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SIXTIETH DAY




MORNING SESSION




House Chamber, Olympia, Thursday, March 12, 1998


             The House was called to order at 9:00 a.m. by the Speaker (Representative Pennington 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 Jessica Scott and Devin Davolio. Prayer was offered by Pastor Mark Carlson, Westminster Chapel, Bellevue.


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


POINT OF PERSONAL PRIVILEGE


             Representative Constantine honored the "Child Welfare Worker" of the year, Mr. Buntha Cheam.


POINT OF PERSONAL PRIVILEGE


             Representative Veloria rose as well in honor of Mr. Cheam and his contribution to the children of Washington.


MESSAGES FROM THE SENATE

March 11, 1998

Mr. Speaker:


             The Senate has concurred in the House amendment(s) and has passed the following bills as amended by the House:

ENGROSSED SUBSTITUTE SENATE BILL NO. 5703,

SUBSTITUTE SENATE BILL NO. 6119,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6205,

SUBSTITUTE SENATE BILL NO. 6253,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6328,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6497,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6533,

SENATE BILL NO. 6588,

and the same are herewith transmitted.

Mike O'Connell, Secretary


March 11, 1998

Mr. Speaker:


             The Senate has passed:

SUBSTITUTE HOUSE BILL NO. 1088,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1328,

SUBSTITUTE HOUSE BILL NO. 1447,

HOUSE BILL NO. 1549,

HOUSE BILL NO. 2278,

HOUSE BILL NO. 2566,

SUBSTITUTE HOUSE BILL NO. 2659,

SUBSTITUTE HOUSE BILL NO. 2711,

SECOND SUBSTITUTE HOUSE BILL NO. 3058,

SUBSTITUTE HOUSE BILL NO. 3109,

and the same are herewith transmitted.

Mike O'Connell, Secretary


March 11, 1998

Mr. Speaker:


             The President has signed:

SENATE CONCURRENT RESOLUTION NO. 8429,

and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998


Mr. Speaker:


             The Senate has granted the request of the House for a conference on ENGROSSED SUBSTITUTE HOUSE BILL NO. 2439. The President has appointed the following members as conferees: Senators Benton, Haugen and Prince, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate has granted the request of the House for a conference on SUBSTITUTE HOUSE BILL NO. 2556. The President has appointed the following members as conferees: Senators Long, Hargrove and Zarelli, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate has granted the request of the House for a conference on SUBSTITUTE HOUSE BILL NO. 2077. The President has appointed the following members as conferees: Senators Hale, Patterson and Horn, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate grants the request of the House for a conference on SUBSTITUTE HOUSE BILL NO. 1126. The President has appointed the following members as conferees: Senators West, Snyder and Strannigan, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate has granted the request of the House for a conference on ENGROSSED HOUSE BILL NO. 3041. The President has appointed the following members as conferees: Senators Roach, Hargrove and Zarelli, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


             The Speaker assumed the chair.


SIGNED BY THE SPEAKER


             The Speaker announced he was signing:


SUBSTITUTE HOUSE BILL NO. 1441,

SUBSTITUTE HOUSE BILL NO. 2077,

SENATE CONCURRENT RESOLUTION NO. 8429,


             The Speaker called upon Representative Pennington to preside.


RESOLUTIONS


             HOUSE RESOLUTION NO. 98-4719, by Representatives Backlund and Cody


             WHEREAS, Chronic Hepatitis C has been classified as the silent killer, where no recognizable signs or symptoms occur until severe liver damage has occurred; and

             WHEREAS, Chronic Hepatitis C has been characterized by the World Health Organization as a disease of primary concern to humanity; and

             WHEREAS, Chronic Hepatitis C currently infects approximately four million five hundred thousand Americans and there are thirty thousand new infections each year in the United States; and

             WHEREAS, This disease is considered such a public health threat that the National Institute of Health convened an international conference of health experts in March of 1997, to issue guidelines for diagnosis, control, and treatment of Hepatitis C; and

             WHEREAS, The United States Department of Health and Human Services has launched a comprehensive plan to address this significant public health problem, beginning with the identification and notification of the hundreds of thousands of persons inadvertently exposed to Hepatitis C through blood transfusions; and

             WHEREAS, In the absence of a vaccine, emphasis must be placed on other means of disease prevention including the education of health care workers and the general public; and

             WHEREAS, The American Liver Foundation is a national voluntary health organization dedicated to preventing, treating, and curing hepatitis and other liver and gall bladder diseases through research and education; and

             WHEREAS, The American Liver Foundation has designated October as Hepatitis C Education Awareness Month in an effort to increase awareness and understanding of the importance of the liver and the effects of Hepatitis C;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the State of Washington recognize that October is Hepatitis C Education Awareness Month; and

             BE IT FURTHER RESOLVED, That the House of Representatives hereby honor and encourage the efforts of the American Liver Foundation and its volunteers in this state and nation-wide in their efforts to provide vital services and outreach with regards to the prevention, treatment, and cure of Hepatitis C.


             There being no objection, House Resolution No. 4719 was adopted.


             HOUSE RESOLUTION NO. 98-4741, by Representatives Robertson, Kastama, McDonald, L. Thomas, Fisher and Regala


             WHEREAS, It is the policy of the Legislature to honor excellence in every field of endeavor; and

             WHEREAS, The Chief Leschi High School Boys' Basketball Team has won the 1998 State "B" Championship, by defeating Valley Christian 62-43; and

             WHEREAS, The Chief Leschi Warriors finished the season with an overall record of 25-3, which includes their four wins in the state tournament; and

             WHEREAS, The Warriors Boys' Basketball Team State Championship participants were Nathan Bradley, Brandon Brown, Guy Francis, Doug Johns, Borin Lach, Alyrece McCloud, Jesse Morales, Jonathan Redding, Issac Richardson, Michael Richardson, Jack Simmons, and Lamond Trente; and

             WHEREAS, The Warriors have exemplified to their classmates the success that is possible in any field of endeavor when persistent effort is made; and

             WHEREAS, The Warriors are a credit to their community; and

             WHEREAS, The honor of being high school state champions reflects positively upon the character of the school, the students, the parents, and the community;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives honor and congratulate the Chief Leschi High School Boys' Basketball Team for its hard work, dedication, and sacrifice in achieving this significant accomplishment; and

             BE IT FURTHER RESOLVED, That Coach Michael Bradley and Assistant Coaches Michael Richardson, Sr., Marcus Rogers, and Les Stafford be recognized for their leadership; and

             BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Chief Clerk of the House of Representatives to the Superintendent of Chief Leschi Schools Linda Rudolph, Principal of Chief Leschi High School Molly Ross, Athletic Director Clayte Huber, Head Coach Michael Bradley, Assistant Coaches Michael Richardson, Sr., Marcus Rogers, and Les Stafford, and each member of the Chief Leschi High School Boys' Basketball Team.


             There being no objection, House Resolution 4741 was adopted.


MESSAGES FROM THE SENATE

March 11, 1998


Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on ENGROSSED SUBSTITUTE SENATE BILL NO. 6108, and has passed the bill as recommended by the Conference Committee.


and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The President has signed:

ENGROSSED SUBSTITUTE SENATE BILL NO. 6108,

and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The President has signed:


ENGROSSED SUBSTITUTE SENATE BILL NO. 5703,

SUBSTITUTE SENATE BILL NO. 6119,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6205,

SUBSTITUTE SENATE BILL NO. 6253,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6328,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6497,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6533,

SENATE BILL NO. 6588,

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The President has signed:

ENGROSSED HOUSE BILL NO. 1042,

SUBSTITUTE HOUSE BILL NO. 1043,

SUBSTITUTE HOUSE BILL NO. 1083,

HOUSE BILL NO. 1165,

SUBSTITUTE HOUSE BILL NO. 1184,

ENGROSSED HOUSE BILL NO. 1254,

HOUSE BILL NO. 1297,

HOUSE BILL NO. 1309,

ENGROSSED HOUSE BILL NO. 1408,

SUBSTITUTE HOUSE BILL NO. 1692,

SECOND ENGROSSED SUBSTITUTE HOUSE BILL NO. 1746,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2313,

HOUSE BILL NO. 2402,

SUBSTITUTE HOUSE BILL NO. 2459,

HOUSE BILL NO. 2500,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2551,

SUBSTITUTE HOUSE BILL NO. 2826,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2831,

ENGROSSED HOUSE BILL NO. 3003,

SUBSTITUTE HOUSE BILL NO. 3015,

SECOND SUBSTITUTE HOUSE BILL NO. 3089,

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


REPORT OF CONFERENCE COMMITTEE


Bill No: SSB 6240                                                                                                                     Date: March 11, 1998

Prepared by: Trudes Hutcheson (7384)                                                                         Includes "NEW ITEM": YES


Mr. Speaker:

Mr. President:


We of your Conference Committee, to whom was referred SUBSTITUTE SENATE BILL NO. 6240, allowing a superior court judge to appoint a stenographic reporter, have had the same under consideration and we recommend that:

 

All previous amendments not be adopted, and the striking amendment by the Conference Committee be adopted; and


that the bill do pass as recommended by the Conference Committee.


             Strike everything after the enacting clause and insert the following:


             "Sec. 1. RCW 2.32.180 and 1992 c 189 s 6 are each amended to read as follows:

             ((It shall be and is the duty of)) (1) Each ((and every)) superior court judge ((in counties or judicial districts in the state of Washington having a population of over thirty-five thousand inhabitants to appoint, or said judge may, in any county or judicial district having a population of over twenty-five thousand and less than thirty-five thousand,)) may appoint a stenographic reporter to be attached to the judge's court who shall have had at least three years' experience as a skilled, practical reporter, or ((who upon examination shall be able to report and transcribe accurately one hundred and seventy-five words per minute of the judge's charge or two hundred words per minute of testimony each for five consecutive minutes; said test of proficiency, in event of inability to meet qualifications as to length of time of experience, to be given by an examining committee composed of one judge of the superior court and two official reporters of the superior court of the state of Washington, appointed by the president judge of the superior court judges association of the state of Washington: PROVIDED, That a stenographic reporter shall not be required to be appointed for the seven additional judges of the superior court authorized for appointment by section 1, chapter 323, Laws of 1987, the additional superior court judge authorized by section 1, chapter 66, Laws of 1988, the additional superior court judges authorized by sections 2 and 3, chapter 328, Laws of 1989, the additional superior court judges authorized by sections 1 and 2, chapter 186, Laws of 1990, or the additional superior court judges authorized by sections 1 through 5, chapter 189, Laws of 1992)) is a Washington state certified court reporter. Appointment of a stenographic reporter is not required ((for any additional superior court judge authorized after July 1, 1992.

             The initial judicial appointee shall serve for a period of six years; the two initial reporter appointees shall serve for a period of four years and two years, respectively, from September 1, 1957; thereafter on expiration of the first terms of service, each newly appointed member of said examining committee to serve for a period of six years. In the event of death or inability of a member to serve, the president judge shall appoint a reporter or judge, as the case may be, to serve for the balance of the unexpired term of the member whose inability to serve caused such vacancy. The examining committee shall grant certificates to qualified applicants. Administrative and procedural rules and regulations shall be promulgated by said examining committee, subject to approval by the said president judge)). The county governing body shall consult with each judge in whose courtroom an alternative method of making a record is planned.

             (2) The stenographic reporter upon appointment shall thereupon become an officer of the court and shall be designated and known as the official reporter for the court or judicial district for which he or she is appointed((: PROVIDED, That)). In no event shall there be appointed more official reporters in any one county or judicial district than there are superior court judges in such county or judicial district; the appointments in each county with a population of one million or more shall be made by the majority vote of the judges in said county acting Committee on Energy & Utilities banc; the appointments in each county with a population of from one hundred twenty-five thousand to less than one million may be made by each individual judge therein or by the judges in said county acting Committee on Energy & Utilities banc. Each official reporter so appointed ((shall hold office during the term of office of the judge or judges appointing him or her, but)) may be removed for incompetency, misconduct, or neglect of duty, and before entering upon the discharge of his or her duties shall take an oath to perform faithfully the duties of his or her office, and file a bond in the sum of two thousand dollars for the faithful discharge of his or her duties. ((Such reporter in each court is hereby declared to be a necessary part of the judicial system of the state of Washington.))"


             On page 1, line 1 of the title, after "reporters;" strike the remainder of the title and insert "and amending RCW 2.32.180."


             There being no objection, the House adopted the Report of the Conference Committee on Substitute Senate Bill No. 6240 and advanced the bill to Final Passage.


FINAL PASSAGE OF SENATE BILL

AS RECOMMENDED BY THE CONFERENCE COMMITTEE


             The Speaker (Representative Pennington presiding) stated the question before the House to be final passage of Substitute Senate Bill No. 6240 as recommended by the Conference Committee.


             Representative Sheahan spoke in favor of passage of the bill.


             Representative Costa spoke against the passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute Senate Bill No. 6240 as recommended by the Conference Committee, and the bill passed the House by the following vote: Yeas - 56, Nays - 42, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Cairnes, Carlson, Carrell, Chandler, Clements, Cooke, Crouse, DeBolt, Delvin, Dunn, Dyer, Hankins, Hickel, Honeyford, Huff, Johnson, Koster, Lambert, Lisk, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Mulliken, Parlette, Pennington, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 56.

             Voting nay: Representatives Anderson, Appelwick, Butler, Chopp, Cody, Cole, Constantine, Conway, Cooper, Costa, Dickerson, Doumit, Dunshee, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hatfield, Kastama, Keiser, Kenney, Kessler, Lantz, Linville, Mason, Morris, Murray, O'Brien, Ogden, Poulsen, Quall, Radcliff, Regala, Romero, Scott, Sommers, H., Sullivan, Tokuda, Veloria, Wolfe and Wood - 42.


             Substitute Senate Bill No. 6240, as recommended by the Conference Committee, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

March 11, 1998

Mr. Speaker:


             The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 2830 with the following amendment(s):


             Strike everything after the enacting clause and insert the following:


             "Sec. 1. RCW 35.13.182 and 1997 c 429 s 37 are each amended to read as follows:

             (1) The legislative body of a city or town planning under chapter 36.70A RCW as of June 30, 1994, may resolve to annex territory to the city or town if there is, within the city or town, unincorporated territory containing residential property owners within the same county and within the same urban growth area designated under RCW 36.70A.110 as the city or town:

             (a) Containing less than one hundred acres and having at least eighty percent of the boundaries of such area contiguous to the city or town ((if such area existed before June 30, 1994)); or

             (b) Of any size and having at least eighty percent of the boundaries of the area contiguous to the city if the area existed before June 30, 1994.

             (2) The resolution shall describe the boundaries of the area to be annexed, state the number of voters residing in the area as nearly as may be, and set a date for a public hearing on the resolution for annexation. Notice of the hearing shall be given by publication of the resolution at least once a week for two weeks before the date of the hearing in one or more newspapers of general circulation within the city or town and one or more newspapers of general circulation within the area to be annexed.

             (3) For purposes of subsection (1)(b) of this section, territory bounded by a river, lake, or other body of water is considered contiguous to a city that is also bounded by the same river, lake, or other body of water.


             NEW SECTION. Sec. 2. A new section is added to chapter 35.13 RCW to read as follows:

             The annexation ordinance provided for in RCW 35.13.182 is subject to referendum for forty-five days after its passage. Upon the filing of a timely and sufficient referendum petition with the legislative body, signed by qualified electors in number equal to not less than ten percent of the votes cast in the last general state election in the area to be annexed, the question of annexation shall be submitted to the voters of the area in a general election if one is to be held within ninety days or at a special election called for that purpose not less than forty-five days nor more than ninety days after the filing of the referendum petition. Notice of the election shall be given as provided in RCW 35.13.080 and the election shall be conducted as provided in the general election law. The annexation shall be deemed approved by the voters unless a majority of the votes cast on the proposition are in opposition thereto.

             After the expiration of the forty-fifth day from but excluding the date of passage of the annexation ordinance, if no timely and sufficient referendum petition has been filed, the area annexed shall become a part of the city or town upon the date fixed in the ordinance of annexation.


             NEW SECTION. Sec. 3. A new section is added to chapter 35.13 RCW to read as follows:

             On the date set for hearing as provided in RCW 35.13.182(2), residents or property owners of the area included in the resolution for annexation shall be afforded an opportunity to be heard. The legislative body may provide by ordinance for annexation of the territory described in the resolution, but the effective date of the ordinance shall be not less than forty-five days after the passage thereof. The legislative body shall cause notice of the proposed effective date of the annexation, together with a description of the property to be annexed, to be published at least once each week for two weeks subsequent to passage of the ordinance, in one or more newspapers of general circulation within the city and in one or more newspapers of general circulation within the area to be annexed. If the annexation ordinance provides for assumption of indebtedness or adoption of a proposed zoning regulation, the notice shall include a statement of such requirements.


             Sec. 4. RCW 36.70A.020 and 1990 1st ex.s. c 17 s 2 are each amended to read as follows:

             The following goals are adopted to guide the development and adoption of comprehensive plans and development regulations of those counties and cities that are required or choose to plan under RCW 36.70A.040. The following goals are not listed in order of priority and shall be used exclusively for the purpose of guiding the development of comprehensive plans and development regulations:

             (1) Urban growth. Encourage development in urban areas where adequate public facilities and services exist or can be provided in an efficient manner. Urban growth areas should have concentrated employment centers, separated by adequate buffers that protect critical areas, and need not be uniformly urban in nature.

             (2) Reduce sprawl. Reduce the inappropriate conversion of undeveloped land into sprawling, low-density development.

             (3) Transportation. Encourage efficient multimodal transportation systems that are based on regional priorities and coordinated with county and city comprehensive plans.

             (4) Housing. Encourage the availability of affordable housing to all economic segments of the population of this state, promote a variety of residential densities and housing types, and encourage preservation of existing housing stock.

             (5) Economic development. Encourage economic development throughout the state that is consistent with adopted comprehensive plans, promote economic opportunity for all citizens of this state, especially for unemployed and for disadvantaged persons, and encourage growth in areas experiencing insufficient economic growth, all within the capacities of the state's natural resources, public services, and public facilities.

             (6) Property rights. Private property shall not be taken for public use without just compensation having been made. The property rights of landowners shall be protected from arbitrary and discriminatory actions.

             (7) Permits. Applications for both state and local government permits should be processed in a timely and fair manner to ensure predictability.

             (8) Natural resource industries. Maintain and enhance natural resource-based industries, including productive timber, agricultural, and fisheries industries. Encourage the conservation of productive forest lands and productive agricultural lands, and discourage incompatible uses.

             (9) Open space and recreation. Encourage the retention of open space and development of recreational opportunities, conserve fish and wildlife habitat, increase access to natural resource lands and water, and develop parks.

             (10) Environment. Protect the environment and enhance the state's high quality of life, including air and water quality, and the availability of water.

             (11) Citizen participation and coordination. Encourage the involvement of citizens in the planning process and ensure coordination between communities and jurisdictions to reconcile conflicts.

             (12) Public facilities and services. Ensure that those public facilities and services necessary to support development shall be adequate to serve the development at the time the development is available for occupancy and use without decreasing current service levels below locally established minimum standards.

             (13) Historic preservation. Identify and encourage the preservation of lands, sites, and structures, that have historical or archaeological significance.


             Sec. 5. RCW 36.70A.060 and 1991 sp.s. c 32 s 21 are each amended to read as follows:

             (1) Each county that is required or chooses to plan under RCW 36.70A.040, and each city within such county, shall adopt development regulations on or before September 1, 1991, to assure the conservation of agricultural, forest, and mineral resource lands designated under RCW 36.70A.170. Regulations adopted under this subsection may not prohibit uses legally existing on any parcel prior to their adoption and shall remain in effect until the county or city adopts development regulations pursuant to RCW ((36.70A.120)) 36.70A.040. Such regulations shall assure that the use of lands adjacent to agricultural, forest, or mineral resource lands shall not interfere with the continued use, in the accustomed manner and in accordance with best management practices, of these designated lands for the production of food, agricultural products, or timber, or for the extraction of minerals. Counties and cities shall require that all plats, short plats, development permits, and building permits issued for development activities on, or within ((three)) five hundred feet of, lands designated as agricultural lands, forest lands, or mineral resource lands, contain a notice that the subject property is within or near designated agricultural lands, forest lands, or mineral resource lands on which a variety of commercial activities may occur that are not compatible with residential development for certain periods of limited duration. The notice for mineral resource lands shall also inform that an application might be made for mining-related activities, including mining, extraction, washing, crushing, stockpiling, blasting, transporting, and recycling of minerals.

             (2) Each county and city shall adopt development regulations that protect critical areas that are required to be designated under RCW 36.70A.170. For counties and cities that are required or choose to plan under RCW 36.70A.040, such development regulations shall be adopted on or before September 1, 1991. For the remainder of the counties and cities, such development regulations shall be adopted on or before March 1, 1992.

             (3) Such counties and cities shall review these designations and development regulations when adopting their comprehensive plans under RCW 36.70A.040 and implementing development regulations under RCW 36.70A.120 and may alter such designations and development regulations to insure consistency.

             (4) Forest land and agricultural land located within urban growth areas shall not be designated by a county or city as forest land or agricultural land of long-term commercial significance under RCW 36.70A.170 unless the city or county has enacted a program authorizing transfer or purchase of development rights.


             Sec. 6. RCW 36.70A.070 and 1997 c 429 s 7 are each amended to read as follows:

             The comprehensive plan of a county or city that is required or chooses to plan under RCW 36.70A.040 shall consist of a map or maps, and descriptive text covering objectives, principles, and standards used to develop the comprehensive plan. The plan shall be an internally consistent document and all elements shall be consistent with the future land use map. A comprehensive plan shall be adopted and amended with public participation as provided in RCW 36.70A.140.

             Each comprehensive plan shall include a plan, scheme, or design for each of the following:

             (1) A land use element designating the proposed general distribution and general location and extent of the uses of land, where appropriate, for agriculture, timber production, housing, commerce, industry, recreation, open spaces, general aviation airports, public utilities, public facilities, and other land uses. The land use element shall include population densities, building intensities, and estimates of future population growth. The land use element shall provide for protection of the quality and quantity of ground water used for public water supplies. Where applicable, the land use element shall review drainage, flooding, and storm water run-off in the area and nearby jurisdictions and provide guidance for corrective actions to mitigate or cleanse those discharges that pollute waters of the state, including Puget Sound or waters entering Puget Sound.

             (2) A housing element ensuring the vitality and character of established residential neighborhoods that: (a) Includes an inventory and analysis of existing and projected housing needs; (b) includes a statement of goals, policies, objectives, and mandatory provisions for the preservation, improvement, and development of housing, including single-family residences; (c) identifies sufficient land for housing, including, but not limited to, government-assisted housing, housing for low-income families, manufactured housing, multifamily housing, and group homes and foster care facilities; and (d) makes adequate provisions for existing and projected needs of all economic segments of the community, including affordable housing and adequate housing located within reasonable commuting distances to employment centers.

             (3) A capital facilities plan element consisting of: (a) An inventory of existing capital facilities owned by public entities, showing the locations and capacities of the capital facilities; (b) a forecast of the future needs for such capital facilities; (c) the proposed locations and capacities of expanded or new capital facilities; (d) at least a six-year plan that will finance such capital facilities within projected funding capacities and clearly identifies sources of public money for such purposes; and (e) a requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, capital facilities plan element, and financing plan within the capital facilities plan element are coordinated and consistent.

             (4) A utilities element consisting of the general location, proposed location, and capacity of all existing and proposed utilities, including, but not limited to, electrical lines, telecommunication lines, and natural gas lines.

             (5) Rural element. Counties shall include a rural element including lands that are not designated for urban growth, agriculture, forest, or mineral resources. The following provisions shall apply to the rural element:

             (a) Growth management act goals and local circumstances. Because circumstances vary from county to county, in establishing patterns of rural densities and uses, a county may consider local circumstances, but shall develop a written record explaining how the rural element harmonizes the planning goals in RCW 36.70A.020 and meets the requirements of this chapter.

             (b) Rural development. The rural element shall permit rural development, forestry, and agriculture in rural areas. The rural element shall provide for a variety of rural densities, uses, essential public facilities, and rural governmental services needed to serve the permitted densities and uses. In order to achieve a variety of rural densities and uses, counties may provide for clustering, density transfer, design guidelines, conservation easements, and other innovative techniques that will accommodate appropriate rural densities and uses that are not characterized by urban growth and that are consistent with rural character.

             (c) Measures governing rural development. The rural element shall include measures that apply to rural development and protect the rural character of the area, as established by the county, by:

             (i) Containing or otherwise controlling rural development;

             (ii) Assuring visual compatibility of rural development with the surrounding rural area;

             (iii) Reducing the inappropriate conversion of undeveloped land into sprawling, low-density development in the rural area;

             (iv) Protecting critical areas, as provided in RCW 36.70A.060, and surface water and ground water resources; and

             (v) Protecting against conflicts with the use of agricultural, forest, and mineral resource lands designated under RCW 36.70A.170.

             (d) Limited areas of more intensive rural development. Subject to the requirements of this subsection and except as otherwise specifically provided in this subsection (5)(d), the rural element may allow for limited areas of more intensive rural development, including necessary public facilities and public services to serve the limited area as follows:

             (i) Rural development consisting of the infill, development, or redevelopment of existing commercial, industrial, residential, or mixed-use areas, whether characterized as shoreline development, villages, hamlets, rural activity centers, or crossroads developments. A commercial, industrial, residential, shoreline, or mixed-use area shall be subject to the requirements of (d)(iv) of this subsection, but shall not be subject to the requirements of (c)(ii) and (iii) of this subsection. An industrial area is not required to be principally designed to serve the existing and projected rural population;

             (ii) The intensification of development on lots containing, or new development of, small-scale recreational or tourist uses, including commercial facilities to serve those recreational or tourist uses, that rely on a rural location and setting, but that do not include new residential development. A small-scale recreation or tourist use is not required to be principally designed to serve the existing and projected rural population. Public services and public facilities shall be limited to those necessary to serve the recreation or tourist use and shall be provided in a manner that does not permit low-density sprawl;

             (iii) The intensification of development on lots containing isolated nonresidential uses or new development of isolated cottage industries and isolated small-scale businesses that are not principally designed to serve the existing and projected rural population and nonresidential uses, but do provide job opportunities for rural residents. Public services and public facilities shall be limited to those necessary to serve the isolated nonresidential use and shall be provided in a manner that does not permit low-density sprawl;

             (iv) A county shall adopt measures to minimize and contain the existing areas or uses of more intensive rural development, as appropriate, authorized under this subsection. Lands included in such existing areas or uses shall not extend beyond the logical outer boundary of the existing area or use, thereby allowing a new pattern of low-density sprawl. Existing areas are those that are clearly identifiable and contained and where there is a logical boundary delineated predominately by the built environment, but that may also include undeveloped lands if limited as provided in this subsection. The county shall establish the logical outer boundary of an area of more intensive rural development. In establishing the logical outer boundary the county shall address (A) the need to preserve the character of existing natural neighborhoods and communities, (B) physical boundaries such as bodies of water, streets and highways, and land forms and contours, (C) the prevention of abnormally irregular boundaries, and (D) the ability to provide public facilities and public services in a manner that does not permit low-density sprawl;

             (v) For purposes of (d) of this subsection, an existing area or existing use is one that was in existence:

             (A) On July 1, 1990, in a county that was initially required to plan under all of the provisions of this chapter;

             (B) On the date the county adopted a resolution under RCW 36.70A.040(2), in a county that is planning under all of the provisions of this chapter under RCW 36.70A.040(2); or

             (C) On the date the office of financial management certifies the county's population as provided in RCW 36.70A.040(5), in a county that is planning under all of the provisions of this chapter pursuant to RCW 36.70A.040(5).

             (e) Exception. This subsection shall not be interpreted to permit in the rural area a major industrial development or a master planned resort unless otherwise specifically permitted under RCW 36.70A.360 and 36.70A.365.

             (6) A transportation element that implements, and is consistent with, the land use element. The transportation element shall include the following subelements:

             (a) Land use assumptions used in estimating travel;

             (b) Facilities and services needs, including:

             (i) An inventory of air, water, and ground transportation facilities and services, including railways, transit alignments, and general aviation airport facilities, to define existing capital facilities and travel levels as a basis for future planning. This inventory must include state-owned transportation facilities, including interstate highway exits and ferry terminals, within the city or county's jurisdictional boundaries;

             (ii) Level of service standards for all arterials and transit routes to serve as a gauge to judge performance of the system. These standards should be regionally coordinated;

             (iii) Specific actions and requirements for bringing into compliance any facilities or services that are below an established level of service standard;

             (iv) Forecasts of traffic for at least ten years based on the adopted land use plan to provide information on the location, timing, and capacity needs of future growth;

             (v) Identification of system expansion needs and transportation system management needs to meet current and future demands;

             (c) Finance, including:

             (i) An analysis of funding capability to judge needs against probable funding resources;

             (ii) A multiyear financing plan based on the needs identified in the comprehensive plan, the appropriate parts of which shall serve as the basis for the six-year street, road, or transit program required by RCW 35.77.010 for cities, RCW 36.81.121 for counties, and RCW 35.58.2795 for public transportation systems;

             (iii) If probable funding falls short of meeting identified needs, a discussion of how additional funding will be raised, or how land use assumptions will be reassessed to ensure that level of service standards will be met;

             (d) Intergovernmental coordination efforts, including an assessment of the impacts of the transportation plan and land use assumptions on the transportation systems of adjacent jurisdictions;

             (e) Demand-management strategies.

             After adoption of the comprehensive plan by jurisdictions required to plan or who choose to plan under RCW 36.70A.040, local jurisdictions must adopt and enforce ordinances which prohibit development approval if the development causes the level of service on a transportation facility to decline below the standards adopted in the transportation element of the comprehensive plan, unless transportation improvements or strategies to accommodate the impacts of development are made concurrent with the development. These strategies may include increased public transportation service, ride sharing programs, demand management, and other transportation systems management strategies. For the purposes of this subsection (6) "concurrent with the development" shall mean that improvements or strategies are in place at the time of development, or that a financial commitment is in place to complete the improvements or strategies within six years.

             The transportation element described in this subsection, and the six-year plans required by RCW 35.77.010 for cities, RCW 36.81.121 for counties, and RCW 35.58.2795 for public transportation systems, must be consistent.


             NEW SECTION. Sec. 7. A new section is added to chapter 36.70A RCW to read as follows:

             As part of the review required by RCW 36.70A.130(1), a county or city shall review its mineral resource lands designations adopted pursuant to RCW 36.70A.170 and mineral resource lands development regulations adopted pursuant to RCW 36.70A.040 and 36.70A.060. In its review, the county or city shall take into consideration:

             (1) New information made available since the adoption or last review of its designations or development regulations, including data available from the department of natural resources relating to mineral resource deposits; and

             (2) New or modified model development regulations for mineral resource lands prepared by the department of natural resources, the department of community, trade, and economic development, or the Washington state association of counties.


             Sec. 8. 1995 c 347 s 433 (uncodified) is amended to read as follows:

             ((Sections 413 and 421 of this act)) RCW 36.70B.090 and 64.40.050 shall expire June 30, ((1998)) 2000. The provisions of ((sections 413 and 421 of this act)) RCW 36.70B.090 and 64.40.050 shall apply to project permit applications determined to be complete pursuant to RCW 36.70B.070 on or before June 30, ((1998)) 2000.


             Sec. 9. 1995 c 347 s 411 (uncodified) is amended to read as follows:

             The amendments to RCW ((36.70A.065)) 36.70B.080 contained in section 409 ((of this act)), chapter 347, Laws of 1995 shall expire July 1, ((1998)) 2000.


             Sec. 10. 1995 c 347 s 412 (uncodified) is amended to read as follows:

             Section 410 ((of this act)), chapter 347, Laws of 1995 shall take effect July 1, ((1998)) 2000."


             On page 1, line 2 of the title, after "commission;" strike the remainder of the title and insert "amending RCW 35.13.182, 36.70A.020, 36.70A.060, and 36.70A.070; amending 1995 c 347 s 433 (uncodified); amending 1995 c 347 s 411 (uncodified); amending 1995 c 347 s 412 (uncodified); adding new sections to chapter 35.13 RCW; and adding a new section to chapter 36.70A RCW."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to Engrossed Substitute House Bill No. 2830 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Lantz and Mulliken spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Engrossed Substitute House Bill No. 2830 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2830 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Engrossed Substitute House Bill No. 2830, as amended by the Senate, having received the constitutional majority, was declared passed.


SENATE AMENDMENTS TO HOUSE BILL

March 11, 1998

Mr. Speaker:


             The Senate has passed Engrossed Second Substitute House Bill No. 2935 with the following amendment(s):


             Strike everything after the enacting clause and insert the following:


             "Sec. 1. RCW 74.46.010 and 1980 c 177 s 1 are each amended to read as follows:

             This chapter may be known and cited as the "nursing ((Homes Auditing and Cost Reimbursement Act of 1980)) facility medicaid payment system."

             The purposes of this chapter are to specify the manner by which legislative appropriations for medicaid nursing facility services are to be allocated as payment rates among nursing facilities, and to set forth auditing, billing, and other administrative standards associated with payments to nursing home facilities.


             Sec. 2. RCW 74.46.020 and 1995 1st sp.s. c 18 s 90 are each amended to read as follows:

             Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

             (1) "Accrual method of accounting" means a method of accounting in which revenues are reported in the period when they are earned, regardless of when they are collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.

             (2) (("Ancillary care" means those services required by the individual, comprehensive plan of care provided by qualified therapists.

             (3))) "Appraisal" means the process of estimating the fair market value or reconstructing the historical cost of an asset acquired in a past period as performed by a professionally designated real estate appraiser with no pecuniary interest in the property to be appraised. It includes a systematic, analytic determination and the recording and analyzing of property facts, rights, investments, and values based on a personal inspection and inventory of the property.

             (((4))) (3) "Arm's-length transaction" means a transaction resulting from good-faith bargaining between a buyer and seller who are not related organizations and have adverse positions in the market place. Sales or exchanges of nursing home facilities among two or more parties in which all parties subsequently continue to own one or more of the facilities involved in the transactions shall not be considered as arm's-length transactions for purposes of this chapter. Sale of a nursing home facility which is subsequently leased back to the seller within five years of the date of sale shall not be considered as an arm's-length transaction for purposes of this chapter.

             (((5))) (4) "Assets" means economic resources of the contractor, recognized and measured in conformity with generally accepted accounting principles.

             (((6))) (5) "Audit" or "department audit" means an examination of the records of a nursing facility participating in the medicaid payment system, including but not limited to: The contractor's financial and statistical records, cost reports and all supporting documentation and schedules, receivables, and resident trust funds, to be performed as deemed necessary by the department and according to department rule.        (6) "Bad debts" means amounts considered to be uncollectible from accounts and notes receivable.

             (7) (("Beds" means the number of set-up beds in the facility, not to exceed the number of licensed beds.

             (8))) "Beneficial owner" means:

             (a) Any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

             (i) Voting power which includes the power to vote, or to direct the voting of such ownership interest; and/or

             (ii) Investment power which includes the power to dispose, or to direct the disposition of such ownership interest;

             (b) Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement, or any other contract, arrangement, or device with the purpose or effect of divesting himself or herself of beneficial ownership of an ownership interest or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of this chapter;

             (c) Any person who, subject to ((subparagraph)) (b) of this subsection, has the right to acquire beneficial ownership of such ownership interest within sixty days, including but not limited to any right to acquire:

             (i) Through the exercise of any option, warrant, or right;

             (ii) Through the conversion of an ownership interest;

             (iii) Pursuant to the power to revoke a trust, discretionary account, or similar arrangement; or

             (iv) Pursuant to the automatic termination of a trust, discretionary account, or similar arrangement;

except that, any person who acquires an ownership interest or power specified in ((subparagraphs)) (c)(i), (ii), or (iii) of this ((subparagraph (c))) subsection with the purpose or effect of changing or influencing the control of the contractor, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the ownership interest which may be acquired through the exercise or conversion of such ownership interest or power;

             (d) Any person who in the ordinary course of business is a pledgee of ownership interest under a written pledge agreement shall not be deemed to be the beneficial owner of such pledged ownership interest until the pledgee has taken all formal steps necessary which are required to declare a default and determines that the power to vote or to direct the vote or to dispose or to direct the disposition of such pledged ownership interest will be exercised; except that:

             (i) The pledgee agreement is bona fide and was not entered into with the purpose nor with the effect of changing or influencing the control of the contractor, nor in connection with any transaction having such purpose or effect, including persons meeting the conditions set forth in ((subparagraph)) (b) of this subsection; and

             (ii) The pledgee agreement, prior to default, does not grant to the pledgee:

             (A) The power to vote or to direct the vote of the pledged ownership interest; or

             (B) The power to dispose or direct the disposition of the pledged ownership interest, other than the grant of such power(s) pursuant to a pledge agreement under which credit is extended and in which the pledgee is a broker or dealer.

             (((9))) (8) "Capitalization" means the recording of an expenditure as an asset.

             (((10))) (9) "Case mix" means a measure of the intensity of care and services needed by the residents of a nursing facility or a group of residents in the facility.

             (10) "Case mix index" means a number representing the average case mix of a nursing facility.

             (11) "Case mix weight" means a numeric score that identifies the relative resources used by a particular group of a nursing facility's residents.

             (12) "Contractor" means ((an)) a person or entity ((which contracts)) licensed under chapter 18.51 RCW to operate a medicare and medicaid certified nursing facility, responsible for operational decisions, and contracting with the department to provide services to ((medical care)) medicaid recipients residing in ((a)) the facility ((and which entity is responsible for operational decisions)).

             (((11))) (13) "Default case" means no initial assessment has been completed for a resident and transmitted to the department by the cut-off date, or an assessment is otherwise past due for the resident, under state and federal requirements.

             (14) "Department" means the department of social and health services (DSHS) and its employees.

             (((12))) (15) "Depreciation" means the systematic distribution of the cost or other basis of tangible assets, less salvage, over the estimated useful life of the assets.

             (((13))) (16) "Direct care" means nursing care and related care provided to nursing facility residents. Therapy care shall not be considered part of direct care.

             (17) "Direct care supplies" means medical, pharmaceutical, and other supplies required for the direct ((nursing and ancillary)) care of ((medical care recipients)) a nursing facility's residents.

             (((14))) (18) "Entity" means an individual, partnership, corporation, limited liability company, or any other association of individuals capable of entering enforceable contracts.

             (((15))) (19) "Equity" means the net book value of all tangible and intangible assets less the recorded value of all liabilities, as recognized and measured in conformity with generally accepted accounting principles.

             (((16))) (20) "Facility" or "nursing facility" means a nursing home licensed in accordance with chapter 18.51 RCW, excepting nursing homes certified as institutions for mental diseases, or that portion of a multiservice facility licensed as a nursing home, or that portion of a hospital licensed in accordance with chapter 70.41 RCW which operates as a nursing home.

             (((17))) (21) "Fair market value" means the replacement cost of an asset less observed physical depreciation on the date for which the market value is being determined.

             (((18))) (22) "Financial statements" means statements prepared and presented in conformity with generally accepted accounting principles including, but not limited to, balance sheet, statement of operations, statement of changes in financial position, and related notes.

             (((19))) (23) "Generally accepted accounting principles" means accounting principles approved by the financial accounting standards board (FASB).

             (((20) "Generally accepted auditing standards" means auditing standards approved by the American institute of certified public accountants (AICPA).

             (21))) (24) "Goodwill" means the excess of the price paid for a nursing facility business over the fair market value of all ((other)) net identifiable((,)) tangible((,)) and intangible assets acquired, as measured in accordance with generally accepted accounting principles.

             (((22))) (25) "Grouper" means a computer software product that groups individual nursing facility residents into case mix classification groups based on specific resident assessment data and computer logic.

             (26) "Historical cost" means the actual cost incurred in acquiring and preparing an asset for use, including feasibility studies, architect's fees, and engineering studies.

             (((23))) (27) "Imprest fund" means a fund which is regularly replenished in exactly the amount expended from it.

             (((24))) (28) "Joint facility costs" means any costs which represent resources which benefit more than one facility, or one facility and any other entity.

             (((25))) (29) "Lease agreement" means a contract between two parties for the possession and use of real or personal property or assets for a specified period of time in exchange for specified periodic payments. Elimination (due to any cause other than death or divorce) or addition of any party to the contract, expiration, or modification of any lease term in effect on January 1, 1980, or termination of the lease by either party by any means shall constitute a termination of the lease agreement. An extension or renewal of a lease agreement, whether or not pursuant to a renewal provision in the lease agreement, shall be considered a new lease agreement. A strictly formal change in the lease agreement which modifies the method, frequency, or manner in which the lease payments are made, but does not increase the total lease payment obligation of the lessee, shall not be considered modification of a lease term.

             (((26))) (30) "Medical care program" or "medicaid program" means medical assistance, including nursing care, provided under RCW 74.09.500 or authorized state medical care services.

             (((27))) (31) "Medical care recipient," "medicaid recipient," or "recipient" means an individual determined eligible by the department for the services provided ((in)) under chapter 74.09 RCW.

             (((28))) (32) "Minimum data set" means the overall data component of the resident assessment instrument, indicating the strengths, needs, and preferences of an individual nursing facility resident.

             (33) "Net book value" means the historical cost of an asset less accumulated depreciation.

             (((29))) (34) "Net invested funds" means the net book value of tangible fixed assets employed by a contractor to provide services under the medical care program, including land, buildings, and equipment as recognized and measured in conformity with generally accepted accounting principles, plus an allowance for working capital which shall be five percent of the product of the per patient day rate multiplied by the prior calendar year reported total patient days of each contractor.

             (((30))) (35) "Operating lease" means a lease under which rental or lease expenses are included in current expenses in accordance with generally accepted accounting principles.

             (((31))) (36) "Owner" means a sole proprietor, general or limited partners, members of a limited liability company, and beneficial interest holders of five percent or more of a corporation's outstanding stock.

             (((32))) (37) "Ownership interest" means all interests beneficially owned by a person, calculated in the aggregate, regardless of the form which such beneficial ownership takes.

             (((33))) (38) "Patient day" or "resident day" means a calendar day of care provided to a nursing facility resident, regardless of payment source, which will include the day of admission and exclude the day of discharge; except that, when admission and discharge occur on the same day, one day of care shall be deemed to exist. A "((client day)) medicaid day" or "recipient day" means a calendar day of care provided to a ((medical care)) medicaid recipient determined eligible by the department for services provided under chapter 74.09 RCW, subject to the same conditions regarding admission and discharge applicable to a patient day or resident day of care.

