expiration of the preceding registration year, whichever date is later.


             Sec. 10. RCW 46.16.305 and 1990 c 250 s 2 are each amended to read as follows:

             The department shall continue to issue, under RCW 46.16.301 and the department's rules implementing RCW 46.16.301 through 46.16.332, the categories of special plates issued by the department under the sections repealed under section ((13)) 12 (1) through (7), chapter 250, Laws of 1990. Special license plates issued under those repealed sections before January 1, 1991, are valid to the extent and under the conditions provided in those repealed sections. The following conditions, limitations, or requirements apply to certain special license plates issued after January 1, 1991:

             (1) A horseless carriage plate and a plate or plates issued for collectors' vehicles more than thirty years old, upon payment of the initial fees required by law and the additional special license plate fee established by the department, are valid for the life of the vehicle for which application is approved by the department. When a single plate is issued, it shall be displayed on the rear of the vehicle.

             (2) The department may issue special license plates denoting amateur radio operator status only to persons having a valid official radio operator license issued ((for a term of five years)) by the federal communications commission.

             (3) The department shall issue one set of special license plates to each resident of this state who has been awarded the Congressional Medal of Honor for use on a passenger vehicle registered to that person. The department shall issue the plate without the payment of any fees.

             (4) The department may issue for use on only one motor vehicle owned by the qualified applicant special license plates denoting that the recipient of the plate is a survivor of the attack on Pearl Harbor on December 7, 1941, to persons meeting all of the following criteria:

             (a) Is a resident of this state;

             (b) Was a member of the United States Armed Forces on December 7, 1941;

             (c) Was on station on December 7, 1941, during the hours of 7:55 a.m. to 9:45 a.m. Hawaii time at Pearl Harbor, the island of Oahu, or offshore at a distance not to exceed three miles;

             (d) Received an honorable discharge from the United States Armed Forces; and

             (e) Is certified by a Washington state chapter of the Pearl Harbor survivors association as satisfying the qualifications in (c) of this subsection.

             The department may issue such plates to the surviving spouse of any deceased Pearl Harbor survivor who met the requirements of this subsection. If the surviving spouse remarries, he or she shall return the special plates to the department within fifteen days and apply for regular plates. The surviving spouse must be a resident of this state.

             The department shall issue these plates upon payment by the applicant of all other license fees, but the department may not set or charge an additional fee for these special license plates under RCW 46.16.313.

             (5) The department shall replace, free of charge, special license plates issued under subsections (3) and (4) of this section if they are lost, stolen, damaged, defaced, or destroyed. Such plates shall remain with the persons upon transfer or other disposition of the vehicle for which they were initially issued, and may be used on another vehicle registered to the recipient in accordance with the provisions of RCW 46.16.316(1).


             Sec. 11. RCW 46.16.630 and 1979 ex.s. c 213 s 5 are each amended to read as follows:

             Application for registration of a moped shall be made to the department of licensing in such manner and upon such forms as the department shall prescribe, and shall state the name and address of each owner of the moped to be registered, the vehicle identification number, and such other information as the department may require, and shall be accompanied by a registration fee of three dollars. Upon receipt of the application and the application fee, the moped shall be registered and a registration number assigned, which shall be affixed to the moped in the manner as provided by rules adopted by the department. The registration provided in this section shall be valid for a period of twelve months.

             Every owner of a moped in this state shall renew the registration, in such manner as the department shall prescribe, for an additional period of twelve months, upon payment of a renewal fee of three dollars.

             Any person acquiring a moped already validly registered must, within fifteen days of the acquisition or purchase of the moped, make application to the department for transfer of the registration, and the application shall be accompanied by a transfer fee of one dollar and twenty-five cents.

             The registration fees provided in this section shall be in lieu of any personal property tax or the vehicle excise tax imposed by chapter 82.44 RCW.

             The department shall, at the time the registration number is assigned, make available a decal or other identifying device to be displayed on the moped. A fee of one dollar and fifty cents shall be charged for the decal or other identifying device.

             The provisions of RCW 46.01.130 and 46.01.140 shall apply to applications for the issuance of registration numbers or renewals or transfers thereof for mopeds as they do to the issuance of vehicle licenses, the appointment of agents, and the collection of application fees. Except for the fee collected pursuant to RCW 46.01.140, all fees collected under this section shall be deposited in the motor vehicle fund.


             Sec. 12. RCW 88.02.075 and 1986 c 71 s 1 are each amended to read as follows:

             (1) If a certificate of ((title)) ownership, a certificate of registration, or a pair of decals is lost, stolen, mutilated, or destroyed or becomes illegible, the first priority secured party or, if none, the owner or legal representative of the owner named in the certificate, as shown by the records of the department, shall promptly apply for and may obtain a duplicate certificate or replacement decals upon payment of one dollar and twenty-five cents and furnishing information satisfactory to the department.

             (a) An application for a duplicate certificate of title shall be accompanied by an affidavit of loss or destruction in a form approved by the department and signed by the first secured party or, if none, the owner or legal representative of the owner.

             (b) An application for a duplicate certificate of registration or replacement decals shall be accompanied by an affidavit of loss or destruction in a form approved by the department and signed by the registered owner or legal representative of the owner.

             (2) The duplicate certificate of ((title)) ownership or registration shall contain the legend, "((This is a)) duplicate ((certificate))." It shall be mailed to the first priority secured party named in it or, if none, to the owner.

             (3) A person recovering an original certificate of ((title)) ownership, certificate of registration, or decal for which a duplicate or replacement has been issued shall promptly surrender the original to the department.