             (((34))) (39) "Professionally designated real estate appraiser" means an individual who is regularly engaged in the business of providing real estate valuation services for a fee, and who is deemed qualified by a nationally recognized real estate appraisal educational organization on the basis of extensive practical appraisal experience, including the writing of real estate valuation reports as well as the passing of written examinations on valuation practice and theory, and who by virtue of membership in such organization is required to subscribe and adhere to certain standards of professional practice as such organization prescribes.

             (((35))) (40) "Qualified therapist" means:

             (a) ((An activities specialist who has specialized education, training, or experience as specified by the department;

             (b) An audiologist who is eligible for a certificate of clinical competence in audiology or who has the equivalent education and clinical experience;

             (c))) A mental health professional as defined by chapter 71.05 RCW;

             (((d))) (b) A mental retardation professional who is ((either a qualified therapist or)) a therapist approved by the department who has had specialized training or one year's experience in treating or working with the mentally retarded or developmentally disabled;

             (((e) A social worker who is a graduate of a school of social work;

             (f))) (c) A speech pathologist who is eligible for a certificate of clinical competence in speech pathology or who has the equivalent education and clinical experience;

             (((g))) (d) A physical therapist as defined by chapter 18.74 RCW;

             (((h))) (e) An occupational therapist who is a graduate of a program in occupational therapy, or who has the equivalent of such education or training; and

             (((i))) (f) A respiratory care practitioner certified under chapter 18.89 RCW.

             (((36) "Questioned costs" means those costs which have been determined in accordance with generally accepted accounting principles but which may constitute disallowed costs or departures from the provisions of this chapter or rules and regulations adopted by the department.

             (37))) (41) "Rate" or "rate allocation" means the medicaid per-patient-day payment amount for medicaid patients calculated in accordance with the allocation methodology set forth in part E of this chapter.

             (42) "Real property," whether leased or owned by the contractor, means the building, allowable land, land improvements, and building improvements associated with a nursing facility.

             (43) "Rebased rate" or "cost-rebased rate" means a facility-specific component rate assigned to a nursing facility for a particular rate period established on desk-reviewed, adjusted costs reported for that facility covering at least six months of a prior calendar year designated as a year to be used for cost rebasing payment rate allocations under the provisions of this chapter.

             (((38))) (44) "Records" means those data supporting all financial statements and cost reports including, but not limited to, all general and subsidiary ledgers, books of original entry, and transaction documentation, however such data are maintained.

             (((39))) (45) "Related organization" means an entity which is under common ownership and/or control with, or has control of, or is controlled by, the contractor.

             (a) "Common ownership" exists when an entity is the beneficial owner of five percent or more ownership interest in the contractor and any other entity.

             (b) "Control" exists where an entity has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution, whether or not it is legally enforceable and however it is exercisable or exercised.

             (((40))) (46) "Related care" means only those services that are directly related to providing direct care to nursing facility residents. These services include, but are not limited to, nursing direction and supervision, medical direction, medical records, pharmacy services, activities, and social services.

             (47) "Resident assessment instrument," including federally approved modifications for use in this state, means a federally mandated, comprehensive nursing facility resident care planning and assessment tool, consisting of the minimum data set and resident assessment protocols.

             (48) "Resident assessment protocols" means those components of the resident assessment instrument that use the minimum data set to trigger or flag a resident's potential problems and risk areas.

             (49) "Resource utilization groups" means a case mix classification system that identifies relative resources needed to care for an individual nursing facility resident.

             (50) "Restricted fund" means those funds the principal and/or income of which is limited by agreement with or direction of the donor to a specific purpose.

             (((41))) (51) "Secretary" means the secretary of the department of social and health services.

             (((42))) (52) "Support services" means food, food preparation, dietary, housekeeping, and laundry services provided to nursing facility residents.

             (53) "Therapy care" means those services required by a nursing facility resident's comprehensive assessment and plan of care, that are provided by qualified therapists, or support personnel under their supervision, including related costs as designated by the department.

             (54) "Title XIX" or "medicaid" means the 1965 amendments to the social security act, P.L. 89-07, as amended and the medicaid program administered by the department.

             (((43) "Physical plant capital improvement" means a capitalized improvement that is limited to an improvement to the building or the related physical plant.))


             Sec. 3. RCW 74.46.040 and 1985 c 361 s 4 are each amended to read as follows:

             (1) Not later than March 31st of each year, each contractor shall submit to the department an annual cost report for the period from January 1st through December 31st of the preceding year.

             (2) Not later than one hundred twenty days following the termination or assignment of a contract, the terminating or assigning contractor shall submit to the department a cost report for the period from January 1st through the date the contract was terminated or assigned.

             (3) Two extensions of not more than thirty days each may be granted by the department upon receipt of a written request setting forth the circumstances which prohibit the contractor from compliance with a report due date; except, that the ((secretary)) department shall establish the grounds for extension in rule ((and regulation)). Such request must be received by the department at least ten days prior to the due date.


             Sec. 4. RCW 74.46.050 and 1985 c 361 s 5 are each amended to read as follows:

             (1) If the cost report is not properly completed or if it is not received by the due date, all or part of any payments due under the contract may be withheld by the department until such time as the required cost report is properly completed and received.

             (2) The department may impose civil fines, or take adverse rate action against contractors and former contractors who do not submit properly completed cost reports by the applicable due date. The department is authorized to adopt rules addressing fines and adverse rate actions including procedures, conditions, and the magnitude and frequency of fines.


             Sec. 5. RCW 74.46.060 and 1985 c 361 s 6 are each amended to read as follows:

             (1) Cost reports shall be prepared in a standard manner and form, as determined by the department((, which shall provide for an itemized list of allowable costs and a preliminary settlement report)). Costs reported shall be determined in accordance with generally accepted accounting principles, the provisions of this chapter, and such additional rules ((and regulations as are)) established by the ((secretary)) department. In the event of conflict, rules adopted and instructions issued by the department take precedence over generally accepted accounting principles.

             (2) The records shall be maintained on the accrual method of accounting and agree with or be reconcilable to the cost report. All revenue and expense accruals shall be reversed against the appropriate accounts unless they are received or paid, respectively, within one hundred twenty days after the accrual is made. However, if the contractor can document a good faith billing dispute with the supplier or vendor, the period may be extended, but only for those portions of billings subject to good faith dispute. Accruals for vacation, holiday, sick pay, payroll, and real estate taxes may be carried for longer periods, provided the contractor follows generally accepted accounting principles and pays this type of accrual when due.


             Sec. 6. RCW 74.46.080 and 1985 c 361 s 7 are each amended to read as follows:

             (1) All records supporting the required cost reports, as well as trust funds established by RCW 74.46.700, shall be retained by the contractor for a period of four years following the filing of such reports at a location in the state of Washington specified by the contractor. ((All records supporting the cost reports and financial statements filed with the department before May 20, 1985, shall be retained by the contractor for four years following their filing.))

             (2) The department may direct supporting records to be retained for a longer period if there remain unresolved questions on the cost reports. All such records shall be made available upon demand to authorized representatives of the department, the office of the state auditor, and the United States department of health and human services.

             (((2))) (3) When a contract is terminated or assigned, all payments due the terminating or assigning contractor will be withheld until accessibility and preservation of the records within the state of Washington are assured.


             Sec. 7. RCW 74.46.090 and 1985 c 361 s 8 are each amended to read as follows:

             The department will retain the required cost reports for a period of one year after final settlement or reconciliation, or the period required under chapter 40.14 RCW, whichever is longer. Resident assessment information and records shall be retained as provided elsewhere in statute or by department rule.


             Sec. 8. RCW 74.46.100 and 1985 c 361 s 9 are each amended to read as follows:

             ((The principles inherent within RCW 74.46.105 and 74.46.130 are)) (1) The purposes of department audits under this chapter are to ascertain, through department audit of the financial and statistical records of the contractor's nursing facility operation, that:

             (((1) To ascertain, through department audit, that the)) (a) Allowable costs for each year for each medicaid nursing facility are accurately reported((, thereby providing a valid basis for future rate determination));

             (((2) To ascertain, through department audits of the cost reports, that)) (b) Cost reports ((properly)) accurately reflect the true financial condition, revenues, expenditures, equity, beneficial ownership, related party status, and records of the contractor((, particularly as they pertain to related organizations and beneficial ownership, thereby providing a valid basis for the determination of return as specified by this chapter));

             (((3) To ascertain, through department audit that compliance with the accounting and auditing provisions of this chapter and the rules and regulations of the department as they pertain to these accounting and auditing provisions is proper and consistent)) (c) The contractor's revenues, expenditures, and costs of the building, land, land improvements, building improvements, and movable and fixed equipment are recorded in compliance with department requirements, instructions, and generally accepted accounting principles; and

             (((4) To ascertain, through department audits, that)) (d) The responsibility of the contractor has been met in the maintenance and disbursement of patient trust funds.

             (2) The department shall examine the submitted cost report, or a portion thereof, of each contractor for each nursing facility for each report period to determine if the information is correct, complete, reported in conformance with department instructions and generally accepted accounting principles, the requirements of this chapter, and rules as the department may adopt. The department shall determine the scope of the examination.

             (3) If the examination finds that the cost report is incorrect or incomplete, the department may make adjustments to the reported information for purposes of establishing component rate allocations or in determining amounts to be recovered in direct care, therapy care, and support services under section 10 (3) and (4) of this act or in any component rate resulting from undocumented or misreported costs. A schedule of the adjustments shall be provided to the contractor, including dollar amount and explanations for the adjustments. Adjustments shall be subject to review if desired by the contractor under the appeals or exception procedure established by the department.

             (4) Examinations of resident trust funds and receivables shall be reported separately and in accordance with the provisions of this chapter and rules adopted by the department.

             (5) The contractor shall:

             (a) Provide access to the nursing facility, all financial and statistical records, and all working papers that are in support of the cost report, receivables, and resident trust funds. To ensure accuracy, the department may require the contractor to submit for departmental review any underlying financial statements or other records, including income tax returns, relating to the cost report directly or indirectly;

             (b) Prepare a reconciliation of the cost report with (i) applicable federal income and federal and state payroll tax returns; and (ii) the records for the period covered by the cost report;

             (c) Make available to the department's auditor an individual or individuals to respond to questions and requests for information from the auditor. The designated individual or individuals shall have sufficient knowledge of the issues, operations, or functions to provide accurate and reliable information.

             (6) If an examination discloses material discrepancies, undocumented costs, or mishandling of resident trust funds, the department may open or reopen one or both of the two preceding cost report or resident trust fund periods, whether examined or unexamined, for indication of similar discrepancies, undocumented costs, or mishandling of resident trust funds.

             (7) Any assets, liabilities, revenues, or expenses reported as allowable that are not supported by adequate documentation in the contractor's records shall be disallowed. Documentation must show both that costs reported were incurred during the period covered by the report and were related to resident care, and that assets reported were used in the provision of resident care.

             (8) When access is required at the facility or at another location in the state, the department shall notify a contractor of its intent to examine all financial and statistical records, and all working papers that are in support of the cost report, receivables, and resident trust funds.

             (9) The department is authorized to assess civil fines and take adverse rate action if a contractor, or any of its employees, does not allow access to the contractor's nursing facility records.

             (10) Part B of this chapter, and rules adopted by the department pursuant thereto prior to January 1, 1998, shall continue to govern the medicaid nursing facility audit process for periods prior to January 1, 1997, as if these statutes and rules remained in full force and effect.


             NEW SECTION. Sec. 9. (1) The department shall reconcile medicaid resident days to billed days and medicaid payments for each medicaid nursing facility for the preceding calendar year, or for that portion of the calendar year the provider's contract was in effect.

             (2) The contractor shall make any payment owed the department, determined by the process of reconciliation, by the process of settlement at the lower of cost or rate in direct care, therapy care, and support services component rate allocations, as authorized in this chapter, within sixty days after notification and demand for payment is sent to the contractor.

             (3) The department shall make any payment due the contractor within sixty days after it determines the underpayment exists and notification is sent to the contractor.

             (4) Interest at the rate of one percent per month accrues against the department or the contractor on an unpaid balance existing sixty days after notification is sent to the contractor. Accrued interest shall be adjusted back to the date it began to accrue if the payment obligation is subsequently revised after administrative or judicial review.

             (5) The department is authorized to withhold funds from the contractor's payment for services, and to take all other actions authorized by law, to recover amounts due and payable from the contractor, including any accrued interest. Neither a timely filed request to pursue any administrative appeals or exception procedure that the department may establish in rule, nor commencement of judicial review as may be available to the contractor in law, to contest a payment obligation determination shall delay recovery from the contractor or payment to the contractor.


             NEW SECTION. Sec. 10. (1) Contractors shall be required to submit with each annual nursing facility cost report a proposed settlement report showing underspending or overspending in each component rate during the cost report year on a per-resident day basis. The department shall accept or reject the proposed settlement report, explain any adjustments, and issue a revised settlement report if needed.

             (2) Contractors shall not be required to refund payments made in the operations, property, and return on investment component rates in excess of the adjusted costs of providing services corresponding to these components.

             (3) The facility will return to the department any overpayment amounts in each of the direct care, therapy care, and support services rate components that the department identifies following the audit and settlement procedures as described in this chapter, provided that the contractor may retain any overpayment that does not exceed 1.0% of the facility's direct care, therapy care, and support services component rate. However, no overpayments may be retained in a cost center to which savings have been shifted to cover a deficit, as provided in subsection (4) of this section. Facilities that are not in substantial compliance for more than ninety days, and facilities that provide substandard quality of care at any time, during the period for which settlement is being calculated, will not be allowed to retain any amount of overpayment in the facility's direct care, therapy care, and support services component rate. The terms "not in substantial compliance" and "substandard quality of care" shall be defined by federal survey regulations.

             (4) Determination of unused rate funds, including the amounts of direct care, therapy care, and support services to be recovered, shall be done separately for each component rate, and neither costs nor rate payments shall be shifted from one component rate or corresponding service area to another in determining the degree of underspending or recovery, if any. However, in computing a preliminary or final settlement, savings in the support services cost center may be shifted to cover a deficit in the direct care or therapy cost centers up to the amount of any savings. Not more than twenty percent of the rate in a cost center may be shifted.

             (5) Total and component payment rates assigned to a nursing facility, as calculated and revised, if needed, under the provisions of this chapter and those rules as the department may adopt, shall represent the maximum payment for nursing facility services rendered to medicaid recipients for the period the rates are in effect. No increase in payment to a contractor shall result from spending above the total payment rate or in any rate component.

             (6) RCW 74.46.150 through 74.46.180, and rules adopted by the department prior to the effective date of this section, shall continue to govern the medicaid settlement process for periods prior to October 1, 1998, as if these statutes and rules remained in full force and effect.

             (7) For calendar year 1998, the department shall calculate split settlements covering January 1, 1998, through September 30, 1998, and October 1, 1998, through December 31, 1998. For the period beginning October 1, 1998, rules specified in this chapter shall apply. The department shall, by rule, determine the division of calendar year 1998 adjusted costs for settlement purposes.


             Sec. 11. RCW 74.46.190 and 1995 1st sp.s. c 18 s 96 are each amended to read as follows:

             (1) The substance of a transaction will prevail over its form.

             (2) All documented costs which are ordinary, necessary, related to care of medical care recipients, and not expressly unallowable under this chapter or department rule, are to be allowable. Costs of providing ((ancillary)) therapy care are allowable, subject to any applicable ((cost center)) limit contained in this chapter, provided documentation establishes the costs were incurred for medical care recipients and other sources of payment to which recipients may be legally entitled, such as private insurance or medicare, were first fully utilized.

             (3) ((Costs applicable to services, facilities, and supplies furnished to the provider by related organizations are allowable but at the cost to the related organization, provided they do not exceed the price of comparable services, facilities, or supplies that could be purchased elsewhere.

             (4) Beginning January 1, 1985,)) The payment for property usage is to be independent of ownership structure and financing arrangements.

             (((5) Beginning July 1, 1995,)) (4) Allowable costs shall not include costs reported by a ((nursing care provider)) contractor for a prior period to the extent such costs, due to statutory exemption, will not be incurred by the nursing facility in the period to be covered by the rate.

             (5) Any costs deemed allowable under this chapter are subject to the provisions of section 18 of this act. The allowability of a cost shall not be construed as creating a legal right or entitlement to reimbursement of the cost.


             Sec. 12. RCW 74.46.220 and 1980 c 177 s 22 are each amended to read as follows:

             (1) Costs applicable to services, facilities, and supplies furnished by a related organization to the contractor shall be allowable only to the extent they do not exceed the lower of the cost to the related organization or the price of comparable services, facilities, or supplies purchased elsewhere.

             (2) Documentation of costs to the related organization shall be made available to the ((auditor at the time and place the records relating to the entity are audited)) department. Payments to or for the benefit of the related organization will be disallowed where the cost to the related organization cannot be documented.


             Sec. 13. RCW 74.46.230 and 1993 sp.s. c 13 s 3 are each amended to read as follows:

             (1) The necessary and ordinary one-time expenses directly incident to the preparation of a newly constructed or purchased building by a contractor for operation as a licensed facility shall be allowable costs. These expenses shall be limited to start-up and organizational costs incurred prior to the admission of the first patient.

             (2) Start-up costs shall include, but not be limited to, administrative and nursing salaries, utility costs, taxes, insurance, repairs and maintenance, and training; except, that they shall exclude expenditures for capital assets. These costs will be allowable in the ((administrative)) operations cost center if they are amortized over a period of not less than sixty months beginning with the month in which the first patient is admitted for care.

             (3) Organizational costs are those necessary, ordinary, and directly incident to the creation of a corporation or other form of business of the contractor including, but not limited to, legal fees incurred in establishing the corporation or other organization and fees paid to states for incorporation; except, that they do not include costs relating to the issuance and sale of shares of capital stock or other securities. Such organizational costs will be allowable in the ((administrative)) operations cost center if they are amortized over a period of not less than sixty months beginning with the month in which the first patient is admitted for care.


             Sec. 14. RCW 74.46.270 and 1983 1st ex.s. c 67 s 13 are each amended to read as follows:

             (1) The contractor shall disclose to the department:

             (a) The nature and purpose of all costs which represent allocations of joint facility costs; and

             (b) The methodology of the allocation utilized.

             (2) Such disclosure shall demonstrate that:

             (a) The services involved are necessary and nonduplicative; and

             (b) Costs are allocated in accordance with benefits received from the resources represented by those costs.

             (3) Such disclosure shall be made not later than September ((30, 1980,)) 30th for the following calendar year ((and not later than September 30th for each year thereafter)); except that a new contractor shall submit the first year's disclosure ((together with the submissions required by RCW 74.46.670. Where a contractor will make neither a change in the joint costs to be incurred nor in the allocation methodology, the contractor may certify that no change will be made in lieu of the disclosure required in subsection (1) of this section)) at least sixty days prior to the date the new contract becomes effective.

             (4) The department shall ((approve such methodology not later than)) by December 31st, ((1980, and not later than December 31st for each year thereafter)) for all disclosures that are complete and timely submitted, either approve or reject the disclosure. The department may request additional information or clarification.

             (5) Acceptance of a disclosure or approval of a joint cost methodology by the department may not be construed as a determination that the allocated costs are allowable in whole or in part. However, joint facility costs not disclosed, allocated, and reported in conformity with this section and department rules are unallowable.

             (6) An approved methodology may be revised or amended subject to approval as provided in rules and regulations adopted by the department.


             Sec. 15. RCW 74.46.280 and 1993 sp.s. c 13 s 4 are each amended to read as follows:

             (1) Management fees will be allowed only if:

             (a) A written management agreement both creates a principal/agent relationship between the contractor and the manager, and sets forth the items, services, and activities to be provided by the manager; and

             (b) Documentation demonstrates that the services contracted for were actually delivered.

             (2) To be allowable, fees must be for necessary, nonduplicative services.

             (3) A management fee paid to or for the benefit of a related organization will be allowable to the extent it does not exceed the lower of the actual cost to the related organization of providing necessary services related to patient care under the agreement or the cost of comparable services purchased elsewhere. Where costs to the related organization represent joint facility costs, the measurement of such costs shall comply with RCW 74.46.270.

             (4) A copy of the agreement must be received by the department at least sixty days before it is to become effective. A copy of any amendment to a management agreement must also be received by the department at least thirty days in advance of the date it is to become effective. Failure to meet these deadlines will result in the unallowability of cost incurred more than sixty days prior to submitting a management agreement and more than thirty days prior to submitting an amendment.

             (5) The scope of services to be performed under a management agreement cannot be so extensive that the manager or managing entity is substituted for the contractor in fact, substantially relieving the contractor/licensee of responsibility for operating the facility.


             Sec. 16. RCW 74.46.300 and 1980 c 177 s 30 are each amended to read as follows:

             Rental or lease costs under arm's-length operating leases of office equipment shall be allowable to the extent the cost is necessary and ordinary. The department may adopt rules to limit the allowability of office equipment leasing expenses.


             Sec. 17. RCW 74.46.410 and 1995 1st sp.s. c 18 s 97 are each amended to read as follows:

             (1) Costs will be unallowable if they are not documented, necessary, ordinary, and related to the provision of care services to authorized patients.

             (2) Unallowable costs include, but are not limited to, the following:

             (a) Costs of items or services not covered by the medical care program. Costs of such items or services will be unallowable even if they are indirectly reimbursed by the department as the result of an authorized reduction in patient contribution;

             (b) Costs of services and items provided to recipients which are covered by the department's medical care program but not included in ((care services)) the medicaid per-resident day payment rate established by the department under this chapter;

             (c) Costs associated with a capital expenditure subject to section 1122 approval (part 100, Title 42 C.F.R.) if the department found it was not consistent with applicable standards, criteria, or plans. If the department was not given timely notice of a proposed capital expenditure, all associated costs will be unallowable up to the date they are determined to be reimbursable under applicable federal regulations;

             (d) Costs associated with a construction or acquisition project requiring certificate of need approval, or exemption from the requirements for certificate of need for the replacement of existing nursing home beds, pursuant to chapter 70.38 RCW if such approval or exemption was not obtained;

             (e) Interest costs other than those provided by RCW 74.46.290 on and after January 1, 1985;

             (f) Salaries or other compensation of owners, officers, directors, stockholders, partners, principals, participants, and others associated with the contractor or its home office, including all board of directors' fees for any purpose, except reasonable compensation paid for service related to patient care;

             (g) Costs in excess of limits or in violation of principles set forth in this chapter;

             (h) Costs resulting from transactions or the application of accounting methods which circumvent the principles of the ((cost-related reimbursement)) payment system set forth in this chapter;

             (i) Costs applicable to services, facilities, and supplies furnished by a related organization in excess of the lower of the cost to the related organization or the price of comparable services, facilities, or supplies purchased elsewhere;

             (j) Bad debts of non-Title XIX recipients. Bad debts of Title XIX recipients are allowable if the debt is related to covered services, it arises from the recipient's required contribution toward the cost of care, the provider can establish that reasonable collection efforts were made, the debt was actually uncollectible when claimed as worthless, and sound business judgment established that there was no likelihood of recovery at any time in the future;

             (k) Charity and courtesy allowances;

             (l) Cash, assessments, or other contributions, excluding dues, to charitable organizations, professional organizations, trade associations, or political parties, and costs incurred to improve community or public relations;

             (m) Vending machine expenses;

             (n) Expenses for barber or beautician services not included in routine care;

             (o) Funeral and burial expenses;

             (p) Costs of gift shop operations and inventory;

             (q) Personal items such as cosmetics, smoking materials, newspapers and magazines, and clothing, except those used in patient activity programs;

             (r) Fund-raising expenses, except those directly related to the patient activity program;

             (s) Penalties and fines;

             (t) Expenses related to telephones, televisions, radios, and similar appliances in patients' private accommodations;

             (u) Federal, state, and other income taxes;

             (v) Costs of special care services except where authorized by the department;

             (w) Expenses of an employee benefit not in fact made available to all employees on an equal or fair basis, for example, key-man insurance and other insurance or retirement plans ((not made available to all employees));

             (x) Expenses of profit-sharing plans;

             (y) Expenses related to the purchase and/or use of private or commercial airplanes which are in excess of what a prudent contractor would expend for the ordinary and economic provision of such a transportation need related to patient care;

             (z) Personal expenses and allowances of owners or relatives;

             (aa) All expenses of maintaining professional licenses or membership in professional organizations;

             (bb) Costs related to agreements not to compete;

             (cc) Amortization of goodwill, lease acquisition, or any other intangible asset, whether related to resident care or not, and whether recognized under generally accepted accounting principles or not;

             (dd) Expenses related to vehicles which are in excess of what a prudent contractor would expend for the ordinary and economic provision of transportation needs related to patient care;

             (ee) Legal and consultant fees in connection with a fair hearing against the department where a decision is rendered in favor of the department or where otherwise the determination of the department stands;

             (ff) Legal and consultant fees of a contractor or contractors in connection with a lawsuit against the department;

             (gg) Lease acquisition costs ((and)), goodwill, the cost of bed rights, or any other ((intangibles not related to patient care)) intangible assets;

             (hh) All rental or lease costs other than those provided in RCW 74.46.300 on and after January 1, 1985;

             (ii) Postsurvey charges incurred by the facility as a result of subsequent inspections under RCW 18.51.050 which occur beyond the first postsurvey visit during the certification survey calendar year;

             (jj) Compensation paid for any purchased nursing care services, including registered nurse, licensed practical nurse, and nurse assistant services, obtained through service contract arrangement in excess of the amount of compensation paid for such hours of nursing care service had they been paid at the average hourly wage, including related taxes and benefits, for in-house nursing care staff of like classification at the same nursing facility, as reported in the most recent cost report period;

             (kk) For all partial or whole rate periods after July 17, 1984, costs of land and depreciable assets that cannot be reimbursed under the Deficit Reduction Act of 1984 and implementing state statutory and regulatory provisions;

             (ll) Costs reported by the contractor for a prior period to the extent such costs, due to statutory exemption, will not be incurred by the contractor in the period to be covered by the rate;

             (mm) Costs of outside activities, for example, costs allocated to the use of a vehicle for personal purposes or related to the part of a facility leased out for office space;

             (nn) Travel expenses outside the states of Idaho, Oregon, and Washington and the province of British Columbia. However, travel to or from the home or central office of a chain organization operating a nursing facility is allowed whether inside or outside these areas if the travel is necessary, ordinary, and related to resident care;

             (oo) Moving expenses of employees in the absence of demonstrated, good-faith effort to recruit within the states of Idaho, Oregon, and Washington, and the province of British Columbia;

             (pp) Depreciation in excess of four thousand dollars per year for each passenger car or other vehicle primarily used by the administrator, facility staff, or central office staff;

             (qq) Costs for temporary health care personnel from a nursing pool not registered with the secretary of the department of health;

             (rr) Payroll taxes associated with compensation in excess of allowable compensation of owners, relatives, and administrative personnel;

             (ss) Costs and fees associated with filing a petition for bankruptcy;

             (tt) All advertising or promotional costs, except reasonable costs of help wanted advertising;

             (uu) Outside consultation expenses required to meet department-required minimum data set completion proficiency;

             (vv) Interest charges assessed by any department or agency of this state for failure to make a timely refund of overpayments and interest expenses incurred for loans obtained to make the refunds;

             (ww) All home office or central office costs, whether on or off the nursing facility premises, and whether allocated or not to specific services, in excess of the median of those adjusted costs for all facilities reporting such costs for the most recent report period; and

             (xx) Tax expenses that a nursing facility has never incurred.


             NEW SECTION. Sec. 18. A new section, to be codified as RCW 74.46.421, is added to chapter 74.46 RCW to read as follows:

             (1) The purpose of part E of this chapter is to determine nursing facility medicaid payment rates that, in the aggregate for all participating nursing facilities, are in accordance with the biennial appropriations act.

             (2)(a) The department shall use the nursing facility medicaid payment rate methodologies described in this chapter to determine initial component rate allocations for each medicaid nursing facility.

             (b) The initial component rate allocations shall be subject to adjustment as provided in this section in order to assure that the state-wide average payment rate to nursing facilities is less than or equal to the state-wide average payment rate specified in the biennial appropriations act.

             (3) Nothing in this chapter shall be construed as creating a legal right or entitlement to any payment that (a) has not been adjusted under this section or (b) would cause the state-wide average payment rate to exceed the state-wide average payment rate specified in the biennial appropriations act.

             (4)(a) The state-wide average payment rate for any state fiscal year under the nursing facility medicaid payment system, weighted by patient days, shall not exceed the annual state-wide weighted average nursing facility payment rate identified for that fiscal year in the biennial appropriations act.

             (b) If the department determines that the weighted average nursing facility payment rate calculated in accordance with this chapter is likely to exceed the weighted average nursing facility payment rate identified in the biennial appropriations act, then the department shall adjust all nursing facility payment rates proportional to the amount by which the weighted average rate allocations would otherwise exceed the budgeted rate amount. Any such adjustments shall only be made prospectively, not retrospectively, and shall be applied proportionately to each component rate allocation for each facility.


             NEW SECTION. Sec. 19. (1) Effective October 1, 1998, nursing facility medicaid payment rate allocations shall be facility-specific and shall have six components: Direct care, therapy care, support services, operations, property, and return on investment. The department shall establish and adjust each of these components, as provided in this section and elsewhere in this chapter, for each medicaid nursing facility in this state.

             (2) All component rate allocations shall be based upon a minimum facility occupancy of eighty-five percent of licensed beds, regardless of how many beds are set up or in use.

             (3) Information and data sources used in determining medicaid payment rate allocations, including formulas, procedures, cost report periods, resident assessment instrument formats, resident assessment methodologies, and resident classification and case mix weighting methodologies, may be substituted or altered from time to time as determined by the department.

             (4)(a) Direct care component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 will be used for October 1, 1998, through June 30, 2001, direct care component rate allocations; adjusted cost report data from 1999 will be used for July 1, 2001, through June 30, 2004, direct care component rate allocations.

             (b) Direct care component rate allocations based on 1996 cost report data shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act. A different economic trends and conditions adjustment factor or factors may be defined in the biennial appropriations act for facilities whose direct care component rate is set equal to their adjusted June 30, 1998, rate, as provided in section 25(5)(k) of this act.

             (c) Direct care component rate allocations based on 1999 cost report data shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act. A different economic trends and conditions adjustment factor or factors may be defined in the biennial appropriations act for facilities whose direct care component rate is set equal to their adjusted June 30, 1998, rate, as provided in section 25(5)(k) of this act.

              (5)(a) Therapy care component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 will be used for October 1, 1998, through June 30, 2001, therapy care component rate allocations; adjusted cost report data from 1999 will be used for July 1, 2001, through June 30, 2004, therapy care component rate allocations.

             (b) Therapy care component rate allocations shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act.

             (6)(a) Support services component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 shall be used for October 1, 1998, through June 30, 2001, support services component rate allocations; adjusted cost report data from 1999 shall be used for July 1, 2001, through June 30, 2004, support services component rate allocations.

             (b) Support services component rate allocations shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act.

             (7)(a) Operations component rate allocations shall be established using adjusted cost report data covering at least six months. Adjusted cost report data from 1996 shall be used for October 1, 1998, through June 30, 2001, operations component rate allocations; adjusted cost report data from 1999 shall be used for July 1, 2001, through June 30, 2004, operations component rate allocations.

             (b) Operations component rate allocations shall be adjusted annually for economic trends and conditions by a factor or factors defined in the biennial appropriations act.

             (8) For July 1, 1998, through September 30, 1998, a facility's property and return on investment component rates shall be the facility's June 30, 1998, property and return on investment component rates, without increase. For October 1, 1998, through June 30, 1999, a facility's property and return on investment component rates shall be rebased utilizing 1997 adjusted cost report data covering at least six months of data.

             (9) Total payment rates under the nursing facility medicaid payment system shall not exceed facility rates charged to the general public for comparable services.

             (10) Medicaid contractors shall pay to all facility staff a minimum wage of the greater of five dollars and fifteen cents per hour or the federal minimum wage.

             (11) The department shall establish in rule procedures, principles, and conditions for determining component rate allocations for facilities in circumstances not directly addressed by this chapter, including but not limited to: The need to prorate inflation for partial-period cost report data, newly constructed facilities, existing facilities entering the medicaid program for the first time or after a period of absence from the program, existing facilities with expanded new bed capacity, existing medicaid facilities following a change of ownership of the nursing facility business, facilities banking beds or converting beds back into service, facilities having less than six months of either resident assessment, cost report data, or both, under the current contractor prior to rate setting, and other circumstances.

             (12) The department shall establish in rule procedures, principles, and conditions, including necessary threshold costs, for adjusting rates to reflect capital improvements or new requirements imposed by the department or the federal government. Any such rate adjustments are subject to the provisions of section 18 of this act.


             NEW SECTION. Sec. 20. The department shall disclose to any member of the public all rate-setting information consistent with requirements of state and federal laws.


             Sec. 21. RCW 74.46.475 and 1985 c 361 s 13 are each amended to read as follows:

             (1) The department shall analyze the submitted cost report or a portion thereof of each contractor for each report period to determine if the information is correct, complete, ((and)) reported in conformance with department instructions and generally accepted accounting principles, the requirements of this chapter, and such rules ((and regulations)) as the ((secretary)) department may adopt. If the analysis finds that the cost report is incorrect or incomplete, the department may make adjustments to the reported information for purposes of establishing ((reimbursement)) payment rate((s)) allocations. A schedule of such adjustments shall be provided to contractors and shall include an explanation for the adjustment and the dollar amount of the adjustment. Adjustments shall be subject to review and appeal as provided in this chapter.

             (2) The department shall accumulate data from properly completed cost reports, in addition to assessment data on each facility's resident population characteristics, for use in:

             (a) Exception profiling; and

             (b) Establishing rates.

             (3) The department may further utilize such accumulated data for analytical, statistical, or informational purposes as necessary.


             NEW SECTION. Sec. 22. (1) The department shall employ the resource utilization group III case mix classification methodology. The department shall use the forty-four group index maximizing model for the resource utilization group III grouper version 5.10, but the department may revise or update the classification methodology to reflect advances or refinements in resident assessment or classification, subject to federal requirements.

             (2) A default case mix group shall be established for cases in which the resident dies or is discharged for any purpose prior to completion of the resident's initial assessment. The default case mix group and case mix weight for these cases shall be designated by the department.

             (3) A default case mix group may also be established for cases in which there is an untimely assessment for the resident. The default case mix group and case mix weight for these cases shall be designated by the department.


             NEW SECTION. Sec. 23. (1) Each case mix classification group shall be assigned a case mix weight. The case mix weight for each resident of a nursing facility for each calendar quarter shall be based on data from resident assessment instruments completed for the resident and weighted by the number of days the resident was in each case mix classification group. Days shall be counted as provided in this section.

             (2) The case mix weights shall be based on the average minutes per registered nurse, licensed practical nurse, and certified nurse aide, for each case mix group, and using the health care financing administration of the United States department of health and human services 1995 nursing facility staff time measurement study stemming from its multistate nursing home case mix and quality demonstration project. Those minutes shall be weighted by state-wide ratios of registered nurse to certified nurse aide, and licensed practical nurse to certified nurse aide, wages, including salaries and benefits, which shall be based on 1995 cost report data for this state.

             (3) The case mix weights shall be determined as follows:

             (a) Set the certified nurse aide wage weight at 1.000 and calculate wage weights for registered nurse and licensed practical nurse average wages by dividing the certified nurse aide average wage into the registered nurse average wage and licensed practical nurse average wage;

             (b) Calculate the total weighted minutes for each case mix group in the resource utilization group III classification system by multiplying the wage weight for each worker classification by the average number of minutes that classification of worker spends caring for a resident in that resource utilization group III classification group, and summing the products;

             (c) Assign a case mix weight of 1.000 to the resource utilization group III classification group with the lowest total weighted minutes and calculate case mix weights by dividing the lowest group's total weighted minutes into each group's total weighted minutes and rounding weight calculations to the third decimal place.

             (4) The case mix weights in this state may be revised if the health care financing administration updates its nursing facility staff time measurement studies. The case mix weights shall be revised, but only when direct care component rates are cost-rebased as provided in subsection (5) of this section, to be effective on the July 1st effective date of each cost-rebased direct care component rate. However, the department may revise case mix weights more frequently if, and only if, significant variances in wage ratios occur among direct care staff in the different caregiver classifications identified in this section.

             (5) Case mix weights shall be revised when direct care component rates are cost-rebased every three years as provided in section 19(4)(a) of this act.


             NEW SECTION. Sec. 24. (1) From individual case mix weights for the applicable quarter, the department shall determine two average case mix indexes for each medicaid nursing facility, one for all residents in the facility, known as the facility average case mix index, and one for medicaid residents, known as the medicaid average case mix index.

             (2)(a) In calculating a facility's two average case mix indexes for each quarter, the department shall include all residents or medicaid residents, as applicable, who were physically in the facility during the quarter in question (January 1st through March 31st, April 1st through June 30th, July 1st through September 30th, or October 1st through December 31st).

             (b) The facility average case mix index shall exclude all default cases as defined in this chapter. However, the medicaid average case mix index shall include all default cases.

             (3) Both the facility average and the medicaid average case mix indexes shall be determined by multiplying the case mix weight of each resident, or each medicaid resident, as applicable, by the number of days, as defined in this section and as applicable, the resident was at each particular case mix classification or group, and then averaging.

             (4)(a) In determining the number of days a resident is classified into a particular case mix group, the department shall determine a start date for calculating case mix grouping periods as follows:

             (i) If a resident's initial assessment for a first stay or a return stay in the nursing facility is timely completed and transmitted to the department by the cutoff date under state and federal requirements and as described in subsection (5) of this section, the start date shall be the later of either the first day of the quarter or the resident's facility admission or readmission date;

             (ii) If a resident's significant change, quarterly, or annual assessment is timely completed and transmitted to the department by the cutoff date under state and federal requirements and as described in subsection (5) of this section, the start date shall be the date the assessment is completed;

             (iii) If a resident's significant change, quarterly, or annual assessment is not timely completed and transmitted to the department by the cutoff date under state and federal requirements and as described in subsection (5) of this section, the start date shall be the due date for the assessment.

             (b) If state or federal rules require more frequent assessment, the same principles for determining the start date of a resident's classification in a particular case mix group set forth in subsection (4)(a) of this section shall apply.

             (c) In calculating the number of days a resident is classified into a particular case mix group, the department shall determine an end date for calculating case mix grouping periods as follows:

             (i) If a resident is discharged before the end of the applicable quarter, the end date shall be the day before discharge;

             (ii) If a resident is not discharged before the end of the applicable quarter, the end date shall be the last day of the quarter;

             (iii) If a new assessment is due for a resident or a new assessment is completed and transmitted to the department, the end date of the previous assessment shall be the earlier of either the day before the assessment is due or the day before the assessment is completed by the nursing facility.

             (5) The cutoff date for the department to use resident assessment data, for the purposes of calculating both the facility average and the medicaid average case mix indexes, and for establishing and updating a facility's direct care component rate, shall be one month and one day after the end of the quarter for which the resident assessment data applies.

             (6) A threshold of ninety percent, as described and calculated in this subsection, shall be used to determine the case mix index each quarter. The threshold shall also be used to determine which facilities' costs per case mix unit are included in determining the ceiling, floor, and price. If the facility does not meet the ninety percent threshold, the department may use an alternate case mix index to determine the facility average and medicaid average case mix indexes for the quarter. The threshold is a count of unique minimum data set assessments, and it shall include resident assessment instrument tracking forms for residents discharged prior to completing an initial assessment. The threshold is calculated by dividing the count of unique minimum data set assessments by the average census for each facility. A daily census shall be reported by each nursing facility as it transmits assessment data to the department. The department shall compute a quarterly average census based on the daily census. If no census has been reported by a facility during a specified quarter, then the department shall use the facility's licensed beds as the denominator in computing the threshold.

             (7)(a) Although the facility average and the medicaid average case mix indexes shall both be calculated quarterly, the facility average case mix index will be used only every three years in combination with cost report data as specified by sections 19 and 25 of this act, to establish a facility's allowable cost per case mix unit. A facility's medicaid average case mix index shall be used to update a nursing facility's direct care component rate quarterly.

             (b) The facility average case mix index used to establish each nursing facility's direct care component rate shall be based on an average of calendar quarters of the facility's average case mix indexes.

             (i) For October 1, 1998, direct care component rates, the department shall use an average of facility average case mix indexes from the four calendar quarters of 1997.

             (ii) For July 1, 2001, direct care component rates, the department shall use an average of facility average case mix indexes from the four calendar quarters of 1999.

             (c) The medicaid average case mix index used to update or recalibrate a nursing facility's direct care component rate quarterly shall be from the calendar quarter commencing six months prior to the effective date of the quarterly rate. For example, October 1, 1998, through December 31, 1998, direct care component rates shall utilize case mix averages from the April 1, 1998, through June 30, 1998, calendar quarter, and so forth.


             NEW SECTION. Sec. 25. (1) The direct care component rate allocation corresponds to the provision of nursing care for one resident of a nursing facility for one day, including direct care supplies. Therapy services and supplies, which correspond to the therapy care component rate, shall be excluded. The direct care component rate includes elements of case mix determined consistent with the principles of this section and other applicable provisions of this chapter.

             (2) Beginning October 1, 1998, the department shall determine and update quarterly for each nursing facility serving medicaid residents a facility-specific per-resident day direct care component rate allocation, to be effective on the first day of each calendar quarter. In determining direct care component rates the department shall utilize, as specified in this section, minimum data set resident assessment data for each resident of the facility, as transmitted to, and if necessary corrected by, the department in the resident assessment instrument format approved by federal authorities for use in this state.

             (3) The department may question the accuracy of assessment data for any resident and utilize corrected or substitute information, however derived, in determining direct care component rates. The department is authorized to impose civil fines and to take adverse rate actions against a contractor, as specified by the department in rule, in order to obtain compliance with resident assessment and data transmission requirements and to ensure accuracy.

             (4) Cost report data used in setting direct care component rate allocations shall be 1996 and 1999, for rate periods as specified in section 19(4)(a) of this act.