             Sec. 13. RCW 46.16.010 and 1996 c 184 s 1 are each amended to read as follows:

             (1) It is unlawful for a person to operate any vehicle over and along a public highway of this state without first having obtained and having in full force and effect a current and proper vehicle license and display vehicle license number plates therefor as by this chapter provided. Failure to make initial registration before operation on the highways of this state is a misdemeanor, and any person convicted thereof shall be punished by a fine of no less than three hundred thirty dollars, no part of which may be suspended or deferred. Failure to renew an expired registration before operation on the highways of this state is a traffic infraction.

             (2) The licensing of a vehicle in another state by a resident of this state, as defined in RCW 46.16.028, evading the payment of any tax or license fee imposed in connection with registration, is a gross misdemeanor punishable as follows:

             (a) For a first offense, up to one year in the county jail and a fine equal to twice the amount of delinquent taxes and fees, no part of which may be suspended or deferred;

             (b) For a second or subsequent offense, up to one year in the county jail and a fine equal to four times the amount of delinquent taxes and fees, no part of which may be suspended or deferred;

             (c) For fines levied under (b) of this subsection, an amount equal to the avoided taxes and fees owed shall be deposited in the vehicle licensing fraud account created in the state treasury;

             (d) The avoided taxes and fees shall be deposited and distributed in the same manner as if the taxes and fees were properly paid in a timely fashion.

             (3) These provisions shall not apply to farm vehicles as defined in RCW 46.04.181 if operated within a radius of fifteen miles of the farm where principally used or garaged, farm tractors and farm implements including trailers designed as cook or bunk houses used exclusively for animal herding temporarily operating or drawn upon the public highways, and trailers used exclusively to transport farm implements from one farm to another during the daylight hours or at night when such equipment has lights that comply with the law: PROVIDED FURTHER, That these provisions shall not apply to spray or fertilizer applicator rigs designed and used exclusively for spraying or fertilization in the conduct of agricultural operations and not primarily for the purpose of transportation, and nurse rigs or equipment auxiliary to the use of and designed or modified for the fueling, repairing or loading of spray and fertilizer applicator rigs and not used, designed or modified primarily for the purpose of transportation: PROVIDED FURTHER, That these provisions shall not apply to fork lifts operated during daylight hours on public highways adjacent to and within five hundred feet of the warehouses which they serve: PROVIDED FURTHER, That these provisions shall not apply to vehicles used by the state parks and recreation commission exclusively for park maintenance and operations upon public highways within state parks: PROVIDED FURTHER, That these provisions shall not apply to equipment defined as follows:

             "Special highway construction equipment" is any vehicle which is designed and used primarily for grading of highways, paving of highways, earth moving, and other construction work on highways and which is not designed or used primarily for the transportation of persons or property on a public highway and which is only incidentally operated or moved over the highway. It includes, but is not limited to, road construction and maintenance machinery so designed and used such as portable air compressors, air drills, asphalt spreaders, bituminous mixers, bucket loaders, track laying tractors, ditchers, leveling graders, finishing machines, motor graders, paving mixers, road rollers, scarifiers, earth moving scrapers and carryalls, lighting plants, welders, pumps, power shovels and draglines, self-propelled and tractor-drawn earth moving equipment and machinery, including dump trucks and tractor-dump trailer combinations which either (1) are in excess of the legal width or (2) which, because of their length, height or unladen weight, may not be moved on a public highway without the permit specified in RCW 46.44.090 and which are not operated laden except within the boundaries of the project limits as defined by the contract, and other similar types of construction equipment, or (3) which are driven or moved upon a public highway only for the purpose of crossing such highway from one property to another, provided such movement does not exceed five hundred feet and the vehicle is equipped with wheels or pads which will not damage the roadway surface.

             Exclusions:

             "Special highway construction equipment" does not include any of the following:

             Dump trucks originally designed to comply with the legal size and weight provisions of this code notwithstanding any subsequent modification which would require a permit, as specified in RCW 46.44.090, to operate such vehicles on a public highway, including trailers, truck-mounted transit mixers, cranes and shovels, or other vehicles designed for the transportation of persons or property to which machinery has been attached.

             (4) The following vehicles, whether operated solo or in combination, are exempt from license registration and displaying license plates as required by this chapter:

             (a) A converter gear used to convert a semitrailer into a trailer or a two-axle truck or tractor into a three or more axle truck or tractor or used in any other manner to increase the number of axles of a vehicle. Converter gear includes an auxiliary axle, booster axle, dolly, and jeep axle.

             (b) A tow dolly that is used for towing a motor vehicle behind another motor vehicle. The front or rear wheels of the towed vehicle are secured to and rest on the tow dolly that is attached to the towing vehicle by a tow bar.


             Sec. 14. RCW 46.37.010 and 1989 c 178 s 22 are each amended to read as follows:

             (1) It is a traffic infraction for any person to drive or move or for the owner to cause or knowingly permit to be driven or moved on any highway any vehicle or combination of vehicles which is in such unsafe condition as to endanger any person, or which does not contain those parts or is not at all times equipped with such lamps and other equipment in proper condition and adjustment as required in this chapter or in regulations issued by the chief of the Washington state patrol, or which is equipped in any manner in violation of this chapter or the state patrol's regulations, or for any person to do any act forbidden or fail to perform any act required under this chapter or the state patrol's regulations.

             (2) Nothing contained in this chapter or the state patrol's regulations shall be construed to prohibit the use of additional parts and accessories on any vehicle not inconsistent with the provisions of this chapter or the state patrol's regulations.

             (3) The provisions of the chapter and the state patrol's regulations with respect to equipment on vehicles shall not apply to implements of husbandry, road machinery, road rollers, or farm tractors except as herein made applicable.

             (4) No owner or operator of a farm tractor, self-propelled unit of farm equipment, or implement of husbandry shall be guilty of a crime or subject to penalty for violation of RCW 46.37.160 as now or hereafter amended unless such violation occurs on a public highway.

             (5) It is a traffic infraction for any person to sell or offer for sale vehicle equipment which is required to be approved by the state patrol as prescribed in RCW 46.37.005 unless it has been approved by the state patrol.

             (6) The provisions of this chapter with respect to equipment required on vehicles shall not apply to motorcycles or motor-driven cycles except as herein made applicable.

             (7) This chapter does not apply to vehicles used by the state parks and recreation commission exclusively for park maintenance and operations upon public highways within state parks.

             (8) Notices of traffic infraction issued to commercial drivers under the provisions of this chapter with respect to equipment required on commercial motor vehicles shall not be considered for driver improvement purposes under chapter 46.20 RCW.

             (((8))) (9) Whenever a traffic infraction is chargeable to the owner or lessee of a vehicle under subsection (1) of this section, the driver shall not be arrested or issued a notice of traffic infraction unless the vehicle is registered in a jurisdiction other than Washington state, or unless the infraction is for an offense that is clearly within the responsibility of the driver.

             (((9))) (10) Whenever the owner or lessee is issued a notice of traffic infraction under this section the court may, on the request of the owner or lessee, take appropriate steps to make the driver of the vehicle, or any other person who directs the loading, maintenance, or operation of the vehicle, a codefendant. If the codefendant is held solely responsible and is found to have committed the traffic infraction, the court may dismiss the notice against the owner or lessee."


             On page 1, line 2 of the title, after "licensing;" strike the remainder of the title and insert "amending RCW 46.09.070, 46.10.040, 46.12.010, 46.12.080, 46.12.170, 46.12.181, 46.16.210, 46.16.220, 46.16.305, 46.16.630, 88.02.075, 46.16.010, and 46.37.010; and adding a new section to chapter 46.16 RCW.


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to House Bill No. 1457, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of House Bill No. 1457 as amended by the Senate.


             Representative Chandler spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 1457 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 91, Nays - 0, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 91.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             House Bill No. 1457, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 17, 1997

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 1458 with the following attached amendment(s):


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 46.70.023 and 1996 c 282 s 1 are each amended to read as follows:

             (1) An "established place of business" requires a permanent, enclosed commercial building located within the state of Washington easily accessible at all reasonable times. The business of a vehicle dealer must be lawfully carried on at an established place of business in accordance with the terms of all applicable building code, zoning, and other land-use regulatory ordinances. A vehicle dealer may display a vehicle for sale only at its established place of business, licensed subagency, or temporary subagency site, except at auction. The dealer shall keep the building open to the public so that the public may contact the vehicle dealer or the dealer's salespersons at all reasonable times. The books, records, and files necessary to conduct the business shall be kept and maintained at that place. The established place of business shall display an exterior sign with the business name and nature of the business, such as auto sales, permanently affixed to the land or building, with letters clearly visible to the major avenue of traffic. A room or rooms in a hotel, rooming house, or apartment house building or part of a single or multiple-unit dwelling house may not be considered an "established place of business" unless the ground floor of such a dwelling is devoted principally to and occupied for commercial purposes and the dealer offices are located on the ground floor. A mobile office or mobile home may be used as an office if it is connected to utilities and is set up in accordance with state law. A state-wide trade association representing manufactured housing dealers shall be permitted to use a manufactured home as an office if the office complies with all other applicable building code, zoning, and other land-use regulatory ordinances. This subsection does not apply to auction companies that do not own vehicle inventory or sell vehicles from an auction yard.

             (2) An auction company shall have office facilities within the state. The books, records, and files necessary to conduct the business shall be maintained at the office facilities. All storage facilities for inventory shall be listed with the department, and shall meet local zoning and land use ordinances. An auction company shall maintain a telecommunications system.

             (3) Auction companies shall post their vehicle dealer license at each auction where vehicles are offered, and shall provide the department with the address of the auction at least three days before the auction.

             (4) If a dealer maintains a place of business at more than one location or under more than one name in this state, he or she shall designate one location as the principal place of business of the firm, one name as the principal name of the firm, and all other locations or names as subagencies. A subagency license is required for each and every subagency: PROVIDED, That the department may grant an exception to the subagency requirement in the specific instance where a licensed dealer is unable to locate their used vehicle sales facilities adjacent to or at the established place of business. This exception shall be granted and defined under the promulgation of rules consistent with the Administrative Procedure Act.

             (5) All vehicle dealers shall maintain ownership or leasehold throughout the license year of the real property from which they do business. The dealer shall provide the department with evidence of ownership or leasehold whenever the ownership changes or the lease is terminated.

             (6) A subagency shall comply with all requirements of an established place of business, except that subagency records may be kept at the principal place of business designated by the dealer. Auction companies shall comply with the requirements in subsection (2) of this section.

             (7) A temporary subagency shall meet all local zoning and building codes for the type of merchandising being conducted. The dealer license certificate shall be posted at the location. No other requirements of an established place of business apply to a temporary subagency. Auction companies are not required to obtain a temporary subagency license.

             (8) A wholesale vehicle dealer shall have office facilities in a commercial building within this state, and all storage facilities for inventory shall be listed with the department, and shall meet local zoning and land use ordinances. A wholesale vehicle dealer shall maintain a telecommunications system. An exterior sign visible from the nearest street shall identify the business name and the nature of business. ((A wholesale dealer need not maintain a display area as required in this section.)) When two or more vehicle dealer businesses share a location, all records, office facilities, and inventory, if any, must be physically segregated and clearly identified.

             (9) A retail vehicle dealer shall be open during normal business hours, maintain office and display facilities in a commercially zoned location or in a location complying with all applicable building and land use ordinances, and maintain a business telephone listing in the local directory. When two or more vehicle dealer businesses share a location, all records, office facilities, and inventory shall be physically segregated and clearly identified.

             (10) ((A listing dealer need not have a display area if the dealer does not physically maintain any vehicles for display.