             (5) Beginning October 1, 1998, the department shall rebase each nursing facility's direct care component rate allocation as described in section 19 of this act, adjust its direct care component rate allocation for economic trends and conditions as described in section 19 of this act, and update its medicaid average case mix index, consistent with the following:

             (a) Reduce total direct care costs reported by each nursing facility for the applicable cost report period specified in section 19(4)(a) of this act to reflect any department adjustments, and to eliminate reported resident therapy costs and adjustments, in order to derive the facility's total allowable direct care cost;

             (b) Divide each facility's total allowable direct care cost by its adjusted resident days for the same report period, increased if necessary to a minimum occupancy of eighty-five percent; that is, the greater of actual or imputed occupancy at eighty-five percent of licensed beds, to derive the facility's allowable direct care cost per resident day;

             (c) Adjust the facility's per resident day direct care cost by the applicable factor specified in section 19(4) (b) and (c) of this act to derive its adjusted allowable direct care cost per resident day;

             (d) Divide each facility's adjusted allowable direct care cost per resident day by the facility average case mix index for the applicable quarters specified by section 24(7)(b) of this act to derive the facility's allowable direct care cost per case mix unit;

             (e) Divide nursing facilities into two peer groups: Those located in metropolitan statistical areas as determined and defined by the United States office of management and budget or other appropriate agency or office of the federal government, and those not located in a metropolitan statistical area;

             (f) Array separately the allowable direct care cost per case mix unit for all metropolitan statistical area and for all nonmetropolitan statistical area facilities, and determine the median allowable direct care cost per case mix unit for each peer group;

             (g) Except as provided in (k) of this subsection, from October 1, 1998, through June 30, 2000, determine each facility's quarterly direct care component rate as follows:

             (i) Any facility whose allowable cost per case mix unit is less than eighty-five percent of the facility's peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to eighty-five percent of the facility's peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (ii) Any facility whose allowable cost per case mix unit is greater than one hundred fifteen percent of the peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to one hundred fifteen percent of the peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (iii) Any facility whose allowable cost per case mix unit is between eighty-five and one hundred fifteen percent of the peer group median established under (f) of this subsection shall have a direct care component rate allocation equal to the facility's allowable cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (h) Except as provided in (k) of this subsection, from July 1, 2000, through June 30, 2002, determine each facility's quarterly direct care component rate as follows:

             (i) Any facility whose allowable cost per case mix unit is less than ninety percent of the facility's peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to ninety percent of the facility's peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (ii) Any facility whose allowable cost per case mix unit is greater than one hundred ten percent of the peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to one hundred ten percent of the peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (iii) Any facility whose allowable cost per case mix unit is between ninety and one hundred ten percent of the peer group median established under (f) of this subsection shall have a direct care component rate allocation equal to the facility's allowable cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (i) From July 1, 2002, through June 30, 2004, determine each facility's quarterly direct care component rate as follows:

             (i) Any facility whose allowable cost per case mix unit is less than ninety-five percent of the facility's peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to ninety-five percent of the facility's peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (ii) Any facility whose allowable cost per case mix unit is greater than one hundred five percent of the peer group median established under (f) of this subsection shall be assigned a cost per case mix unit equal to one hundred five percent of the peer group median, and shall have a direct care component rate allocation equal to the facility's assigned cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (iii) Any facility whose allowable cost per case mix unit is between ninety-five and one hundred five percent of the peer group median established under (f) of this subsection shall have a direct care component rate allocation equal to the facility's allowable cost per case mix unit multiplied by that facility's medicaid average case mix index from the applicable quarter specified in section 24(7)(c) of this act;

             (j) Beginning July 1, 2004, determine each facility's quarterly direct care component rate by multiplying the facility's peer group median allowable direct care cost per case mix unit by that facility's medicaid average case mix index from the applicable quarter as specified in section 24(7)(c) of this act.

             (k)(i) Between October 1, 1998, and June 30, 2000, the department shall compare each facility's direct care component rate allocation calculated under (g) of this subsection with the facility's nursing services component rate in effect on June 30, 1998, less therapy costs, plus any exceptional care offsets as reported on the cost report, adjusted for economic trends and conditions as provided in section 19 of this act. A facility shall receive the higher of the two rates;

             (ii) Between July 1, 2000, and June 30, 2002, the department shall compare each facility's direct care component rate allocation calculated under (h) of this subsection with the facility's direct care component rate in effect on June 30, 2000. A facility shall receive the higher of the two rates.

             (6) The direct care component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with section 18 of this act. If the department determines that the weighted average rate allocations for all rate components for all facilities is likely to exceed the weighted average total rate specified in the state biennial appropriations act, the department shall adjust the rate allocations calculated in this section proportional to the amount by which the total weighted average rate allocations would otherwise exceed the budgeted level. Such adjustments shall only be made prospectively, not retrospectively.


             NEW SECTION. Sec. 26. (1) The therapy care component rate allocation corresponds to the provision of medicaid one-on-one therapy provided by a qualified therapist as defined in this chapter, including therapy supplies and therapy consultation, for one day for one medicaid resident of a nursing facility. The therapy care component rate allocation for October 1, 1998, through June 30, 2001, shall be based on adjusted therapy costs and days from calendar year 1996. The therapy component rate allocation for July 1, 2001, through June 30, 2004, shall be based on adjusted therapy costs and days from calendar year 1999. The therapy care component rate shall be adjusted for economic trends and conditions as specified in section 19(5)(b) of this act, and shall be determined in accordance with this section.

             (2) In rebasing, as provided in section 19(5)(a) of this act, the department shall take from the cost reports of facilities the following reported information:

             (a) Direct one-on-one therapy charges for all residents by payer including charges for supplies;

             (b) The total units or modules of therapy care for all residents by type of therapy provided, for example, speech or physical. A unit or module of therapy care is considered to be fifteen minutes of one-on-one therapy provided by a qualified therapist or support personnel; and

             (c) Therapy consulting expenses for all residents.

             (3) The department shall determine for all residents the total cost per unit of therapy for each type of therapy by dividing the total adjusted one-on-one therapy expense for each type by the total units provided for that therapy type.

             (4) The department shall divide medicaid nursing facilities in this state into two peer groups:

             (a) Those facilities located within a metropolitan statistical area; and

             (b) Those not located in a metropolitan statistical area.

             Metropolitan statistical areas and nonmetropolitan statistical areas shall be as determined by the United States office of management and budget or other applicable federal office. The department shall array the facilities in each peer group from highest to lowest based on their total cost per unit of therapy for each therapy type. The department shall determine the median total cost per unit of therapy for each therapy type and add ten percent of median total cost per unit of therapy. The cost per unit of therapy for each therapy type at a nursing facility shall be the lesser of its cost per unit of therapy for each therapy type or the median total cost per unit plus ten percent for each therapy type for its peer group.

             (5) The department shall calculate each nursing facility's therapy care component rate allocation as follows:

             (a) To determine the allowable total therapy cost for each therapy type, the allowable cost per unit of therapy for each type of therapy shall be multiplied by the total therapy units for each type of therapy;

             (b) The medicaid allowable one-on-one therapy expense shall be calculated taking the allowable total therapy cost for each therapy type times the medicaid percent of total therapy charges for each therapy type;

             (c) The medicaid allowable one-on-one therapy expense for each therapy type shall be divided by total adjusted medicaid days to arrive at the medicaid one-on-one therapy cost per patient day for each therapy type;

             (d) The medicaid one-on-one therapy cost per patient day for each therapy type shall be multiplied by total adjusted patient days for all residents to calculate the total allowable one-on-one therapy expense. The lesser of the total allowable therapy consultant expense for the therapy type or a reasonable percentage of allowable therapy consultant expense for each therapy type, as established in rule by the department, shall be added to the total allowable one-on-one therapy expense to determine the allowable therapy cost for each therapy type;

             (e) The allowable therapy cost for each therapy type shall be added together, the sum of which shall be the total allowable therapy expense for the nursing facility;

             (f) The total allowable therapy expense will be divided by the greater of adjusted total patient days from the cost report on which the therapy expenses were reported, or patient days at eighty-five percent occupancy of licensed beds. The outcome shall be the nursing facility's therapy care component rate allocation.

             (6) The therapy care component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with section 18 of this act. If the department determines that the weighted average rate allocations for all rate components for all facilities is likely to exceed the weighted average total rate specified in the state biennial appropriations act, the department shall adjust the rate allocations calculated in this section proportional to the amount by which the total weighted average rate allocations would otherwise exceed the budgeted level. Such adjustments shall only be made prospectively, not retrospectively.


             NEW SECTION. Sec. 27. (1) The support services component rate allocation corresponds to the provision of food, food preparation, dietary, housekeeping, and laundry services for one resident for one day.

             (2) Beginning October 1, 1998, the department shall determine each medicaid nursing facility's support services component rate allocation using cost report data specified by section 19(6) of this act.

             (3) To determine each facility's support services component rate allocation, the department shall:

             (a) Array facilities' adjusted support services costs per adjusted resident day for each facility from facilities' cost reports from the applicable report year, for facilities located within a metropolitan statistical area, and for those not located in any metropolitan statistical area and determine the median adjusted cost for each peer group;

             (b) Set each facility's support services component rate at the lower of the facility's per resident day adjusted support services costs from the applicable cost report period or the adjusted median per resident day support services cost for that facility's peer group, either metropolitan statistical area or nonmetropolitan statistical area, plus ten percent; and

             (c) Adjust each facility's support services component rate for economic trends and conditions as provided in section 19(6) of this act.

             (4) The support services component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with section 18 of this act. If the department determines that the weighted average rate allocations for all rate components for all facilities is likely to exceed the weighted average total rate specified in the state biennial appropriations act, the department shall adjust the rate allocations calculated in this section proportional to the amount by which the total weighted average rate allocations would otherwise exceed the budgeted level. Such adjustments shall only be made prospectively, not retrospectively.


             NEW SECTION. Sec. 28. (1) The operations component rate allocation corresponds to the general operation of a nursing facility for one resident for one day, including but not limited to management, administration, utilities, office supplies, accounting and bookkeeping, minor building maintenance, minor equipment repairs and replacements, and other supplies and services, exclusive of direct care, therapy care, support services, property, and return on investment.

             (2) Beginning October 1, 1998, the department shall determine each medicaid nursing facility's operations component rate allocation using cost report data specified by section 19(7)(a) of this act.

             (3) To determine each facility's operations component rate the department shall:

             (a) Array facilities' adjusted general operations costs per adjusted resident day for each facility from facilities' cost reports from the applicable report year, for facilities located within a metropolitan statistical area and for those not located in a metropolitan statistical area and determine the median adjusted cost for each peer group;

             (b) Set each facility's operations component rate at the lower of the facility's per resident day adjusted operations costs from the applicable cost report period or the adjusted median per resident day general operations cost for that facility's peer group, metropolitan statistical area or nonmetropolitan statistical area; and

             (c) Adjust each facility's operations component rate for economic trends and conditions as provided in section 19(7)(b) of this act.

             (4) The operations component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with section 18 of this act. If the department determines that the weighted average rate allocations for all rate components for all facilities is likely to exceed the weighted average total rate specified in the state biennial appropriations act, the department shall adjust the rate allocations calculated in this section proportional to the amount by which the total weighted average rate allocations would otherwise exceed the budgeted level. Such adjustments shall only be made prospectively, not retrospectively.


             NEW SECTION. Sec. 29. (1) The property component rate allocation for each facility shall be determined by dividing the sum of the reported allowable prior period actual depreciation, subject to RCW 74.46.310 through 74.46.380, adjusted for any capitalized additions or replacements approved by the department, and the retained savings from such cost center, by the greater of a facility's total resident days for the facility in the prior period or resident days as calculated on eighty-five percent facility occupancy. If a capitalized addition or retirement of an asset will result in a different licensed bed capacity during the ensuing period, the prior period total resident days used in computing the property component rate shall be adjusted to anticipated resident day level.

             (2) A nursing facility's property component rate allocation shall be rebased annually, effective July 1st or October 1st as applicable, in accordance with this section and this chapter.

             (3) When a certificate of need for a new facility is requested, the department, in reaching its decision, shall take into consideration per-bed land and building construction costs for the facility which shall not exceed a maximum to be established by the secretary.

             (4) For the purpose of calculating a nursing facility's property component rate, if a contractor elects to bank licensed beds or to convert banked beds to active service, under chapter 70.38 RCW, the department shall use the facility's anticipated resident occupancy level subsequent to the decrease or increase in licensed bed capacity. However, in no case shall the department use less than eighty-five percent occupancy of the facility's licensed bed capacity after banking or conversion.

             (5) The property component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with section 18 of this act. If the department determines that the weighted average rate allocations for all rate components for all facilities is likely to exceed the weighted average total rate specified in the state biennial appropriations act, the department shall adjust the rate allocations calculated in this section proportional to the amount by which the total weighted average rate allocations would otherwise exceed the budgeted level. Such adjustments shall only be made prospectively, not retrospectively.


             NEW SECTION. Sec. 30. (1) The department shall establish for each medicaid nursing facility a return on investment component rate allocation composed of two parts: A financing allowance and a variable return allowance. The financing allowance part of a facility's return on investment component rate shall be rebased annually, effective July 1st, in accordance with the provisions of this section and this chapter.

             (a) The financing allowance shall be determined by multiplying the net invested funds of each facility by .10, and dividing by the greater of a nursing facility's total resident days from the most recent cost report period or resident days calculated on eighty-five percent facility occupancy. If a capitalized addition or retirement of an asset will result in a different licensed bed capacity during the ensuing period, the prior period total resident days used in computing the financing and variable return allowances shall be adjusted to the anticipated resident day level.

             (b) In computing the portion of net invested funds representing the net book value of tangible fixed assets, the same assets, depreciation bases, lives, and methods referred to in RCW 74.46.330, 74.46.350, 74.46.360, 74.46.370, and 74.46.380, including owned and leased assets, shall be utilized, except that the capitalized cost of land upon which the facility is located and such other contiguous land which is reasonable and necessary for use in the regular course of providing resident care shall also be included. Subject to provisions and limitations contained in this chapter, for land purchased by owners or lessors before July 18, 1984, capitalized cost of land shall be the buyer's capitalized cost. For all partial or whole rate periods after July 17, 1984, if the land is purchased after July 17, 1984, capitalized cost shall be that of the owner of record on July 17, 1984, or buyer's capitalized cost, whichever is lower. In the case of leased facilities where the net invested funds are unknown or the contractor is unable to provide necessary information to determine net invested funds, the secretary shall have the authority to determine an amount for net invested funds based on an appraisal conducted according to RCW 74.46.360(1).

             (c) In determining the variable return allowance:

             (i) For the October 1, 1998, rate setting, the department, without utilizing peer groups, shall first rank all facilities in numerical order from highest to lowest according to their per resident day adjusted or audited, or both, allowable costs for nursing services, food, administration, and operational costs combined for the 1996 calendar year cost report period.

             (ii) The department shall then compute the variable return allowance by multiplying the appropriate percentage amounts, which shall not be less than one percent and not greater than four percent, by the sum of the facility's nursing services, food, administrative, and operational rate components. The percentage amounts will be based on groupings of facilities according to the rankings prescribed in (c)(i) of this subsection. Those groups of facilities with lower per diem costs shall receive higher percentage amounts than those with higher per diem costs.

             (d) The sum of the financing allowance and the variable return allowance shall be the return on investment rate for each facility, and shall be added to the prospective rates of each contractor as determined in sections 19 through 29 of this act.

             (e) In the case of a facility that was leased by the contractor as of January 1, 1980, in an arm's-length agreement, which continues to be leased under the same lease agreement, and for which the annualized lease payment, plus any interest and depreciation expenses associated with contractor-owned assets, for the period covered by the prospective rates, divided by the contractor's total resident days, minus the property component rate allocation determined according to section 29 of this act, is more than the return on investment rate determined according to (d) of this subsection, the following shall apply:

             (i) The financing allowance shall be recomputed substituting the fair market value of the assets as of January 1, 1982, as determined by the department of general administration through an appraisal procedure, less accumulated depreciation on the lessor's assets since January 1, 1982, for the net book value of the assets in determining net invested funds for the facility. A determination by the department of general administration of fair market value shall be final unless the procedure used to make such a determination is shown to be arbitrary and capricious.

             (ii) The sum of the financing allowance computed under (e)(i) of this subsection and the variable allowance shall be compared to the annualized lease payment, plus any interest and depreciation associated with contractor-owned assets, for the period covered by the prospective rates, divided by the contractor's total resident days, minus the property component rate determined according to section 29 of this act. The lesser of the two amounts shall be called the alternate return on investment rate.

             (iii) The return on investment rate determined according to (d) of this subsection or the alternate return on investment rate, whichever is greater, shall be the return on investment rate for the facility and shall be added to the prospective rates of the contractor as determined in sections 19 through 29 of this act.

             (f) In the case of a facility that was leased by the contractor as of January 1, 1980, in an arm's-length agreement, if the lease is renewed or extended under a provision of the lease, the treatment provided in (e) of this subsection shall be applied, except that in the case of renewals or extensions made subsequent to April 1, 1985, reimbursement for the annualized lease payment shall be no greater than the reimbursement for the annualized lease payment for the last year prior to the renewal or extension of the lease.

             (2) For the purpose of calculating a nursing facility's return on investment component rate, if a contractor elects to bank beds or to convert banked beds to active service, under chapter 70.38 RCW, the department shall use the facility's anticipated resident occupancy level subsequent to the decrease or increase in licensed bed capacity. However, in no case shall the department use less than eighty-five percent occupancy of the facility's licensed bed capacity after banking or conversion.

             (3) Each biennium the secretary shall review the adequacy of return on investment rates in relation to anticipated requirements for maintaining, reducing, or expanding nursing care capacity. The secretary shall report the results of a such review to the legislature and make recommendations for adjustments in the return on investment rates utilized in this section, if appropriate.

             (4) The return or investment component rate allocations calculated in accordance with this section shall be adjusted to the extent necessary to comply with section 18 of this act. If the department determines that the weighted average rate allocations for all rate components for all facilities is likely to exceed the weighted average total rate specified in the state biennial appropriations act, the department shall adjust the rate allocations calculated in this section proportional to the amount by which the total weighted average rate allocations would otherwise exceed the budgeted level. Such adjustments shall only be made prospectively, not retrospectively.


             NEW SECTION. Sec. 31. (1) The department may adjust component rates for errors or omissions made in establishing component rates and determine amounts either overpaid to the contractor or underpaid by the department.

             (2) A contractor may request the department to adjust its component rates because of:

             (a) An error or omission the contractor made in completing a cost report; or

             (b) An alleged error or omission made by the department in determining one or more of the contractor's component rates.

             (3) A request for a rate adjustment made on incorrect cost reporting must be accompanied by the amended cost report pages prepared in accordance with the department's written instructions and by a written explanation of the error or omission and the necessity for the amended cost report pages and the rate adjustment.

             (4) The department shall review a contractor's request for a rate adjustment because of an alleged error or omission, even if the time period has expired in which the contractor must appeal the rate when initially issued, pursuant to rules adopted by the department under RCW 74.46.780. If the request is received after this time period, the department has the authority to correct the rate if it agrees an error or omission was committed. However, if the request is denied, the contractor shall not be entitled to any appeals or exception review procedure that the department may adopt under RCW 74.46.780.

             (5) The department shall notify the contractor of the amount of the overpayment to be recovered or additional payment to be made to the contractor reflecting a rate adjustment to correct an error or omission. The recovery from the contractor of the overpayment or the additional payment to the contractor shall be governed by the reconciliation, settlement, security, and recovery processes set forth in this chapter and by rules adopted by the department in accordance with this chapter.

             (6) Component rate adjustments approved in accordance with this section are subject to the provisions of section 18 of this act.


             Sec. 32. RCW 74.46.610 and 1983 1st ex.s. c 67 s 33 are each amended to read as follows:

             (1) A contractor shall bill the department each month by completing and returning a facility billing statement as provided by the department ((which shall include, but not be limited to:

             (a) Billing by cost center;

             (b) Total patient days; and

             (c) Patient days for medical care recipients)).

             The statement shall be completed and filed in accordance with rules ((and regulations)) established by the ((secretary)) department.

             (2) A facility shall not bill the department for service provided to a recipient until an award letter of eligibility of such recipient under rules established under chapter 74.09 RCW has been received by the facility. However a facility may bill and shall be reimbursed for all medical care recipients referred to the facility by the department prior to the receipt of the award letter of eligibility or the denial of such eligibility.

             (3) Billing shall cover the patient days of care.


             Sec. 33. RCW 74.46.620 and 1980 c 177 s 62 are each amended to read as follows:

             (1) The department will ((reimburse)) pay a contractor for service rendered under the facility contract and billed in accordance with RCW 74.46.610.

             (2) The amount paid will be computed using the appropriate rates assigned to the contractor.

             (3) For each recipient, the department will pay an amount equal to the appropriate rates, multiplied by the number of ((patient)) medicaid resident days each rate was in effect, less the amount the recipient is required to pay for his or her care as set forth by RCW 74.46.630.


             Sec. 34. RCW 74.46.630 and 1980 c 177 s 63 are each amended to read as follows:

             (1) The department will notify a contractor of the amount each medical care recipient is required to pay for care provided under the contract and the effective date of such required contribution. It is the contractor's responsibility to collect that portion of the cost of care from the patient, and to account for any authorized reduction from his or her contribution in accordance with rules ((and regulations)) established by the ((secretary)) department.

             (2) If a contractor receives documentation showing a change in the income or resources of a recipient which will mean a change in his or her contribution toward the cost of care, this shall be reported in writing to the department within seventy-two hours and in a manner specified by rules ((and regulations)) established by the ((secretary)) department. If necessary, appropriate corrections will be made in the next facility statement, and a copy of documentation supporting the change will be attached. If increased funds for a recipient are received by a contractor, an amount determined by the department shall be allowed for clothing and personal and incidental expense, and the balance applied to the cost of care.

             (3) The contractor shall accept the ((reimbursement)) payment rates established by the department as full compensation for all services provided under the contract, certification as specified by Title XIX, and licensure under chapter 18.51 RCW. The contractor shall not seek or accept additional compensation from or on behalf of a recipient for any or all such services.


             Sec. 35. RCW 74.46.640 and 1995 1st sp.s. c 18 s 112 are each amended to read as follows:

             (1) Payments to a contractor may be withheld by the department in each of the following circumstances:

             (a) A required report is not properly completed and filed by the contractor within the appropriate time period, including any approved extension. Payments will be released as soon as a properly completed report is received;

             (b) State auditors, department auditors, or authorized personnel in the course of their duties are refused access to a nursing facility or are not provided with existing appropriate records. Payments will be released as soon as such access or records are provided;

             (c) A refund in connection with a ((preliminary or final)) settlement or rate adjustment is not paid by the contractor when due. The amount withheld will be limited to the unpaid amount of the refund and any accumulated interest owed to the department as authorized by this chapter;

             (d) Payment for the final sixty days of service ((under)) prior to termination or assignment of a contract will be held in the absence of adequate alternate security acceptable to the department pending ((final)) settlement of all periods when the contract is terminated or assigned; and

             (e) Payment for services at any time during the contract period in the absence of adequate alternate security acceptable to the department, if a contractor's net medicaid overpayment liability for one or more nursing facilities or other debt to the department, as determined by ((preliminary settlement, final)) settlement, civil fines imposed by the department, third-party liabilities or other source, reaches or exceeds fifty thousand dollars, whether subject to good faith dispute or not, and for each subsequent increase in liability reaching or exceeding twenty-five thousand dollars. Payments will be released as soon as practicable after acceptable security is provided or refund to the department is made.

             (2) No payment will be withheld until written notification of the suspension is provided to the contractor, stating the reason for the withholding, except that neither a timely filed request to pursue ((the)) any administrative appeals or exception procedure that the department may establish((ed)) by ((the department in)) rule nor commencement of judicial review, as may be available to the contractor in law, shall delay suspension of payment.


             Sec. 36. RCW 74.46.650 and 1980 c 177 s 65 are each amended to read as follows:

             All payments to a contractor will end no later than sixty days after any of the following occurs:

             (1) A contract ((expires,)) is terminated, assigned, or is not renewed;

             (2) A facility license is revoked; or

             (3) A facility is decertified as a Title XIX facility; except that, in situations where the ((secretary)) department determines that residents must remain in such facility for a longer period because of the resident's health or safety, payments for such residents shall continue.


             Sec. 37. RCW 74.46.660 and 1992 c 215 s 1 are each amended to read as follows:

             In order to participate in the ((prospective cost-related reimbursement)) nursing facility medicaid payment system established by this chapter, the person or legal ((organization)) entity responsible for operation of a facility shall:

             (1) Obtain a state certificate of need and/or federal capital expenditure review (section 1122) approval pursuant to chapter 70.38 RCW and Part 100, Title 42 CFR where required;

             (2) Hold the appropriate current license;

             (3) Hold current Title XIX certification;

             (4) Hold a current contract to provide services under this chapter;

             (5) Comply with all provisions of the contract and all ((application)) applicable regulations, including but not limited to the provisions of this chapter; and

             (6) Obtain and maintain medicare certification, under Title XVIII of the social security act, 42 U.S.C. Sec. 1395, as amended, for a portion of the facility's licensed beds. ((Until June 1, 1993, the department may grant exemptions from the medicare certification requirements of this subsection to nursing facilities that are making good faith efforts to obtain medicare certification.))


             Sec. 38. RCW 74.46.680 and 1985 c 361 s 2 are each amended to read as follows:

             (1) On the effective date of a change of ownership the department's contract with the old owner shall be ((terminated)) automatically assigned to the new owner, unless: (a) The new owner does not desire to participate in medicaid as a nursing facility provider; (b) the department elects not to continue the contract with the new owner for good cause; or (c) the new owner elects not to accept assignment and requests certification and a new contract. The old owner shall give the department sixty days' written notice of such ((termination)) intent to change ownership and assign. When certificate of need and/or section 1122 approval is required pursuant to chapter 70.38 RCW and Part 100, Title 42 CFR, for the new owner to acquire the facility, and the new owner wishes to continue to provide service to recipients without interruption, certificate of need and/or section 1122 approval shall be obtained before the old owner submits a notice of ((termination)) intent to change ownership and assign.

             (2) If the new owner desires to participate in the ((cost-related reimbursement)) nursing facility medicaid payment system, it shall meet the conditions specified in RCW 74.46.660 ((and shall submit a projected budget in accordance with RCW 74.46.670 no later than sixty days before the date of the change of ownership)). The facility contract with the new owner shall be effective as of the date of the change of ownership.


             Sec. 39. RCW 74.46.690 and 1995 1st sp.s. c 18 s 113 are each amended to read as follows:

             (1) When ((a facility contract is terminated)) there is a change of ownership for any reason, ((the old contractor shall submit)) final reports shall be submitted as required by RCW 74.46.040.

             (2) Upon a notification of ((a contract termination)) intent to change ownership, the department shall determine by ((preliminary or final settlement calculations)) settlement or reconciliation the amount of any overpayments made to the assigning or terminating contractor, including overpayments disputed by the assigning or terminating contractor. If ((preliminary or final)) settlements are unavailable for any period up to the date of ((contract termination)) assignment or termination, the department shall make a reasonable estimate of any overpayment or underpayments for such periods. The reasonable estimate shall be based upon prior period settlements, available audit findings, the projected impact of prospective rates, and other information available to the department. The department shall also determine and add in the total of all other debts and potential debts owed to the department regardless of source, including, but not limited to, interest owed to the department as authorized by this chapter, civil fines imposed by the department, or third-party liabilities.

             (3) ((The old)) For all cost reports filed after December 31, 1997, the assigning or terminating contractor shall provide security, in a form deemed adequate by the department, equal to the total amount of determined and estimated overpayments and all ((other)) debts and potential debts from any source, whether or not the overpayments are the subject of good faith dispute including but not limited to, interest owed to the department, civil fines imposed by the department, and third-party liabilities. Security shall consist of one or more of the following:

             (a) Withheld payments due the assigning or terminating contractor under the contract being assigned or terminated; ((or))

             (b) ((A surety bond issued by a bonding company acceptable to the department; or

             (c))) An assignment of funds to the department; ((or

             (d) Collateral acceptable to the department; or

             (e) A purchaser's)) (c) The new contractor's assumption of liability for the prior contractor's ((overpayment)) debt or potential debt;

             (d) An authorization to withhold payments from one or more medicaid nursing facilities that continue to be operated by the assigning or terminating contractor;

             (((f))) (e) A promissory note secured by a deed of trust; or

             (((g) Any combination of (a), (b), (c), (d), (e), or (f) of this subsection)) (f) Other collateral or security acceptable to the department.

             (4) ((A surety bond or)) An assignment of funds shall:

             (a) Be at least equal ((in)) to the amount ((to)) of determined or estimated ((overpayments, whether or not the subject of good faith dispute,)) debt or potential debt minus withheld payments or other security provided; and

             (b) ((Be issued or accepted by a bonding company or financial institution licensed to transact business in Washington state;

             (c) Be for a term, as determined by the department, sufficient to ensure effectiveness after final settlement and the exhaustion of any administrative appeals or exception procedure and judicial remedies, as may be available to and sought by the contractor, regarding payment, settlement, civil fine, interest assessment, or other debt issues: PROVIDED, That the bond or assignment shall initially be for a term of at least five years, and shall be forfeited if not renewed thereafter in an amount equal to any remaining combined overpayment and debt liability as determined by the department;

             (d) Provide that the full amount of the bond or assignment, or both, shall be paid to the department if a properly completed final cost report is not filed in accordance with this chapter, or if financial records supporting this report are not preserved and made available to the auditor; and

             (e))) Provide that an amount equal to any recovery the department determines is due from the contractor from ((settlement or from)) any ((other)) source of debt to the department, but not exceeding the amount of the ((bond and assignment)) assigned funds, shall be paid to the department if the contractor does not pay the ((refund and)) debt within sixty days following receipt of written demand for payment from the department to the contractor.

             (5) The department shall release any payment withheld as security if alternate security is provided under subsection (3) of this section in an amount equivalent to the determined and estimated ((overpayments)) debt.

             (6) If the total of withheld payments((, bonds,)) and ((assignments)) assigned funds is less than the total of determined and estimated ((overpayments)) debt, the unsecured amount of such ((overpayments)) debt shall be a debt due the state and shall become a lien against the real and personal property of the contractor from the time of filing by the department with the county auditor of the county where the contractor resides or owns property, and the lien claim has preference over the claims of all unsecured creditors.

             (7) ((The contractor shall file)) A properly completed final cost report shall be filed in accordance with the requirements of ((this chapter)) RCW 74.46.040, which shall be ((audited)) examined by the department in accordance with the requirements of RCW 74.46.100. ((A final settlement shall be determined within ninety days following completion of the audit process, including completion of any administrative appeals or exception procedure review of the audit requested by the contractor, but not including completion of any judicial review available to and commenced by the contractor.))

             (8) ((Following determination of settlement for all periods,)) Security held pursuant to this section shall be released to the contractor after all ((overpayments, erroneous payments, and)) debts ((determined in connection with final settlement, or otherwise)), including accumulated interest owed the department, have been paid by the ((contractor)) old owner.

             (9) If, after calculation of settlements for any periods, it is determined that overpayments exist in excess of the value of security held by the state, the department may seek recovery of these additional overpayments as provided by law.

             (10) Regardless of whether a contractor intends to ((terminate its medicaid contracts)) change ownership, if a contractor's net medicaid overpayments and erroneous payments for one or more settlement periods, and for one or more nursing facilities, combined with debts due the department, reaches or exceeds a total of fifty thousand dollars, as determined by ((preliminary settlement, final)) settlement, civil fines imposed by the department, third-party liabilities or by any other source, whether such amounts are subject to good faith dispute or not, the department shall demand and obtain security equivalent to the total of such overpayments, erroneous payments, and debts and shall obtain security for each subsequent increase in liability reaching or exceeding twenty-five thousand dollars. Such security shall meet the criteria in subsections (3) and (4) of this section, except that the department shall not accept an assumption of liability. The department shall withhold all or portions of a contractor's current contract payments or impose liens, or both, if security acceptable to the department is not forthcoming. The department shall release a contractor's withheld payments or lift liens, or both, if the contractor subsequently provides security acceptable to the department. ((This subsection shall apply to all overpayments and erroneous payments determined by preliminary or final settlements issued on or after July 1, 1995, regardless of what payment periods the settlements may cover and shall apply to all debts owed the department from any source, including interest debts, which become due on or after July 1, 1995.))

             (11) Notwithstanding the application of security measures authorized by this section, if the department determines that any remaining debt of the old owner is uncollectible from the old owner, the new owner is liable for the unsatisfied debt in all respects. If the new owner does not accept assignment of the contract and the contingent liability for all debt of the prior owner, a new certification survey shall be done and no payments shall be made to the new owner until the department determines the facility is in substantial compliance for the purposes of certification.

             (12) Medicaid provider contracts shall only be assigned if there is a change of ownership, and with approval by the department.


             Sec. 40. RCW 74.46.770 and 1995 1st sp.s. c 18 s 114 are each amended to read as follows:

             (1) ((For all nursing facility medicaid payment rates effective on or after July 1, 1995, and for all settlements and audits issued on or after July 1, 1995, regardless of what periods the settlements or audits may cover,)) If a contractor wishes to contest the way in which a rule relating to the medicaid payment ((rate)) system was applied to the contractor by the department, it shall pursue ((the)) any appeals or exception procedure ((established by)) that the department may establish in rule authorized by RCW 74.46.780.

             (2) If a contractor wishes to challenge the legal validity of a statute, rule, or contract provision or wishes to bring a challenge based in whole or in part on federal law, ((including but not limited to issues of procedural or substantive compliance with the federal medicaid minimum payment standard for long-term care facility services, the)) any appeals or exception procedure ((established by)) that the department may establish in rule may not be used for these purposes. This prohibition shall apply regardless of whether the contractor wishes to obtain a decision or ruling on an issue of validity or federal compliance or wishes only to make a record for the purpose of subsequent judicial review.

             (3) If a contractor wishes to challenge the legal validity of a statute, rule, or contract provision relating to the medicaid payment rate system, or wishes to bring a challenge based in whole or in part on federal law, it must bring such action de novo in a court of proper jurisdiction as may be provided by law.


             Sec. 41. RCW 74.46.780 and 1995 1st sp.s. c 18 s 115 are each amended to read as follows:

             ((For all nursing facility medicaid payment rates effective on or after July 1, 1995, and for all audits completed and settlements issued on or after July 1, 1995, regardless of what periods the payment rates, audits, or settlements may cover,)) The department shall establish in rule, consistent with federal requirements for nursing facilities participating in the medicaid program, an appeals or exception procedure that allows individual nursing care providers an opportunity to submit additional evidence and receive prompt administrative review of payment rates with respect to such issues as the department deems appropriate.


             Sec. 42. RCW 74.46.800 and 1980 c 177 s 80 are each amended to read as follows:

             (1) The department shall have authority to adopt, ((promulgate,)) amend, and rescind such administrative rules and definitions as ((are)) it deems necessary to carry out the policies and purposes of this chapter and to resolve issues and develop procedures that it deems necessary to implement, update, and improve the case mix elements of the nursing facility medicaid payment system. ((In addition, at least annually the department shall review changes to generally accepted accounting principles and generally accepted auditing standards as approved by the financial accounting standards board, and the American institute of certified public accountants, respectively. The department shall adopt by administrative rule those approved changes which it finds to be consistent with the policies and purposes of this chapter.))

             (2) Nothing in this chapter shall be construed to require the department to adopt or employ any calculations, steps, tests, methodologies, alternate methodologies, indexes, formulas, mathematical or statistical models, concepts, or procedures for medicaid rate setting or payment that are not expressly called for in this chapter.


             Sec. 43. RCW 74.46.820 and 1985 c 361 s 14 are each amended to read as follows:

             (1) Cost reports and their final audit reports filed by the contractor shall be subject to public disclosure pursuant to the requirements of chapter 42.17 RCW. ((Notwithstanding any other provision of law, cost report schedules showing information on rental or lease of assets, the facility or corporate balance sheet, schedule of changes in financial position, statement of changes in equity-fund balances, notes to financial statements, and any accompanying schedules summarizing the adjustments to a contractor's financial records, reports on review of internal control and accounting procedures, and letters of comments or recommendations relating to suggested improvements in internal control or accounting procedures which are prepared pursuant to the requirements of this chapter shall be exempt from public disclosure.

             This)) (2) Subsection (1) of this section does not prevent a contractor from having access to its own records or from authorizing an agent or designee to have access to the contractor's records.

             (((2))) (3) Regardless of whether any document or report submitted to the secretary pursuant to this chapter is subject to public disclosure, copies of such documents or reports shall be provided by the secretary, upon written request, to the legislature and to state agencies or state or local law enforcement officials who have an official interest in the contents thereof.


             Sec. 44. RCW 74.46.840 and 1983 1st ex.s. c 67 s 42 are each amended to read as follows:

             If any part of this chapter ((and)) or RCW 18.51.145 ((and)) or 74.09.120 is found by an agency of the federal government to be in conflict with federal requirements ((which)) that are a prescribed condition to the receipts of federal funds to the state, the conflicting part of this chapter ((and)) or RCW 18.51.145 ((and)) or 74.09.120 is ((hereby)) declared inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and such finding or determination shall not affect the operation of the remainder of this chapter ((and)) or RCW 18.51.145 ((and)) or 74.09.120 in its application to the agencies concerned. In the event that any portion of this chapter ((and)) or RCW 18.51.145 ((and)) or 74.09.120 is found to be in conflict with federal requirements ((which)) that are a prescribed condition to the receipt of federal funds, the secretary, to the extent that the secretary finds it to be consistent with the general policies and intent of chapters 18.51, 74.09, and 74.46 RCW, may adopt such rules as to resolve a specific conflict and ((which)) that do meet minimum federal requirements. In addition, the secretary shall submit to the next regular session of the legislature a summary of the specific rule changes made and recommendations for statutory resolution of the conflict.


             Sec. 45. RCW 74.09.120 and 1993 sp.s. c 3 s 8 are each amended to read as follows:

             The department shall purchase necessary physician and dentist services by contract or "fee for service." The department shall purchase nursing home care by contract and payment for the care shall be in accordance with the provisions of chapter 74.46 RCW and rules adopted by the department under the authority of RCW 74.46.800. ((The department shall establish regulations for reasonable nursing home accounting and reimbursement systems which shall provide that)) No payment shall be made to a nursing home which does not permit inspection by the department of social and health services of every part of its premises and an examination of all records, including financial records, methods of administration, general and special dietary programs, the disbursement of drugs and methods of supply, and any other records the department deems relevant to the ((establishment of such a system)) regulation of nursing home operations, enforcement of standards for resident care, and payment for nursing home services.

             The department may purchase nursing home care by contract in veterans' homes operated by the state department of veterans affairs((. The department shall establish rules for reasonable accounting and reimbursement systems for such care)) and payment for the care shall be in accordance with the provisions of chapter 74.46 RCW and rules adopted by the department under the authority of RCW 74.46.800.

             The department may purchase care in institutions for the mentally retarded, also known as intermediate care facilities for the mentally retarded. The department shall establish rules for reasonable accounting and reimbursement systems for such care. Institutions for the mentally retarded include licensed nursing homes, public institutions, licensed boarding homes with fifteen beds or less, and hospital facilities certified as intermediate care facilities for the mentally retarded under the federal medicaid program to provide health, habilitative, or rehabilitative services and twenty-four hour supervision for mentally retarded individuals or persons with related conditions and includes in the program "active treatment" as federally defined.

             The department may purchase care in institutions for mental diseases by contract. The department shall establish rules for reasonable accounting and reimbursement systems for such care. Institutions for mental diseases are certified under the federal medicaid program and primarily engaged in providing diagnosis, treatment, or care to persons with mental diseases, including medical attention, nursing care, and related services.

             The department may purchase all other services provided under this chapter by contract or at rates established by the department.


             NEW SECTION. Sec. 46. (1) Payment for direct care at the pilot nursing facility in King county designed to meet the service needs of residents living with AIDS, as defined in RCW 70.24.017, and as specifically authorized for this purpose under chapter 9, Laws of 1989 1st ex. sess., shall be exempt from case mix methods of rate determination set forth in this chapter and shall be exempt from the direct care metropolitan statistical area peer group cost limitation set forth in this chapter.

             (2) Direct care component rates at the AIDS pilot facility shall be based on direct care reported costs at the pilot facility, utilizing the same three-year, rate-setting cycle prescribed for other nursing facilities, and as supported by a staffing benchmark based upon a department-approved acuity measurement system.

             (3) The provisions of section 18 of this act and all other rate-setting principles, cost lids, and limits, including settlement as provided in section 10 of this act shall apply to the AIDS pilot facility.

             (4) This section applies only to the AIDS pilot nursing facility.


             NEW SECTION. Sec. 47. (1) By December 1, 1998, the department of social and health services shall study and provide recommendations to the chairs of the house of representatives appropriations and health care committees, and the senate ways and means and health and long-term care committees, concerning options for changing the method for paying facilities for capital and property related expenses.

             (2) The department of social and health services shall contract with an independent and recognized organization to study and evaluate the impacts of chapter 74.46 RCW implementation on access, quality of care, quality of life for nursing facility residents, and the wage and benefit levels of all nursing facility employees. The department shall require, and the contractor shall submit, a report with the results of this study and evaluation, including their findings, to the governor and legislature by December 1, 2001.

             (3) The department of social and health services shall study and, as needed, specify additional case mix groups and appropriate case mix weights to reflect the resource utilization of residents whose care needs are not adequately identified or reflected in the resource utilization group III grouper version 5.10. At a minimum, the department shall study the adequacy of the resource utilization group III grouper version 5.10, including the minimum data set, for capturing the care and resource utilization needs of residents with AIDS, residents with traumatic brain injury, and residents who are behaviorally challenged. The department shall report its findings to the chairs of the house of representatives health care committee and the senate health and long-term care committee by December 12, 2002.

             (4) By December 12, 2002, the department of social and health services shall report to the legislature and provide an evaluation of the fiscal impact of rebasing future payments at different intervals, including the impact of averaging two years' cost data as the basis for rebasing. This report shall include the fiscal impact to the state and the fiscal impact to nursing facility providers.


             NEW SECTION. Sec. 48. By December 12, 1998, the department of social and health services shall study and provide recommendation to appropriate committees of the legislature on the appropriateness of extending case-mix reimbursement to home and community services providers, as defined in chapter 74.39A RCW. The department shall invite stakeholders to participate in this study.


             Sec. 49. RCW 72.36.030 and 1993 sp.s. c 3 s 5 are each amended to read as follows:

             All of the following persons who have been actual bona fide residents of this state at the time of their application, and who are indigent and unable to support themselves and their families may be admitted to a state veterans' home under rules as may be adopted by the director of the department, unless sufficient facilities and resources are not available to accommodate these people:

             (1)(a) All honorably discharged veterans of a branch of the armed forces of the United States or merchant marines; (b) members of the state militia disabled while in the line of duty; ((and)) (c) Filipino World War II veterans who swore an oath to American authority and who participated in military engagements with American soldiers; and (d) the spouses of these veterans, merchant marines, and members of the state militia. However, it is required that the spouse was married to and living with the veteran three years prior to the date of application for admittance, or, if married to him or her since that date, was also a resident of a state veterans' home in this state or entitled to admission thereto;

             (2)(a) The spouses of: (i) All honorably discharged veterans of the United States armed forces; (ii) merchant marines; and (iii) members of the state militia who were disabled while in the line of duty and who were residents of a state veterans' home in this state or were entitled to admission to one of this state's state veteran homes at the time of death; (b) the spouses of: (i) All honorably discharged veterans of a branch of the United States armed forces; (ii) merchant marines; and (iii) members of the state militia who would have been entitled to admission to one of this state's state veterans' homes at the time of death, but for the fact that the spouse was not indigent, but has since become indigent and unable to support himself or herself and his or her family. However, the included spouse shall be at least fifty years old and have been married to and living with their husband or wife for three years prior to the date of their application. The included spouse shall not have been married since the death of his or her husband or wife to a person who is not a resident of one of this state's state veterans' homes or entitled to admission to one of this state's state veterans' homes; and

             (3) All applicants for admission to a state veterans' home shall apply for all federal and state benefits for which they may be eligible, including medical assistance under chapter 74.09 RCW.