             (11))) A subagency license is not required for a mobile home dealer to display an on-site display model, a consigned mobile home not relocated from its site, or a repossessed mobile home if sales are handled from a principal place of business or subagency. A mobile home dealer shall identify on-site display models, repossessed mobile homes, and those consigned at their sites with a sign that includes the dealer's name and telephone number.

             (((12))) (11) Every vehicle dealer shall advise the department of the location of each and every place of business of the firm and the name or names under which the firm is doing business at such location or locations. If any name or location is changed, the dealer shall notify the department of such change within ten days. The license issued by the department shall reflect the name and location of the firm and shall be posted in a conspicuous place at that location by the dealer.

             (((13))) (12) A vehicle dealer's license shall upon the death or incapacity of an individual vehicle dealer authorize the personal representative of such dealer, subject to payment of license fees, to continue the business for a period of six months from the date of the death or incapacity.


             NEW SECTION. Sec. 2. A new section is added to chapter 46.70 RCW to read as follows:

             The director may deny a license under this chapter when the application is a subterfuge that conceals the real person in interest whose license has been denied, suspended, or revoked for cause under this chapter and the terms have not been fulfilled or a civil penalty has not been paid, or the director finds that the application was not filed in good faith. This section does not preclude the department from taking an action against a current licensee.


             NEW SECTION. Sec. 3. A new section is added to chapter 88.02 RCW to read as follows:

             The director may deny a license under this chapter when the application is a subterfuge that conceals the real person in interest whose license has been denied, suspended, or revoked for cause under this chapter and the terms have not been fulfilled or a civil penalty has not been paid, or the director finds that the application was not filed in good faith. This section does not preclude the department from taking an action against a current licensee.


             Sec. 4. RCW 46.70.051 and 1996 c 282 s 2 are each amended to read as follows:

             (1) After the application has been filed, the fee paid, and bond posted, if required, the department shall, if no denial order is in effect and no proceeding is pending under RCW 46.70.101, issue the appropriate license, which license, in the case of a vehicle dealer, shall designate the classification of the dealer. Nothing prohibits a vehicle dealer from obtaining licenses for more than one classification, and nothing prevents any vehicle dealer from dealing in other classes of vehicles on an isolated basis.

             (2) An auction company licensed under chapter 18.11 RCW may sell at auction all classifications of vehicles under a motor vehicle dealer's license issued under this chapter including motor vehicles, miscellaneous type vehicles, and mobile homes and travel trailers.

             (3) At the time the department issues a vehicle dealer license, the department shall provide to the dealer a current, up-to-date vehicle dealer manual setting forth the various statutes and rules applicable to vehicle dealers. In addition, at the time any such license is renewed under RCW 46.70.083, the department shall provide the dealer with any updates or current revisions to the vehicle dealer manual.

             (4) The department may contract with responsible private parties to provide them elements of the vehicle data base on a regular basis. The private parties may only disseminate this information to licensed vehicle dealers.

             (a) Subject to the disclosure agreement provisions of RCW 46.12.380 and the requirements of Executive Order 97-01, the department may provide to the contracted private parties the following information:

             (i) All vehicle and title data necessary to accurately disclose known title defects, brands, or flags and odometer discrepancies;

             (ii) All registered and legal owner information necessary to determine true ownership of the vehicle and the existence of any recorded liens, including but not limited to liens of the department of social and health services or its successor; and

             (iii) Any data in the department's possession necessary to calculate the motor vehicle excise tax, license, and registration fees including information necessary to determine the applicability of regional transit authority excise and use tax surcharges.

             (b) The department may provide this information in any form the contracted private party and the department agree upon, but if the data is to be transmitted over the Internet or similar public network from the department to the contracted private party, it must be encrypted.

             (c) The department shall give these contracted private parties advance written notice of any change in the information referred to in (a)(i), (ii), or (iii) of this subsection, including information pertaining to the calculation of motor vehicle excise taxes.

             (d) The department shall revoke a contract made under this subsection (4) with a private party who disseminates information from the vehicle data base to anyone other than a licensed vehicle dealer. A private party who obtains information from the vehicle data base under a contract with the department and disseminates any of that information to anyone other than a licensed vehicle dealer is guilty of a gross misdemeanor punishable under chapter 9A.20 RCW.

             (e) Nothing in this subsection (4) authorizes a vehicle dealer or any other organization or entity not otherwise appointed as a vehicle licensing subagent under RCW 46.01.140 to perform any of the functions of a vehicle licensing subagent so appointed.


             Sec. 5. RCW 46.12.170 and 1994 c 262 s 6 are each amended to read as follows:

             If, after a certificate of ownership is issued, a security interest is granted on the vehicle described therein, the registered owner or secured party shall, within ten days thereafter, present an application to the department, to which shall be attached the certificate of ownership last issued covering the vehicle, or such other documentation as may be required by the department, which application shall be upon a form provided by the department and shall be accompanied by a fee of one dollar and twenty-five cents in addition to all other fees. The department, if satisfied that there should be a reissue of the certificate, shall note such change upon the vehicle records and issue to the secured party a new certificate of ownership.

             Whenever there is no outstanding secured obligation and no commitment to make advances and incur obligations or otherwise give value, the secured party must assign the certificate of ownership to the debtor or the debtor's assignee or transferee, and transmit the certificate to the department with an accompanying fee of one dollar and twenty-five cents in addition to all other fees. The department shall then issue a new certificate of ownership and transmit it to the owner. If the affected secured party fails to either assign the certificate of ownership to the debtor or the debtor's assignee or transferee or transmit the certificate of ownership to the department within ten days after proper demand, that secured party shall be liable to the debtor or the debtor's assignee or transferee for one hundred dollars, and in addition for any loss caused to the debtor or the debtor's assignee or transferee by such failure.


             Sec. 6. RCW 46.12.370 and 1982 c 215 s 1 are each amended to read as follows:

             In addition to any other authority which it may have, the department of licensing may furnish lists of registered and legal owners of motor vehicles only for the purposes specified in this section to:

             (1) The manufacturers of motor vehicles, or their authorized agents, to be used to enable those manufacturers to carry out the provisions of the National Traffic and Motor Vehicle Safety Act of 1966 (15 U.S.C. sec. 1382-1418), including amendments or additions thereto, respecting safety-related defects in motor vehicles;

             (2) Any governmental agency of the United States or Canada, or political subdivisions thereof, to be used by it or by its authorized commercial agents or contractors only in connection with the enforcement of motor vehicle or traffic laws by, or programs related to traffic safety of, that government agency. Only such parts of the list as are required for completion of the work required of the agent or contractor shall be provided to such agent or contractor; ((or))

             (3) An authorized agent or contractor of the department, to be used only in connection with providing motor vehicle excise tax, licensing, title, and registration information to motor vehicle dealers; or

             (4) Any business regularly making loans to other persons to finance the purchase of motor vehicles, to be used to assist the person requesting the list to determine ownership of specific vehicles for the purpose of determining whether or not to provide such financing. In the event a list of registered and legal owners of motor vehicles is used for any purpose other than that authorized in ((subsections (1), (2) and (3) of)) this section, the manufacturer, governmental agency, authorized agent, contractor, financial institution, or their authorized agents or contractors responsible for the unauthorized disclosure or use will be denied further access to such information by the department of licensing.


             Sec. 7. RCW 82.44.060 and 1990 c 42 s 304 are each amended to read as follows:

             (1) The excise tax hereby imposed shall be due and payable to the department or its agents at the time of registration of a motor vehicle. Whenever an application is made to the department or its agents for a license for a motor vehicle there shall be collected, in addition to the amount of the license fee or renewal license fee, the amount of the excise tax imposed by this chapter, and no dealer's license or license plates, and no license or license plates for a motor vehicle shall be issued unless such tax is paid in full. The excise tax hereby imposed shall be collected for each registration year. The excise tax upon a motor vehicle licensed for the first time in this state shall be levied for one full registration year commencing on the date of the calendar year designated by the department and ending on the same date of the next succeeding calendar year. For vehicles registered under chapter 46.87 RCW, proportional registration, and for vehicle dealer plates issued under chapter 46.70 RCW, the registration year is the period provided in those chapters: PROVIDED, That the tax shall in no case be less than two dollars except for proportionally registered vehicles.

             (2) A motor vehicle shall be deemed licensed for the first time in this state when such vehicle was not previously licensed by this state for the registration year immediately preceding the registration year in which the application for license is made or when the vehicle has been registered in another jurisdiction subsequent to any prior registration in this state.

             (3) No additional tax shall be imposed under this chapter upon any vehicle upon the transfer of ownership thereof if the tax imposed with respect to such vehicle has already been paid for the registration year or fraction of a registration year in which transfer of ownership occurs.

             (4) The regional transit authority (RTA) must provide at no cost to the private parties referred to in RCW 46.70.051(4) accurate, up-to-date, and easily decipherable excise tax information in a machine readable ASCII text file. This file will allow the contracted private parties to accurately determine which individuals are subject to any such special excise or use taxes and the amount of any such special excise or use taxes. The file must contain the following items: (a) A list of five digit zip codes completely contained within the RTA taxation area; (b) a list of five digit zip codes for those areas on the border of the RTA taxation, with the border area defined as those zip codes where some residences may be subject to the RTA use or motor vehicle excise tax surcharge and some residences are not; and (c) for those residences described in (b) of this subsection, a complete list of only those street addresses subject to RTA taxation.

             (5) No person may be denied issuance of a registration or license plates due to the nonpayment of any such special excise tax if the information referred to in subsection (4) of this section is not provided by the RTA to the contracted private parties.

             (6) No motor vehicle dealer may be held liable for the remittance of any such special excise tax if the information referred to in subsection (4) of this section is not provided by the RTA to the contracted private parties."


             On page 1, line 1 of the title, after "licensing;" strike the remainder of the title and insert "amending RCW 46.70.023, 46.70.051, 46.12.170, 46.12.370, and 82.44.060; adding a new section to chapter 46.70 RCW; adding a new section to chapter 88.02 RCW; and prescribing penalties."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to House Bill No. 1458, and advanced the bill as amended by the Senate to Final Passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker stated the question before the House to be final passage of House Bill No. 1458 as amended by the Senate.


             Representatives Zellinsky and Fisher spoke in favor of passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 1458 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 90, Nays - 1, Absent - 0, Excused - 7.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Blalock, Boldt, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sullivan, Sump, Talcott, Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 90.

             Voting nay: Representative Sommers, H. - 1.

             Excused: Representatives Buck, DeBolt, Kastama, Mastin, McDonald, Ogden and Thomas, B. - 7.


             House Bill No. 1458, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

April 14, 1997

Mr. Speaker:


             The Senate has passed SUBSTITUTE HOUSE BILL NO. 1464 with the following attached amendment(s):


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 17.10.905 and 1975 1st ex.s. c 13 s 17 are each amended to read as follows:

             The purpose of this chapter is to limit economic loss ((due to the presence and spread of noxious weeds on or near agricultural land)) and adverse effects to Washington's agricultural, natural, and human resources due to the presence and spread of noxious weeds on all terrestrial and aquatic areas in the state.

             The intent of the legislature is that this chapter be liberally construed, and that the jurisdiction, powers, and duties granted to the county noxious weed control boards by this chapter are limited only by specific provisions of this chapter or other state and federal law.