             NEW SECTION. Sec. 50. A new section is added to chapter 70.38 RCW to read as follows:

             (1) A change in bed capacity at a residential hospice care center shall not be subject to certificate of need review under this chapter if the department determined prior to June 1994 that the construction, development, or other establishment of the residential hospice care center was not subject to certificate of need review under this chapter.

             (2) For purposes of this section, a "residential hospice care center" means any building, facility, place, or equivalent that opened in December 1996 and is organized, maintained, and operated specifically to provide beds, accommodations, facilities, and services over a continuous period of twenty-four hours or more for palliative care of two or more individuals, not related to the operator, who are diagnosed as being in the latter stages of an advanced disease that is expected to lead to death.


             NEW SECTION. Sec. 51. (1) A facility's nursing services, food, administrative, and operational component rates, existing on June 30, 1998, weighted by medicaid resident days, and adjusted by a factor specified in the biennial appropriations act, shall be the facility's nursing services, food, administrative, and operational component rates for the period July 1, 1998, through September 30, 1998.

             (2) A facility's return on investment and property component rates existing on June 30, 1998, or as subsequently adjusted or revised, shall be the facility's return on investment and property component rates for the period July 1, 1998, through September 30, 1998, with no increase for the period July 1, 1998, through September 30, 1998.


             NEW SECTION. Sec. 52. The following acts or parts of acts are each repealed:

                                       (1)        RCW 74.46.105 and 1995 1st sp.s. c 18 s 91, 1985 c 361 s 10, & 1983 1st ex.s. c 67 s 5;

                                       (2)        RCW 74.46.115 and 1995 1st sp.s. c 18 s 92 & 1983 1st ex.s. c 67 s 6;

                                       (3)        RCW 74.46.130 and 1985 c 361 s 11, 1983 1st ex.s. c 67 s 7, & 1980 c 177 s 13;

                                       (4)        RCW 74.46.150 and 1983 1st ex.s. c 67 s 8 & 1980 c 177 s 15;

                                       (5)        RCW 74.46.160 and 1995 1st sp.s. c 18 s 93, 1985 c 361 s 12, 1983 1st ex.s. c 67 s 9, & 1980 c 177 s 16;

                                       (6)        RCW 74.46.170 and 1995 1st sp.s. c 18 s 94, 1983 1st ex.s. c 67 s 10, & 1980 c 177 s 17;

                                       (7)        RCW 74.46.180 and 1995 1st sp.s. c 18 s 95 & 1993 sp.s. c 13 s 2;

                                       (8)        RCW 74.46.210 and 1991 sp.s. c 8 s 14 & 1980 c 177 s 21; and

                                       (9)        RCW 74.46.670 and 1983 1st ex.s. c 67 s 35 & 1980 c 177 s 67.


             NEW SECTION. Sec. 53. RCW 74.46.595 and 1995 1st sp.s. c 18 s 98 are each repealed effective July 2, 1998.


             NEW SECTION. Sec. 54. The following acts or parts of acts are each repealed, effective June 30, 1999:

             (1) 1998 c . . . s 29 (section 29 of this act) (uncodified); and

             (2) 1998 c . . . s 30 (section 30 of this act) (uncodified).


             NEW SECTION. Sec. 55. Sections 1 through 37, 40 through 49, and 52 through 54 of this act take effect July 1, 1998.


             NEW SECTION. Sec. 56. 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. 57. (1) Sections 9, 10, 19, 20, 22 through 28, 31, and 46 of this act are each added to chapter 74.46 RCW.

             (2) Sections 19, 20, 22 through 28, and 31 of this act shall be codified in part E of chapter 74.46 RCW.


             NEW SECTION. Sec. 58. Section 51 of this act takes effect July 1, 1998, and expires October 1, 1998.


             NEW SECTION. Sec. 59. Sections 38 and 39 of this act take effect October 1, 1998."


             On page 1, line 1 of the title, after "rates;" strike the remainder of the title and insert "amending RCW 74.46.010, 74.46.020, 74.46.040, 74.46.050, 74.46.060, 74.46.080, 74.46.090, 74.46.100, 74.46.190, 74.46.220, 74.46.230, 74.46.270, 74.46.280, 74.46.300, 74.46.410, 74.46.475, 74.46.610, 74.46.620, 74.46.630, 74.46.640, 74.46.650, 74.46.660, 74.46.680, 74.46.690, 74.46.770, 74.46.780, 74.46.800, 74.46.820, 74.46.840, 74.09.120, and 72.36.030; adding new sections to chapter 74.46 RCW; adding a new section to chapter 70.38 RCW; creating new sections; repealing RCW 74.46.105, 74.46.115, 74.46.130, 74.46.150, 74.46.160, 74.46.170, 74.46.180, 74.46.210, 74.46.670, and 74.46.595; prescribing penalties; providing effective dates; and providing an expiration date."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to Engrossed Second Substitute House Bill No. 2935 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Dyer, Cody, Costa and Huff spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Engrossed Second Substitute House Bill No. 2935 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 2935 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.

 

             Engrossed Second Substitute House Bill No. 2935, as amended by the Senate, having received the constitutional majority, was declared passed.


SENATE AMENDMENTS TO HOUSE BILL

March 11, 1998

Mr. Speaker:


             Under suspension of rules, SUBSTITUTE HOUSE BILL NO. 3001 was returned to second reading for purposes of amendment(s). The Senate adopted the attached striking amendment Floor No. 1020, and passed the bill as amended,


             Strike everything after the enacting clause and insert the following:


             "Sec. 1. RCW 66.28.040 and 1997 c 39 s 1 are each amended to read as follows:

             Except as permitted by the board under RCW 66.20.010, no brewer, wholesaler, distiller, winery, importer, rectifier, or other manufacturer of liquor shall, within the state, by himself or herself, a clerk, servant, or agent, give to any person any liquor; but nothing in this section nor in RCW 66.28.010 shall prevent a brewer, wholesaler, winery, distiller, or importer from furnishing samples of beer, wine, or spirituous liquor to authorized licensees for the purpose of negotiating a sale, in accordance with regulations adopted by the liquor control board, provided that the samples are subject to taxes imposed by RCW 66.24.290 and 66.24.210, and in the case of spirituous liquor, any product used for samples must be purchased at retail from the board; nothing in this section shall prevent the furnishing of samples of liquor to the board for the purpose of negotiating the sale of liquor to the state liquor control board; nothing in this section shall prevent a brewery, winery, distillery, or wholesaler from furnishing beer, wine, or spirituous liquor for instructional purposes under RCW 66.28.150 and 66.28.155; nothing in this section shall prevent a winery or wholesaler from furnishing wine without charge, subject to the taxes imposed by RCW 66.24.210, to a not-for-profit group organized and operated solely for the purpose of enology or the study of viticulture which has been in existence for at least six months and ((any)) that uses wine so furnished ((shall be used)) solely for such educational purposes((, provided that the wine furnished shall be subject to the taxes imposed by RCW 66.24.210)) or a domestic winery from furnishing wine without charge or a domestic brewery from furnishing beer without charge, subject to the taxes imposed by RCW 66.24.210 or 66.24.290, to a nonprofit charitable corporation or association exempt from taxation under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3)) for use consistent with the purpose or purposes entitling it to such exemption; nothing in this section shall prevent a brewer from serving beer without charge, on the brewery premises; nothing in this section shall prevent donations of wine for the purposes of RCW 66.12.180; and nothing in this section shall prevent a domestic winery from serving wine without charge, on the winery premises."


             On page 1, line 2 of the title, after "organizations;" strike the remainder of the title and insert "and amending RCW 66.28.040."


and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendments to Substitute House Bill No. 3001 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             The Speaker (Representative Pennington presiding) state the question before the House to be final passage of Substitute House Bill No. 3001 as amended by the Senate.


             Representatives Honeyford and Conway spoke in favor of final passage of the bill.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 3001 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Substitute House Bill No. 3001 as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

March 11, 1998

Mr. Speaker:


             The Senate concurred in the House amendment(s) to SENATE BILL NO. 6541 on page 2, line 33 and page 3, line 6, and refused to concur in the House amendment on page 3, beginning on line 10, and asks the House to recede from said amendment,


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House receded in its amendment on page 3, beginning on line 10, to Senate Bill No. 6541 and advanced the bill as amended to final passage.


FINAL PASSAGE OF SENATE BILL AS AMENDED BY HOUSE


             Representatives Alexander, Morris, Van Luven, Ogden, DeBolt, Chandler and Skinner spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Senate Bill No. 6541, with the House amendments page 2, line 33 and page 3, line 6, and without the House amendment on page 3, beginning on line 10.


ROLL CALL


             The Clerk called the roll on the final passage of Senate Bill No. 6541, with the House amendments on page 2, line 33 and page 3, line 6, and without the House amendment on page 3, beginning on line 10, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Senate Bill No. 6541, as amended by the House, having received the constitutional majority, was declared passed.


RESOLUTIONS


             HOUSE RESOLUTION NO. 98-4742, by Representatives Butler and Cole


             WHEREAS, The Shorewood High School girls basketball team won the Class AAA state prep girls basketball championship by defeating Blanchet High School by a score of 41 to 32; and

             WHEREAS, This is the first state basketball title ever brought to Shorewood High School; and

             WHEREAS, The team finished the season with an impressive record of 23-6; and

             WHEREAS, The success these young women experienced is a tribute to their dedication, determination, and hard work; and

             WHEREAS, As young women athletes, they serve as role models for younger girls aspiring to succeed in athletics;

             NOW, THEREFORE BE IT RESOLVED, That the House of Representatives recognize and honor team members Julie Taborski, Blaire Burman, Kristin Shrewsbury, Laura Taborsky, Michelle Webb, Heidi Hascall, Stephanie Hart, Brynn Grimley, Cori Nelson, Tegan Simonson, Nino Lowe, Esther Poloai, Analisa Johnson, and coaches Tom Demetre, Cecil Jackson, Gail Pintler, and Gina O'Neil for a tremendous performance on the court; and

             BE IT FURTHER RESOLVED, That the Chief Clerk immediately transmit this resolution to the Governor of the State of Washington, the Honorable Gary F. Locke, the President of the Senate, the Honorable Brad Owen, the Speaker of the House of Representatives, the Honorable Clyde Ballard, the superintendent of the Shorewood School District, the principal of Shorewood High School, and the families of the young ladies on the championship team.


             House Resolution No. 4742 was adopted.


             HOUSE RESOLUTION NO. 98-4743, by Representatives Cody and Veloria


             WHEREAS, Ken Harmon has serve his community since 1978, when he was duly elected by a vote of citizens to the Skyway Water and Sewer District; and

             WHEREAS, He has selflessly served as commissioner and president of the board; and

             WHEREAS, He has carried out his official obligations with fairness and efficiency for two decades; and

             WHEREAS, His service has been voluntary and continuous; and

             WHEREAS, The Washington State Legislature places a high value on public service, volunteerism, and exemplary behavior of citizens;

             NOW, THEREFORE, BE IT RESOLVED, That the Washington State Legislature give recognition and praise to Ken Harmon for his personal sacrifice, dedication, and contribution to the Skyway Water and Sewer District; and

             BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Ken Harmon.


             House Resolution No. 4743 was adopted.


MESSAGES FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on ENGROSSED SUBSTITUTE SENATE BILL NO. 6165, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate receded from its amendment(s) to ENGROSSED HOUSE BILL NO. 2772 and passed the bill without said amendments, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate has granted the request of the House for a Second Conference Committee on ENGROSSED SUBSTITUTE HOUSE BILL NO. 2439. The President has appointed the following members as conferees: Senators Benton, Haugen and Prince, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SUBSTITUTE SENATE BILL NO. 5582, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SUBSTITUTE SENATE BILL NO. 6181, and has passed the bill as recommended by the Conference. Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SECOND SUBSTITUTE SENATE BILL NO. 6190, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on ENGROSSED SUBSTITUTE SENATE BILL NO. 6204, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on ENGROSSED HOUSE BILL NO. 3041, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


REPORT OF CONFERENCE COMMITTEE

Bill No.:            EHB 3041                                                                                                         Date: March 11, 1998

Prepared by:      Aldo Melchiori                                                                                      Includes "NEW ITEM": YES


Mr. President:

Mr. Speaker:


             We of your CONFERENCE COMMITTEE, to whom was referred ENGROSSED HOUSE BILL NO. 3041, Family & child ombudsman office, have had the same under consideration and we recommend that:

 

All previous amendments not be adopted, and the striking amendment by the Conference Committee (s-5559.1) be adopted, and


and that the bill do pass as recommended by the Conference Committee.


             Strike everything after the enacting clause and insert the following:


             "NEW SECTION. Sec. 1. A new section is added to chapter 43.06A RCW to read as follows:

             Neither the ombudsman nor the ombudsman's staff may be compelled, in any judicial or administrative proceeding, to testify or to produce evidence regarding the exercise of the official duties of the ombudsman or of the ombudsman's staff. All related memoranda, work product, notes, and case files of the ombudsman's office are confidential, are not subject to discovery, judicial or administrative subpoena, or other method of legal compulsion, and are not admissible in evidence in a judicial or administrative proceeding. This section shall not apply to the legislative oversight committee.


             NEW SECTION. Sec. 2. A new section is added to chapter 43.06A RCW to read as follows:

             Identifying information about complainants or witnesses shall not be subject to any method of legal compulsion, nor shall such information be revealed to the legislative oversight committee or the governor except under the following circumstances: (1) The complainant or witness waives confidentiality; (2) under a legislative subpoena when there is a legislative investigation for neglect of duty or misconduct by the ombudsman or ombudsman's office when the identifying information is necessary to the investigation of the ombudsman's acts; or (3) under an investigation or inquiry by the governor as to neglect of duty or misconduct by the ombudsman or ombudsman's office when the identifying information is necessary to the investigation of the ombudsman' acts.

             For the purposes of this section, "identifying information" includes the complainant's or witness's name, location, telephone number, likeness, social security number or other identification number, or identification of immediate family members.


             NEW SECTION. Sec. 3. A new section is added to chapter 43.06A RCW to read as follows:

             The privilege described in section 1 of this act does not apply when:

             (1) The ombudsman or ombudsman's staff member has direct knowledge of an alleged crime, and the testimony, evidence, or discovery sought is relevant to that allegation;

             (2) The ombudsman or a member of the ombudsman's staff has received a threat of, or becomes aware of a risk of, imminent serious harm to any person, and the testimony, evidence, or discovery sought is relevant to that threat or risk;

             (3) The ombudsman has been asked to provide general information regarding the general operation of, or the general processes employed at, the ombudsman's office; or

             (4) The ombudsman or ombudsman's staff member has direct knowledge of a failure by any person specified in RCW 26.44.030, including the state family and children's ombudsman or any volunteer in the ombudsman's office, to comply with RCW 26.44.030.


             NEW SECTION. Sec. 4. A new section is added to chapter 43.06A RCW to read as follows:

             When the ombudsman or ombudsman's staff member has reasonable cause to believe that any public official, employee, or other person has acted in a manner warranting criminal or disciplinary proceedings, the ombudsman or ombudsman's staff member shall report the matter, or cause a report to be made, to the appropriate authorities.


             NEW SECTION. Sec. 5. A new section is added to chapter 43.06A RCW to read as follows:

             Nothing in this chapter shall be construed to conflict with the duty to report specified in RCW 26.44.030.


             Sec. 6. RCW 43.06A.010 and 1996 c 131 s 2 are each amended to read as follows:

             There is hereby created an office of the family and children's ombudsman within the office of the governor for the purpose of promoting public awareness and understanding of family and children services, identifying system issues and responses for the governor and the legislature to act upon, and monitoring and ensuring compliance with administrative acts, relevant statutes, rules, and policies pertaining to family and children's services and the placement, supervision, and treatment of children in the state's care or in state-licensed facilities or residences. The ombudsman shall report directly to the governor and the legislative oversight committee and shall exercise his or her powers and duties independently of the secretary.


             Sec. 7. RCW 43.06A.020 and 1996 c 131 s 3 are each amended to read as follows:

             (1) Subject to confirmation by the senate, the governor shall appoint an ombudsman who shall be a person of recognized judgment, independence, objectivity, and integrity, and shall be qualified by training or experience, or both, in family and children's services law and policy. Prior to the appointment, the governor shall consult with, and may receive recommendations from the committee, regarding the selection of the ombudsman.

             (2) The person appointed ombudsman shall hold office for a term of three years and shall continue to hold office until reappointed or until his or her successor is appointed. The governor may remove the ombudsman only for neglect of duty, misconduct, or inability to perform duties. Any vacancy shall be filled by similar appointment for the remainder of the unexpired term.


             NEW SECTION. Sec. 8. 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. 9. 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 3 of the title, after "proceedings;" strike the remainder of the title and insert "amending RCW 43.06A.010 and 43.06A.020; adding new sections to chapter 43.06A RCW; and declaring an emergency."


             There being no objection, the House adopted the Report of the Conference Committee on Engrossed House Bill No. 3041 and advanced the bill to Final Passage.


FINAL PASSAGE OF HOUSE BILL

AS RECOMMENDED BY THE CONFERENCE COMMITTEE


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


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Engrossed House Bill No. 3041 as recommended by the Conference Committee.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed House Bill No. 3041 as recommended by the Conference Committee, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Engrossed House Bill No. 3041, as recommended by the Conference Committee, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SUBSTITUTE HOUSE BILL NO. 2556, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


REPORT OF CONFERENCE COMMITTEE

Bill No.:            SHB 2556                                                                                                         Date: March 11, 1998

Prepared by:      Richard Rodger                                                                                     Includes "NEW ITEM": YES


Mr. President:

Mr. Speaker:


             We of your CONFERENCE COMMITTEE, to whom was referred SUBSTITUTE HOUSE BILL NO. 2556, Child abuse prevention/treatment, have had the same under consideration and we recommend that:

 

All previous amendments not be adopted, and the striking amendment by the Conference Committee be adopted, and


and that the bill do pass as recommended by the Conference Committee.


             Strike everything after the enacting clause and insert the following:


             "Sec. 1. RCW 13.34.020 and 1990 c 284 s 31 are each amended to read as follows:

             The legislature declares that the family unit is a fundamental resource of American life which should be nurtured. Toward the continuance of this principle, the legislature declares that the family unit should remain intact unless a child's right to conditions of basic nurture, health, or safety is jeopardized. When the rights of basic nurture, physical and mental health, and safety of the child and the legal rights of the parents are in conflict, the rights and safety of the child should prevail. In making reasonable efforts under this chapter, the child's health and safety shall be the paramount concern. The right of a child to basic nurturing includes the right to a safe, stable, and permanent home and a speedy resolution of any proceeding under this chapter.


             Sec. 2. RCW 13.34.130 and 1997 c 280 s 1 are each amended to read as follows:

             If, after a fact-finding hearing pursuant to RCW 13.34.110, it has been proven by a preponderance of the evidence that the child is dependent within the meaning of RCW 13.34.030; after consideration of the predisposition report prepared pursuant to RCW 13.34.110 and after a disposition hearing has been held pursuant to RCW 13.34.110, the court shall enter an order of disposition pursuant to this section.

             (1) The court shall order one of the following dispositions of the case:

             (a) Order a disposition other than removal of the child from his or her home, which shall provide a program designed to alleviate the immediate danger to the child, to mitigate or cure any damage the child has already suffered, and to aid the parents so that the child will not be endangered in the future. In selecting a program, the court should choose those services that least interfere with family autonomy, provided that the services are adequate to protect the child.

             (b) Order that the child be removed from his or her home and ordered into the custody, control, and care of a relative or the department of social and health services or a licensed child placing agency for placement in a foster family home or group care facility licensed pursuant to chapter 74.15 RCW or in a home not required to be licensed pursuant to chapter 74.15 RCW. Unless there is reasonable cause to believe that the safety or welfare of the child would be jeopardized or that efforts to reunite the parent and child will be hindered, such child shall be placed with a person who is related to the child as defined in RCW 74.15.020(4)(a) and with whom the child has a relationship and is comfortable, and who is willing and available to care for the child. Placement of the child with a relative under this subsection shall be given preference by the court. An order for out-of-home placement may be made only if the court finds that reasonable efforts have been made to prevent or eliminate the need for removal of the child from the child's home and to make it possible for the child to return home, specifying the services that have been provided to the child and the child's parent, guardian, or legal custodian, and that preventive services have been offered or provided and have failed to prevent the need for out-of-home placement, unless the health, safety, and welfare of the child cannot be protected adequately in the home, and that:

             (i) There is no parent or guardian available to care for such child;

             (ii) The parent, guardian, or legal custodian is not willing to take custody of the child;

             (iii) The court finds, by clear, cogent, and convincing evidence, a manifest danger exists that the child will suffer serious abuse or neglect if the child is not removed from the home and an order under RCW 26.44.063 would not protect the child from danger; or

             (iv) The extent of the child's disability is such that the parent, guardian, or legal custodian is unable to provide the necessary care for the child and the parent, guardian, or legal custodian has determined that the child would benefit from placement outside of the home.

             (2) If the court has ordered a child removed from his or her home pursuant to subsection (1)(b) of this section, the court may order that a petition seeking termination of the parent and child relationship be filed if the court finds ((it)): (a) Termination is recommended by the supervising agency((, that it)); (b) termination is in the best interests of the child; and (c) that ((it is not reasonable to provide further services to reunify the family)) because of the existence of aggravated circumstances ((make it unlikely that services will effectuate the return of the child to the child's parents in the near future)), reasonable efforts to unify the family are not required. Notwithstanding the existence of aggravated circumstances, reasonable efforts may be required if the court or department determines it is in the best interest of the child. In determining whether aggravated circumstances exist, the court shall consider one or more of the following:

             (((a))) (i) Conviction of the parent of rape of the child in the first, second, or third degree as defined in RCW 9A.44.073, 9A.44.076, and 9A.44.079;

             (((b))) (ii) Conviction of the parent of criminal mistreatment of the child in the first or second degree as defined in RCW 9A.42.020 and 9A.42.030;

             (((c))) (iii) Conviction of the parent of one of the following assault crimes, when the child is the victim: Assault in the first or second degree as defined in RCW 9A.36.011 and 9A.36.021 or assault of a child in the first or second degree as defined in RCW 9A.36.120 or 9A.36.130;

             (((d))) (iv) Conviction of the parent of murder, manslaughter, or homicide by abuse of the child's other parent, sibling, or another child;

             (((e))) (v) Conviction of the parent of attempting, soliciting, or conspiracy to commit a crime listed in (c)(i), (ii), (iii), or (iv) of this subsection;

             (vi) A finding by a court that a parent is a sexually violent predator as defined in RCW 71.09.020;

             (((f))) (vii) Failure of the parent to complete available treatment ordered under this chapter or the equivalent laws of another state, where such failure has resulted in a prior termination of parental rights to another child and the parent has failed to effect significant change in the interim. In the case of a parent of an Indian child, as defined in the Indian Child Welfare Act, P.L. 95-608 (25 U.S.C. 1903), the court shall also consider tribal efforts to assist the parent in completing treatment and make it possible for the child to return home;

             (viii) An infant under three years of age has been abandoned as defined in RCW 13.34.030(4)(a);

             (ix) The mother has given birth to three or more drug-affected infants, resulting in the department filing a petition under section 23 of this act.

             (3) If reasonable efforts are not ordered under this subsection (3) a permanency plan hearing shall be held within thirty days. Reasonable efforts shall be made to place the child in a timely manner in accordance with the permanency plan, and to complete whatever steps are necessary to finalize the permanent placement of the child;

             (4) Whenever a child is ordered removed from the child's home, the agency charged with his or her care shall provide the court with:

             (a) A permanency plan of care that shall identify one of the following outcomes as a primary goal and may identify additional outcomes as alternative goals: Return of the child to the home of the child's parent, guardian, or legal custodian; adoption; guardianship; or long-term relative or foster care, until the child is age eighteen, with a written agreement between the parties and the care provider; and independent living, if appropriate and if the child is age sixteen or older. Whenever a permanency plan identifies independent living as a goal, the plan shall also specifically identify the services that will be provided to assist the child to make a successful transition from foster care to independent living. Before the court approves independent living as a permanency plan of care, the court shall make a finding that the provision of services to assist the child in making a transition from foster care to independent living will allow the child to manage his or her financial affairs and to manage his or her personal, social, educational, and nonfinancial affairs. The department shall not discharge a child to an independent living situation before the child is eighteen years of age unless the child becomes emancipated pursuant to chapter 13.64 RCW.

             (b) Unless the court has ordered, pursuant to subsection (2) of this section, that a termination petition be filed, a specific plan as to where the child will be placed, what steps will be taken to return the child home, and what actions the agency will take to maintain parent-child ties. All aspects of the plan shall include the goal of achieving permanence for the child.

             (i) The agency plan shall specify what services the parents will be offered in order to enable them to resume custody, what requirements the parents must meet in order to resume custody, and a time limit for each service plan and parental requirement.

             (ii) The agency shall be required to encourage the maximum parent-child contact possible, including regular visitation and participation by the parents in the care of the child while the child is in placement. Visitation may be limited or denied only if the court determines that such limitation or denial is necessary to protect the child's health, safety, or welfare.

             (iii) A child shall be placed as close to the child's home as possible, preferably in the child's own neighborhood, unless the court finds that placement at a greater distance is necessary to promote the child's or parents' well-being.

             (iv) The agency charged with supervising a child in placement shall provide all reasonable services that are available within the agency, or within the community, or those services which the department of social and health services has existing contracts to purchase. It shall report to the court if it is unable to provide such services.

             (c) If the court has ordered, pursuant to subsection (2) of this section, that a termination petition be filed, a specific plan as to where the child will be placed, what steps will be taken to achieve permanency for the child, services to be offered or provided to the child, and, if visitation would be in the best interests of the child, a recommendation to the court regarding visitation between parent and child pending a fact-finding hearing on the termination petition. The agency shall not be required to develop a plan of services for the parents or provide services to the parents.

             (((4))) (5) If the court determines that the continuation of reasonable efforts to prevent or eliminate the need to remove the child from his or her home or to safely return the child home should not be part of the permanency plan of care for the child, reasonable efforts shall be made to place the child in a timely manner and to complete whatever steps are necessary to finalize the permanent placement of the child.

             (6) If there is insufficient information at the time of the disposition hearing upon which to base a determination regarding the suitability of a proposed placement with a relative, the child shall remain in foster care and the court shall direct the supervising agency to conduct necessary background investigations as provided in chapter 74.15 RCW and report the results of such investigation to the court within thirty days. However, if such relative appears otherwise suitable and competent to provide care and treatment, the criminal history background check need not be completed before placement, but as soon as possible after placement. Any placements with relatives, pursuant to this section, shall be contingent upon cooperation by the relative with the agency case plan and compliance with court orders related to the care and supervision of the child including, but not limited to, court orders regarding parent-child contacts and any other conditions imposed by the court. Noncompliance with the case plan or court order shall be grounds for removal of the child from the relative's home, subject to review by the court.

             (((5))) (7) Except for children whose cases are reviewed by a citizen review board under chapter 13.70 RCW, the status of all children found to be dependent shall be reviewed by the court at least every six months from the beginning date of the placement episode or the date dependency is established, whichever is first, at a hearing in which it shall be determined whether court supervision should continue. The review shall include findings regarding the agency and parental completion of disposition plan requirements, and if necessary, revised permanency time limits. The supervising agency shall provide a foster parent, preadoptive parent, or relative with notice of, and their right to an opportunity to be heard in, a review hearing pertaining to the child, but only if that person is currently providing care to that child at the time of the hearing. This section shall not be construed to grant party status to any person who has been provided an opportunity to be heard.

             (a) A child shall not be returned home at the review hearing unless the court finds that a reason for removal as set forth in this section no longer exists. The parents, guardian, or legal custodian shall report to the court the efforts they have made to correct the conditions which led to removal. If a child is returned, casework supervision shall continue for a period of six months, at which time there shall be a hearing on the need for continued intervention.

             (b) If the child is not returned home, the court shall establish in writing:

             (i) Whether reasonable services have been provided to or offered to the parties to facilitate reunion, specifying the services provided or offered;

             (ii) Whether the child has been placed in the least-restrictive setting appropriate to the child's needs, including whether consideration and preference has been given to placement with the child's relatives;

             (iii) Whether there is a continuing need for placement and whether the placement is appropriate;

             (iv) Whether there has been compliance with the case plan by the child, the child's parents, and the agency supervising the placement;

             (v) Whether progress has been made toward correcting the problems that necessitated the child's placement in out-of-home care;

             (vi) Whether the parents have visited the child and any reasons why visitation has not occurred or has been infrequent;

             (vii) Whether additional services are needed to facilitate the return of the child to the child's parents; if so, the court shall order that reasonable services be offered specifying such services; and

             (viii) The projected date by which the child will be returned home or other permanent plan of care will be implemented.

             (c) The court at the review hearing may order that a petition seeking termination of the parent and child relationship be filed.


             Sec. 3. RCW 13.34.145 and 1995 c 311 s 20 and 1995 c 53 s 2 are each reenacted and amended to read as follows:

             (1) A permanency plan shall be developed no later than sixty days from the time the supervising agency assumes responsibility for providing services, including placing the child, or at the time of a hearing under RCW 13.34.130, whichever occurs first. The permanency planning process continues until a permanency planning goal is achieved or dependency is dismissed. The planning process shall include reasonable efforts to return the child to the parent's home.

             (a) Whenever a child is placed in out-of-home care pursuant to RCW 13.34.130, the agency that has custody of the child shall provide the court with a written permanency plan of care directed towards securing a safe, stable, and permanent home for the child as soon as possible. The plan shall identify one of the following outcomes as the primary goal and may also identify additional outcomes as alternative goals: Return of the child to the home of the child's parent, guardian, or legal custodian; adoption; guardianship; or long-term relative or foster care, until the child is age eighteen, with a written agreement between the parties and the care provider; and independent living, if appropriate and if the child is age sixteen or older and the provisions of subsection (2) of this section are met.

             (b) The identified outcomes and goals of the permanency plan may change over time based upon the circumstances of the particular case.

             (c) Permanency planning goals should be achieved at the earliest possible date, preferably before the child has been in out-of-home care for fifteen months. In cases where parental rights have been terminated, the child is legally free for adoption, and adoption has been identified as the primary permanency planning goal, it shall be a goal to complete the adoption within six months following entry of the termination order.

             (2) Whenever a permanency plan identifies independent living as a goal, the plan shall also specifically identify the services that will be provided to assist the child to make a successful transition from foster care to independent living. Before the court approves independent living as a permanency plan of care, the court shall make a finding that the provision of services to assist the child in making a transition from foster care to independent living will allow the child to manage his or her financial affairs and to manage his or her personal, social, educational, and nonfinancial affairs. The department shall not discharge a child to an independent living situation before the child is eighteen years of age unless the child becomes emancipated pursuant to chapter 13.64 RCW.

             (3)(((a) For children ten and under,)) A permanency planning hearing shall be held in all cases where the child has remained in out-of-home care for at least nine months and an adoption decree or guardianship order has not previously been entered. The hearing shall take place no later than twelve months following commencement of the current placement episode.

             (((b) For children over ten, a permanency planning hearing shall be held in all cases where the child has remained in out-of-home care for at least fifteen months and an adoption decree or guardianship order has not previously been entered. The hearing shall take place no later than eighteen months following commencement of the current placement episode.))

             (4) Whenever a child is removed from the home of a dependency guardian or long-term relative or foster care provider, and the child is not returned to the home of the parent, guardian, or legal custodian but is placed in out-of-home care, a permanency planning hearing shall take place no later than twelve ((or eighteen)) months, as provided in subsection (3) of this section, following the date of removal unless, prior to the hearing, the child returns to the home of the dependency guardian or long-term care provider, the child is placed in the home of the parent, guardian, or legal custodian, an adoption decree or guardianship order is entered, or the dependency is dismissed.

             (5) No later than ten working days prior to the permanency planning hearing, the agency having custody of the child shall submit a written permanency plan to the court and shall mail a copy of the plan to all parties and their legal counsel, if any.

             (6) At the permanency planning hearing, the court shall enter findings as required by RCW 13.34.130(((5))) (7) and shall review the permanency plan prepared by the agency. If the child has resided in the home of a foster parent or relative for more than six months prior to the permanency planning hearing, the court shall also enter a finding regarding whether the foster parent or relative was informed of the hearing as required in RCW 74.13.280 and 13.34.130(7). If a goal of long-term foster or relative care has been achieved prior to the permanency planning hearing, the court shall review the child's status to determine whether the placement and the plan for the child's care remain appropriate. In cases where the primary permanency planning goal has not yet been achieved, the court shall inquire regarding the reasons why the primary goal has not been achieved and determine what needs to be done to make it possible to achieve the primary goal. In all cases, the court shall:

             (a)(i) Order the permanency plan prepared by the agency to be implemented; or

             (ii) Modify the permanency plan, and order implementation of the modified plan; and

             (b)(i) Order the child returned home only if the court finds that a reason for removal as set forth in RCW 13.34.130 no longer exists; or

             (ii) Order the child to remain in out-of-home care for a limited specified time period while efforts are made to implement the permanency plan.

             (7) If the court orders the child returned home, casework supervision shall continue for at least six months, at which time a review hearing shall be held pursuant to RCW 13.34.130(((5))) (7), and the court shall determine the need for continued intervention.

             (8) Following the first permanency planning hearing, the court shall hold a further permanency planning hearing in accordance with this section at least once every twelve months until a permanency planning goal is achieved or the dependency is dismissed, whichever occurs first.

             (9) Except as otherwise provided in RCW 13.34.235, the status of all dependent children shall continue to be reviewed by the court at least once every six months, in accordance with RCW 13.34.130(((5))) (7), until the dependency is dismissed. Prior to the second permanency planning hearing, the agency that has custody of the child shall consider whether to file a petition for termination of parental rights.

             (10) Nothing in this chapter may be construed to limit the ability of the agency that has custody of the child to file a petition for termination of parental rights or a guardianship petition at any time following the establishment of dependency. Upon the filing of such a petition, a fact-finding hearing shall be scheduled and held in accordance with this chapter unless the agency requests dismissal of the petition prior to the hearing or unless the parties enter an agreed order terminating parental rights, establishing guardianship, or otherwise resolving the matter.

             (11) The approval of a permanency plan that does not contemplate return of the child to the parent does not relieve the supervising agency of its obligation to provide reasonable services, under this chapter, intended to effectuate the return of the child to the parent, including but not limited to, visitation rights.

             (12) Nothing in this chapter may be construed to limit the procedural due process rights of any party in a termination or guardianship proceeding filed under this chapter.


             Sec. 4. RCW 13.34.180 and 1997 c 280 s 2 are each amended to read as follows:

             A petition seeking termination of a parent and child relationship may be filed in juvenile court by any party to the dependency proceedings concerning that child. Such petition shall conform to the requirements of RCW 13.34.040, shall be served upon the parties as provided in RCW 13.34.070(8), and shall allege:

             (1) That the child has been found to be a dependent child under RCW 13.34.030(4); and

             (2) That the court has entered a dispositional order pursuant to RCW 13.34.130; and

             (3) That the child has been removed or will, at the time of the hearing, have been removed from the custody of the parent for a period of at least six months pursuant to a finding of dependency under RCW 13.34.030(4); and

             (4) That the services ordered under RCW 13.34.130 have been expressly and understandably offered or provided and all necessary services, reasonably available, capable of correcting the parental deficiencies within the foreseeable future have been expressly and understandably offered or provided; and

             (5) That there is little likelihood that conditions will be remedied so that the child can be returned to the parent in the near future. A parent's failure to substantially improve parental deficiencies within twelve months following entry of the dispositional order shall give rise to a rebuttable presumption that there is little likelihood that conditions will be remedied so that the child can be returned to the parent in the near future. The presumption shall not arise unless the petitioner makes a showing that all necessary services reasonably capable of correcting the parental deficiencies within the foreseeable future have been clearly offered or provided. In determining whether the conditions will be remedied the court may consider, but is not limited to, the following factors:

             (a) Use of intoxicating or controlled substances so as to render the parent incapable of providing proper care for the child for extended periods of time and documented unwillingness of the parent to receive and complete treatment or documented multiple failed treatment attempts; or

             (b) Psychological incapacity or mental deficiency of the parent that is so severe and chronic as to render the parent incapable of providing proper care for the child for extended periods of time, and documented unwillingness of the parent to receive and complete treatment or documentation that there is no treatment that can render the parent capable of providing proper care for the child in the near future; and

             (6) That continuation of the parent and child relationship clearly diminishes the child's prospects for early integration into a stable and permanent home; or

             (7) In lieu of the allegations in subsections (1) through (6) of this section, the petition may allege that the child was found under such circumstances that the whereabouts of the child's parent are unknown and no person has acknowledged paternity or maternity and requested custody of the child within two months after the child was found; or

             (8) In lieu of the allegations in subsections (2) through (6) of this section, the petition may allege that the parent has been found by a court of competent jurisdiction:

             (a) To have committed, against another child of such parent, murder in the first degree, murder in the second degree, or homicide by abuse as defined in chapter 9A.32 RCW;

             (b) To have committed, against another child of such parent, manslaughter in the first degree or manslaughter in the second degree, as defined in chapter 9A.32 RCW;

             (c) To have attempted, conspired, or solicited to commit one or more of the crimes listed in (a) or (b) of this subsection; or

             (d) To have committed assault in the first or second degree, as defined in chapter 9A.36 RCW, against the surviving child or another child of the parent.

             ((A parent's failure to substantially improve parental deficiencies within twelve months following entry of the dispositional order shall give rise to a rebuttable presumption that there is little likelihood that conditions will be remedied so that the child can be returned to the parent in the near future. The presumption shall not arise unless the petitioner makes a showing that all necessary services reasonably capable of correcting the parental deficiencies within the foreseeable future have been offered or provided.))

             Notice of rights shall be served upon the parent, guardian, or legal custodian with the petition and shall be in substantially the following form:

 

"NOTICE

 

A petition for termination of parental rights has been filed against you. You have important legal rights and you must take steps to protect your interests. This petition could result in permanent loss of your parental rights.

1. You have the right to a fact-finding hearing before a judge.

2. You have the right to have a lawyer represent you at the hearing. A lawyer can look at the files in your case, talk to the department of social and health services and other agencies, tell you about the law, help you understand your rights, and help you at hearings. If you cannot afford a lawyer, the court will appoint one to represent you. To get a court-appointed lawyer you must contact:    (explain local procedure)   .

3. At the hearing, you have the right to speak on your own behalf, to introduce evidence, to examine witnesses, and to receive a decision based solely on the evidence presented to the judge.

You should be present at this hearing.

You may call    (insert agency)    for more information about your child. The agency's name and telephone number are    (insert name and telephone number)   ."


             Sec. 5. RCW 13.34.190 and 1993 c 412 s 3 are each amended to read as follows:

             After hearings pursuant to RCW 13.34.110, the court may enter an order terminating all parental rights to a child if the court finds that:

             (1)(a) The allegations contained in the petition as provided in RCW 13.34.180 (1) through (6) are established by clear, cogent, and convincing evidence; or

             (((2))) (b) RCW 13.34.180 (3) and (4) may be waived because the allegations under RCW 13.34.180 (1), (2), (5), and (6) are established beyond a reasonable doubt and when an infant has been abandoned, as defined in RCW 13.34.030, the abandonment has been proved beyond a reasonable doubt; or

             (((3))) (c) The allegation under RCW 13.34.180(7) is established beyond a reasonable doubt. In determining whether RCW 13.34.180 (5) and (6) are established beyond a reasonable doubt, the court shall consider whether one or more of the aggravated circumstances listed in RCW 13.34.130(2) exist; or

             (d) The allegation under RCW 13.34.180(8) is established beyond a reasonable doubt; and

             (((4))) (2) Such an order is in the best interests of the child.


             Sec. 6. RCW 74.15.130 and 1995 c 302 s 5 are each amended to read as follows:

             (1) An agency may be denied a license, or any license issued pursuant to chapter 74.15 RCW and RCW 74.13.031 may be suspended, revoked, modified, or not renewed by the secretary upon proof (a) that the agency has failed or refused to comply with the provisions of chapter 74.15 RCW and RCW 74.13.031 or the requirements promulgated pursuant to the provisions of chapter 74.15 RCW and RCW 74.13.031; or (b) that the conditions required for the issuance of a license under chapter 74.15 RCW and RCW 74.13.031 have ceased to exist with respect to such licenses. RCW 43.20A.205 governs notice of a license denial, revocation, suspension, or modification and provides the right to an adjudicative proceeding.

             (2) In any adjudicative proceeding regarding the denial, modification, suspension, or revocation of a foster family home license, the department's decision shall be upheld if there is reasonable cause to believe that:

             (a) The applicant or licensee lacks the character, suitability, or competence to care for children placed in out-of-home care, however, no unfounded report of child abuse or neglect may be used to deny employment or a license;

             (b) The applicant or licensee has failed or refused to comply with any provision of chapter 74.15 RCW, RCW 74.13.031, or the requirements adopted pursuant to such provisions; or

             (c) The conditions required for issuance of a license under chapter 74.15 RCW and RCW 74.13.031 have ceased to exist with respect to such licenses.

             (3) In any adjudicative proceeding regarding the denial, modification, suspension, or revocation of any license under this chapter, other than a foster family home license, the department's decision shall be upheld if it is supported by a preponderance of the evidence.

             (4) The department may assess civil monetary penalties upon proof that an agency has failed or refused to comply with the rules adopted under the provisions of this chapter and RCW 74.13.031 or that an agency subject to licensing under this chapter and RCW 74.13.031 is operating without a license except that civil monetary penalties shall not be levied against a licensed foster home. Monetary penalties levied against unlicensed agencies that submit an application for licensure within thirty days of notification and subsequently become licensed will be forgiven. These penalties may be assessed in addition to or in lieu of other disciplinary actions. Civil monetary penalties, if imposed, may be assessed and collected, with interest, for each day an agency is or was out of compliance. Civil monetary penalties shall not exceed seventy-five dollars per violation for a family day-care home and two hundred fifty dollars per violation for group homes, child day-care centers, and child-placing agencies. Each day upon which the same or substantially similar action occurs is a separate violation subject to the assessment of a separate penalty. The department shall provide a notification period before a monetary penalty is effective and may forgive the penalty levied if the agency comes into compliance during this period. The department may suspend, revoke, or not renew a license for failure to pay a civil monetary penalty it has assessed pursuant to this chapter within ten days after such assessment becomes final. Chapter 43.20A RCW governs notice of a civil monetary penalty and provides the right of an adjudicative proceeding. The preponderance of evidence standard shall apply in adjudicative proceedings related to assessment of civil monetary penalties.