             Sec. 2. RCW 17.10.010 and 1995 c 255 s 6 are each amended to read as follows:

             ((Unless a different meaning is plainly required by the context, the following words and phrases as hereinafter used in this chapter shall have the following meanings)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise:

             (1) "Noxious weed" means ((any)) a plant ((which)) that when established is highly destructive, competitive, or difficult to control by cultural or chemical practices.

             (2) "State noxious weed list" means a list of noxious weeds adopted by the state noxious weed control board ((which)). The list is divided into three classes:

             (a) Class A ((shall)) consists of those noxious weeds not native to the state that are of limited distribution or are unrecorded in the state and that pose a serious threat to the state;

             (b) Class B ((shall)) consists of those noxious weeds not native to the state that are of limited distribution or are unrecorded in a region of the state and that pose a serious threat to that region;

             (c) Class C ((shall)) consists of any other noxious weeds.

             (3) "Person" means any individual, partnership, corporation, firm, the state or any department, agency, or subdivision thereof, or any other entity.

             (4) "Owner" means the person in actual control of property, or his or her agent, whether ((such)) the control is based on legal or equitable title or on any other interest entitling the holder to possession and, for purposes of liability, pursuant to RCW 17.10.170 or 17.10.210, means the possessor of legal or equitable title or the possessor of an easement: PROVIDED, That when the possessor of an easement has the right to control or limit the growth of vegetation within the boundaries of an easement, only the possessor of ((such)) the easement ((shall be)) is deemed, for the purpose of this chapter, an "owner" of the property within the boundaries of ((such)) the easement.

             (5) As pertains to the duty of an owner, the words "control", "contain", "eradicate", and the term "prevent the spread of noxious weeds" ((shall)) means conforming to the standards of noxious weed control or prevention in this chapter or as adopted by rule ((or regulation)) in chapter 16-750 WAC by the state noxious weed control board and an activated county noxious weed control board.

             (6) "Agent" means any occupant or any other person acting for the owner and working or in charge of the land.

             (7) "Agricultural purposes" are those ((which)) that are intended to provide for the growth and harvest of food and fiber.

             (8) "Director" means the director of the department of agriculture or the director's appointed representative.

             (9) "Weed district" means a weed district as defined in chapters 17.04 and 17.06 RCW.

             (10) "Aquatic noxious weed" means an aquatic plant species that is listed on the state weed list under RCW 17.10.080.

             (11) "Screenings" means a mixture of mill or elevator run mixture or a combination of varying amounts of materials obtained in the process of cleaning either grain or seeds, or both, such as light or broken grain or seed, weed seeds, hulls, chaff, joints, straw, elevator dust, floor sweepings, sand, and dirt.


             Sec. 3. RCW 17.10.020 and 1969 ex.s. c 113 s 2 are each amended to read as follows:

             (1) In each county of the state there is ((hereby)) created a noxious weed control board, ((which shall)) bearing the name of the county within which it is located. The jurisdictional boundaries of each board ((shall be coextensive with)) are the boundaries of the county within which it is located.

             (2) Each noxious weed control board ((shall be)) is inactive until activated pursuant to the provisions of RCW 17.10.040.


             Sec. 4. RCW 17.10.030 and 1987 c 438 s 2 are each amended to read as follows:

             There is ((hereby)) created a state noxious weed control board ((which shall be)) comprised of nine voting members and three nonvoting members. Four of the voting members shall be elected by the members of the various activated county noxious weed control boards, and shall be residents of a county in which a county noxious weed control board has been activated and a member of said board, and those qualifications shall continue through their term of office. Two ((such)) of these members shall be elected from the west side of the state, the crest of the Cascades being the dividing line, and two from the east side of the state. The director of agriculture ((shall be)) is a voting member of the board. One voting member shall be elected by the directors of the various active weed districts formed under chapter 17.04 or 17.06 RCW. The Washington state association of counties ((shall)) appoints one voting member who shall be a member of a county legislative authority. ((The director shall appoint three nonvoting members representing scientific disciplines relating to weed control.)) The director shall ((also)) appoint two voting members to represent the public interest, one from the west side and one from the east side of the state. The director shall also appoint three nonvoting members representing scientific disciplines relating to weed control. The term of office for all members of the board ((shall be)) is three years from the date of election or appointment.

             The board, by rule, shall establish a position number for each elected position of the board and shall designate which county noxious weed control board members are eligible to vote for each elected position. The elected members ((shall)) serve staggered terms. Elections for the elected members of the board shall be held thirty days prior to the expiration date of their respective terms. Nominations and elections shall be by mail and conducted by the board.

             The board shall conduct its first meeting within thirty days after all its members have been elected. The board shall elect from its members a ((chairman)) chair and ((such)) other officers as may be necessary. A majority of the voting members of the board ((shall)) constitutes a quorum for the transaction of business and ((shall be)) is necessary for any action taken by the board. The members of the board ((shall)) serve without salary, but shall be reimbursed for travel expenses incurred in the performance of their duties under this chapter in accordance with RCW 43.03.050 and 43.03.060 ((as now existing or hereafter amended)).


             Sec. 5. RCW 17.10.040 and 1987 c 438 s 3 are each amended to read as follows:

             An inactive county noxious weed control board may be activated by any one of the following methods:

             (1) Either within sixty days after a petition is filed by one hundred registered voters within the county or, on its own motion, the county legislative authority shall hold a hearing to determine whether there is a need, due to a damaging infestation of noxious weeds, to activate the county noxious weed control board. If such a need is found to exist, then the county legislative authority shall, in the manner provided by RCW 17.10.050, appoint five persons to ((hold seats on)) the county's noxious weed control board.

             (2) If the county's noxious weed control board is not activated within one year following a hearing by the county legislative authority to determine the need for activation, then upon the filing with the state noxious weed control board of a petition comprised either of the signatures of at least two hundred registered voters within the county, or of the signatures of a majority of an adjacent county's noxious weed control board, the state board shall, within six months of the date of ((such)) the filing, hold a hearing in the county to determine the need for activation. If a need for activation is found to exist, then the state board shall order the county legislative authority to activate the county's noxious weed control board and to appoint members to ((such)) the board in the manner provided by RCW 17.10.050.