             Sec. 7. RCW 26.44.020 and 1997 c 386 s 45, 1997 c 386 s 24, 1997 c 282 s 4, and 1997 c 132 s 2 are each reenacted and amended to read as follows:

             For the purpose of and as used in this chapter:

             (1) "Court" means the superior court of the state of Washington, juvenile department.

             (2) "Law enforcement agency" means the police department, the prosecuting attorney, the state patrol, the director of public safety, or the office of the sheriff.

             (3) "Practitioner of the healing arts" or "practitioner" means a person licensed by this state to practice podiatric medicine and surgery, optometry, chiropractic, nursing, dentistry, osteopathic medicine and surgery, or medicine and surgery or to provide other health services. The term "practitioner" shall include a duly accredited Christian Science practitioner: PROVIDED, HOWEVER, That a person who is being furnished Christian Science treatment by a duly accredited Christian Science practitioner shall not be considered, for that reason alone, a neglected person for the purposes of this chapter.

             (4) "Institution" means a private or public hospital or any other facility providing medical diagnosis, treatment or care.

             (5) "Department" means the state department of social and health services.

             (6) "Child" or "children" means any person under the age of eighteen years of age.

             (7) "Professional school personnel" shall include, but not be limited to, teachers, counselors, administrators, child care facility personnel, and school nurses.

             (8) "Social service counselor" shall mean anyone engaged in a professional capacity during the regular course of employment in encouraging or promoting the health, welfare, support or education of children, or providing social services to adults or families, including mental health, drug and alcohol treatment, and domestic violence programs, whether in an individual capacity, or as an employee or agent of any public or private organization or institution.

             (9) "Psychologist" shall mean any person licensed to practice psychology under chapter 18.83 RCW, whether acting in an individual capacity or as an employee or agent of any public or private organization or institution.

             (10) "Pharmacist" shall mean any registered pharmacist under the provisions of chapter 18.64 RCW, whether acting in an individual capacity or as an employee or agent of any public or private organization or institution.

             (11) "Clergy" shall mean any regularly licensed or ordained minister, priest or rabbi of any church or religious denomination, whether acting in an individual capacity or as an employee or agent of any public or private organization or institution.

             (12) "Abuse or neglect" shall mean the injury, sexual abuse, sexual exploitation, negligent treatment, or maltreatment of a child, adult dependent, or developmentally disabled person by any person under circumstances which indicate that the child's or adult's health, welfare, and safety is harmed, excluding conduct permitted under RCW 9A.16.100. An abused child is a child who has been subjected to child abuse or neglect as defined herein.

             (13) "Child protective services section" shall mean the child protective services section of the department.

             (14) "Adult dependent persons" shall be defined as those persons over the age of eighteen years who have been found to be legally incompetent or disabled pursuant to chapter 11.88 RCW.

             (15) "Sexual exploitation" includes: (a) Allowing, permitting, or encouraging a child to engage in prostitution by any person; or (b) allowing, permitting, encouraging, or engaging in the obscene or pornographic photographing, filming, or depicting of a child by any person.

             (16) "Negligent treatment or maltreatment" means an act or omission which evidences a serious disregard of consequences of such magnitude as to constitute a clear and present danger to the child's health, welfare, and safety. The fact that siblings share a bedroom is not, in and of itself, "negligent treatment or maltreatment."

             (17) "Developmentally disabled person" means a person who has a disability defined in RCW 71A.10.020.

             (18) "Child protective services" means those services provided by the department designed to protect children from child abuse and neglect and safeguard such children from future abuse and neglect, and conduct investigations of child abuse and neglect reports. Investigations may be conducted regardless of the location of the alleged abuse or neglect. Child protective services includes referral to services to ameliorate conditions which endanger the welfare of children, the coordination of necessary programs and services relevant to the prevention, intervention, and treatment of child abuse and neglect, and services to children to ensure that each child has a permanent home. In determining whether protective services should be provided, the department shall not decline to provide such services solely because of the child's unwillingness or developmental inability to describe the nature and severity of the abuse or neglect.

             (19) "Malice" or "maliciously" means an evil intent, wish, or design to vex, annoy, or injure another person. Such malice may be inferred from an act done in wilful disregard of the rights of another, or an act wrongfully done without just cause or excuse, or an act or omission of duty betraying a wilful disregard of social duty.

             (20) "Sexually aggressive youth" means a child who is defined in RCW 74.13.075(1)(b) as being a "sexually aggressive youth."

             (21) "Unfounded" means available ((evidence)) information indicates that, more likely than not, child abuse or neglect did not occur.


             Sec. 8. RCW 26.44.100 and 1997 c 282 s 2 are each amended to read as follows:

             (1) The legislature finds parents and children often are not aware of their due process rights when agencies are investigating allegations of child abuse and neglect. The legislature reaffirms that all citizens, including parents, shall be afforded due process, that protection of children remains the priority of the legislature, and that this protection includes protecting the family unit from unnecessary disruption. To facilitate this goal, the legislature wishes to ensure that parents and children be advised in writing and orally, if feasible, of their basic rights and other specific information as set forth in this chapter, provided that nothing contained in this chapter shall cause any delay in protective custody action.

             (2) The department shall notify the alleged perpetrator of the allegations of child abuse and neglect at the earliest possible point in the investigation that will not jeopardize the safety and protection of the child or the investigation process.

             Whenever the department completes an investigation of a child abuse or neglect report under chapter 26.44 RCW, the department shall notify the alleged perpetrator of the report and the department's investigative findings. The notice shall also advise the alleged perpetrator that:

             (a) A written response to the report may be provided to the department and that such response will be filed in the record following receipt by the department;

             (b) Information in the department's record may be considered in subsequent investigations or proceedings related to child protection or child custody;

             (c) ((There is currently information in the department's record that may)) Founded reports of child abuse and neglect may be considered in determining ((that)) whether the person is disqualified from being licensed to provide child care, employed by a licensed child care agency, or authorized by the department to care for children; and

             (d) ((A person who has demonstrated a good-faith desire to work in a licensed agency may request an informal meeting with the department to have an opportunity to discuss and contest the information currently in the record.)) An alleged perpetrator named in a founded report of child abuse or neglect has the right to seek review of the finding as provided in this chapter.

             (3) The notification required by this section shall be made by ((regular)) certified mail, return receipt requested, to the person's last known address.

             (4) The duty of notification created by this section is subject to the ability of the department to ascertain the location of the person to be notified. The department shall exercise reasonable, good-faith efforts to ascertain the location of persons entitled to notification under this section.


             NEW SECTION. Sec. 9. A new section is added to chapter 26.44 RCW to read as follows:

             (1) A person who is named as an alleged perpetrator after October 1, 1998, in a founded report of child abuse or neglect has the right to seek review and amendment of the finding as provided in this section.

             (2) Within twenty calendar days after receiving written notice from the department under RCW 26.44.100 that a person is named as an alleged perpetrator in a founded report of child abuse or neglect, he or she may request that the department review the finding. The request must be made in writing. If a request for review is not made as provided in this subsection, the alleged perpetrator may not further challenge the finding and shall have no right to agency review or to an adjudicative hearing or judicial review of the finding.

             (3) Upon receipt of a written request for review, the department shall review and, if appropriate, may amend the finding. Management level staff within the children's administration designated by the secretary shall be responsible for the review. The review must be conducted in accordance with procedures the department establishes by rule. Upon completion of the review, the department shall notify the alleged perpetrator in writing of the agency's determination. The notification must be sent by certified mail, return receipt requested, to the person's last known address.

             (4) If, following agency review, the report remains founded, the person named as the alleged perpetrator in the report may request an adjudicative hearing to contest the finding. The adjudicative proceeding is governed by chapter 34.05 RCW and this section. The request for an adjudicative proceeding must be filed within thirty calendar days after receiving notice of the agency review determination. If a request for an adjudicative proceeding is not made as provided in this subsection, the alleged perpetrator may not further challenge the finding and shall have no right to agency review or to an adjudicative hearing or judicial review of the finding.

             (5) Reviews and hearings conducted under this section are confidential and shall not be open to the public. Information about reports, reviews, and hearings may be disclosed only in accordance with federal and state laws pertaining to child welfare records and child protective services reports.

             (6) The department may adopt rules to implement this section.


             Sec. 10. RCW 74.13.031 and 1997 c 386 s 32 and 1997 c 272 s 1 are each reenacted and amended to read as follows:

             The department shall have the duty to provide child welfare services and shall:

             (1) Develop, administer, supervise, and monitor a coordinated and comprehensive plan that establishes, aids, and strengthens services for the protection and care of homeless, runaway, dependent, or neglected children.

             (2) Within available resources, recruit an adequate number of prospective adoptive and foster homes, both regular and specialized, i.e. homes for children of ethnic minority, including Indian homes for Indian children, sibling groups, handicapped and emotionally disturbed, teens, pregnant and parenting teens, and annually report to the governor and the legislature concerning the department's success in: (a) Meeting the need for adoptive and foster home placements; (b) reducing the foster parent turnover rate; (c) completing home studies for legally free children; and (d) implementing and operating the passport program required by RCW 74.13.285. The report shall include a section entitled "Foster Home Turn-Over, Causes and Recommendations."

             (3) Investigate complaints of ((alleged neglect, abuse, or abandonment of children)) any recent act or failure to act on the part of a parent or caretaker that results in death, serious physical or emotional harm, or sexual abuse or exploitation, or that presents an imminent risk of serious harm, and on the basis of the findings of such investigation, offer child welfare services in relation to the problem to such parents, legal custodians, or persons serving in loco parentis, and/or bring the situation to the attention of an appropriate court, or another community agency: PROVIDED, That an investigation is not required of nonaccidental injuries which are clearly not the result of a lack of care or supervision by the child's parents, legal custodians, or persons serving in loco parentis. If the investigation reveals that a crime against a child may have been committed, the department shall notify the appropriate law enforcement agency.

             (4) Offer, on a voluntary basis, family reconciliation services to families who are in conflict.

             (5) Monitor out-of-home placements, on a timely and routine basis, to assure the safety, well-being, and quality of care being provided is within the scope of the intent of the legislature as defined in RCW 74.13.010 and 74.15.010, and annually submit a report measuring the extent to which the department achieved the specified goals to the governor and the legislature.

             (6) Have authority to accept custody of children from parents and to accept custody of children from juvenile courts, where authorized to do so under law, to provide child welfare services including placement for adoption, and to provide for the physical care of such children and make payment of maintenance costs if needed. Except where required by Public Law 95-608 (25 U.S.C. Sec. 1915), no private adoption agency which receives children for adoption from the department shall discriminate on the basis of race, creed, or color when considering applications in their placement for adoption.

             (7) Have authority to provide temporary shelter to children who have run away from home and who are admitted to crisis residential centers.

             (8) Have authority to purchase care for children; and shall follow in general the policy of using properly approved private agency services for the actual care and supervision of such children insofar as they are available, paying for care of such children as are accepted by the department as eligible for support at reasonable rates established by the department.

             (9) Establish a children's services advisory committee which shall assist the secretary in the development of a partnership plan for utilizing resources of the public and private sectors, and advise on all matters pertaining to child welfare, licensing of child care agencies, adoption, and services related thereto. At least one member shall represent the adoption community.

             (10) Have authority to provide continued foster care or group care for individuals from eighteen through twenty years of age to enable them to complete their high school or vocational school program.

             (11) Have authority within funds appropriated for foster care services to purchase care for Indian children who are in the custody of a federally recognized Indian tribe or tribally licensed child-placing agency pursuant to parental consent, tribal court order, or state juvenile court order; and the purchase of such care shall be subject to the same eligibility standards and rates of support applicable to other children for whom the department purchases care.

             Notwithstanding any other provision of RCW 13.32A.170 through 13.32A.200 and 74.13.032 through 74.13.036, or of this section all services to be provided by the department of social and health services under subsections (4), (6), and (7) of this section, subject to the limitations of these subsections, may be provided by any program offering such services funded pursuant to Titles II and III of the federal juvenile justice and delinquency prevention act of 1974.


             Sec. 11. RCW 70.190.010 and 1996 c 132 s 2 are each amended to read as follows:

             Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

             (1) "Administrative costs" means the costs associated with procurement; payroll processing; personnel functions; management; maintenance and operation of space and property; data processing and computer services; accounting; budgeting; auditing; indirect costs; and organizational planning, consultation, coordination, and training.

             (2) "Assessment" has the same meaning as provided in RCW 43.70.010.

             (3) "At-risk" children are children who engage in or are victims of at-risk behaviors.

             (4) "At-risk behaviors" means violent delinquent acts, teen substance abuse, teen pregnancy and male parentage, teen suicide attempts, dropping out of school, child abuse or neglect, and domestic violence.

             (5) "Community public health and safety networks" or "networks" means the organizations authorized under RCW 70.190.060.

             (6) "Comprehensive plan" means a two-year plan that examines available resources and unmet needs for a county or multicounty area, barriers that limit the effective use of resources, and a plan to address these issues that is broadly supported by local residents.

             (7) "Participating state agencies" means the office of the superintendent of public instruction, the department of social and health services, the department of health, the employment security department, the department of community, trade, and economic development, and such other departments as may be specifically designated by the governor.

             (8) "Family policy council" or "council" means the superintendent of public instruction, the secretary of social and health services, the secretary of health, the commissioner of the employment security department, and the director of the department of community, trade, and economic development or their designees, ((one)) two legislators from each caucus of the senate and house of representatives, and one representative of the governor.

             (9) "Fiduciary interest" means (a) the right to compensation from a health, educational, social service, or justice system organization that receives public funds, or (b) budgetary or policy-making authority for an organization listed in (a) of this subsection. A person who acts solely in an advisory capacity and receives no compensation from a health, educational, social service, or justice system organization, and who has no budgetary or policy-making authority is deemed to have no fiduciary interest in the organization.

             (10) "Outcome" or "outcome based" means defined and measurable outcomes used to evaluate progress in reducing the rate of at-risk children and youth through reducing risk factors and increasing protective factors.

             (11) "Matching funds" means an amount no less than twenty-five percent of the amount budgeted for a network. The network's matching funds may be in-kind goods and services. Funding sources allowable for match include appropriate federal or local levy funds, private charitable funding, and other charitable giving. Basic education funds shall not be used as a match. State general funds shall not be used as a match for violence reduction and drug enforcement account funds created under RCW 69.50.520.

             (12) "Policy development" has the same meaning as provided in RCW 43.70.010.

             (13) "Protective factors" means those factors determined by the department of health to be empirically associated with behaviors that contribute to socially acceptable and healthy nonviolent behaviors. Protective factors include promulgation, identification, and acceptance of community norms regarding appropriate behaviors in the area of delinquency, early sexual activity, alcohol and substance abuse, educational opportunities, employment opportunities, and absence of crime.

             (14) "Risk factors" means those factors determined by the department of health to be empirically associated with at-risk behaviors that contribute to violence.


             Sec. 12. RCW 70.190.060 and 1996 c 132 s 3 are each amended to read as follows:

             (1) The legislature authorizes community public health and safety networks to reconnect parents and other citizens with children, youth, families, and community institutions which support health and safety. The networks have only those powers and duties expressly authorized under this chapter. The networks should empower parents and other citizens by being a means of expressing their attitudes, spirit, and perspectives regarding safe and healthy family and community life. The legislature intends that parent and other citizen perspectives exercise a controlling influence over policy and program operations of professional organizations concerned with children and family issues within networks in a manner consistent with the Constitution and state law. It is not the intent of the legislature that health, social service, or educational professionals dominate community public health and safety network processes or programs, but rather that these professionals use their skills to lend support to parents and other citizens in expressing their values as parents and other citizens identify community needs and establish community priorities. To this end, the legislature intends full participation of parents and other citizens in community public health and safety networks. The intent is that local community values are reflected in the operations of the network.

             (2) A group of persons described in subsection (3) of this section may apply to be a community public health and safety network.

             (3) Each community public health and safety network shall be composed of twenty-three people, thirteen of whom shall be citizens who live within the network boundary with no fiduciary interest. In selecting these members, first priority shall be given to members of community mobilization advisory boards, city or county children's services commissions, human services advisory boards, or other such organizations. The thirteen persons shall be selected as follows: Three by chambers of commerce, three by school board members, three by county legislative authorities, three by city legislative authorities, and one high school student, selected by student organizations. The remaining ten members shall live or work within the network boundary and shall include local representation selected by the following groups and entities: Cities; counties; federally recognized Indian tribes; parks and recreation programs; law enforcement agencies; state children's service workers; employment assistance workers; private social service providers, broad-based nonsecular organizations, or health service providers; and public education.

             (4) Each of the twenty-three people who are members of each community public health and safety network must sign an annual declaration under penalty of perjury or a notarized statement that clearly, in plain and understandable language, states whether or not he or she has a fiduciary interest. If a member has a fiduciary interest, the nature of that interest must be made clear, in plain understandable language, on the signed statement.

             (5) Members of the network shall serve terms of three years.

             The terms of the initial members of each network shall be as follows: (a) One-third shall serve for one year; (b) one-third shall serve for two years; and (c) one-third shall serve for three years. Initial members may agree which shall serve fewer than three years or the decision may be made by lot. Any vacancy occurring during the term may be filled by the chair for the balance of the unexpired term.

             (((5))) (6) Not less than sixty days before the expiration of a network member's term, the chair shall submit the name of a nominee to the network for its approval. The network shall comply with subsection (3) of this section.

             (((6))) (7) Networks are subject to the open public meetings act under chapter 42.30 RCW and the public records provisions of RCW 42.17.270 through 42.17.310.


             Sec. 13. RCW 70.190.130 and 1996 c 132 s 8 are each amended to read as follows:

             (1) The council shall only disburse funds to a network after a comprehensive plan has been prepared by the network and approved by the council. In approving the plan the council shall consider whether the network:

             (a) Promoted input from the widest practical range of agencies and affected parties, including public hearings;

             (b) Reviewed the indicators of violence data compiled by the local public health departments and incorporated a response to those indicators in the plan;

             (c) Obtained a declaration by the largest health department within the network boundary, indicating whether the plan meets minimum standards for assessment and policy development relating to social development according to RCW 43.70.555;

             (d) Included a specific mechanism of data collection and transmission based on the rules established under RCW 43.70.555;

             (e) Considered all relevant causes of violence in its community and did not isolate only one or a few of the elements to the exclusion of others and demonstrated evidence of building community capacity through effective neighborhood and community development;

             (f) Considered youth employment and job training programs outlined in this chapter as a strategy to reduce the rate of at-risk children and youth;

             (g) Integrated local programs that met the network's priorities and were deemed successful by the network;

             (h) Committed to make measurable reductions in the rate of at-risk children and youth by reducing the rate of state-funded out-of-home placements and make reductions in at least three of the following rates of youth: Violent criminal acts, substance abuse, pregnancy and male parentage, suicide attempts, dropping out of school, child abuse or neglect, and domestic violence; and

             (i) Held a public hearing on its proposed comprehensive plan and submitted to the council all of the written comments received at the hearing and a copy of the minutes taken at the hearing.

             (2) The council may establish a maximum amount to be expended by a network for purposes of planning and administrative duties, that shall not, in total, exceed ten percent of funds available to a network. The council shall make recommendations to the legislature regarding the specific maximum amounts that can be spent by a network or group of networks on planning and administrative duties. The recommendation may provide differing percentages, considering the size of the budgets of each network and giving consideration to whether there should be a higher percentage for administrative and planning purposes in budgets for smaller networks and a smaller percentage of the budgets for administration and planning purposes in larger networks.

             (3) The council may determine that a network is not in compliance with this chapter if it fails to comply with statutory requirements. Upon a determination of noncompliance, the council may suspend or revoke a network's status or contract and specify a process and deadline for the network's compliance.


             NEW SECTION. Sec. 14. The legislature finds that it is critically important to the basic nurture, health, and safety of children that the state examine a state-wide program relating to child abuse and neglect that includes citizen review panels as required by the federal child abuse prevention and treatment act, 42 U.S.C. Sec. 5106a.


             NEW SECTION. Sec. 15. The Washington state institute for public policy shall conduct, or contract for, a study regarding the creation of citizen review panels to meet the requirements of federal law, and located independent of the department of social and health services. The study shall include an examination of a system of independent citizen review panels to:

             (1) Examine the policies and procedures of state agencies and, where appropriate, specific cases, to evaluate the extent to which the agencies are effectively discharging their child protection responsibilities according to the state law and the state plan required under 42 U.S.C. Sec. 5106a.

             (2) Examine child protection standards set forth in the federal and state law.

             (3) Examine any other criteria that the panel considers important to ensure the protection of children, including a review of the extent to which the state child protective services system is coordinated with the foster care and adoption programs established under part E, Title IV of the Social Security Act.

             (4) Examine whether the panels should report possible criminal activity to the local prosecuting attorney in the county in which the case resides.

             (5) Examine whether, if the panel finds possible civil infractions, whether the findings should be turned over to the aggrieved individual, if the conditions set forth in RCW 74.13.500 through 74.13.525 are met, and who should turn the findings over, and whether the individual should be awarded attorneys' fees, costs, damages, including punitive damages, if the individual prevails in court.

             The study shall include an examination of the barriers to broad access to information, whether the panels should have access to the information and specific recommendations on how the panels can obtain access to such information from the department of social and health services, criminal justice agencies, law enforcement, schools, and medical providers, and other sources that have relevant information, including reports and records made and maintained by the department and its contracting agencies, while preserving the confidentiality of the records.

             The study shall also include a review of the department of social and health services' current committees and teams that have citizen membership and participation, to determine whether any of these committees and teams should be consolidated.

             An interim report of the study shall be submitted to the legislative children's oversight committee by September 15, 1998. The final study and recommendations shall be submitted to the appropriate committees of the house of representatives and the senate by December 1, 1998.


             NEW SECTION. Sec. 16. The sum of twelve thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 1998, from the general fund to The Evergreen State College for the Washington state institute for public policy for the purposes of sections 14 and 15 of this act.


             Sec. 17. RCW 70.47.060 and 1997 c 337 s 2, 1997 c 335 s 2, 1997 c 245 s 6, and 1997 c 231 s 206 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 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)) 48.47.030, 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.

             (d) To develop, as an offering by every health carrier providing coverage identical to the basic health plan, as configured on January 1, 1996, a basic health plan model plan 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. Funds received by a family as part of participation in the adoption support program authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 shall not be counted toward a family's current gross family income for the purposes of this chapter. 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.

             (16) In consultation with appropriate state and local government agencies, to establish criteria defining eligibility for persons confined or residing in government-operated institutions.


             NEW SECTION. Sec. 18. The legislature finds that all children have the right to be born healthy and free of the consequences of substance abuse by the mother during pregnancy. Individuals who abuse substances are unable to make reasoned decisions that help ensure the birth of a healthy infant. The availability of long-term pharmaceutical birth control, when combined with other treatment regimens, may allow women to regain control of their lives and make long-term decisions in the best interest of themselves and their children. The legislature finds that it may be unreasonable to continue efforts to reunify the family when a mother has given birth to a third or subsequent infant affected by her substance abuse.


             NEW SECTION. Sec. 19. A new section is added to chapter 13.34 RCW to read as follows:

             (1) A physician licensed under chapter 18.71 or 18.57 RCW, or an advanced registered nurse practitioner under chapter 18.79 RCW, primarily responsible for the care of a newborn infant, who has reasonable cause to believe the infant has been exposed to nonprescription use of controlled substances shall: (a) Conduct reasonably available and appropriate tests to determine whether the infant is drug-affected; (b) notify the department of the name and address of the parent or parents of the infant who is drug-affected; and (c) retain the infant in the birthing facility for medical treatment or place the infant in appropriate pediatric interim care services with the concurrence of the department for sufficient time for the infant to undergo withdrawal from the effects of the controlled substances. The withdrawal shall be under the supervision of appropriate health care professionals.

             (2) The physician or nurse practitioner who was responsible for the birth shall, as soon as practical, inform the mother of a drug-affected infant of: (a) The availability of publicly funded tubal ligation surgery as provided under section 34 of this act; (b) available drug treatment and counseling; and (c) birth control counseling and education. The mother may accept the offer of a tubal ligation up to six months following its tender.

             (3) A physician or nurse practitioner who makes any determination under this section shall not be liable in any cause of action as a result of his or her determination except for acts of gross negligence or intentional misconduct.

             (4) For the purpose of this section, "newborn infant" means an infant within seven days after birth.

             (5) This section expires June 30, 2002.


             NEW SECTION. Sec. 20. A new section is added to chapter 13.34 RCW to read as follows:

             (1) The department, upon receipt of a report under section 19 of this act, shall investigate and, in appropriate cases, file a dependency petition. In the event the department does not file a petition, it shall refer the mother to available chemical dependency treatment programs or a model project.

             (2) The department and the mother may enter an agreement in which the mother agrees to chemical dependency treatment on an inpatient or outpatient basis or be referred to a model project created under section 30 of this act. The agreement must specify completion dates for each of the conditions. All agreements expire twelve months from the date of execution. If the conditions have not been fulfilled at the time the agreement expires, the department shall investigate and in appropriate cases, file a dependency petition.

             (3) If the department and mother enter an agreement under subsection (2) of this section, the department shall, if a dependency petition has been filed, request the court to defer the entry of an order of dependency for as long as the mother remains in treatment or enrolled in the model project, subject to the department's monitoring for compliance. As a condition of deferral of the order of dependency, the parents, if both are available and known, shall stipulate to facts sufficient to constitute a dependency and the court shall order treatment or enrollment in a model project and prohibit nonprescription use of controlled substances. In the event that an available parent unreasonably refuses to stipulate to facts constituting a dependency, the court may proceed with the hearing on the petition.

             (4) This section expires June 30, 2002.


             NEW SECTION. Sec. 21. A new section is added to chapter 13.34 RCW to read as follows:

             (1) If the department receives a report under section 19 of this act of a mother who has given birth to a second drug-affected infant, the department:

             (a) May request the court to proceed immediately with the entry of a dependency for the first drug-affected infant; and

             (b) Shall investigate and, unless there are compelling reasons to the contrary, file a dependency petition on the second drug-affected infant. If the department does not file a petition, it shall refer the woman to available chemical dependency treatment programs or a model project.

             (2) The department and the mother may enter an agreement in which the mother agrees to: (a) Enter chemical dependency inpatient treatment or a model project, together with an aftercare program that includes participation in a model project when feasible; and (b) medically appropriate pharmaceutical pregnancy prevention that is administered not less than once every thirty days. The selection of the pregnancy prevention method shall be based on an evaluation of the medical and physical consequences to the mother and shall remain in effect until the dependency petition is dismissed or the court determines it is no longer medically appropriate. The agreement must specify completion dates for each of the conditions. All agreements expire twelve months from the date of execution. If the conditions have not been fulfilled at the time the agreement expires, the department shall investigate and in appropriate cases, file a dependency petition.

             (3) If the department and the mother enter an agreement under subsection (2) of this section, the department shall, if a dependency petition has been filed, request the court to defer the entry of an order of dependency on the second drug-affected infant for as long as the mother remains in treatment or enrolled in the model project, subject to the department's monitoring for compliance. As a condition of deferral of the order of dependency, the parents, if both are available and known, shall stipulate to facts sufficient to constitute a dependency and the court shall order treatment or enrollment in a model project and prohibit nonprescription use of controlled substances. In the event that an available parent unreasonably refuses to stipulate to facts constituting a dependency, the court may proceed with the hearing on the petition.

             (4) This section expires June 30, 2002.


             NEW SECTION. Sec. 22. A new section is added to chapter 13.34 RCW to read as follows:

             (1) The department may request the court to dismiss the petition deferred under section 20 or 21 of this act at any time. No petition may be vacated or dismissed unless the mother demonstrates by clear and convincing evidence that she has not used controlled substances in a nonprescription manner for at least twelve consecutive months and can safely provide for the child's welfare without continuing supervision by the department or court.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 23. A new section is added to chapter 13.34 RCW to read as follows:

             (1) If the department receives a report under section 19 of this act of a mother who has given birth to a third or subsequent drug-affected infant, the department shall:

             (a) Request the court to proceed immediately with the entry of a finding of dependency on all drug-affected children born before the third or subsequent birth unless an order of dependency has been vacated or dismissed; and

             (b) File a dependency petition on any drug-affected infant subject to this section as well as any other child born before the third or subsequent birth of a drug-affected infant.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 24. A new section is added to chapter 13.34 RCW to read as follows:

             (1) Following a filing of a petition under section 23 of this act:

             (a) The court shall order evaluation by a designated chemical dependency specialist, as defined in RCW 70.96A.020 who shall undertake the processes described in RCW 70.96A.140.

             (b) If the court has ordered removal of a child or children, the out-of-home placement order shall remain in effect until the petition is dismissed or the mother has successfully completed inpatient treatment and any aftercare program for controlled substances ordered by the court.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 25. By July 1, 1999, the department of social and health services, in consultation with the department of health, shall adopt rules to implement this act, including a definition of "drug-affected infant," which shall be limited to infants who are affected by a mother's nonprescription use of controlled substances.


             NEW SECTION. Sec. 26. A new section is added to chapter 13.34 RCW to read as follows:

             (1) A physician licensed under chapter 18.71 or 18.57 RCW, or an advanced registered nurse practitioner under chapter 18.79 RCW, primarily responsible for the care of a newborn infant, who has reasonable cause to believe the infant has been physiologically affected by the mother's alcohol abuse during her pregnancy shall: (a) Conduct reasonably available and appropriate tests to determine whether the infant is alcohol-affected; (b) notify the department of the name and address of the parent or parents of the infant who is alcohol-affected; and (c) retain the infant in the birthing facility for medical treatment or place the infant in appropriate pediatric interim care services with the concurrence of the department for sufficient time for the infant to undergo withdrawal from the effects of the alcohol. The withdrawal shall be under the supervision of appropriate medical professionals.

             (2) The physician or nurse practitioner who was responsible for the birth shall, as soon as practical, inform the mother of an alcohol-affected infant of: (a) The availability of publicly funded tubal ligation surgery as provided under section 35 of this act; (b) available alcohol treatment and counseling; and (c) birth control counseling and education. The mother may accept the offer of a tubal ligation up to six months following its tender.

             (3) A physician or nurse practitioner who makes any determination under this section shall not be liable in any cause of action as a result of his or her determination except for acts of gross negligence or intentional misconduct.

             (4) For the purposes of this section, "newborn infant" means an infant within seven days after birth.

             (5) This section expires June 30, 2002.


             NEW SECTION. Sec. 27. A new section is added to chapter 13.34 RCW to read as follows:

             (1) The department, upon receipt of a report under section 26 of this act, shall investigate and, in appropriate cases, file a dependency petition. In the event the department does not file a petition, it shall refer the mother to available alcohol dependency treatment programs or a model project.

             (2) The department and the mother may enter an agreement in which the mother agrees to alcohol treatment on an inpatient or outpatient basis or be referred to a model project created under section 30 of this act. The agreement must specify completion dates for each of the conditions. All agreements expire twelve months from the date of execution. If the conditions have not been fulfilled at the time the agreement expires, the department shall investigate and in appropriate cases, file a dependency petition.

             (3) If the department and mother enter an agreement under subsection (2) of this section, the department shall, if a dependency petition has been filed, request the court to defer the entry of an order of dependency for as long as the mother remains in treatment or enrolled in the model project, subject to the department's monitoring for compliance. As a condition of deferral of the order of dependency, the parents, if both are available and known, shall stipulate to facts sufficient to constitute a dependency and the court shall order treatment or enrollment in a model project and prohibit alcohol abuse. In the event that an available parent unreasonably refuses to stipulate to facts constituting a dependency, the court may proceed with the hearing on the petition.

             (4) This section expires June 30, 2002.


             NEW SECTION. Sec. 28. A new section is added to chapter 13.34 RCW to read as follows:

             (1) The department may request the court to dismiss the petition deferred under section 27 of this act at any time. No petition may be vacated or dismissed unless the mother demonstrates by clear and convincing evidence that she has not abused alcohol for at least twelve consecutive months and can safely provide for the child's welfare without continuing supervision by the department or court.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 29. By July 1, 1999, the department of social and health services, in consultation with the department of health, shall adopt rules to implement this act, including a definition of "alcohol-affected infant," which shall be limited to infants who are affected by a mother's abuse of alcohol.


             NEW SECTION. Sec. 30. To the extent funds are appropriated, the department shall operate a model project to provide services to women who give birth to infants exposed to the nonprescription use of controlled substances or abuse of alcohol by the mother during pregnancy. Within available funds, the project may be offered in one site in each of the three department's administrative regions that have the highest incidence of drug-affected or alcohol-affected infants annually. The project shall accept women referred to it by the department following the birth of a drug-affected or alcohol-affected infant. The model project shall be concluded by July 1, 2002.


             NEW SECTION. Sec. 31. To the extent funds are appropriated, the institute for public policy shall study the cost-effectiveness of this act and report to the governor and legislature not later than January 1, 2002. The study shall measure the reduction in the birth rate of drug-affected infants among women and shall compare the reduction with the rate of birth of drug-affected infants born to women referred to chemical dependency treatment programs. The study shall identify the factors that promote or discourage the ability of women to avoid giving birth to drug-affected infants.


             NEW SECTION. Sec. 32. To the extent funds are appropriated, the institute for public policy study referenced in section 31 of this act shall include alcohol-affected births.


             NEW SECTION. Sec. 33. A new section is added to chapter 70.96A RCW to read as follows:

             (1) Any treatment program or model project in which a mother is enrolled under sections 20 through 22 of this act shall provide family planning, which means the process of limiting or spacing the birth of children, education, counseling, information, and services. Family planning does not include pregnancy termination.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 34. A new section is added to chapter 74.09 RCW to read as follows:

             The department may make available, or cause to be made available, pharmaceutical birth control services, information, and counseling to any person who enters chemical dependency treatment under section 20 or 21 of this act. Within available funds, the department may pay for any tubal ligations requested under section 19 of this act if the mother's income is less than two hundred percent of the federal poverty level. The department shall report by December 1st of each year to the governor and legislature: (1) The number of tubal ligations performed as a result of chapter . . ., Laws of 1998 (this act); (2) the number of women who decline to undergo the surgery; (3) the number of women who obtain pharmaceutical birth control, by type of birth control; and (4) the number of women who are reported to the department.


             NEW SECTION. Sec. 35. A new section is added to chapter 74.09 RCW to read as follows:

             The department may make available, or cause to be made available, pharmaceutical birth control services, information, and counseling to any person who enters chemical dependency treatment under section 27 of this act. Within available funds, the department may pay for any tubal ligations requested under section 26 of this act if the mother's income is less than two hundred percent of the federal poverty level. The department shall report by December 1st of each year to the governor and legislature: (1) The number of tubal ligations performed as a result of chapter . . ., Laws of 1998 (this act); (2) the number of women who decline to undergo the surgery; (3) the number of women who obtain pharmaceutical birth control, by type of birth control; and (4) the number of women who are reported to the department.


             NEW SECTION. Sec. 36. A new section is added to chapter 18.71 RCW to read as follows:

             (1) Nothing in section 19 of this act imposes any additional duties or responsibilities on, or removes any duties or responsibilities from, a physician licensed under this chapter, except as specifically included in chapter 13.34 RCW and sections 33 and 34 of this act.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 37. A new section is added to chapter 18.57 RCW to read as follows:

             (1) Nothing in section 19 of this act imposes any additional duties or responsibilities on, or removes any duties or responsibilities from, an osteopath licensed under this chapter, except as specifically included in chapter 13.34 RCW and sections 33 and 34 of this act.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 38. A new section is added to chapter 18.79 RCW to read as follows:

             (1) Nothing in section 19 of this act imposes any additional duties or responsibilities on, or removes any duties or responsibilities from, an advanced registered nurse practitioner licensed under this chapter, except as specifically included in chapter 13.34 RCW and sections 33 and 34 of this act.

             (2) This section expires June 30, 2002.


             Sec. 39. RCW 13.34.070 and 1993 c 358 s 1 are each amended to read as follows:

             (1) Upon the filing of the petition, the clerk of the court shall issue a summons, one directed to the child, if the child is twelve or more years of age, and another to the parents, guardian, or custodian, and such other persons as appear to the court to be proper or necessary parties to the proceedings, requiring them to appear personally before the court at the time fixed to hear the petition. If the child is developmentally disabled and not living at home, the notice shall be given to the child's custodian as well as to the child's parent. The developmentally disabled child shall not be required to appear unless requested by the court. Where the custodian is summoned, the parent or guardian or both shall also be served with a summons. The fact-finding hearing on the petition shall be held no later than seventy-five days after the filing of the petition, unless exceptional reasons for a continuance are found. In cases where an infant has been affected by the mother's substance abuse, exceptional reasons for a continuance exist if the mother and the department have executed an agreement that will take more than seventy-five days to fulfill. The party requesting the continuance shall have the burden of proving by a preponderance of the evidence that exceptional circumstances do exist. To ensure that the hearing on the petition occurs within the seventy-five day time limit, the court shall schedule and hear the matter on an expedited basis.

             (2) A copy of the petition shall be attached to each summons.

             (3) The summons shall advise the parties of the right to counsel. The summons shall also inform the child's parent, guardian, or legal custodian of his or (([her])) her right to appointed counsel, if indigent, and of the procedure to use to secure appointed counsel.

             (4) The summons shall advise the parents that they may be held responsible for the support of the child if the child is placed in out-of-home care.

             (5) The judge may endorse upon the summons an order directing any parent, guardian, or custodian having the custody or control of the child to bring the child to the hearing.

             (6) If it appears from affidavit or sworn statement presented to the judge that there is probable cause for the issuance of a warrant of arrest or that the child needs to be taken into custody pursuant to RCW 13.34.050, the judge may endorse upon the summons an order that an officer serving the summons shall at once take the child into custody and take him to the place of shelter designated by the court.

             (7) If the person summoned as provided in this section is subject to an order of the court pursuant to subsection (5) or (6) of this section, and if the person fails to abide by the order, he may be proceeded against as for contempt of court. The order endorsed upon the summons shall conspicuously display the following legend:

 

NOTICE:

VIOLATION OF THIS ORDER

IS SUBJECT TO PROCEEDING

FOR CONTEMPT OF COURT

PURSUANT TO RCW 13.34.070.

 

             (8) If a party to be served with a summons can be found within the state, the summons shall be served upon the party personally as soon as possible following the filing of the petition, but in no case later than fifteen court days before the fact-finding hearing, or such time as set by the court. If the party is within the state and cannot be personally served, but the party's address is known or can with reasonable diligence be ascertained, the summons may be served upon the party by mailing a copy thereof by certified mail as soon as possible following the filing of the petition, but in no case later than fifteen court days before the hearing, or such time as set by the court. If a party other than the child is without the state but can be found or the address is known, or can with reasonable diligence be ascertained, service of the summons may be made either by delivering a copy thereof to the party personally or by mailing a copy thereof to the party by certified mail at least ten court days before the fact-finding hearing, or such time as set by the court.

             (9) Service of summons may be made under the direction of the court by any person eighteen years of age or older who is not a party to the proceedings or by any law enforcement officer, probation counselor, or department of social and health services social worker.

             (10) In any proceeding brought under this chapter where the court knows or has reason to know that the child involved is a member of an Indian tribe, notice of the pendency of the proceeding shall also be sent by registered mail, return receipt requested, to the child's tribe. If the identity or location of the tribe cannot be determined, such notice shall be transmitted to the secretary of the interior of the United States.


             NEW SECTION. Sec. 40. (1) The departments of health and social and health services, shall develop a comprehensive plan for providing services to mothers who (a) have delivered a drug or alcohol exposed or affected infant, and (b) meet the definition of at-risk eligible persons in RCW 74.09.790 and who have a child up to three years of age. The services to be provided by the plan will include those defined in RCW 74.09.790. The plan shall provide for the coordination of services through community-based programs and among: (a) The departments; (b) the departments' divisions; and (c) other state agencies. The plan shall include recommendations to the legislature for implementing the plan and any alternative methods for addressing the needs of these mothers and their children.

             (2) In developing the plan, the department of health shall inventory the community-based programs that may be accessed to provide services to these mothers and their children; evaluate implementing services for these mothers through extension of the maternity care access system; and evaluate the fiscal impact of the plan. In performing the fiscal evaluation, the department shall calculate potential long-term cost savings to the state resulting from reduced use of the medical, juvenile justice, public assistance, and dependency systems by children and mothers receiving services under the plan.

             (3) The department shall submit a report describing the plan to the appropriate committees of the house of representatives and senate by November 1, 1998.


             NEW SECTION. Sec. 41. A new section is added to chapter 70.96A RCW to read as follows:

             (1) Any treatment program or model project in which a mother is enrolled under section 27 of this act shall provide family planning, which means the process of limiting or spacing the birth of children, education, counseling, information, and services. Family planning does not include pregnancy termination.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 42. A new section is added to chapter 18.71 RCW to read as follows:

             (1) Nothing in section 26 of this act imposes any additional duties or responsibilities on, or removes any duties or responsibilities from, a physician licensed under this chapter, except as specifically included in chapter 13.34 RCW and sections 35 and 41 of this act.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 43. A new section is added to chapter 18.57 RCW to read as follows:

             (1) Nothing in section 26 of this act imposes any additional duties or responsibilities on, or removes any duties or responsibilities from, an osteopath licensed under this chapter, except as specifically included in chapter 13.34 RCW and sections 35 and 41 of this act.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 44. A new section is added to chapter 18.79 RCW to read as follows:

             (1) Nothing in section 26 of this act imposes any additional duties or responsibilities on, or removes any duties or responsibilities from, an advanced registered nurse practitioner licensed under this chapter, except as specifically included in chapter 13.34 RCW and sections 35 and 41 of this act.

             (2) This section expires June 30, 2002.


             NEW SECTION. Sec. 45. Section 9 of this act takes effect October 1, 1998.


             NEW SECTION. Sec. 46. Sections 18 through 24, 26 through 28, 30 through 39, and 41 through 44 of this act take effect January 1, 1999.


             NEW SECTION. Sec. 47. Sections 14 through 16 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect immediately.


             NEW SECTION. Sec. 48. The department of community, trade, and economic development shall contract with The Evergreen State College for completion of the study by the Washington institute for public policy ordered pursuant to sections 14 through 16 of this act. The department of community, trade, and economic development shall contract with the department of social and health services for the purpose of implementing sections 18 through 44 of this act. No funds for administrative expenses may be deducted by the department of community, trade, and economic development prior to allocation as provided in this section."


             Correct the title.


             There being no objection, the House adopted the Report of the Conference Committee on Substitute House Bill No. 2556 and advanced the bill to Final Passage.


FINAL PASSAGE OF HOUSE BILL

AS RECOMMENDED BY THE CONFERENCE COMMITTEE


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


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Substitute House Bill No. 2556 as recommended by the Conference Committee.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 2556 as recommended by the Conference Committee, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Substitute House Bill No. 2556, as recommended by the Conference Committee, having received the constitutional majority, was declared passed.


             The Speaker assumed the chair.


MESSAGE FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1354, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.


Susan Carlson, Deputy Secretary


REPORT OF CONFERENCE COMMITTEE

Bill No.             2E2SHB 1354                                                                                                             March 11, 1998

Prepared by:     Vic Moon                                                                                              Includes "NEW ITEM": YES


Mr. President:

Mr. Speaker:


             We of your CONFERENCE COMMITTEE, to whom was referred SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1354, Air pollution control, have had the same under consideration and we recommend that:

 

All previous amendments not be adopted, and the attached striking amendment by the Conference Committee be adopted, and


and that the bill do pass as recommended by the Conference Committee.


             Strike everything after the enacting clause and insert the following:

             "Sec. 1. RCW 70.94.130 and 1991 c 199 s 705 are each amended to read as follows:

             The board shall exercise all powers of the authority except as otherwise provided. The board shall conduct its first meeting within thirty days after all of its members have been appointed or designated as provided in RCW 70.94.100. The board shall meet at least ten times per year. All meetings shall be publicly announced prior to their occurrence. All meetings shall be open to the public. A majority of the board shall constitute a quorum for the transaction of business and shall be necessary for any action taken by the board. The board shall elect from its members a chair and such other officers as may be necessary. Any member of the board may designate a regular alternate to serve on the board in his or her place with the same authority as the member when he or she is unable to attend. In no event may a regular alternate serve as the permanent chair. Each member of the board, or his or her representative, shall receive from the authority compensation consistent with such authority's rates (but not to exceed one thousand dollars per year) for time spent in the performance of duties under this chapter, plus the actual and necessary expenses incurred by the member in such performance. The board may appoint a control officer, and any other personnel, and shall determine their salaries, and pay same, together with any other proper indebtedness, from authority funds.


             Sec. 2. RCW 70.120.070 and 1991 c 199 s 203 are each amended to read as follows:

             (1) Any person:

             (a) Whose motor vehicle is tested pursuant to this chapter and fails to comply with the emission standards established for the vehicle; and

             (b) Who, following such a test, expends more than one hundred dollars on a 1980 or earlier model year motor vehicle or expends more than one hundred fifty dollars on a 1981 or later model year motor vehicle for repairs solely devoted to meeting the emission standards and that are performed by a certified emission specialist authorized by RCW 70.120.020(2)(a); and

             (c) Whose vehicle fails a retest, may be issued a certificate of acceptance if (i) the vehicle has been in use for more than five years or fifty thousand miles, and (ii) any component of the vehicle installed by the manufacturer for the purpose of reducing emissions, or its appropriate replacement, is installed and operative.

             To receive the certificate, the person must document compliance with (b) and (c) of this subsection to the satisfaction of the department.

             Should any provision of (b) of this subsection be disapproved by the administrator of the United States environmental protection agency, all vehicles shall be required to expend at least four hundred fifty dollars to qualify for a certificate of acceptance.

             (2) Persons who fail the initial tests shall be provided with:

             (a) Information regarding the availability of federal warranties and certified emission specialists;

             (b) Information on the availability and procedure for acquiring license trip-permits;

             (c) Information on the availability and procedure for receiving a certificate of acceptance; and

             (d) The local phone number of the department's local vehicle specialist.


             Sec. 3. RCW 70.120.100 and 1979 ex.s. c 163 s 10 are each amended to read as follows:

             The department shall investigate complaints received regarding the operation of emission testing stations and shall require corrections or modifications in those operations when deemed necessary.

             The department shall also review complaints received regarding the maintenance or repairs secured by owners of motor vehicles for the purpose of complying with the requirements of this chapter. When possible, the department shall assist such owners in determining the merits of the complaints.

             The department shall keep a copy of all complaints received, and on request, make copies available to the public. This is not intended to require disclosure of any information that is exempt from public disclosure under chapter 42.17 RCW.


             Sec. 4. RCW 70.120.170 and 1991 c 199 s 208 are each amended to read as follows:

             (1) The department shall administer a system for emission inspections of all motor vehicles, except those described in RCW 46.16.015(2), that are registered within the boundaries of each emission contributing area. Under such system a motor vehicle shall be inspected biennially except where an annual program would be required to meet federal law and prevent federal sanctions. In addition, motor vehicles shall be inspected at each change of registered owner of a licensed vehicle as provided under RCW 46.16.015.

             (2) The director shall:

             (a) Adopt procedures for conducting emission inspections of motor vehicles. The inspections may include idle and high revolution per minute emission tests. The emission test for diesel vehicles shall consist solely of a smoke opacity test.

             (b) Adopt criteria for calibrating emission testing equipment. Electronic equipment used to test for emissions standards provided for in this chapter shall be properly calibrated. The department shall examine frequently the calibration of the emission testing equipment used at the stations.

             (c) Authorize, through contracts, the establishment and operation of inspection stations for conducting vehicle emission inspections authorized in this chapter. No person contracted to inspect motor vehicles may perform for compensation repairs on any vehicles. No public body may establish or operate contracted inspection stations. Any contracts must be let in accordance with the procedures established for competitive bids in chapter 43.19 RCW.

             (3) Subsection (2)(c) of this section does not apply to volunteer motor vehicle inspections under RCW 70.120.020(1) if the inspections are conducted for the following purposes:

             (a) Auditing;

             (b) Contractor evaluation;

             (c) Collection of data for establishing calibration and performance standards; or

             (d) Public information and education.

             (4)(a) The director shall establish by rule the fee to be charged for emission inspections. The inspection fee shall be a standard fee applicable state-wide or throughout an emission contributing area and shall be no greater than ((eighteen)) fifteen dollars. Surplus moneys collected from fees over the amount due the contractor shall be paid to the state and deposited in the general fund. Fees shall be set at the minimum whole dollar amount required to (i) compensate the contractor or inspection facility owner, and (ii) offset the general fund appropriation to the department to cover the administrative costs of the motor vehicle emission inspection program.

             (b) Before each inspection, a person whose motor vehicle is to be inspected shall pay to the inspection station the fee established under this section. The person whose motor vehicle is inspected shall receive the results of the inspection. If the inspected vehicle complies with the standards established by the director, the person shall receive a dated certificate of compliance. If the inspected vehicle does not comply with those standards, one reinspection of the vehicle shall be afforded without charge.

             (5) All units of local government and agencies of the state with motor vehicles garaged or regularly operated in an emissions contributing area shall test the emissions of those vehicles annually to ensure that the vehicle's emissions comply with the emission standards established by the director. All state agencies outside of emission contributing areas with more than twenty motor vehicles housed at a single facility or contiguous facilities shall test the emissions of those vehicles annually to ensure that the vehicles' emissions comply with standards established by the director. A report of the results of the tests shall be submitted to the department.


             NEW SECTION. Sec. 5. A new section is added to chapter 70.120 RCW to read as follows:

             The department shall establish a scientific advisory board to review plans to establish or expand the geographic area where an inspection and maintenance system for motor vehicle emissions is required. The board shall consist of three to five members. All members shall have at least a master's degree in physics, chemistry, or engineering, or a closely related field. No member may be a current employee of a local air pollution control authority, the department, the United States environmental protection agency, or a company that may benefit from a review by the board.

             The board shall review an inspection and maintenance plan at the request of a local air pollution control authority, the department, or by a petition of at least fifty people living within the proposed boundaries of a vehicle emission inspection and maintenance system. The entity or entities requesting a scientific review may include specific issues for the board to consider in its review. The board shall limit its review to matters of science and shall not provide advice on penalties or issues that are strictly legal in nature.

             The board shall provide a complete written review to the department. If the board members are not in agreement as to the scientific merit of any issue under review, the board may include a dissenting opinion in its report to the department. The department shall immediately make copies available to the local air pollution control authority and to the public.

             The department shall conduct a public hearing, within the area affected by the proposed rule, if any significant aspect of the rule is in conflict with a majority opinion of the board. The department shall include in its responsiveness summary the rationale for including a rule that is not consistent with the review of the board, including a response to the issues raised at the public hearing.

              Members shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.


             Sec. 6. RCW 46.16.015 and 1991 c 199 s 209 are each amended to read as follows:

             (1) Neither the department of licensing nor its agents may issue or renew a motor vehicle license for any vehicle or change the registered owner of a licensed vehicle, for any vehicle that is required to be inspected under chapter 70.120 RCW, unless the application for issuance or renewal is: (a) Accompanied by a valid certificate of compliance or a valid certificate of acceptance issued pursuant to chapter 70.120 RCW; or (b) exempted from this requirement pursuant to subsection (2) of this section. The certificates must have a date of validation which is within six months of the date of application for the vehicle license or license renewal. Certificates for fleet or owner tested diesel vehicles may have a date of validation which is within twelve months of the assigned license renewal date.

             (2) Subsection (1) of this section does not apply to the following vehicles:

             (a) New motor vehicles whose equitable or legal title has never been transferred to a person who in good faith purchases the vehicle for purposes other than resale;

             (b) Motor vehicles with a model year of 1967 or earlier;

             (c) Motor vehicles that use propulsion units powered exclusively by electricity;

             (d) Motor vehicles fueled by propane, compressed natural gas, or liquid petroleum gas, unless it is determined that federal sanctions will be imposed as a result of this exemption;

             (e) Motorcycles as defined in RCW 46.04.330 and motor-driven cycles as defined in RCW 46.04.332;

             (f) Farm vehicles as defined in RCW 46.04.181;

             (g) Used vehicles which are offered for sale by a motor vehicle dealer licensed under chapter 46.70 RCW; ((or))

             (h) Classes of motor vehicles exempted by the director of the department of ecology;

             (i) Collector cars as identified by the department of licensing under RCW 46.16.305(1); or

             (j) Beginning January 1, 2000, vehicles that are less than five years old or more than twenty-five years old.

             The provisions of ((subparagraph)) (a) of this subsection may not be construed as exempting from the provisions of subsection (1) of this section applications for the renewal of licenses for motor vehicles that are or have been leased.

             (3) The department of ecology shall provide information to motor vehicle owners regarding the boundaries of emission contributing areas and restrictions established under this section that apply to vehicles registered in such areas. In addition the department of ecology shall provide information to motor vehicle owners on the relationship between motor vehicles and air pollution and steps motor vehicle owners should take to reduce motor vehicle related air pollution. The department of licensing shall send to all registered motor vehicle owners affected by the emission testing program notice that they must have an emission test to renew their registration.


             NEW SECTION. Sec. 7. (1) The department of ecology shall evaluate changes to the motor vehicle emission inspection program made in RCW 46.16.015(2)(j) and other options that meet air quality objectives and lessen the effect of the program on the motorist. The department shall consider air quality, program costs, and motorist convenience in its evaluation and make recommendations for changes to the program to the appropriate standing committees of the legislature by January 1, 1999.

             (2) This section expires June 30, 1999.


             Sec. 8. RCW 70.94.473 and 1995 c 205 s 1 are each amended to read as follows:

             (1) Any person in a residence or commercial establishment which has an adequate source of heat without burning wood shall:

             (a) Not burn wood in any solid fuel burning device whenever the department has determined under RCW 70.94.715 that any air pollution episode exists in that area;

             (b) Not burn wood in any solid fuel burning device except those which are either Oregon department of environmental quality phase II or United States environmental protection agency certified or certified by the department under RCW 70.94.457(1) or a pellet stove either certified or issued an exemption by the United States environmental protection agency in accordance with Title 40, Part 60 of the code of federal regulations, in the geographical area and for the period of time that a first stage of impaired air quality has been determined, by the department or any authority, for that area. A first stage of impaired air quality is reached when particulates ten microns and smaller in diameter are at an ambient level of ((seventy-five)) sixty micrograms per cubic meter measured on a twenty-four hour average or when carbon monoxide is at an ambient level of eight parts of contaminant per million parts of air by volume measured on an eight-hour average; and

             (c) Not burn wood in any solid fuel burning device in a geographical area and for the period of time that a second stage of impaired air quality has been determined by the department or any authority, for that area. A second stage of impaired air quality is reached when particulates ten microns and smaller in diameter are at an ambient level of one hundred five micrograms per cubic meter measured on a twenty-four hour average.

             (2) Actions of the department and local air pollution control authorities under this section shall preempt actions of other state agencies and local governments for the purposes of controlling air pollution from solid fuel burning devices, except where authorized by chapter 199, Laws of 1991."


             On page 1, line 1 of the title, after "control;" strike the remainder of the title and insert "amending RCW 70.94.130, 70.120.070, 70.120.100, 70.120.170, 46.16.015, and 70.94.473; adding a new section to chapter 70.120 RCW; creating a new section; and providing an expiration date."


             There being no objection, the House adopted the Report of the Conference Committee on Second Engrossed Second Substitute House Bill No. 1354 and advanced the bill to Final Passage.


FINAL PASSAGE OF HOUSE BILL

AS RECOMMENDED BY THE CONFERENCE COMMITTEE


             Representatives Pennington, Cooper and Carrell spoke in favor of passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Second Engrossed Second Substitute House Bill No. 1354 as recommended by the Conference Committee.


ROLL CALL


             The Clerk called the roll on the final passage of Second Engrossed Second Substitute House Bill No. 1354 as recommended by the Conference Committee, and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Second Engrossed Second Substitute House Bill No. 1354, as recommended by the Conference Committee, having received the constitutional majority, was declared passed.


MESSAGES FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on ENGROSSED SUBSTITUTE SENATE BILL NO. 6238, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has concurred in the House amendment(s) to ENGROSSED SUBSTITUTE SENATE BILL NO. 6187, and passed the bill as amended by the House, and the same is herewith transmitted.


Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SECOND SUBSTITUTE SENATE BILL NO. 6168, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SUBSTITUTE SENATE BILL NO. 6455, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


             The Speaker requested Sergeant-at-Arms to escort the following Representatives to the Rostrum: Suzette Cooke, Grace Cole, Philip Dyer and Barry Sehlin.


RESOLUTIONS


             HOUSE FLOOR RESOLUTION NO. 4739, by Representatives Ballard, Hatfield, Carlson, L. Thomas, Dunn, Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, D. Schmidt, K. Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, D. Sommers, H. Sommers, Sterk, Sullivan, Sump, Talcott, B. Thomas, Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood and Zellinsky


             WHEREAS, It is the policy of the Washington State Legislature to recognize excellence in all fields of endeavor; and

             WHEREAS, In 1992 Representative Suzette Cooke began her distinguished legislative career with the Washington State House of Representatives as the representative from the 47th District, comprising all or part of Black Diamond, Auburn, Covington, Maple Valley, Kent, and Renton; and

             WHEREAS, Representative Suzette Cooke during her terms in office has served with distinction as the Chairman of the House of Representatives Children and Family Services and as a member of the House of Representatives Appropriations Committee; and

             WHEREAS, Representative Cooke during her time with the legislature has primarily focused her attention on the legislation aimed at helping children and needy families; and

             WHEREAS, She became a leader in welfare reform and was the prime sponsor of WorkFirst, a historic new public assistance plan, which requires personal responsibility and increases flexibility to achieve permanent self-sufficiency to those in need; and

             WHEREAS, Representative Cooke was and has remained active in the King County Sexual Assault Resource Center, Rotary Club of Kent, First Christian Church of Kent, The G.A.P. Theatre Company, and the Chambers of Commerce for Kent, Renton, Covington, and Maple Valley-Black Diamond; and

             WHEREAS, Prior to her election to the House of Representatives, Suzette Cooke was the Executive Director of the Kent Chamber of Commerce, and was also the Director of Kent Parks and Recreation Department Senior Activity Center; and

             WHEREAS, Representative Cooke attended and graduated with a Bachelor of Arts in Recreation Administration, with a minor in mathematics, from Western Washington University and Fairhaven College;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the state of Washington honor her excellence in service and the untold legislative and personal accomplishments and contributions by State Representative Suzette Cooke to her office, her constituents and colleagues, and especially to the citizens of the great state of Washington; and

             BE IT FURTHER RESOLVED, That the House of Representatives of the state of Washington extend its very best wishes to Suzette Cooke, and her husband, David; and

             BE IT FURTHER RESOLVED, That copies of this Resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Representative Suzette Cooke.


             Representative Lisk moved adoption of the resolution.


             Representatives Lisk, Lambert, Cairnes, Huff, Tokuda, DeBolt, L. Thomas, Dickerson, Boldt, Mitchell, Smith, Carlson and Veloria spoke in favor of the adoption of the resolution.


             House Resolution No. 4739 was adopted.


             Representative Cooke addressed the body.


             HOUSE FLOOR RESOLUTION NO. 4737, by Representatives Butler, Scott, Kenney, Veloria, Wolfe, Kessler, Grant, Ogden, Mason, O'Brien, Murray, Dunshee, Conway, Romero, Hatfield, Poulsen, Fisher, H. Sommers, Gombosky, Wood, Sullivan, Regala, Doumit, Tokuda, Appelwick, Keiser, Anderson, Lantz, Cody, Constantine, Eickmeyer, Gardner, Quall, Cooper, Costa, Morris, Linville, Chopp, Johnson, Carlson, L. Thomas, Alexander, Backlund, Ballard, Ballasiotes, Benson, Boldt, Buck, Bush, Cairnes, Carrell, Chandler, Clements, Cooke, Crouse, DeBolt, Delvin, Dickerson, Dunn, Dyer, Hankins, Hickel, Honeyford, Huff, Kastama, Koster, Lambert, Lisk, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Mulliken, Parlette, Pennington, Radcliff, Reams, Robertson, D. Schmidt, K. Schmidt, Schoesler, Sehlin, Sheahan, Sherstad, Skinner, Smith, D. Sommers, Sterk, Sump, Talcott, B. Thomas, Thompson, Van Luven, Wensman and Zellinsky


             WHEREAS, Washington State Representative Grace Cole, first appointed to the Washington State House of Representatives in 1982, is serving her eighth term of unselfish, distinguished service to the citizens of what is now known as the thirty-second Legislative District; and

             WHEREAS, Representative Cole, affectionately and very appropriately known as Grace, has announced that she will not seek reelection to the Washington State Legislature this year; and

             WHEREAS, Representative Cole, who lives with her husband Carl in Lake Forest Park, has served her community as an active member of the Chamber of Commerce, the League of Women Voters, the American Association of University Women, and numerous other civic organizations; and

             WHEREAS, Representative Cole has devoted her life to children, having raised four sons, and having served on the Shoreline School Board for fourteen years, with Shoreline Youth Services for three years, as cofounder of the Center for Human Services, and on the Education Committee of the State House of Representatives for fifteen years; and

             WHEREAS, During her legislative career Representative Cole has distinguished herself by displaying her concern for the needs of children, school improvement, and the rights of workers, and by ensuring a clean environment; and

             WHEREAS, Grace has above all been the personification of her name, recognized by all for graciousness, courtesy, and caring; and

             WHEREAS, Our friend and colleague once again wants to devote herself to children by taking time to enjoy her five grandchildren; and

             WHEREAS, The Washington State Legislature will not be the same without her;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives celebrate and commemorate the distinguished legislative, professional, civic, and personal career of Washington State Representative Grace Cole; and

             BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Washington State Representative Grace Cole and the members of her family.


             Representative Butler moved adoption of the resolution.


             Representatives Butler, Scott, Johnson, Keiser, Sump, Cooper, Lisk, Fisher and Appelwick spoke in favor of the adoption of the resolution.


             House Resolution No. 4737 was adopted.


             Representative Cole addressed the body.


             HOUSE FLOOR RESOLUTION NO. 4740, by Representatives Ballard, Carlson, L. Thomas, Dunn, Conway, Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunshee, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, D. Schmidt, K. Schmidt, Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, D. Sommers, H. Sommers, Sterk, Sullivan, Sump, Talcott, B. Thomas, Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood and Zellinsky


             WHEREAS, It is the policy of the Washington State Legislature to recognize excellence in all fields of endeavor; and

             WHEREAS, Representative Philip Dyer began his distinguished legislative career with the Washington State House of Representatives in 1992 as the representative from the 5th District, which encompasses part of King County, including Issaquah, North Bend, Snoqualmie and Maple Valley; and

             WHEREAS, Representative Philip Dyer during his current term in office has served with distinction as the Chairman of the House of Representatives Health Care Committee and as a member of the House of Representatives Appropriations Committee; and

             WHEREAS, Representative Dyer during his time with the Legislature has primarily focused his attention on health care issues, transportation, education, and the Issaquah Salmon Hatchery; and

             WHEREAS, He became a leader in health care and long-term care legislation, including the Clara Act, and Health Care Reform; and

             WHEREAS, Representative Dyer is a member of the Washington State Health Policy Board, is a member of the Issaquah Valley Kiwanis, is a retired Major from the Washington Army National Guard after twenty-three years of service, is a member of Friends of Issaquah Salmon Hatchery, is past president of Eagle Ridge Homeowners Association, is a former community member of Issaquah School District Insurance Committee, and is a member of many other professional and community associations too voluminous to list; and

             WHEREAS, Prior to his election to the House of Representatives, Philip Dyer was the owner of the Doctors Agency and later becoming Vice-President of The Doctor's Company, a medical malpractice insurance company; and

             WHEREAS, Representative Dyer has received a Bachelor of Science degree from Oregon State University, a Masters degree in Management and Military Science from U.S.A. Command and General Staff College, and graduated from the Army Corps of Engineers, Officers Advanced Course;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the state of Washington honor his excellence in service and the untold legislative and personal accomplishments and contributions by State Representative Philip Dyer to his office, his constituents and colleagues, and especially to the citizens of the great state of Washington; and

             BE IT FURTHER RESOLVED, That the House of Representatives of the state of Washington extend its very best wishes to Philip Dyer, his wife Carolyn, and their two children, Pierce and Payton; and

             BE IT FURTHER RESOLVED, That copies of this Resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Representative Philip Dyer.


             Representative Thompson moved adoption of the resolution.


             Representatives Thompson, Lambert, Huff, D. Schmidt, Backlund, Cody and Chandler spoke in favor of the adoption of the resolution.


             House Resolution No. 4740 was adopted.


             The Speaker introduced the Honorable Governor Gary Locke who addressed the body and expressed his well wishes to the House's retiring members.


             Representative Dyer addressed the body.


             HOUSE FLOOR RESOLUTION NO. 4738, by Representatives Ballard, Chopp, Hatfield, Carlson, L. Thomas, Dunn, Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carrell, Chandler, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunshee, Dyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, D. Schmidt, K. Schmidt, Schoesler, Scott, Sheahan, Sherstad, Skinner, Smith, D. Sommers, H. Sommers, Sterk, Sullivan, Sump, Talcott, B. Thomas, Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood and Zellinsky


             WHEREAS, It is the policy of the Washington State Legislature to recognize excellence in all fields of endeavor; and

             WHEREAS, Representative Barry Sehlin began his distinguished legislative career with the Washington State House of Representatives, in 1992 as the representative from the 10th District, which encompasses Island County and parts of Skagit and Snohomish Counties; and

             WHEREAS, Representative Barry Sehlin during his terms in office has served with distinction as the Chairman of the House of Representatives Capital Budget Committee, as a member of the House of Representatives Appropriations Committee and a member of the executive committee on the Joint Pension Policy Committee; and

             WHEREAS, Representative Sehlin during his time with the legislature has primarily focused his attention on the state's capital and operating budgets; and

             WHEREAS, Representative Sehlin has remained an active supporter of Skagit Valley College, serving on the Board of Governors of the Skagit Valley College Foundation for several years, he has also served on the Board of Directors of New Leaf, the Oak Harbor Chamber of Commerce Navy League, Whidbey Playhouse, and is a member of the Save NAS Task Force; and

             WHEREAS, Prior to his election to the House of Representatives, Barry Sehlin served for twenty-seven years in the Navy, during which he served as NAS Whidbey in VAQ-136, as Commanding Officer of VAQ-136 and VAQ-129, as well as Commanding Officer of the Naval Air Station; and

             WHEREAS, Representative Sehlin attended elementary school in Oak Harbor, and after moving with his family to Anacortes, graduated from Anacortes High School, and later went on to graduate from Skagit Valley College in 1963;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the state of Washington honor his excellence in service and the legislative and personal accomplishments and contributions by State Representative Barry Sehlin to his office, his constituents and colleagues, and especially to the citizens of the great state of Washington; and

             BE IT FURTHER RESOLVED, That the House of Representatives of the state of Washington extend its very best wishes to Barry Sehlin, his wife of thirty-two years, Susan, and their two children, Jennifer and Martin; and

             BE IT FURTHER RESOLVED, That copies of this Resolution be immediately transmitted by the Chief Clerk of the House of Representatives to Representative Barry Sehlin.


             Representative Lisk moved adoption of the resolution.


             Representatives Lisk, Pennington, Ogden, Mulliken, Anderson, Huff, Cairnes, Appelwick, Honeyford, Morris and McMorris spoke in favor of the adoption of the resolution.


             House Resolution No. 4738 was adopted.


             Representative Sehlin addressed the body.


             HOUSE RESOLUTION NO. 98-4745, by Representatives Conway, Cody, Mason, Regala, Talcott and Linville


             WHEREAS, The National Institutes of Health Consensus Development conference on early identification of hearing impairment has convened to express the need in the United States for the early identification of hearing impairment in infants and young children; and

             WHEREAS, They have shown that approximately one of every one thousand children is born deaf and many more with significant, yet less severe, degrees of hearing impairment; and

             WHEREAS, The conference findings clearly show that reduced hearing acuity during infancy and early childhood interferes with the development of speech and verbal language skills and can have harmful effects on social, emotional, cognitive, and academic development as well as a person's vocational and economic potential; and

             WHEREAS, The National Institutes of Health Consensus is in general agreement that hearing impairment should be recognized as early as possible, so that the remediation process can take full advantage of the plasticity of the developing sensory systems and so that the child can enjoy normal social development; and

             WHEREAS, Leading health care professionals now recommend that universal screening be implemented for all infants within the first three months of life as an important adjunct to child health care;

             NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives recognize the efforts of the National Institutes of Health Consensus Development conference on early identification to stress the importance and need for universal hearing tests for all infants within the first three months; and

             BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Chief Clerk of the House of Representatives to the National Institutes of Health Consensus Development conference on early identification of hearing impairment.


             There being no objection, House Resolution No. 4745 was adopted.


MESSAGES FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The President has signed:

SUBSTITUTE HOUSE BILL NO. 1441,

SUBSTITUTE HOUSE BILL NO. 2077,

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on SUBSTITUTE SENATE BILL NO. 6751, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998

Mr. Speaker:


             The Senate has adopted the report of the Conference Committee on ENGROSSED SUBSTITUTE SENATE BILL NO. 6408, and has passed the bill as recommended by the Conference Committee, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


SIGNED BY THE SPEAKER


             The Speaker announced he was signing:

SUBSTITUTE HOUSE BILL NO. 1126,

SUBSTITUTE HOUSE BILL NO. 1541,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2417,

SUBSTITUTE HOUSE BILL NO. 2933,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1374,

SUBSTITUTE HOUSE BILL NO. 1088,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1328,

SUBSTITUTE HOUSE BILL NO. 1447,

HOUSE BILL NO. 1549,

HOUSE BILL NO. 2278,

HOUSE BILL NO. 2566,

SUBSTITUTE HOUSE BILL NO. 2659,

SUBSTITUTE HOUSE BILL NO. 2711,

ENGROSSED HOUSE BILL NO. 2772,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2830,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2933,

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2935,

SUBSTITUTE HOUSE BILL NO. 3001,

SECOND SUBSTITUTE HOUSE BILL NO. 3058,

SUBSTITUTE HOUSE BILL NO. 3109,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5703,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6108,

SUBSTITUTE HOUSE BILL NO. 6119,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 6205,

SUBSTITUTE HOUSE BILL NO. 6253,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6328,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6497,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6533,

SENATE BILL NO. 6588,


             The Speaker called upon Representative Pennington to preside.


MESSAGE FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate has passed:

SUBSTITUTE HOUSE BILL NO. 1939,

HOUSE BILL NO. 2371,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2947,

SUBSTITUTE HOUSE BILL NO. 3076,

SUBSTITUTE HOUSE BILL NO. 3110,


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:


             The Senate has passed SECOND SUBSTITUTE HOUSE BILL NO. 2849 with the following amendment(s):


             On page 4, line 1, after "(2)" strike "(a)"


             On page 4, after line 12, strike all the material down to and including "parents." on line 18


and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to Second Substitute House Bill No. 2849 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Talcott and Cole spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Second Substitute House Bill No. 2849 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Second Substitute House Bill No. 2849 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Second Substitute House Bill No. 2849, as amended by the Senate, having received the constitutional majority, was declared passed.


SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:


             The Senate has passed Substitute House Bill No. 2312 with the following amendment(s)


             Strike everything after the enacting clause and insert the following:


             "NEW SECTION. Sec. 1. The legislature finds that a competitive disadvantage exists in the construction industry because of a disparity in workers' compensation coverage requirements among the states. The intent of this act is (1) to provide an equal footing for all contractors bidding on or engaging in construction work in this state, (2) to ensure that all workers injured while in the course of employment in this state receive the benefits to which they are entitled, and (3) to not create disincentives for employers to hire workers in this state.


             Sec. 2. RCW 51.12.120 and 1995 c 199 s 1 are each amended to read as follows:

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

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

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

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

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

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

             (3)(a) An employer not domiciled in this state who is employing workers in this state in work for which the employer must be registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW, or prequalified under RCW 47.28.070, must secure the payment of compensation under this title by:

             (i) Insuring the employer's workers' compensation obligation under this title with the department;

             (ii) Being qualified as a self-insurer under this title; or

             (iii) For employers domiciled in a state or province of Canada subject to an agreement entered into under subsection (7) of this section, as permitted by the agreement, filing with the department a certificate of coverage issued by the agency that administers the workers' compensation law in the employer's state or province of domicile certifying that the employer has secured the payment of compensation under the other state's or province's workers' compensation law.

             (b) The department shall adopt rules to implement this subsection.

             (4) If a worker or beneficiary is entitled to compensation under this title by reason of an injury sustained in this state while in the employ of an employer who is domiciled in another state or province of Canada and the employer:

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

             (a))) (b) Has filed a certificate under subsection (3)(a)(iii) of this section or (a) of this subsection (4):

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

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

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

             (((ii))) (iv) If ((such)) the employer's liability under the workers' compensation law of ((such)) the other state or province of Canada is insured((, such)):

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

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

             (((e))) (c) If ((such employer)) subject to subsection (3) of this section, has not complied with subsection (3) of this section or, if not subject to subsection (3) of this section, has neither qualified as a self-insurer nor secured insurance coverage under the workers' compensation law of another state or province of Canada, ((such)) the claimant shall be paid compensation by the department((;)) and

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

             (((4))) (5) As used in this section:

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

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

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

             (((6))) (7) The director ((shall be)) is authorized to enter into agreements with the appropriate agencies of other states and provinces of Canada ((which)) that administer their workers' compensation law with respect to conflicts of jurisdiction and the assumption of jurisdiction in cases where the contract of employment arises in one state or province and the injury occurs in another((, and)). If the other state's or province's law requires Washington employers to secure the payment of compensation under the other state's or province's workers' compensation laws for work that in Washington requires the employer to be registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW, or prequalified under RCW 47.28.070, then employers domiciled in that state or province must purchase compensation covering their workers engaged in that work in this state under this state's industrial insurance law. When ((any such)) an agreement under this subsection has been executed and ((promulgated)) adopted as a ((regulation)) rule of the department under chapter 34.05 RCW, it ((shall)) binds all employers and workers subject to this title and the jurisdiction of this title ((shall be)) is governed by this ((regulation)) rule.


             Sec. 3. RCW 18.27.030 and 1997 c 314 s 4 are each amended to read as follows:

             (1) An applicant for registration as a contractor shall submit an application under oath upon a form to be prescribed by the director and which shall include the following information pertaining to the applicant:

             (a) Employer social security number.

             (b) ((As applicable: (i) The industrial insurance account number covering employees domiciled in Washington; and (ii) evidence of workers' compensation coverage in the applicant's state of domicile for the applicant's employees working in Washington who are not domiciled in Washington)) Evidence of workers' compensation coverage for the applicant's employees working in Washington, as follows:

             (i) The applicant's industrial insurance account number issued by the department;

             (ii) The applicant's self-insurer number issued by the department; or

             (iii) For applicants domiciled in a state or province of Canada subject to an agreement entered into under RCW 51.12.120(7), as permitted by the agreement, filing a certificate of coverage issued by the agency that administers the workers' compensation law in the applicant's state or province of domicile certifying that the applicant has secured the payment of compensation under the other state's or province's workers' compensation law.

             (c) Employment security department number.

             (d) State excise tax registration number.

             (e) Unified business identifier (UBI) account number may be substituted for the information required by (b)((,)) of this subsection if the applicant will not employ employees in Washington, and by (c)((,)) and (d) of this subsection.

             (f) Type of contracting activity, whether a general or a specialty contractor and if the latter, the type of specialty.

             (g) The name and address of each partner if the applicant ((be)) is a firm or partnership, or the name and address of the owner if the applicant ((be)) is an individual proprietorship, or the name and address of the corporate officers and statutory agent, if any, if the applicant ((be)) is a corporation. The information contained in such application ((shall be)) is a matter of public record and open to public inspection.

             (2) The department may verify the workers' compensation coverage information provided by the applicant under subsection (1)(b) of this section, including but not limited to information regarding the coverage of an individual employee of the applicant. If coverage is provided under the laws of another state, the department may notify the other state that the applicant is employing employees in Washington.

             (3) The department shall deny an application for registration if the applicant has been previously registered as a sole proprietor, partnership, or corporation and the applicant has an unsatisfied final judgment against him or her in an action based on this chapter that was incurred during a previous registration under this chapter.


             Sec. 4. RCW 19.28.120 and 1992 c 217 s 2 are each amended to read as follows:

             (1) It is unlawful for any person, firm, partnership, corporation, or other entity to engage in, conduct, or carry on the business of installing or maintaining wires or equipment to convey electric current, or installing or maintaining equipment to be operated by electric current as it pertains to the electrical industry, without having an unrevoked, unsuspended, and unexpired electrical contractor license, issued by the department in accordance with this chapter. All electrical contractor licenses expire twenty-four calendar months following the day of their issue. The department may issue an electrical contractors license for a period of less than twenty-four months only for the purpose of equalizing the number of electrical contractor licenses ((which)) that expire each month. Application for an electrical contractor license shall be made in writing to the department, accompanied by the required fee. The application shall state:

             (a) The name and address of the applicant; in case of firms or partnerships, the names of the individuals composing the firm or partnership; in case of corporations, the names of the managing officials thereof;

             (b) The location of the place of business of the applicant and the name under which the business is conducted;

             (c) Employer social security number;

             (d) ((As applicable: (i) The industrial insurance account number covering employees domiciled in Washington; and (ii) evidence of workers' compensation coverage in the applicant's state of domicile for the applicant's employees working in Washington who are not domiciled in Washington)) Evidence of workers' compensation coverage for the applicant's employees working in Washington, as follows:

             (i) The applicant's industrial insurance account number issued by the department;

             (ii) The applicant's self-insurer number issued by the department; or

             (iii) For applicants domiciled in a state or province of Canada subject to an agreement entered into under RCW 51.12.120(7), as permitted by the agreement, filing a certificate of coverage issued by the agency that administers the workers' compensation law in the applicant's state or province of domicile certifying that the applicant has secured the payment of compensation under the other state's or province's workers' compensation law;

             (e) Employment security department number;

             (f) State excise tax registration number;

             (g) Unified business identifier (UBI) account number may be substituted for the information required by (d)((,)) of this subsection if the applicant will not employ employees in Washington, and by (e)((,)) and (f) of this subsection; and

             (h) Whether a general or specialty electrical contractor license is sought and, if the latter, the type of specialty. Electrical contractor specialties include, but are not limited to: Residential, domestic appliances, pump and irrigation, limited energy system, signs, nonresidential maintenance, and a combination specialty. A general electrical contractor license shall grant to the holder the right to engage in, conduct, or carry on the business of installing or maintaining wires or equipment to carry electric current, and installing or maintaining equipment, or installing or maintaining material to fasten or insulate such wires or equipment to be operated by electric current, in the state of Washington. A specialty electrical contractor license shall grant to the holder a limited right to engage in, conduct, or carry on the business of installing or maintaining wires or equipment to carry electrical current, and installing or maintaining equipment; or installing or maintaining material to fasten or insulate such wires or equipment to be operated by electric current in the state of Washington as expressly allowed by the license.

             (2) The department may verify the workers' compensation coverage information provided by the applicant under subsection (1)(d) of this section, including but not limited to information regarding the coverage of an individual employee of the applicant. If coverage is provided under the laws of another state, the department may notify the other state that the applicant is employing employees in Washington.

             (3) The application for a contractor license shall be accompanied by a bond in the sum of four thousand dollars with the state of Washington named as obligee in the bond, with good and sufficient surety, to be approved by the department. The bond shall at all times be kept in full force and effect, and any cancellation or revocation thereof, or withdrawal of the surety therefrom, suspends the license issued to the principal until a new bond has been filed and approved as provided in this section. Upon approval of a bond, the department shall on the next business day deposit the fee accompanying the application in the electrical license fund and shall file the bond in the office. The department shall upon request furnish to any person, firm, partnership, corporation, or other entity a certified copy of the bond upon the payment of a fee that the department shall set by rule. The fee shall cover but not exceed the cost of furnishing the certified copy. The bond shall be conditioned that in any installation or maintenance of wires or equipment to convey electrical current, and equipment to be operated by electrical current, the principal will comply with the provisions of this chapter and with any electrical ordinance, building code, or regulation of a city or town adopted pursuant to RCW 19.28.010(((2))) (3) that is in effect at the time of entering into a contract. The bond shall be conditioned further that the principal will pay for all labor, including employee benefits, and material furnished or used upon the work, taxes and contributions to the state of Washington, and all damages that may be sustained by any person, firm, partnership, corporation, or other entity due to a failure of the principal to make the installation or maintenance in accordance with this chapter or any applicable ordinance, building code, or regulation of a city or town adopted pursuant to RCW 19.28.010(((2))) (3). In lieu of the surety bond required by this section the license applicant may file with the department a cash deposit or other negotiable security acceptable to the department. If the license applicant has filed a cash deposit, the department shall deposit the funds in a special trust savings account in a commercial bank, mutual savings bank, or savings and loan association and shall pay annually to the depositor the interest derived from the account.

             (4) The department shall issue general or specialty electrical contractor licenses to applicants meeting all of the requirements of this chapter. The provisions of this chapter relating to the licensing of any person, firm, partnership, corporation, or other entity including the requirement of a bond with the state of Washington named as obligee therein and the collection of a fee therefor, are exclusive, and no political subdivision of the state of Washington may require or issue any licenses or bonds or charge any fee for the same or a similar purpose. No person, firm, partnership, corporation, or other entity holding more than one specialty contractor license under this chapter may be required to pay an annual fee for more than one such license or to post more than one four thousand dollar bond, equivalent cash deposit, or other negotiable security.

             (5) To obtain a general or specialty electrical contractor license the applicant must designate an individual who currently possesses an administrator's certificate as a general electrical contractor administrator or as a specialty electrical contractor administrator in the specialty for which application has been made. Administrator certificate specialties include but are not limited to: Residential, domestic, appliance, pump and irrigation, limited energy system, signs, nonresidential maintenance, and combination specialty. To obtain an administrator's certificate an individual must pass an examination as set forth in RCW 19.28.123 unless the applicant was a licensed electrical contractor at any time during 1974. Applicants who were electrical contractors licensed by the state of Washington at any time during 1974 are entitled to receive a general electrical contractor administrator's certificate without examination if the applicants apply prior to January 1, 1984. The board of electrical examiners shall certify to the department the names of all persons who are entitled to either a general or specialty electrical contractor administrator's certificate.


             NEW SECTION. Sec. 5. The workers' compensation advisory committee established under RCW 51.04.110 shall appoint a subcommittee to review section 2 of this act and related issues, as determined by the committee, and report its findings and recommendations to the committee. The committee shall make a final report to the department of labor and industries by December 15, 1998. The department shall report on the study to the appropriate committees of the legislature by January 15, 1999."


             On page 1, line 2 of the title, after "Washington;" strike the remainder of the title and insert "amending RCW 51.12.120, 18.27.030, and 19.28.120; and creating new sections."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to Substitute House Bill No. 2312 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Doumit and McMorris spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Substitute House Bill No. 2312 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 2312 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Substitute House Bill No. 2312, as amended by the Senate, having received the constitutional majority, was declared passed.


SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:


             The Senate has passed Substitute House Bill No. 2051 with the following amendment(s):


             Strike everything after the enacting clause and insert the following:


             "Sec. 1. RCW 82.04.050 and 1997 c 127 s 1 are each amended to read as follows:

             (1) "Sale at retail" or "retail sale" means every sale of tangible personal property (including articles produced, fabricated, or imprinted) to all persons irrespective of the nature of their business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers other than a sale to a person who presents a resale certificate under RCW 82.04.470 and who:

             (a) Purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person; or

             (b) Installs, repairs, cleans, alters, imprints, improves, constructs, or decorates real or personal property of or for consumers, if such tangible personal property becomes an ingredient or component of such real or personal property without intervening use by such person; or

             (c) Purchases for the purpose of consuming the property purchased in producing for sale a new article of tangible personal property or substance, of which such property becomes an ingredient or component or is a chemical used in processing, when the primary purpose of such chemical is to create a chemical reaction directly through contact with an ingredient of a new article being produced for sale; or

             (d) Purchases for the purpose of consuming the property purchased in producing ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose of such property is to create a chemical reaction directly through contact with an ingredient of ferrosilicon; or

             (e) Purchases for the purpose of providing the property to consumers as part of competitive telephone service, as defined in RCW 82.04.065. The term shall include every sale of tangible personal property which is used or consumed or to be used or consumed in the performance of any activity classified as a "sale at retail" or "retail sale" even though such property is resold or utilized as provided in (a), (b), (c), (d), or (e) of this subsection following such use. The term also means every sale of tangible personal property to persons engaged in any business which is taxable under RCW 82.04.280 (2) and (7) and 82.04.290.