             (3) The director, ((with notice to)) upon request of the state noxious weed control board, ((may)) shall order a county legislative authority to activate the noxious weed control board immediately if an infestation of a class A noxious weed or class B noxious weed designated for control ((within the region wherein the county lies as defined in RCW 17.10.080)) on the state noxious weed list is confirmed in that county. The county legislative authority may, as an alternative to activating the noxious weed board, combat the class A noxious weed or class B noxious weed with county resources and personnel operating with the authorities and responsibilities imposed by this chapter on a county noxious weed control board. No county may continue without a noxious weed control board for a second consecutive year if the class A noxious weed or class B noxious weed ((designated for control within the region wherein the county lies)) has not been eradicated.


             Sec. 6. RCW 17.10.050 and 1987 c 438 s 4 are each amended to read as follows:

             (1) Each activated county noxious weed control board ((shall)) consists of five voting members ((who shall be)) appointed by the county legislative authority. In appointing ((such)) the voting members, the county legislative authority shall divide the county into five ((sections, none of which shall overlap and each of which shall be of the same approximate area)) geographical areas that best represent the county's interests, and ((shall)) appoint a voting member from each ((section)) geographical area. At least four of the voting members shall be engaged in the primary production of agricultural products. There ((shall be)) is one nonvoting member on ((such)) the board who ((shall be)) is the ((chief)) chair of the county extension ((agent)) office or an extension agent appointed by the ((chief)) chair of the county extension ((agent)) office. Each voting member of the board ((shall)) serves a term of four years, except that the county legislative authority shall, when a board is first activated under this chapter, designate two voting members to serve terms of two years. The board members shall not receive a salary but shall be compensated for actual and necessary expenses incurred in the performance of their official duties.

             (2) The voting members of the board ((shall represent the same sections designated by the county legislative authority in appointing members to the board at its inception and shall)) serve until their replacements are appointed. New members of the board shall be appointed at least thirty days prior to the expiration of any board member's term of office.

             Notice of expiration of a term of office shall be published at least twice in a weekly or daily newspaper of general circulation in ((said)) the section with last publication occurring at least ten days prior to the nomination. All persons interested in appointment to the board and residing in the ((section)) geographical area with a pending nomination shall make a written application that includes the signatures of at least ten registered voters residing in the ((section)) geographical area supporting the nomination to the county noxious weed control board. After nominations close, the county noxious weed control board shall, after a hearing, send the applications to the county legislative authority recommending the names of the most qualified candidates, and ((shall)) post the names of those nominees in the county courthouse and ((in three places in the section)) publish in at least one newspaper of general circulation in the county. The county legislative authority, within ten days of receiving the list of nominees, shall appoint one of those nominees to the county noxious weed control board to represent that ((section)) geographical area during that term of office.

             (3) Within thirty days after all the members have been appointed, the board shall conduct its first meeting. A majority of the voting members of the board ((shall)) constitutes a quorum for the transaction of business and ((shall be)) is necessary for any action taken by the board. The board shall elect from its members a ((chairperson)) chair and ((such)) other officers as may be necessary.

             (4) In case of a vacancy occurring in any voting position on a county noxious weed control board, the county legislative authority of the county in which ((such)) the board is located shall appoint a qualified person to fill the vacancy for the unexpired term.


             Sec. 7. RCW 17.10.060 and 1987 c 438 s 5 are each amended to read as follows:

             (1) Each activated county noxious weed control board ((may)) shall employ or otherwise provide a weed coordinator whose duties ((shall be)) are fixed by the board but which shall include inspecting land to determine the presence of noxious weeds, offering technical assistance and education, and developing a program to achieve compliance with the weed law. The weed coordinator may be employed full time, part time, or seasonally by the county noxious weed control board. County weed board employment practices shall comply with county personnel policies. Within sixty days from initial employment the weed coordinator shall obtain a pest control consultant license, a pesticide operator license, and the necessary endorsements on the licenses as required by law. Each board may purchase, rent, or lease ((such)) equipment, facilities, or products and may hire ((such)) additional persons as it deems necessary for the administration of the county's noxious weed control program.

             (2) Each activated county noxious weed control board ((shall have)) has the power to adopt ((such)) rules and regulations, subject to notice and hearing as provided in chapters 42.30 and 42.32 RCW ((as now or hereafter amended)), as are necessary for an effective county weed control or eradication program.

             (3) Each activated county noxious weed control board shall meet with a quorum at least quarterly.


             Sec. 8. RCW 17.10.070 and 1987 c 438 s 6 are each amended to read as follows:

             (1) In addition to the powers conferred on the state noxious weed control board under other provisions of this chapter, it ((shall have)) has the power to:

             (a) Employ a state noxious weed control board executive secretary ((who shall)), and additional persons as it deems necessary, to disseminate information relating to noxious weeds to county noxious weed control boards and weed districts ((and who shall work)), to coordinate the educational and weed control efforts of the various county and regional noxious weed control boards and weed districts, and to assist the board in carrying out its responsibilities;

             (b) Adopt, amend, ((change,)) or repeal ((such)) rules, pursuant to the administrative procedure act, chapter 34.05 RCW, as may be necessary to carry out the duties and authorities assigned to the board by this chapter.

             (2) The state noxious weed control board shall provide a written report before January 1 of each odd-numbered year to the governor, the legislature, the county noxious weed control boards, and the weed districts showing the ((funds disbursed by the department to each noxious weed control board or district,)) expenditure of state funds on noxious weed control; specifically how the funds were spent((,)); the status of the state, county, and district programs; and recommendations for the continued best use of state funds for noxious weed control. The report shall include recommendations as to the long-term needs regarding weed control.


             Sec. 9. RCW 17.10.074 and 1987 c 438 s 7 are each amended to read as follows:

             (1) In addition to the powers conferred on the director under other provisions of this chapter, the director ((shall)), with the advice of the state noxious weed control board, ((have)) has power to:

             (a) Require the county legislative authority or the noxious weed control board of any county or any weed district to report to it concerning the presence, absence, or estimated amount of noxious weeds and measures, if any, taken or planned for the control thereof;

             (b) Employ ((such)) staff as may be necessary in the administration of this chapter;

             (c) Adopt, amend, ((change,)) or repeal ((such)) rules, pursuant to the administrative procedure act, chapter 34.05 RCW, as may be necessary to carry out this chapter;

             (d) Do such things as may be necessary and incidental to the administration of its functions pursuant to this chapter including but not limited to surveying for and detecting noxious weed infestations;

             (e) Upon receipt of a complaint signed by a majority of the members of an adjacent county noxious weed control board or weed district, or by one hundred registered voters that are land owners within the county, require the county legislative authority or noxious weed control board of the county or weed district that is the subject of the complaint to respond to the complaint within forty-five days with a plan for the control of the noxious weeds cited in the complaint;

             (f) If the complaint in ((subsection)) (e) of this subsection involves a class A or class B noxious weed, order the county legislative authority, noxious weed control board, or weed district to take immediate action to eradicate or control the noxious weed infestation. If the county or the weed district does not take action to control the noxious weed infestation in accordance with the order, the director may control it or cause it to be controlled. The county or weed district ((shall be)) is liable for payment of the expense of the control work including necessary costs and expenses for attorneys' fees incurred by the director in securing payment from the county or weed district. The director may bring a civil action in a court of competent jurisdiction to collect the expenses of the control work, costs, and attorneys' fees;

             (g) In counties ((which have not activated their)) without an activated noxious weed control board, enter upon any property as provided for in RCW 17.10.160, issue or cause to be issued notices and citations and take the necessary action to control noxious weeds as provided in RCW 17.10.170, hold hearings on any charge or cost of control action taken as provided for in RCW 17.10.180, issue a notice of civil infraction as provided for in RCW 17.10.230((,)) and 17.10.310 through 17.10.350, and place a lien on any property pursuant to RCW 17.10.280, 17.10.290, and 17.10.300 with the same authorities and responsibilities imposed by these sections on county noxious weed control boards;

             (h) Adopt a list of noxious weed seeds and toxic weeds which shall be controlled in designated articles, products, or feed stuffs as provided for in RCW 17.10.235.

             (2) The moneys appropriated for noxious weed control to the department shall be used for administration of the state noxious weed control board ((for determining the economic impact of noxious weeds in the state of Washington)), the administration of the director's powers under this chapter, the purchase of materials for controlling, containing, or eradicating noxious weeds, the purchase or collection of biological control agents for controlling noxious weeds, and the contracting for services to carry out the purposes of this chapter. In a county with an activated noxious weed control board, the director shall make every effort to contract with that board for the needed services.

             (3) If the director determines the need to reallocate funds previously designated for county use, the director shall convene a meeting of the state noxious weed control board to seek its advice concerning any reallocation.


             Sec. 10. RCW 17.10.080 and 1989 c 175 s 57 are each amended to read as follows:

             (1) The state noxious weed control board shall each year or more often, following a hearing, adopt a state noxious weed list.

             (2) ((At the hearing)) Any person may request during a comment period established by the state weed board the inclusion, deletion, or designation change of any plant to the ((lists to be adopted by the state noxious weed control board. Any hearing held pursuant to this section shall conform to the Administrative Procedure Act, chapter 34.05 RCW: PROVIDED, That adding a weed to or deleting a weed from the list shall constitute a substantial change as provided for in RCW 34.05.340)) state noxious weed list.

             (3) The state noxious weed control board shall send a copy of the list((s)) to each activated county noxious weed control board, ((to each regional noxious weed control board,)) to each weed district, and to the county legislative authority of each county with an inactive noxious weed control board.

             (4) The record of ((hearing shall)) rule making must include the written findings of the board for the inclusion of each plant on the list. ((Such)) The findings shall be made available upon request to any interested person.


             Sec. 11. RCW 17.10.090 and 1987 c 438 s 9 are each amended to read as follows:

             Each county noxious weed control board shall, within ((thirty)) ninety days of the ((receipt)) adoption of the state noxious weed list from the state noxious weed control board and following a hearing, select those weeds from the class C list and those weeds from the class B list not designated for control in the noxious weed control region in which the county lies ((which)) that it finds necessary to be controlled in the county. The weeds thus selected and all class A weeds and those class B weeds that have been designated for control in the noxious weed control region in which the county lies shall be classified within that county as noxious weeds, and those weeds ((shall)) comprise the county noxious weed list.


             Sec. 12. RCW 17.10.100 and 1987 c 438 s 10 are each amended to read as follows:

             Where any of the following occur, the state noxious weed control board may, following a hearing, order any county noxious weed control board or weed district to include a noxious weed from the state board's list in the county's noxious weed list:

             (1) Where the state noxious weed control board receives a petition from at least one hundred registered voters within the county requesting that the weed be listed.

             (2) Where the state noxious weed control board receives a request for ((such)) inclusion from an adjacent county's noxious weed control board or weed district, which the adjacent board or district has included that weed in ((the)) its county list, and ((which)) the adjacent board or weed district alleges that its noxious weed control program is being hampered by the failure to include the weed on the county's noxious weed list.


             Sec. 13. RCW 17.10.110 and 1987 c 438 s 11 are each amended to read as follows:

             A regional noxious weed control board comprising the area of two or more counties may be created as follows:

        &