             (2) The term "sale at retail" or "retail sale" shall include the sale of or charge made for tangible personal property consumed and/or for labor and services rendered in respect to the following:

             (a) The installing, repairing, cleaning, altering, imprinting, or improving of tangible personal property of or for consumers, including charges made for the mere use of facilities in respect thereto, but excluding sales of laundry service to members by nonprofit associations composed exclusively of nonprofit hospitals, and excluding services rendered in respect to live animals, birds and insects;

             (b) The constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for consumers, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, and shall also include the sale of services or charges made for the clearing of land and the moving of earth excepting the mere leveling of land used in commercial farming or agriculture;

             (c) The charge for labor and services rendered in respect to constructing, repairing, or improving any structure upon, above, or under any real property owned by an owner who conveys the property by title, possession, or any other means to the person performing such construction, repair, or improvement for the purpose of performing such construction, repair, or improvement and the property is then reconveyed by title, possession, or any other means to the original owner;

             (d) The sale of or charge made for labor and services rendered in respect to the cleaning, fumigating, razing or moving of existing buildings or structures, but shall not include the charge made for janitorial services; and for purposes of this section the term "janitorial services" shall mean those cleaning and caretaking services ordinarily performed by commercial janitor service businesses including, but not limited to, wall and window washing, floor cleaning and waxing, and the cleaning in place of rugs, drapes and upholstery. The term "janitorial services" does not include painting, papering, repairing, furnace or septic tank cleaning, snow removal or sandblasting;

             (e) The sale of or charge made for labor and services rendered in respect to automobile towing and similar automotive transportation services, but not in respect to those required to report and pay taxes under chapter 82.16 RCW;

             (f) The sale of and charge made for the furnishing of lodging and all other services by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property, and it shall be presumed that the occupancy of real property for a continuous period of one month or more constitutes a rental or lease of real property and not a mere license to use or enjoy the same;

             (g) The sale of or charge made for tangible personal property, labor and services to persons taxable under (a), (b), (c), (d), (e), and (f) of this subsection when such sales or charges are for property, labor and services which are used or consumed in whole or in part by such persons in the performance of any activity defined as a "sale at retail" or "retail sale" even though such property, labor and services may be resold after such use or consumption. Nothing contained in this subsection shall be construed to modify subsection (1) of this section and nothing contained in subsection (1) of this section shall be construed to modify this subsection.

             (3) The term "sale at retail" or "retail sale" shall include the sale of or charge made for personal, business, or professional services including amounts designated as interest, rents, fees, admission, and other service emoluments however designated, received by persons engaging in the following business activities:

             (a) Amusement and recreation services including but not limited to golf, pool, billiards, skating, bowling, ski lifts and tows, day trips for sightseeing purposes, and others, when provided to consumers;

             (b) Abstract, title insurance, and escrow services;

             (c) Credit bureau services;

             (d) Automobile parking and storage garage services;

             (e) Landscape maintenance and horticultural services but excluding (i) horticultural services provided to farmers and (ii) pruning, trimming, repairing, removing, and clearing of trees and brush near electric transmission or distribution lines or equipment, if performed by or at the direction of an electric utility;

             (f) Service charges associated with tickets to professional sporting events; and

             (g) The following personal services: Physical fitness services, tanning salon services, tattoo parlor services, steam bath services, turkish bath services, escort services, and dating services.

             (4) The term shall also include the renting or leasing of tangible personal property to consumers and the rental of equipment with an operator.

             (5) The term shall also include the providing of telephone service, as defined in RCW 82.04.065, to consumers.

             (6) The term shall not include the sale of or charge made for labor and services rendered in respect to the building, repairing, or improving of any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of any kind.

             (7) The term shall also not include sales of chemical sprays or washes to persons for the purpose of postharvest treatment of fruit for the prevention of scald, fungus, mold, or decay, nor shall it include sales of feed, seed, seedlings, fertilizer, agents for enhanced pollination including insects such as bees, and spray materials to: (a) Persons who participate in the federal conservation reserve program, the environmental quality incentives program, the wetlands reserve program, and the wildlife habitat incentives program, or their successors administered by the United States department of agriculture; (b) farmers for the purpose of producing for sale any agricultural product; and (c) farmers acting under cooperative habitat development or access contracts with an organization exempt from federal income tax under 26 U.S.C. Sec. 501(c)(3) or the Washington state department of fish and wildlife to produce or improve wildlife habitat on land that the farmer owns or leases.

             (8) The term shall not include the sale of or charge made for labor and services rendered in respect to the constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing, or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation. Nor shall the term include the sale of services or charges made for the clearing of land and the moving of earth of or for the United States, any instrumentality thereof, or a county or city housing authority. Nor shall the term include the sale of services or charges made for cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development.

             (9) Until July 1, 2003, the term shall not include the sale of or charge made for labor and services rendered for environmental remedial action as defined in section 3(2) of this act.


             Sec. 2. RCW 82.04.190 and 1996 c 173 s 2, 1996 c 148 s 4, and 1996 c 112 s 2 are each reenacted and amended to read as follows:

             "Consumer" means the following:

             (1) Any person who purchases, acquires, owns, holds, or uses any article of tangible personal property irrespective of the nature of the person's business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers other than for the purpose (a) of resale as tangible personal property in the regular course of business or (b) of incorporating such property as an ingredient or component of real or personal property when installing, repairing, cleaning, altering, imprinting, improving, constructing, or decorating such real or personal property of or for consumers or (c) of consuming such property in producing for sale a new article of tangible personal property or a new substance, of which such property becomes an ingredient or component or as a chemical used in processing, when the primary purpose of such chemical is to create a chemical reaction directly through contact with an ingredient of a new article being produced for sale or (d) purchases for the purpose of consuming the property purchased in producing ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose of such property is to create a chemical reaction directly through contact with an ingredient of ferrosilicon;

             (2)(a) Any person engaged in any business activity taxable under RCW 82.04.290; (b) any person who purchases, acquires, or uses any telephone service as defined in RCW 82.04.065, other than for resale in the regular course of business; and (c) any person who purchases, acquires, or uses any amusement and recreation service defined in RCW 82.04.050(3)(a), other than for resale in the regular course of business;

             (3) Any person engaged in the business of contracting for the building, repairing or improving of any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state of Washington or by the United States and which is used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of any kind as defined in RCW 82.04.280, in respect to tangible personal property when such person incorporates such property as an ingredient or component of such publicly owned street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle by installing, placing or spreading the property in or upon the right of way of such street, place, road, highway, easement, bridge, tunnel, or trestle or in or upon the site of such mass public transportation terminal or parking facility;

             (4) Any person who is an owner, lessee or has the right of possession to or an easement in real property which is being constructed, repaired, decorated, improved, or otherwise altered by a person engaged in business, excluding only (a) municipal corporations or political subdivisions of the state in respect to labor and services rendered to their real property which is used or held for public road purposes, and (b) the United States, instrumentalities thereof, and county and city housing authorities created pursuant to chapter 35.82 RCW in respect to labor and services rendered to their real property. Nothing contained in this or any other subsection of this definition shall be construed to modify any other definition of "consumer";

             (5) Any person who is an owner, lessee, or has the right of possession to personal property which is being constructed, repaired, improved, cleaned, imprinted, or otherwise altered by a person engaged in business;

             (6) Any person engaged in the business of constructing, repairing, decorating, or improving new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation; also, any person engaged in the business of clearing land and moving earth of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW. Any such person shall be a consumer within the meaning of this subsection in respect to tangible personal property incorporated into, installed in, or attached to such building or other structure by such person;

             (7) Any person who is a lessor of machinery and equipment, the rental of which is exempt from the tax imposed by RCW 82.08.020 under RCW 82.08.02565, with respect to the sale of or charge made for tangible personal property consumed in respect to repairing the machinery and equipment, if the tangible personal property has a useful life of less than one year. Nothing contained in this or any other subsection of this section shall be construed to modify any other definition of "consumer"; ((and))

             (8) Any person engaged in the business of cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development((.

             Nothing contained in this or any other subsection of this definition shall be construed to modify any other definition of "consumer.")); and

             (9) Until July 1, 2003, any person engaged in the business of conducting environmental remedial action as defined in section 3(2) of this act.


             NEW SECTION. Sec. 3. A new section is added to chapter 82.04 RCW to read as follows:

             (1) Upon every person engaging within this state in the business of environmental remedial action, the amount of tax with respect to such business shall be equal to the value of the gross income of the business multiplied by the rate 0.471 percent.

             (2) For purposes of this chapter, "environmental remedial action" means:

             (a) Those services related to the identification, investigation, or cleanup arising out of the release or threatened release of hazardous substances that are conducted under contract with the department of ecology or under an enforcement order, agreed order, or consent decree executed by the department of ecology, or those services, when evaluated as a whole, that are the substantial equivalent of a department of ecology-conducted or supervised remedial action under the model toxics control act, chapter 70.105D RCW; or

             (b) Those services related to the identification, investigation, or cleanup of a facility that are conducted under contract with the United States environmental protection agency or under an order or consent decree executed by the United States environmental protection agency, or that are consistent with the national contingency plan adopted under the comprehensive environmental response compensation and liability act, 42 U.S.C. Sec. 9605 as it exists on the effective date of this section, and those services are conducted at facilities that are included on the national priorities list adopted under 42 U.S.C. Sec. 9605 as it exists on the effective date of this section or at facilities subject to a removal action authorized under 42 U.S.C. Sec. 9604 as it exists on the effective date of this section.

             (3) A site is eligible for environmental remedial action upon submittal, via certified mail to the department of ecology and the department of revenue, of the following:

             (a) A certification from the owner, the department of ecology, or the United States environmental protection agency, containing the following information:

             (i) The location of the site, shown on a map and identified by parcel number or numbers and street address;

             (ii) The name and address and daytime phone number of a contact person;

             (iii) A statement that the proposed environmental remedial actions will be conducted by the department of ecology or its authorized contractor under chapter 70.105D RCW or will be substantially equivalent to a department of ecology-conducted or supervised remedial action under the model toxics control act, chapter 70.105D RCW, or will be conducted by the United States environmental protection agency or its authorized contractor or will be consistent with the national contingency plan under 42 U.S.C. Sec. 9605 as it exists on the effective date of this section; and

             (iv) A description of the proposed environmental remedial actions to be taken; and

             (b)(i) A certification from a certified underground storage tank service supervisor as authorized in chapter 90.76 RCW, from a professional engineer licensed in the state of Washington, or from an environmental professional who subscribes to a code of professional responsibility administered by a recognized organization representing such professions containing the following information:

             (A) Confirmation that an environmental remedial action as defined in this section is to be conducted at the site;

             (B) The location of the site, shown on a map and identified by parcel number or numbers and street address, and the approximate location of the proposed environmental remedial action; and

             (C) The name, address, telephone number, and uniform business identifier of the person providing the certification; or

             (ii) If applicable to the site, a copy of an enforcement order, agreed order, or consent decree executed by the department of ecology or the United States environmental protection agency.

             (4) The department of revenue shall respond in writing to the owner within thirty days confirming receipt of the certification, or certifications, of eligibility.

             (5) The owner shall provide a copy of the confirmation from the department of revenue to each person who renders environmental remedial action at the site. Each person who renders such action shall separately state the charges for labor and services associated with the environmental remedial action.

             (6) Upon completion of the environmental remedial action, the owner shall submit to the department of ecology a report documenting the environmental remedial actions conducted at the site and documenting compliance with the requirements of chapter 70.105D RCW.

             (7) In addition to any other penalties, a person who files a certificate with the department of ecology or the department of revenue that contains falsehoods or misrepresentations are subject to penalties authorized under chapter 18.43 or 90.76 RCW or RCW 9A.76.175. Also, a person who improperly reports the person's tax class shall be assessed a penalty of fifty percent of the tax due, in addition to other taxes or penalties, together with interest. The department of revenue shall waive the penalty imposed under this section if it finds that the falsehoods or misrepresentations or improper reporting of the tax classification was due to circumstances beyond the control of the person.

             (8) This section expires July 1, 2003.


             Sec. 4. RCW 82.04.290 and 1997 c 7 s 2 are each amended to read as follows:

             (1) Upon every person engaging within this state in the business of providing international investment management services, as to such persons, the amount of tax with respect to such business shall be equal to the gross income or gross proceeds of sales of the business multiplied by a rate of 0.275 percent.

             (2) Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, ((and)) 82.04.280, and section 3 of this act, and subsection (1) of this section; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of 1.5 percent.

             This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.


             Sec. 5. RCW 82.04.290 and 1998 c ... s 4 (section 4 of this act) are each amended to read as follows:

             (1) Upon every person engaging within this state in the business of providing international investment management services, as to such persons, the amount of tax with respect to such business shall be equal to the gross income or gross proceeds of sales of the business multiplied by a rate of 0.275 percent.

             (2) Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, and 82.04.280, ((and section 3 of this act,)) and subsection (1) of this section; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of 1.5 percent.

             This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.


             NEW SECTION. Sec. 6. (1) Sections 1 through 4 of this act take effect July 1, 1998.

             (2) Section 5 of this act takes effect July 1, 2003."


             On page 1, line 2 of the title, after "waste;" strike the remainder of the title and insert "amending RCW 82.04.050, 82.04.290, and 82.04.290; reenacting and amending RCW 82.04.190; adding a new section to chapter 82.04 RCW; providing effective dates; and providing an expiration date."


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to Substitute House Bill No. 2051 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Chandler and Linville spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Substitute House Bill No. 2051 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Substitute House Bill No. 2051 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Substitute House Bill No. 2051, as amended by the Senate, having received the constitutional majority, was declared passed.


SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:


             The Senate has passed Second Substitute House Bill No. 2879 with the following amendment(s)


             Strike everything after the enacting clause and insert the following:


             "NEW SECTION. Sec. 1. The legislature finds that fish habitat enhancement projects play a key role in the state's salmon and steelhead recovery efforts. The legislature finds that there are over two thousand barriers to fish passage at road crossings throughout the state, blocking fish access to as much as three thousand miles of freshwater spawning and rearing habitat. The legislature further finds that removal of these barriers and completion of other fish habitat enhancement projects should be done in a cost-effective manner, which includes providing technical assistance and training to people who will undertake projects such as removal of barriers to salmon passage and minimizing the expense and delays of various permitting processes. The purpose of this act is to take immediate action to facilitate the review and approval of fish habitat enhancement projects, to encourage efforts that will continue to improve the process in the future, to address known fish passage barriers immediately, and to develop over time a comprehensive system to inventory and prioritize barriers on a state-wide basis.


             NEW SECTION. Sec. 2. The department of ecology permit assistant center shall immediately modify the joint aquatic resource permit application form to incorporate the permit process established in section 3 of this act.


             NEW SECTION. Sec. 3. A new section is added to chapter 75.20 RCW to read as follows:

             (1) In order to receive the permit review and approval process created in this section, a fish habitat enhancement project must meet the criteria under (a) and (b) of this subsection:

             (a) A fish habitat enhancement project must be a project to accomplish one or more of the following tasks:

             (i) Elimination of human-made fish passage barriers, including culvert repair and replacement;

             (ii) Restoration of an eroded or unstable stream bank employing the principle of bioengineering, including limited use of rock as a stabilization only at the toe of the bank, and with primary emphasis on using native vegetation to control the erosive forces of flowing water; or

             (iii) Placement of woody debris or other instream structures that benefit naturally reproducing fish stocks.

             The department shall develop size or scale threshold tests to determine if projects accomplishing any of these tasks should be evaluated under the process created in this section or under other project review and approval processes. A project proposal shall not be reviewed under the process created in this section if the department determines that the scale of the project raises concerns regarding public health and safety; and

             (b) A fish habitat enhancement project must be approved in one of the following ways:

             (i) By the department pursuant to chapter 75.50 or 75.52 RCW;

             (ii) By the sponsor of a watershed restoration plan as provided in chapter 89.08 RCW;

             (iii) By the department as a department-sponsored fish habitat enhancement or restoration project;

             (iv) Through the review and approval process for the jobs for the environment program;

             (v) Through the review and approval process for conservation district-sponsored projects, where the project complies with design standards established by the conservation commission through interagency agreement with the United States fish and wildlife service and the natural resource conservation service;

             (vi) Through a formal grant program established by the legislature or the department for fish habitat enhancement or restoration; and

             (vii) Through other formal review and approval processes established by the legislature.

             (2) Fish habitat enhancement projects meeting the criteria of subsection (1) of this section are expected to result in beneficial impacts to the environment. Decisions pertaining to fish habitat enhancement projects meeting the criteria of subsection (1) of this section and being reviewed and approved according to the provisions of this section are not subject to the requirements of RCW 43.21C.030(2)(c).

             (3) Hydraulic project approval is required for projects that meet the criteria of subsection (1) of this section and are being reviewed and approved under this section. An applicant shall use a joint aquatic resource permit application form developed by the department of ecology permit assistance center to apply for approval under this chapter. On the same day, the applicant shall provide copies of the completed application form to the department and to each appropriate local government. Local governments shall accept the application as notice of the proposed project. The department shall provide a fifteen-day comment period during which it will receive comments regarding environmental impacts. In no more than forty-five days, the department shall either issue hydraulic project approval, with or without conditions, deny approval, or make a determination that the review and approval process created by this section is not appropriate for the proposed project. The department shall base this determination on identification during the comment period of adverse impacts that cannot be mitigated by hydraulic project approval. If the department determines that the review and approval process created by this section is not appropriate for the proposed project, the department shall notify the applicant and the appropriate local governments of its determination. The applicant may reapply for approval of the project under other review and approval processes.

             Any person aggrieved by the approval, denial, conditioning, or modification of hydraulic project approval under this section may formally appeal the decision to the hydraulic appeals board pursuant to the provisions of this chapter.

             (4) No local government may require permits or charge fees for fish habitat enhancement projects that meet the criteria of subsection (1) of this section and that are reviewed and approved according to the provisions of this section.


             Sec. 4. RCW 90.58.147 and 1995 c 333 s 1 are each amended to read as follows:

             (1) A public or private project that is designed to improve fish or wildlife habitat or fish passage shall be exempt from the substantial development permit requirements of this chapter when all of the following apply:

             (((1))) (a) The project has been approved by the department of fish and wildlife;

             (((2))) (b) The project has received hydraulic project approval by the department of fish and wildlife pursuant to chapter 75.20 RCW; and

             (((3))) (c) The local government has determined that the project is substantially consistent with the local shoreline master program. The local government shall make such determination in a timely manner and provide it by letter to the project proponent.

             (2) Fish habitat enhancement projects that conform to the provisions of section 3 of this act are determined to be consistent with local shoreline master programs.


             Sec. 5. RCW 35.63.230 and 1995 c 378 s 8 are each amended to read as follows:

             A permit required under this chapter for a watershed restoration project as defined in RCW 89.08.460 shall be processed in compliance with RCW 89.08.450 through 89.08.510. A fish habitat enhancement project meeting the criteria of section 3(1) of this act shall be reviewed and approved according to the provisions of section 3 of this act.


             Sec. 6. RCW 35A.63.250 and 1995 c 378 s 9 are each amended to read as follows:

             A permit required under this chapter for a watershed restoration project as defined in RCW 89.08.460 shall be processed in compliance with RCW 89.08.450 through 89.08.510. A fish habitat enhancement project meeting the criteria of section 3(1) of this act shall be reviewed and approved according to the provisions of section 3 of this act.


             Sec. 7. RCW 36.70.992 and 1995 c 378 s 10 are each amended to read as follows:

             A permit required under this chapter for a watershed restoration project as defined in RCW 89.08.460 shall be processed in compliance with RCW 89.08.450 through 89.08.510. A fish habitat enhancement project meeting the criteria of section 3(1) of this act shall be reviewed and approved according to the provisions of section 3 of this act.


             NEW SECTION. Sec. 8. A new section is added to chapter 36.70 RCW to read as follows:

             A county is not liable for adverse impacts resulting from a fish enhancement project that meets the criteria of section 3 of this act and has been permitted by the department of fish and wildlife.


             NEW SECTION. Sec. 9. A new section is added to chapter 35.21 RCW to read as follows:

             A city or town is not liable for adverse impacts resulting from a fish enhancement project that meets the criteria of section 3 of this act and has been permitted by the department of fish and wildlife.


             NEW SECTION. Sec. 10. A new section is added to chapter 35A.21 RCW to read as follows:

             A code city is not liable for adverse impacts resulting from a fish enhancement project that meets the criteria of section 3 of this act and has been permitted by the department of fish and wildlife.


             Sec. 11. RCW 36.70A.460 and 1995 c 378 s 11 are each amended to read as follows:

             A permit required under this chapter for a watershed restoration project as defined in RCW 89.08.460 shall be processed in compliance with RCW 89.08.450 through 89.08.510. A fish habitat enhancement project meeting the criteria of section 3(1) of this act shall be reviewed and approved according to the provisions of section 3 of this act.


             Sec. 12. RCW 43.21C.0382 and 1995 c 378 s 12 are each amended to read as follows:

             Decisions pertaining to watershed restoration projects as defined in RCW 89.08.460 are not subject to the requirements of RCW 43.21C.030(2)(c). Decisions pertaining to fish habitat enhancement projects meeting the criteria of section 3(1) of this act and being reviewed and approved according to the provisions of section 3 of this act are not subject to the requirements of RCW 43.21C.030(2)(c).


             Sec. 13. RCW 89.08.470 and 1995 c 378 s 3 are each amended to read as follows:

             (1) By January 1, 1996, the Washington conservation commission shall develop, in consultation with other state agencies, tribes, and local governments, a consolidated application process for permits for a watershed restoration project developed by an agency or sponsored by an agency on behalf of a volunteer organization. The consolidated process shall include a single permit application form for use by all responsible state and local agencies. The commission shall encourage use of the consolidated permit application process by any federal agency responsible for issuance of related permits. The permit application forms to be consolidated shall include, at a minimum, applications for: (((1))) (a) Approvals related to water quality standards under chapter 90.48 RCW; (((2))) (b) hydraulic project approvals under chapter 75.20 RCW; and (((3))) (c) section 401 water quality certifications under 33 U.S.C. Sec. 1341 and chapter 90.48 RCW.

             (2) If a watershed restoration project is also a fish habitat enhancement project that meets the criteria of section 3(1) of this act, the project sponsor shall instead follow the permit review and approval process established in section 3 of this act with regard to state and local government permitting requirements. The sponsor shall so notify state and local permitting authorities.


             NEW SECTION. Sec. 14. A new section is added to chapter 19.27 RCW to read as follows:

             A fish habitat enhancement project meeting the criteria of section 3(1) of this act is not subject to grading permits, inspections, or fees and shall be reviewed according to the provisions of section 3 of this act.


             NEW SECTION. Sec. 15. The legislature finds that, while the process created in this act can improve the speed with which fish habitat enhancement projects are put into place, additional efforts can improve the review and approval process for the future. The legislature directs the department of fish and wildlife, the conservation commission, local governments, fish habitat enhancement project applicants, and other interested parties to work together to continue to improve the permitting review and approval process. Specific efforts shall include the following:

             (1) Development of common acceptable design standards, best management practices, and standardized hydraulic project approval conditions for each type of fish habitat enhancement project;

             (2) An evaluation of the potential for using technical evaluation teams in evaluating specific project proposals or stream reaches;

             (3) An evaluation of techniques appropriate for restoration and enhancement of pasture and crop land adjacent to riparian areas;

             (4) A review of local government shoreline master plans to identify and correct instances where the local plan does not acknowledge potentially beneficial instream work;

             (5) An evaluation of the potential for local governments to incorporate fish habitat enhancement projects into their comprehensive planning process; and

             (6) Continued work with the federal government agencies on federal permitting for fish habitat enhancement projects.

             The department of fish and wildlife shall coordinate this joint effort and shall report back to the legislature on the group's progress by December 1, 1998.


             NEW SECTION. Sec. 16. A new section is added to chapter 75.50 RCW to read as follows:

             (1) The department of transportation is authorized to administer a grant program to assist state agencies, local governments, private landowners, tribes, and volunteer groups in identifying and removing impediments to anadromous fish passage. The program shall be administered consistent with the following:

             (a) Eligible projects include corrective projects, inventory, assessment, and prioritization efforts;

             (b) Projects shall be subject to a competitive application process;

             (c) Priority shall be given to projects that immediately increase access to available and improved spawning and rearing habitat for depressed, threatened, and endangered stocks. Priority shall also be given to project applications that are coordinated with other efforts within a watershed;

             (d) All projects shall be reviewed and approved by the fish passage barrier removal task force; and

             (e) A match of at least twenty-five percent per project shall be required. For local, private, and volunteer projects, in-kind contributions may be counted toward the match requirement.

             (2) The department of transportation shall proceed expeditiously in implementing the grant program during the 1998 summer construction season.


             NEW SECTION. Sec. 17. By January 1, 1999, the fish passage barrier removal task force as specified in RCW 75.50.160 shall report to the legislature on its progress in implementing the provisions in sections 16 and 19 of this act. The report shall also include recommendations on future governance and administrative structures to coordinate local, state, and private fish passage correction projects and to administer state fish passage grants.


             NEW SECTION. Sec. 18. 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 "projects;" strike the remainder of the title and insert "amending RCW 90.58.147, 35.63.230, 35A.63.250, 36.70.992, 36.70A.460, 43.21C.0382, and 89.08.470; adding a new section to chapter 75.20 RCW; adding a new section to chapter 36.70 RCW; adding a new section to chapter 35.21 RCW; adding a new section to chapter 35.21A RCW; adding a new section to chapter 19.27 RCW; adding a new section to chapter 75.50 RCW; 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 amendment(s) to Second Substitute House Bill No. 2879 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Buck and Regala spoke in favor of final passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Second Substitute House Bill No. 2879 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Second Substitute House Bill No. 2879 as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Second Substitute House Bill No. 2879, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGES FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate has passed:

ENGROSSED SUBSTITUTE SENATE BILL NO. 6470,

and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


March 10, 1998

Mr. Speaker:


             The Senate has adopted:

SENATE CONCURRENT RESOLUTION NO. 8430,

and the same is herewith transmitted.

Mike O'Connell, Secretary


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


INTRODUCTIONS AND FIRST READING

 

HB 3135           by Representatives Dunshee, Constantine, Scott, Dunn and Kessler

 

AN ACT Relating to the veterans' preference in employment examinations; and amending RCW 41.04.010.

 

Referred to Committee on Government Administration.

 

HB 3136           by Representatives Kastama, Gombosky, Dunshee, Doumit, Linville, Sullivan, Hatfield, Anderson, Morris, Eickmeyer, Mason, Keiser, Lantz and Kessler

 

AN ACT Relating to state and local government financing; amending RCW 82.44.020, 82.44.110, 82.44.150, 82.14.045, 82.14.200, 82.14.310, 82.14.330, 43.135.060, 82.50.410, 82.50.510, 35.58.273, 35.58.410, 43.160.070, 43.160.076, 43.160.080, 46.16.068, 70.94.015, 81.100.060, 82.08.020, 82.14.046, 82.44.023, 82.44.025, 82.44.155, 82.44.180, and 84.44.050; amending 1997 c 367 s 10 (uncodified); reenacting and amending RCW 82.14.320, 43.160.210, and 81.104.160; adding a new section to chapter 43.160 RCW; adding a new section to chapter 82.14 RCW; adding a new section to chapter 43.135 RCW; adding new sections to chapter 47.10 RCW; creating a new section; and providing an effective date.

 

Referred to Committee on Appropriations.

 

HB 3137           by Representative B. Thomas

 

AN ACT Relating to lodging tax advisory committees; and amending RCW 67.28.1817.

 

Referred to Committee on Finance.

 

HB 3138           by Representatives Koster, Sump, Sherstad and Dunn

 

AN ACT Relating to medical treatment of children in custody; amending RCW 13.34.060; and adding new sections to chapter 13.34 RCW.

 

Referred to Committee on Children & Family Services.

 

HCR 4437         by Representatives Clements, Parlette, Alexander, Buck, Doumit, Kessler, Regala, Sehlin, Skinner, B. Thomas, Mastin, McMorris, Honeyford, Chandler, Linville, Zellinsky, Huff and Dunn

 

Appointing a joint select committee to evaluate and analyze fish and wildlife programs.

 

HCR 4438         by Representatives Lisk and Chopp

 

Regarding Sine Die.

 

HCR 4439         by Representatives Lisk and Chopp


                          Regarding preadjournment business.

 

HCR 4440         by Representatives Lisk and Chopp


                          Regarding notification to governor of Sine Die.

 

ESSB 6470       by Senate Committee on Ways & Means (originally sponsored by Senators West, Anderson, Kohl, Snyder, Loveland, Fairley, T. Sheldon and Jacobsen; by request of Governor Locke)

 

Specifying the tax treatment of canned and custom software.

 

SCR 8430         by Senators McDonald and Sellar

 

Exempting specified matters from the cutoff resolution.


             There being no objection, the bills and resolutions listed on the day's introduction sheet under the fourth order of business were referred to the committees so designated.


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


MOTION


             Representative Dunshee moved that the rules be suspended, and House Bill No. 3135 be advanced to second reading.


             Representative Dunshee spoke in favor of the motion.


             Representative Sehlin spoke against the motion.


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


             The Speaker (Representative Pennington presiding) the question before the House to be adoption of the motion to suspend the rules and advance House Bill No. 3135 to second reading.


ROLLCALL


             The Clerk called the roll on the adoption of the motion to suspended the rules and advanced House Bill No. 3135 to second reading and the motion was not adopted by the following vote: Yeas - 42, Nays - 56, Absent - 0, Excused - 0.

             Voting yea: Representatives Anderson, Appelwick, Butler, Chandler, Chopp, Cody, Cole, Constantine, Conway, Cooper, Costa, Dickerson, Doumit, Dunshee, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hatfield, Kastama, Keiser, Kenney, Kessler, Lantz, Linville, Mason, Morris, Murray, O'Brien, Ogden, Poulsen, Quall, Regala, Romero, Scott, Sommers, H., Sullivan, Tokuda, Veloria, Wolfe and Wood - 42.

             Voting nay: Representatives Alexander, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Cairnes, Carlson, Carrell, Clements, Cooke, Crouse, DeBolt, Delvin, Dunn, Dyer, Hankins, Hickel, Honeyford, Huff, Johnson, Koster, Lambert, Lisk, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Mulliken, Parlette, Pennington, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Van Luven, Wensman, Zellinsky and Mr. Speaker - 56.


MESSAGE FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate concurred in the House amendment(s) to SENATE BILL NO. 6541, and passed the bill as amended by the House on page 2, line 33 and page 3, line 6.


and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


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


             There being no objection, the rules were suspended and House Concurrent Resolution No. 4437 was placed on second reading.


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


SECOND READING


             HOUSE CONCURRENT RESOLUTION NO. 4437, by Representatives Clements, Parlette, Alexander, Buck, Doumit, Kessler, Regala, Sehlin, Skinner, B. Thomas, Mastin, McMorris, Honeyford, Chandler, Linville, Zellinsky and Huff


             Appoint a joint select committee to evaluate and analyze fish and wildlife programs.


             The resolution was read the second time.


             There being no objection, the rules were suspended, the second reading considered the third and the resolution was placed to final adoption.


             Representatives Clements and Regala spoke in favor of adoption of the resolution.


             House Concurrent Resolution No. 4437 was adopted.


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


             There being no objection, the rules were suspended and Senate Concurrent Resolution No. 8430 was advanced to second reading.


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


SECOND READING


             SENATE CONCURRENT RESOLUTION NO. 8430, By Senators McDonald and Sellar


             Exemption specified matters from the cutoff resolution.


             The resolution was read the second time.


             There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Senate Concurrent Resolution No. 8430. Senate Joint Concurrent Resolution No. 8430 was adopted.


RESOLUTION


             HOUSE RESOLUTION NO. 98-4744, by Representatives Lisk and Dunn


             BE IT RESOLVED, That the House of Representatives establishes the following policy guidelines applicable to publications of the House of Representatives:

             1. DEFINITIONS. For these purposes, "publications" include all communications with a person or entity other than the House of Representatives, its members and employees, made in writing, by facsimile, by video or audio recording or electronically. "Publications" include, but are not limited to letters, newsletters, press releases, brochures, web pages, newsnet and usenet postings, videos, audio recordings, meeting announcements, reports, speech notes, and talking points.

             2. CONTENT RESTRICTIONS. All publications produced at public expense by the House of Representatives, must comply with the following content restrictions:

             A. TONE AND TENOR. All publications must use language that, in tone and tenor, is respectful of other legislators and the legislative process. Language is not permitted in publications that would be unacceptable if expressed in floor debate. Full and open debate of legislative issues necessarily involves criticism of views. Publications may contain language criticizing measures and attacking arguments, but may not include language attacking those who hold those views or make those arguments. Language in publications may not include harsh expressions about other members, must avoid personalities, and may not impute or impugn motives. See House Rule 16(H) and Reeds Parliamentary Rules, Rule 212.

             B. RELEVANCY. All publications must be relevant to the process, activities, issues, business, or duties that are part of the normal and regular conduct of the House and its members. The following rules are intended to guide decisions regarding relevancy:

             (1) Publications on legislation and legislative issues. (a) Publications related to legislation and legislative issues intended for distribution during a session must be focused toward specific legislation pending before the current session.

             (b) Publications related to legislation and legislative issues intended for distribution when the legislature is not in session must be focused toward legislation from the immediately preceding session or issues anticipated for the next session.

             (c) Research publications, commonly referred to as "white papers" or "issue research," are not subject to these restrictions as long as the publication is objective and relevant to providing objective information on public policy issues.

             (2) References to elections that directly or indirectly imply desired or expected future election results, or reflect on the implications of past election results other than ballot measure results, are prohibited. References to election results that are not relevant to legislation or legislative issues in accordance with this section are prohibited. References to ballot measure elections that violate the opinions and decisions of the Legislative Ethics Board and RCW 42.52.180 are prohibited.

             (3) Slogans. Slogans that promote individual legislators are not permitted.

             (4) Publications of a personal nature. Publications of a personal nature are not permitted, except in accordance with opinions and decisions of the Legislative Ethics Board.

             C. GENERAL COMPLIANCE. All publications must comply with opinions of the Legislative Ethics Board, Standards of Conduct Regarding Use of Public Facilities, and such policies and guidelines for House of Representatives publications found in the House Procedures and Guidelines for Publications and Mailings and as may be adopted by the House Executive Rules Committee, including but not limited to format and materials restrictions, and restrictions on the use of photographs.

             3. CAUCUS MAILING AND PUBLICATION RESTRICTIONS. Other than routine office correspondence, caucus publications prepared for distribution to the general public are not permitted.

             4. COSTS. Costs of all publications by members will be charged to the production, printing, and postage allowances set in accordance with RCW 42.52.185(4) by the House Procedures and Guidelines for Publications and Mailings.


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


MOTION


             Representative Lisk moved that the House adopt House Resolution No. 4744.


             Representative Lisk spoke in favor of the motion.


             There being no objection, an electronic roll call vote was called.


             The Speaker (Representative Pennington presiding) the question before the House to be adoption of House Floor Resolution No. 4744.


ROLLCALL


             The Clerk called the roll on the adoption of of House Floor Resolution No. 4744 was adopted by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             House Resolution No. 4744, having received the constitutional majority, was adopted.


             The Speaker assumed the chair.


SIGNED BY THE SPEAKER


             The Speaker announced he was signing:


SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1354,


MESSAGE FROM THE SENATE

March 7, 1998

Mr. Speaker:


             The Senate refuses to concur in the House amendment(s) to SUBSTITUTE SENATE BILL NO. 6518 and asks the House for a conference thereon. The President has appointed the following members as conferees: Senators Roach, Fairley and Zarelli, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House insisted on its position regarding the House amendment(s) to Substitute Senate Bill No. 6518, and again asked the Senate to concur therein.


SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:


             The Senate has passed HOUSE BILL NO. 2335 with the following amendment(s):


             On page 7, after line 3, insert the following:


             "NEW SECTION. Sec. 7. A new section is added to chapter 82.04 RCW to read as follows:

             Upon every person engaging within this state in the business of providing child care for periods of less than twenty-four hours; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such sales multiplied by the rate of 0.484 percent.


             Sec. 8. RCW 82.04.290 and 1997 c 7 s 2 are each amended to read as follows:

             (1) Upon every person engaging within this state in the business of providing international investment management services, as to such persons, the amount of tax with respect to such business shall be equal to the gross income or gross proceeds of sales of the business multiplied by a rate of 0.275 percent.

             (2) Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, section 7 of this act, and 82.04.280, and subsection (1) of this section; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of 1.5 percent.

             This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section."


             Renumber the remaining sections consecutively and correct any internal references accordingly.


             On page 1, line 3 of the title, after "82.04.270," strike "and 82.04.440; adding a new section" and insert "82.04.290, and 82.04.440; adding new sections"


and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to House Bill No. 2335 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives B. Thomas, Dunshee and Conway spoke in favor of passage of the bill as amended by the Senate.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of House Bill No. 2335 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of House Bill No. 2335, as amended by the Senate and the bill passed the House by the following vote: Yeas - 85, Nays - 11, Absent - 2, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Clements, Constantine, Cooke, Cooper, Costa, Crouse, DeBolt, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Gardner, Gombosky, Grant, Hankins, Hatfield, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sterk, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Van Luven, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 85.

             Voting nay: Representatives Chopp, Cody, Cole, Conway, Fisher, Mason, Regala, Sommers, H., Sullivan, Tokuda and Veloria - 11.

             Absent: Representatives Delvin and Hickel - 2.


             House Bill No. 2335, as amended by the Senate, having received the constitutional majority, was declared passed.


MESSAGE FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The Senate adheres to its position regarding the Senate amendment(s) to ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2342 and asks the House to concur thereon, and the same is herewith transmitted.

Susan Carlson, Deputy Secretary


             There being no objection, the House concurred in the Senate amendment(s) to Engrossed Second Substitute House Bill No. 2342 and advanced the bill as amended by the Senate to final passage.


FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE


             Representatives Huff, Dunshee, Conway, Talcot, Mason, DeBolt and Van Luven spoke in favor of passage of the bill as amended by the Senate.


             Representatives B. Thomas and H. Sommers spoke against passage of the bill as amended by the Senate.


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


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Engrossed Second Substitute House Bill No. 2342 as amended by the Senate.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 2342, as amended by the Senate and the bill passed the House by the following vote: Yeas - 75, Nays - 23, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Benson, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chopp, Clements, Constantine, Conway, Cooper, Costa, Crouse, DeBolt, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hatfield, Hickel, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Mason, Mastin, McCune, McDonald, Mitchell, Morris, O'Brien, Ogden, Parlette, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Scott, Sehlin, Sheahan, Skinner, Smith, Sommers, D., Sterk, Sullivan, Talcott, Thomas, L., Thompson, Van Luven, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 75.

             Voting nay: Representatives Ballasiotes, Boldt, Chandler, Cody, Cole, Cooke, Delvin, Dickerson, Hankins, Honeyford, Lisk, McMorris, Mielke, Mulliken, Murray, Pennington, Schoesler, Sherstad, Sommers, H., Sump, Thomas, B., Tokuda and Veloria - 23.


             Engrossed Second Substitute House Bill No. 2342, as amended by the Senate, having received the constitutional majority, was declared passed.


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


             There being no objection, the rules were suspended and Engrossed Substitute Senate Bill No. 6470 was advanced to second reading.


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


SECOND READING


             ENGROSSED SUBSTITUTE SENATE BILL NO. 6470, by Senate Committee on Ways & Means (originally sponsored by Senators West, Anderson, Kohl, Snyder, Loveland, Fairley, T. Sheldon and Jacobsen; by request of Governor Locke)


             Tax treatment of canned and custom software.


             The bill was read the second time.


             There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.


             Representatives B. Thomas, Dunshee, Kessler and Hatfield spoke in favor of passage of the bill.


             The Speaker (Representative Pennington presiding) the question before the House to be final passage of Engrossed Substitute Senate Bill No. 6470.


ROLL CALL


             The Clerk called the roll on the final passage of Engrossed Substitute Senate Bill No. 6470 and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.


             Engrossed Substitute Senate Bill No. 6470, having received the constitutional majority, was declared passed.


MESSAGES FROM THE SENATE

March 12, 1998

Mr. Speaker:


             The President has signed:

SUBSTITUTE SENATE BILL NO. 5582,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6165,

SECOND SUBSTITUTE SENATE BILL NO. 6168,

SUBSTITUTE SENATE BILL NO. 6181,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6187,

SECOND SUBSTITUTE SENATE BILL NO. 6190,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6204,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6238,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6408,

SUBSTITUTE SENATE BILL NO. 6455,

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


March 12, 1998


Mr. Speaker:


             The President has signed:

SUBSTITUTE HOUSE BILL NO. 1088,

SUBSTITUTE HOUSE BILL NO. 1126,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1328,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1374,

SUBSTITUTE HOUSE BILL NO. 1447,

SUBSTITUTE HOUSE BILL NO. 1541,

HOUSE BILL NO. 1549,

HOUSE BILL NO. 2278,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2417,

HOUSE BILL NO. 2566,

SUBSTITUTE HOUSE BILL NO. 2659,

SUBSTITUTE HOUSE BILL NO. 2711,

ENGROSSED HOUSE BILL NO. 2772,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2830,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2933,

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2935,

SUBSTITUTE HOUSE BILL NO. 3001,

SECOND SUBSTITUTE HOUSE BILL NO. 3058,

SUBSTITUTE HOUSE BILL NO. 3109,

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary


             The Speaker assumed the chair.


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


             There being no objection, the Rules Committee was relieved of House Bill No. 2615, and the bill was placed on second reading.


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


SECOND READING


             HOUSE BILL NO. 2615, by Representatives K. Schmidt, Fisher, Robertson, Mitchell, Wensman, O'Brien, Wood, Ogden, Gardner, Thompson and Conway; by request of Governor Locke)


             Creating partnerships for strategic freight investments


             The bill was read the second time. There being no objection, Substitute House Bill No. 2615 was substituted for House Bill No. 2615, and the substitute was placed on second reading.


             Substitute House Bill No. 2615 was read the second time.


             With the consent of the House, amendment number 1171 to Substitute House Bill No. 2615 was withdrawn.


             Representative K. Schmidt moved the adoption of amendment (1183):


             On page 5, line 35 after "possible." strike all material through line 38 and insert "The board shall adopt rules that give preference to projects that contain the greatest levels of financial participation from non-program fund sources. The board shall consider twenty percent as the minimum partnership contribution, but shall also ensure that there are provisions allowing exceptions for projects that are located in areas where minimal local funding capacity exists or where the magnitude of the project makes the adopted partnership contribution financially unfeasible.


             Representatives K. Schmidt and Fisher spoke in favor of the adoption of the amendment.


             The amendment was adopted.


             Representative K. Schmidt moved the adoption of amendment (1167):


             On page 6, line 32 after "(3)" strike all material through line 33 and insert the following:

             "Members of the board may not receive compensation. Reimbursement for travel and other expenses shall be provided by each respective organization that a member represents on the board."

             On page 8, line 27 after "Sec. 9." strike "To the greatest extent practicable, port" and insert "Port"


             Representative K. Schmidt spoke in favor of the adoption of the amendment.


             The amendment was adopted.


             With the consent of the House, amendment number 1189 to Substitute House Bill No. 2615 was withdrawn.


             Representative K. Schmidt moved the adoption of amendment (1190):


             On page 11, after line 20, insert the following:


             "NEW SECTION. Sec. 13. The sum of twenty-five million dollars is appropriated for the biennium ending June 30, 1999, from the motor vehicle fund--state to the department of transportation improvement program for highway construction projects as determined by the transportation commission. This appropriation is conditioned upon the enactment of section 43 of engrossed house bill 2894."

 

             Representative K. Schmidt spoke in favor of the adoption of the amendment.

 

             The amendment was adopted. The bill was ordered engrossed.

 

             There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

 

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

 

             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 2615.

 

ROLL CALL

 

             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2615, and the bill passed the House by the following vote: Yeas - 97, Nays - 1, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 97.

             Voting nay: Representative Schoesler - 1.

 

             Engrossed Substitute House Bill No. 2615, having received the constitutional majority, was declared passed.

 

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

 

             There being no objection, Committee on Transportation Policy & Budget was relieved of Substitute House Bill No. 2108 and the bill was placed on second reading.

 

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

 

SECOND READING

 

             SUBSTITUTE HOUSE BILL NO. 2108, House Committee on Transportation Policy & Budget (originally sponsored by Representatives K. Schmidt, Mitchell, Hankins and Radcliff)

 

             Jumbo ferry construction.

 

             The bill was read the second time.

 

             Representative K. Schmidt moved the adoption of amendment (1192):

 

             Strike everything after the enacting clause and insert the following:

 

             "NEW SECTION. Sec. 1. A new section is added to chapter 47.60 RCW to read as follows:

             The legislature finds and declares that there is a compelling need for the construction of a Jumbo Class Mark II ferry vessel. The long-range travel demand for trips from Central and North Kitsap Peninsula to the Seattle and Edmonds mainland ferry terminals indicate a one hundred twenty-two percent forecast increase in peak travel demand over the next twenty years between the hours of 3:00 p.m. and 7:00 p.m. In order to support the economic growth of the Puget Sound region and meet the forecasted citizen cross-sound travel demand, the Washington state ferry system must provide reliable ferry vessel operations that cannot be maintained with the existing aging super class ferry capacity.

 

             NEW SECTION. Sec. 2. A new section is added to chapter 47.60 RCW to read as follows:

             (1) The department is authorized to proceed with the acquisition, procurement, and construction of a Jumbo Class Mark II ferry. The acquisition, procurement, and construction of the vessel authorized in this section shall be undertaken in accordance with the authority provided in RCW 47.56.030.

             (2) Such ferry shall be constructed within the boundaries of the state of Washington, except that equipment furnished by the state and components, products, and systems that are standard manufactured items are not subject to the in-state requirement under this subsection. For the purposes of this section, "constructed" means the fabrication, by joining together by welding or fastening of all steel parts from which the total vessel is constructed, including, but not limited to, equipment and machinery, castings, electrical, electronics, deck covering, lining, and paint and joiner work, required by the contract. "Constructed" also means the interconnection of all equipment, machinery, and services, such as piping, wiring, and ducting. All warranty work on the vessel also shall be performed within the boundaries of the state of Washington, insofar as practicable.

             (3) A Jumbo Class Mark II ferry constructed under the requirements of subsection (1) of this section shall be of comparable quality and design as, and shall incorporate like controls, engines, and a propulsion system utilized in, the Jumbo Class Mark II ferries presently in operation or under construction in order to promote maximum commonality with those vessels.

 

             NEW SECTION. Sec. 3. A new section is added to chapter 47.60 RCW to read as follows:

             The department's authority to proceed with the acquisition, procurement, and construction of the vessel authorized under section 2 of this act is contingent on a legislative appropriation approving that authority."

 

             On page 1, line 1 of the title, after "vessels;" strike the remainder of the title and insert "and adding new sections to chapter 47.60 RCW."

 

             Representatives K. Schmidt, Cooper and Eickmeyer spoke in favor of the adoption of the amendment.

 

             The amendment was adopted. The bill was ordered engrossed.

 

             There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

 

             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 2108.

 

ROLL CALL

 

             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2108, and the bill passed the House by the following vote: Yeas - 83, Nays - 15, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Buck, Bush, Butler, Cairnes, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, Delvin, Dickerson, Doumit, Dyer, Eickmeyer, Fisher, Gardner, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mitchell, Morris, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Scott, Sehlin, Skinner, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Zellinsky and Mr. Speaker - 83.

             Voting nay: Representatives Boldt, Carlson, DeBolt, Dunn, Dunshee, Gombosky, Koster, Lambert, Mielke, Mulliken, Schoesler, Sheahan, Sherstad, Smith and Wood - 15.

 

             Engrossed Substitute House Bill No. 2108, having received the constitutional majority, was declared passed.

 

SIGNED BY THE SPEAKER

 

             The Speaker announced he was signing:

SUBSTITUTE HOUSE BILL NO. 2312,

SECOND SUBSTITUTE HOUSE BILL NO. 2849,

SECOND SUBSTITUTE HOUSE BILL NO. 2879,

 

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

 

             There being no objection, the Rules Committee was relieved of House Bill No. 1553 and the bill was placed on second reading.

 

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

 

SECOND READING

 

             HOUSE BILL NO. 1553, by Representatives Skinner, Hankins, Murray, Fisher, Mielke, O'Brien, Mitchell, Constantine, Mastin, Cooper, Chopp, Blalock, H. Sommers, Conway, Mason, Wood and Scott

 

             Relating to city and town transportation funding.

 

             The bill was read the second time. There being no objection, Substitute House Bill No. 1553 was substituted for House Bill No. 1553 and the substitute bill was placed on the second reading calendar.

 

             Substitute House Bill No. 1553 was read the second time.

 

             With the consent of the House, amendment numbers 1026 and 1179 to Substitute House Bill No. 1553 were withdrawn.

 

             Representative Murray moved the adoption of amendment (1170):

 

             On page 1, line 5 after the enacting clause, strike all material through page 10, line 12 and insert the following:

             "NEW SECTION. Sec. 1. The legislature recognizes that cities and towns throughout the state face a crisis in their ability to meet growing local transportation needs, due in part to a 1995 decision of the state supreme court that invalidated residential street utility charges imposed under the authority of section 2, chapter 141, Laws of 1991. The legislature recognizes the need to assist cities and towns to replace the local funding that would have been available to them had RCW 82.80.050 been upheld. The legislature hereby intends to provide cities and towns the local option, with voter approval, to: Authorize a city street district levy, similar to the existing county road district levy in RCW 36.82.040, to be levied for cities with a population greater than 400,000 or with a population of over 100,000 and located in a county bordering another county with a population of 75,000 in which is located all or part of a national monument; and increase the local sales and use tax. Additionally, cities and towns are provided the local option, subject to voter referendum, to impose a vehicle license fee if that fee has not been imposed by the county in which the city or town is located. A city or town may use any combination of these options.

 

             NEW SECTION. Sec. 2. For cities with a population greater than 400,000 and for cities with a population greater than 100,000 located in a county sharing a common border with another county having a population greater than 75,000 in which is located all or part of a national monument, the legislative authority may establish in its respective city or town a city street district, if authorized to do so by a majority of its voters voting at a general or special election on a proposition for that purpose, and shall cause its action in so doing to be entered upon its records.

             The city street district must be coterminous with the city or town. Territory later annexed into the city or town automatically becomes part of the city street district, and territory ceasing to be part of the city or town automatically ceases to be part of the city street district.

             A city street district may be disestablished, effective at the start of a new calendar year, by action of the city or town legislative authority.

 

             NEW SECTION. Sec. 3. There is created in each city or town that has established a city street district an account to be known as the city street district account. Any funds accruing to and to be deposited in the city street district account arising from a levy in a city street district must be expended for proper city street and other transportation purposes, in accordance with RCW 82.80.070.

 

             NEW SECTION. Sec. 4. For the purpose of raising revenue for establishing, laying out, constructing, altering, repairing, improving, and maintaining city streets and bridges, and for other proper city transportation purposes in accordance with RCW 82.80.070, the county legislative authority, or the city legislative authority in those cities authorized to impose the levy by section 2 of this act, shall annually at the time of making the property tax levy for general purposes make a uniform tax levy throughout each city street district of an amount not to exceed fifty cents per thousand dollars of assessed value of the last assessed valuation of the taxable property in the city street district, unless other laws of the state require a lower maximum levy, in which event the lower maximum levy controls. All funds accruing from the levy must be credited to and deposited in the city street district account. Revenues derived from the levy shall not supplant any existing transportation funding.

 

             NEW SECTION. Sec. 5. Sections 2 through 4 of this act constitute a new chapter in Title 35 RCW.

 

             NEW SECTION. Sec. 6. A new section is added to chapter 82.14 RCW to read as follows:

             The legislative authority of any city or town may, if authorized to do so by a majority of its voters voting at a general or special election on a proposition for that purpose, fix and impose a sales and use tax in accordance with the terms of this chapter. The referendum procedure provided in RCW 82.14.036 shall not apply to any city or town sales and use tax ordinance or resolution approved by the voters as provided in this section.

             The tax authorized in this section shall be in addition to any other taxes authorized by law and shall be collected from those persons who are taxable by the state pursuant to chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within such city or town. The rate of tax shall equal one-tenth of one percent of the selling price, in the case of a sales tax, or value of the article used, in the case of a use tax.

             The state treasurer shall distribute the moneys collected under this section monthly to the city or town levying the tax, after making the deductions authorized in RCW 82.14.050.

             Moneys received from any tax imposed under this section shall be expended exclusively for transportation purposes in accordance with RCW 82.80.070. Moneys received from any tax imposed under this section shall not supplant any existing transportation funding.

 

             Sec. 7. RCW 82.80.020 and 1996 c 139 s 4 are each amended to read as follows:

             (1) Subject to section 9 of this act, the legislative authority of a county or a transportation benefit district may fix and impose an additional fee, not to exceed fifteen dollars per vehicle, for each vehicle that is subject to license fees under RCW 46.16.060 and for each vehicle that is subject to RCW 46.16.070 with an unladen weight of six thousand pounds or less and is determined by the department of licensing to be registered within the boundaries of the county.

 

             (2) The department of licensing shall administer and collect ((the)) fees adopted under this section. The department shall deduct a percentage amount, as provided by contract, not to exceed two percent of the taxes collected, for administration and collection expenses incurred by it. The remaining proceeds shall be remitted to the custody of the state treasurer for monthly distribution under RCW 82.80.080.

             (3) The proceeds of ((this)) the fee imposed under subsection (1) of this section shall be used strictly for transportation purposes in accordance with RCW 82.80.070. The proceeds of the fee imposed under section 9 of this act shall be used strictly for a transportation project, properly identified by mileposts or other designations that specify the exact project parameters, or for a number of years, specified by the transportation benefit district legislative authority when the that legislative authority authorizes the fee, that is for transportation purposes in accordance with RCW 82.80.070. Moneys received from any fee imposed under this section shall not supplant any existing transportation funding.

             (4) A county imposing ((this)) fees under this section or initiating an exemption process shall delay the effective date at least six months from the date the ordinance is enacted to allow the department of licensing to implement administration and collection of or exemption from the fee.

             (5) The legislative authority of a county may develop and initiate an exemption process of the ((fifteen dollar)) fees adopted under this section for the registered owners of vehicles residing within the boundaries ((of the county)) in which the fees are imposed: (a) Who are sixty-one years old or older at the time payment of the fee is due and whose household income for the previous calendar year is less than an amount prescribed by the county or transportation benefit district legislative authority((,)); or (b) who ((has)) have a physical disability.

             (6) The legislative authority of a county shall develop and initiate an exemption process of the ((fifteen-dollar)) fees adopted under this section for vehicles registered within the boundaries ((of the county)) in which the fees are imposed that are licensed under RCW 46.16.374.

             

             Sec. 10. A new section is added to chapter 36.73 RCW to read as follows:

             (1) A transportation benefit district located within a county that has not imposed a fifteen dollar fee under RCW 82.80.020 may fix and impose an additional fee, not to exceed fifteen dollars per vehicle, for each vehicle that is subject to license fees under RCW 46.16.060 and for each vehicle that is subject to RCW 46.16.070 with an unladen weight of six thousand pounds or less, and that is determined by the department of licensing to be registered within the boundaries of the district.

             (2) The department of licensing shall administer and collect the fees adopted under this section. The department shall deduct a percentage amount, as provided by contract, not to exceed two percent of the taxes collected, for administration and collection expenses incurred by it. The remaining proceeds shall be remitted to the custody of the state treasurer for monthly distribution. The state treasurer shall distribute revenues, less authorized deductions, generated by the fees levied by districts under this section to the levying district.

             (3) A district imposing this fee or initiating an exemption process shall delay the effective date at least six months from the date the ordinance is enacted to allow the department of licensing to implement administration and collection of or exemption from the fee.

             (4) The district may develop and initiate an exemption process of the fees adopted under this section for the registered owners of vehicles residing within the boundaries of the district (a) who are sixty-one years old or older at the time payment of the fee is due and whose household income for the previous calendar year is less than an amount prescribed by district, or (b) who have a physical disability.

             (5) The district shall develop and initiate an exemption process of the fees adopted under this section for vehicles registered within the boundaries of the district that are licensed under RCW 46.16.374.

             (6) A district may not impose a fee that, if combined with the county fee imposed under RCW 82.80.020 in that county, exceeds fifteen dollars. If a county imposes or increases a fee under RCW 82.80.020 that, if combined with the fee imposed by a district within that county, exceeds fifteen dollars, the district fee in that county shall be reduced or eliminated as needed so that in no district does the combined fee exceed fifteen dollars. All revenues from county-imposed fees shall be distributed as called for in RCW 82.80.080.

             (7) The fee imposed under this section shall apply only to renewals and shall not apply to ownership transfer transactions.

 

             Sec. 11. RCW 82.80.080 and 1990 c 42 s 213 are each amended to read as follows:

             (1) The state treasurer shall distribute revenues, less authorized deductions, generated by the local option taxes authorized in RCW 82.80.010 and 82.80.020, levied by counties to the levying counties, and cities contained in those counties, based on the relative per capita population. County population for purposes of this section is equal to one and one-half of the unincorporated population of the county. In calculating the distributions, the state treasurer shall use the population estimates prepared by the state office of financial management and shall further calculate the distribution based on information supplied by the departments of licensing and revenue, as appropriate.

             (2) The state treasurer shall distribute revenues, less authorized deductions, generated by the local option taxes authorized in RCW 82.80.010 and 82.80.020 transportation benefit district to the levying district.

 

             Sec. 12. RCW 84.52.010 and 1995 2nd sp.s. c 13 s 4 are each amended to read as follows:

             Except as is permitted under RCW 84.55.050, all taxes shall be levied or voted in specific amounts.

             The rate percent of all taxes for state and county purposes, and purposes of taxing districts coextensive with the county, shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the county, as shown by the completed tax rolls of the county, and the rate percent of all taxes levied for purposes of taxing districts within any county shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the taxing districts respectively.

             When a county assessor finds that the aggregate rate of tax levy on any property, that is subject to the limitations set forth in RCW 84.52.043 or 84.52.050, exceeds the limitations provided in either of these sections, the assessor shall recompute and establish a consolidated levy in the following manner:

             (1) The full certified rates of tax levy for state, county, county road district, and city or town purposes shall be extended on the tax rolls in amounts not exceeding the limitations established by law; however any state levy shall take precedence over all other levies and shall not be reduced for any purpose other than that required by RCW 84.55.010. If, as a result of the levies imposed under RCW 84.52.069, 84.34.230, the portion of the levy by a metropolitan park district that was protected under RCW 84.52.120, and 84.52.105, the combined rate of regular property tax levies that are subject to the one percent limitation exceeds one percent of the true and fair value of any property, then these levies shall be reduced as follows: (a) The certified levy of a city street district shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated; (b) if the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the portion of the levy by a metropolitan park district that is protected under RCW 84.52.120 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated; (((b))) (c) if the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the levies imposed under RCW 84.34.230, 84.52.105, and any portion of the levy imposed under RCW 84.52.069 that is in excess of thirty cents per thousand dollars of assessed value, shall be reduced on a pro rata basis until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated; and (((c))) (d) if the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the thirty cents per thousand dollars of assessed value of tax levy imposed under RCW 84.52.069 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or eliminated.

             (2) The certified rates of tax levy subject to these limitations by all junior taxing districts imposing taxes on such property shall be reduced or eliminated as follows to bring the consolidated levy of taxes on such property within the provisions of these limitations:

             (a) First, the certified levy of a city street district shall be reduced or eliminated;

             (b) Second, the certified property tax levy rates of those junior taxing districts authorized under RCW 36.68.525, 36.69.145, and 67.38.130 shall be reduced on a pro rata basis or eliminated;

             (((b) Second)) (c) Third, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of flood control zone districts shall be reduced on a pro rata basis or eliminated;

             (((c) Third)) (d) Fourth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of all other junior taxing districts, other than fire protection districts, library districts, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts, and the first fifty cent per thousand dollars of assessed valuation levies for public hospital districts, shall be reduced on a pro rata basis or eliminated;

             (((d) Fourth)) (e) Fifth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized to fire protection districts under RCW 52.16.140 and 52.16.160 shall be reduced on a pro rata basis or eliminated; and

             (((e) Fifth)) (f) Sixth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized for fire protection districts under RCW 52.16.130, library districts, metropolitan park districts under their first fifty cent per thousand dollars of assessed valuation levy, and public hospital districts under their first fifty cent per thousand dollars of assessed valuation levy, shall be reduced on a pro rata basis or eliminated.

             In determining whether the aggregate rate of tax levy on any property, that is subject to the limitations set forth in RCW 84.52.050, exceeds the limitations provided in that section, the assessor shall use the hypothetical state levy, as apportioned to the county under RCW 84.48.080, that was computed under RCW 84.48.080 without regard to the reduction under RCW 84.55.012.

 

             Sec. 13. RCW 84.52.120 and 1995 c 99 s 1 are each amended to read as follows:

             A metropolitan park district with a population of one hundred fifty thousand or more may submit a ballot proposition to voters of the district authorizing the protection of the district's tax levy from prorationing under RCW 84.52.010(2) by imposing all or any portion of the district's twenty-five cent per thousand dollars of assessed valuation tax levy outside of the five dollar and ninety cent per thousand dollar of assessed valuation limitation established under RCW 84.52.043(2), if those taxes otherwise would be prorated under RCW 84.52.010(2)(((c))) (d), for taxes imposed in any year on or before the first day of January six years after the ballot proposition is approved. A simple majority vote of voters voting on the proposition is required for approval.

 

             Representative Murray moved the adoption of amendment (1178) to amendment (1170):

 

             On page 1, line 19 after "Additionally," strike "cities and towns are provied the local option" and insert "a transportation benefit district is provided the local option"

 

             On page 1, line 22 after "which the" strike "city or town" and insert "transportation benefit district"

 

             On page 3, line 20 after "Subject to" strike "section 9" and insert "section 8"

 

             On page 4, at the beginning of line 1, strike "section 9" and insert "section 8"

             On page 4, at the beginning of line 28, strike "Sec. 10." and insert "Sec. 8."

 

             Representative Murray spoke in favor of the adoption of the amendment to the amendment.

 

             The amendment to the amendment was adopted.

 

             Representative Honeyford moved the adoption of amendment (1187) to amendment (1170):

 

             On page 4, after line 27 of the striking amendment, insert the following: "(7) The provisions of subsection (1) of this section do not apply to trucks whose registered owner is an owner or lessee of a farm and the vehicle is regularly used to haul supplies, equipment and products to and from the farm or for persons who are licensed commercial fisherman.

 

             On page 5, after line 23 of the striking amendment, insert the following: "(8) The provisions of subsection (1) of this section do not apply to trucks whose registered owner is an owner or lessee of a farm and the vehicle is regularly used to haul supplies, equipment and products to and from the farm or for persons who are licensed commercial fisherman.

 

             Renumber the sections consecutively and correct any internal references accordingly.

 

             Representative Honeyford spoke in favor of the adoption of the amendment to the amendment.

 

             Representative Fisher spoke against adoption of the amendment to the amendment.

 

             Division was demanded. The Speaker divided the House. The results of the division was 43-YEAS; 55-NAYS. The amendment was not adopted.

 

             The Speaker stated the question before the House to be adoption of amendment (1170) as amended.

             The amendment as amended was adopted. The bill was ordered engrossed.

 

             There being no objection, the rules were suspended, the second reading considered the third and the bill was placed on final passage.

 

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

 

             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1553.

 

ROLL CALL

 

             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1553 and the bill passed the House by the following vote: Yeas - 88, Nays - 10, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Scott, Sehlin, Skinner, Smith, Sommers, D., Sommers, H., Sullivan, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood and Zellinsky - 88.

             Voting nay: Representatives Carrell, Crouse, Honeyford, McMorris, Schoesler, Sheahan, Sherstad, Sterk, Sump and Mr. Speaker - 10.

 

             Engrossed Substitute House Bill No. 1553, having received the constitutional majority, was declared passed.

 

SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:

 

             The Senate has passed ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2339 with the following amendment(s):

 

             Strike everything after the enacting clause and insert the following:

 

             "NEW SECTION. Sec. 1. (1) The legislature finds that wetlands mitigation banks are an important tool for providing compensatory mitigation for unavoidable impacts to wetlands. The legislature further finds that the benefits of mitigation banks include: (a) Maintenance of the ecological functioning of a watershed by consolidating compensatory mitigation into a single large parcel rather than smaller individual parcels; (b) increased potential for the establishment and long-term management of successful mitigation by bringing together financial resources, planning, and scientific expertise not practicable for many project-specific mitigation proposals; (c) increased certainty over the success of mitigation and reduction of temporal losses of wetlands since mitigation banks are typically implemented and functioning in advance of project impacts; (d) potential enhanced protection and preservation of the state's highest value and highest functioning wetlands; (e) a reduction in permit processing times and increased opportunity for more cost-effective compensatory mitigation for development projects; and (f) the ability to provide compensatory mitigation in an efficient, predictable, and economically and environmentally responsible manner. Therefore, the legislature declares that it is the policy of the state to authorize wetland mitigation banking.

             (2) The purpose of this chapter is to support the establishment of mitigation banks by: (a) Authorizing state agencies and local governments, as well as private entities, to achieve the goals of this chapter; and (b) providing a predictable, efficient, regulatory framework, including timely review of mitigation bank proposals. The legislature intends that, in the development and adoption of rules for banks, the department establish and use a collaborative process involving interested public and private entities.

 

             NEW SECTION. Sec. 2. This chapter does not create any new authority for regulating wetlands or wetlands banks beyond what is specifically provided for in this chapter. No authority is granted to the department under this chapter to adopt rules or guidance that apply to wetland projects other than banks under this chapter.

 

             NEW SECTION. Sec. 3. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

             (1) "Banking instrument" means the documentation of agency and bank sponsor concurrence on the objectives and administration of the bank that describes in detail the physical and legal characteristics of the bank, including the service area, and how the bank will be established and operated.

             (2) "Bank sponsor" means any public or private entity responsible for establishing and, in most circumstances, operating a bank.

             (3) "Credit" means a unit of trade representing the increase in the ecological value of the site, as measured by acreage, functions, and/or values, or by some other assessment method.

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

             (5) "Wetlands mitigation bank" or "bank" means a site where wetlands are restored, created, enhanced, or in exceptional circumstances, preserved expressly for the purpose of providing compensatory mitigation in advance of authorized impacts to similar resources.

             (6) "Mitigation" means sequentially avoiding impacts, minimizing impacts, and compensating for remaining unavoidable impacts.

             (7) "Practicable" means available and capable of being done after taking into consideration cost, existing technology, and logistics in light of overall project purposes.

             (8) "Service area" means the designated geographic area in which a bank can reasonably be expected to provide appropriate compensation for unavoidable impacts to wetlands.

             (9) "Unavoidable" means adverse impacts that remain after all appropriate and practicable avoidance and minimization have been achieved.

 

             NEW SECTION. Sec. 4. Subject to the requirements of this chapter, the department, through a collaborative process, shall adopt rules for:

             (1) Certification, operation, and monitoring of wetlands mitigation banks. The rules shall include procedures to assure that:

             (a) Priority is given to banks providing for the restoration of degraded or former wetlands;

             (b) Banks involving the creation and enhancement of wetlands are certified only where there are adequate assurances of success and that the bank will result in an overall environmental benefit; and

             (c) Banks involving the preservation of wetlands or associated uplands are certified only when the preservation is in conjunction with the restoration, enhancement, or creation of a wetland, or in other exceptional circumstances as determined by the department consistent with this chapter;

             (2) Determination and release of credits from banks. Procedures regarding credits shall authorize the use and sale of credits to offset adverse impacts and the phased release of credits as different levels of the performance standards are met;

             (3) Public involvement in the certification of banks, using existing statutory authority;

             (4) Coordination of governmental agencies;

             (5) Establishment of criteria for determining service areas for each bank;

             (6) Performance standards; and

             (7) Long-term management, financial assurances, and remediation for certified banks.

             Before adopting rules under this chapter, the department shall submit the proposed rules to the appropriate standing committees of the legislature. By January 30, 1999, the department shall submit a report to the appropriate standing committees of the legislature on its progress in developing rules under this chapter.

 

             NEW SECTION. Sec. 5. (1) The department may certify only those banks that meet the requirements of this chapter. Certification shall be accomplished through a banking instrument. The local jurisdiction in which the bank is located shall be signatory to the banking instrument.

             (2) State agencies and local governments may approve use of credits from a bank for any mitigation required under a permit issued or approved by that state agency or local government to compensate for the proposed impacts of a specific public or private project.

 

             NEW SECTION. Sec. 6. Prior to authorizing use of credits from a bank as a means of mitigation under a permit issued or approved by the department, the department must assure that all appropriate and practicable steps have been undertaken to first avoid and then minimize adverse impacts to wetlands. In determining appropriate steps to avoid and minimize adverse impacts to wetlands, the department shall take into consideration the functions and values of the wetland, including fish habitat, ground water quality, and protection of adjacent properties. The department may approve use of credits from a bank when:

             (1) The credits represent the creation, restoration, or enhancement of wetlands of like kind and in close proximity when estuarine wetlands are being mitigated;

             (2) There is no practicable opportunity for on-site compensation; or

             (3) Use of credits from a bank is environmentally preferable to on-site compensation.

 

             NEW SECTION. Sec. 7. The interpretation of this chapter and rules adopted under this chapter must be consistent with applicable federal guidance for the establishment, use, and operation of wetlands mitigation banks as it existed on the effective date of this section, or such subsequent date as may be provided by the department by rule, consistent with the purposes of this chapter.

 

             NEW SECTION. Sec. 8. This chapter applies to public and private mitigation banks.

 

             NEW SECTION. Sec. 9. 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. 10. The director of the department of ecology may take the necessary steps to ensure that this act is implemented on its effective date.

 

             NEW SECTION. Sec. 11. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 1998, in the omnibus appropriations act, this act is null and void.

 

             NEW SECTION. Sec. 12. Sections 1 through 9 of this act constitute a new chapter in Title 90 RCW."

 

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

 

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary

 

             There being no objection, the House concurred in the Senate amendment(s) to Engrossed Second Substitute House Bill No. 2339 and advanced the bill as amended by the Senate to final passage.

 

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

 

             Representatives Thompson, Romero, Mulliken, Doumit and Hatfield spoke in favor of passage of the bill as amended by the Senate.

 

             The Speaker stated the question before the House to be final passage of Engrossed Second Substitute House Bill No. 2339 as amended by the Senate.

 

ROLL CALL

 

             The Clerk called the roll on the final passage of Engrossed Second Substitute House Bill No. 2339, as amended by the Senate and the bill passed the House by the following vote: Yeas - 94, Nays - 4, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 94.

             Voting nay: Representatives Constantine, Keiser, McCune and Poulsen - 4.

 

             Engrossed Second Substitute House Bill No. 2339, as amended by the Senate, having received the constitutional majority, was declared passed.

 

SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:

 

             The Senate has passed HOUSE BILL NO. 3060 with the following amendment(s):

 

             On page 2, beginning on line 21, strike all material through "leased" on line 23, and insert the following:

             "(f) If such right or portion of the right is leased to another person for use on land other than the land to which the right is appurtenant as long as the lessee makes beneficial use of the right in accordance with this chapter and a transfer or change of the right has been approved by the department in accordance with RCW 90.03.380, 90.03.383, 90.03.390, or 90.44.100"

 

and the same is herewith transmitted.

Susan Carlson, Deputy Secretary

 

             There being no objection, the House concurred in the Senate amendment(s) to House Bill No. 3060 and advanced the bill as amended by the Senate to final passage.

 

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

 

             Representatives Chandler and Linville spoke in favor of passage of the bill as amended by the Senate.

 

             The Speaker stated the question before the House to be final passage of House Bill No. 3060 as amended by the Senate.

 

ROLL CALL

 

             The Clerk called the roll on the final passage of House Bill No. 3060, as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linville, Lisk, Mason, Mastin, McCune, McDonald, McMorris, Mielke, Mitchell, Morris, Mulliken, Murray, O'Brien, Ogden, Parlette, Pennington, Poulsen, Quall, Radcliff, Reams, Regala, Robertson, Romero, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sherstad, Skinner, Smith, Sommers, D., Sommers, H., Sterk, Sullivan, Sump, Talcott, Thomas, B., Thomas, L., Thompson, Tokuda, Van Luven, Veloria, Wensman, Wolfe, Wood, Zellinsky and Mr. Speaker - 98.

 

             House Bill No. 3060, as amended by the Senate, having received the constitutional majority, was declared passed.

 

SENATE AMENDMENTS TO HOUSE BILL

March 12, 1998

Mr. Speaker:

 

             The Senate reconsidered the vote by which ENGROSSED SUBSTITUTE HOUSE BILL NO. 2439 failed to pass, and relieved the Conference Committee of further consideration on the bill. Under suspension of rules, the bill was returned to Second Reading for purposes of amendment(s), and the bill passed the Senate with the following amendment(s):

 

             Strike everything after the enacting clause and insert the following:

 

             "NEW SECTION. Sec. 1. This act may be known and cited as the Cooper Jones Act.

 

             Sec. 2. RCW 43.59.010 and 1967 ex.s. c 147 s 1 are each amended to read as follows:

             (1) The purpose of this chapter is to establish a new agency of state government to be known as the Washington traffic safety commission. The functions and purpose of this commission shall be to find solutions to the problems that have been created as a result of the tremendous increase of motor vehicles on our highways and the attendant traffic death and accident tolls; to plan and supervise programs for the prevention of accidents on streets and highways including but not limited to educational campaigns designed to reduce traffic accidents in cooperation with all official and unofficial organizations interested in traffic safety; to coordinate the activities at the state and local level in the development of state-wide and local traffic safety programs; to promote a uniform enforcement of traffic safety laws and establish standards for investigation and reporting of traffic accidents; to promote and improve driver education; and to authorize the governor to perform all functions required to be performed by him under the federal Highway Safety Act of 1966 (Public Law 89-564; 80 Stat. 731).

             (2) The legislature finds and declares that bicycling and walking are becoming increasingly popular in Washington as clean and efficient modes of transportation, as recreational activities, and as organized sports. Future plans for the state's transportation system will require increased access and safety for bicycles and pedestrians on our common roadways, and federal transportation legislation and funding programs have created strong incentives to implement these changes quickly. As a result, many more people are likely to take up bicycling in Washington both as a leisure activity and as a convenient, inexpensive form of transportation. Bicyclists are more vulnerable to injury and accident than motorists, and should be as knowledgeable as possible about traffic laws, be highly visible and predictable when riding in traffic, and be encouraged to wear bicycle safety helmets. Hundreds of bicyclists and pedestrians are seriously injured every year in accidents, and millions of dollars are spent on health care costs associated with these accidents. There is clear evidence that organized training in the rules and techniques of safe and effective cycling can significantly reduce the incidence of serious injury and accidents, increase cooperation among road users, and significantly increase the incidence of bicycle helmet use, particularly among minors. A reduction in accidents benefits the entire community. Therefore it is appropriate for businesses and community organizations to provide donations to bicycle and pedestrian safety training programs.

 

             NEW SECTION. Sec. 3. A new section is added to chapter 43.59 RCW to read as follows:

             (1) The Washington state traffic safety commission shall establish a program for improving bicycle and pedestrian safety, and shall cooperate with the stakeholders and independent representatives to form an advisory committee to develop programs and create public private partnerships which promote bicycle and pedestrian safety. The traffic safety commission shall report and make recommendations to the legislative transportation committee and the fiscal committees of the house of representatives and the senate by December 1, 1998, regarding the conclusions of the advisory committee.

             (2) The bicycle and pedestrian safety account is created in the state treasury. To the extent that private contributions are received by the traffic safety commission for the purposes of bicycle and pedestrian safety programs established under this section, the appropriations from the highway safety account for this purpose shall lapse.

 

             NEW SECTION. Sec. 4. A new section is added to chapter 46.20 RCW to read as follows:

             The department of licensing shall incorporate a section on bicycle safety and sharing the road into its instructional publications for drivers and shall include questions in the written portion of the driver's license examination on bicycle safety and sharing the road with bicycles.

 

             Sec. 5. RCW 46.20.095 and 1986 c 93 s 3 are each amended to read as follows:

             The department shall include information on the proper use of the left-hand lane by motor vehicles on multilane highways and on bicyclists' and pedestrians' rights and responsibilities in its instructional publications for drivers.

 

             Sec. 6. RCW 46.82.430 and 1986 c 93 s 5 are each amended to read as follows:

             Instructional material used in driver training schools shall include information on the proper use of the left-hand lane by motor vehicles on multilane highways and on bicyclists' and pedestrians' rights and responsibilities and suggested riding procedures in common traffic situations.

 

             Sec. 7. RCW 46.83.040 and 1961 c 12 s 46.83.040 are each amended to read as follows:

             It shall be the purpose of every traffic school which may be established hereunder to instruct, educate, and inform all persons appearing for training in the proper, lawful, and safe operation of motor vehicles, including but not limited to rules of the road and the limitations of persons, vehicles, and bicycles and roads, streets, and highways under varying conditions and circumstances.

 

             Sec. 8. RCW 46.52.070 and 1967 c 32 s 57 are each amended to read as follows:

             (1) Any police officer of the state of Washington or of any county, city, town or other political subdivision, present at the scene of any accident or in possession of any facts concerning any accident whether by way of official investigation or otherwise shall make report thereof in the same manner as required of the parties to such accident and as fully as the facts in his possession concerning such accident will permit.

             (2) The police officer shall report to the department, on a form prescribed by the director: (a) When an accident has occurred that results in a fatality or serious injury; (b) the identity of the operator of a vehicle involved in the accident when the officer has reasonable grounds to believe the operator who caused the fatality or serious injury may not be competent to operate a motor vehicle; and (c) the reason or reasons for such belief.

 

             Sec. 9. RCW 46.52.100 and 1995 c 219 s 3 are each amended to read as follows:

             Every district court, municipal court, and clerk of superior court shall keep or cause to be kept a record of every traffic complaint, traffic citation, notice of infraction, or other legal form of traffic charge deposited with or presented to the court or a traffic violations bureau, and shall keep a record of every official action by the court or its traffic violations bureau in reference thereto, including but not limited to a record of every conviction, forfeiture of bail, judgment of acquittal, finding that a traffic infraction has been committed, dismissal of a notice of infraction, and the amount of fine, forfeiture, or penalty resulting from every traffic complaint, citation, or notice of infraction deposited with or presented to the district court, municipal court, superior court, or traffic violations bureau.

             The Monday following the conviction, forfeiture of bail, or finding that a traffic infraction was committed for violation of any provisions of this chapter or other law regulating the operating of vehicles on highways, every magistrate of the court or clerk of the court of record in which such conviction was had, bail was forfeited, or the finding made shall prepare and immediately forward to the director of licensing at Olympia an abstract of the record of the court covering the case, which abstract must be certified by the person so required to prepare the same to be true and correct. Report need not be made of any finding involving the illegal parking or standing of a vehicle.

             The abstract must be made upon a form or forms furnished by the director and shall include the name and address of the party charged, the number, if any, of the party's driver's or chauffeur's license, the registration number of the vehicle involved if required by the director, the nature of the offense, the date of hearing, the plea, the judgment, whether the offense was an alcohol-related offense as defined in RCW 46.01.260(2), whether the incident that gave rise to the offense charged resulted in any fatality, whether bail forfeited, whether the determination that a traffic infraction was committed was contested, and the amount of the fine, forfeiture, or penalty as the case may be.

             Every court of record shall also forward a like report to the director upon the conviction of any person of a felony in the commission of which a vehicle was used.

             The failure of any such judicial officer to comply with any of the requirements of this section shall constitute misconduct in office and shall be grounds for removal therefrom.

             The director shall keep all abstracts received hereunder at the director's office in Olympia and the same shall be open to public inspection during reasonable business hours.

             Venue in all district courts shall be before one of the two nearest district judges in incorporated cities and towns nearest to the point the violation allegedly occurred: PROVIDED, That in counties with populations of one hundred twenty-five thousand or more such cases may be tried in the county seat at the request of the defendant.

             It shall be the duty of the officer, prosecuting attorney, or city attorney signing the charge or information in any case involving a charge of driving under the influence of intoxicating liquor or any drug immediately to make request to the director for an abstract of convictions and forfeitures which the director shall furnish.

 

             Sec. 10. RCW 46.52.120 and 1993 c 501 s 12 are each amended to read as follows:

             (1) The director shall keep a case record on every motor vehicle driver licensed under the laws of this state, together with information on each driver, showing all the convictions and findings of traffic infractions certified by the courts, together with an index cross-reference record of each accident reported relating to such individual with a brief statement of the cause of the accident and whether or not the accident resulted in any fatality. The chief of the Washington state patrol shall furnish the index cross-reference record to the director, with reference to each driver involved in the reported accidents.

             (2) The records shall be for the confidential use of the director, the chief of the Washington state patrol, the director of the Washington traffic safety commission, and for such police officers or other cognizant public officials as may be designated by law. Such case records shall not be offered as evidence in any court except in case appeal is taken from the order of the director, suspending, revoking, canceling, or refusing a vehicle driver's license.

             (3) The director shall tabulate and analyze vehicle driver's case records and suspend, revoke, cancel, or refuse a vehicle driver's license to a person when it is deemed from facts contained in the case record of such person that it is for the best interest of public safety that such person be denied the privilege of operating a motor vehicle. The director shall also suspend a person's driver's license if the person fails to attend or complete a driver improvement interview or fails to abide by conditions of probation under RCW 46.20.335. Whenever the director orders the vehicle driver's license of any such person suspended, revoked, or canceled, or refuses the issuance of a vehicle driver's license, such suspension, revocation, cancellation, or refusal is final and effective unless appeal from the decision of the director is taken as provided by law.

 

             Sec. 11. RCW 46.52.130 and 1997 c 66 s 12 are each amended to read as follows:

             A certified abstract of the driving record shall be furnished only to the individual named in the abstract, an employer or prospective employer or an agent acting on behalf of an employer or prospective employer, the insurance carrier that has insurance in effect covering the employer or a prospective employer, the insurance carrier that has insurance in effect covering the named individual, the insurance carrier to which the named individual has applied, an alcohol/drug assessment or treatment agency approved by the department of social and health services, to which the named individual has applied or been assigned for evaluation or treatment, or city and county prosecuting attorneys. City attorneys and county prosecuting attorneys may provide the driving record to alcohol/drug assessment or treatment agencies approved by the department of social and health services to which the named individual has applied or been assigned for evaluation or treatment. The director, upon proper request, shall furnish a certified abstract covering the period of not more than the last three years to insurance companies. Upon proper request, the director shall furnish a certified abstract covering a period of not more than the last five years to state approved alcohol/drug assessment or treatment agencies, except that the certified abstract shall also include records of alcohol-related offenses as defined in RCW 46.01.260(2) covering a period of not more than the last ten years. Upon proper request, a certified abstract of the full driving record maintained by the department shall be furnished to a city or county prosecuting attorney, to the individual named in the abstract or to an employer or prospective employer or an agent acting on behalf of an employer or prospective employer of the named individual. The abstract, whenever possible, shall include an enumeration of motor vehicle accidents in which the person was driving; the total number of vehicles involved; whether the vehicles were legally parked or moving; whether the vehicles were occupied at the time of the accident; whether the accident resulted in any fatality; any reported convictions, forfeitures of bail, or findings that an infraction was committed based upon a violation of any motor vehicle law; and the status of the person's driving privilege in this state. The enumeration shall include any reports of failure to appear in response to a traffic citation or failure to respond to a notice of infraction served upon the named individual by an arresting officer. Certified abstracts furnished to prosecutors and alcohol/drug assessment or treatment agencies shall also indicate whether a recorded violation is an alcohol-related offense as defined in RCW 46.01.260(2) that was originally charged as one of the alcohol-related offenses designated in RCW 46.01.260(2)(b)(i).

             The abstract provided to the insurance company shall exclude any information, except that related to the commission of misdemeanors or felonies by the individual, pertaining to law enforcement officers or fire fighters as defined in RCW 41.26.030, or any officer of the Washington state patrol, while driving official vehicles in the performance of occupational duty. The abstract provided to the insurance company shall include convictions for RCW 46.61.5249 and 46.61.525 except that the abstract shall report them only as negligent driving without reference to whether they are for first or second degree negligent driving. The abstract provided to the insurance company shall exclude any deferred prosecution under RCW 10.05.060, except that if a person is removed from a deferred prosecution under RCW 10.05.090, the abstract shall show the deferred prosecution as well as the removal.

             The director shall collect for each abstract the sum of four dollars and fifty cents which shall be deposited in the highway safety fund.

             Any insurance company or its agent receiving the certified abstract shall use it exclusively for its own underwriting purposes and shall not divulge any of the information contained in it to a third party. No policy of insurance may be canceled, nonrenewed, denied, or have the rate increased on the basis of such information unless the policyholder was determined to be at fault. No insurance company or its agent for underwriting purposes relating to the operation of commercial motor vehicles may use any information contained in the abstract relative to any person's operation of motor vehicles while not engaged in such employment, nor may any insurance company or its agent for underwriting purposes relating to the operation of noncommercial motor vehicles use any information contained in the abstract relative to any person's operation of commercial motor vehicles.

             Any employer or prospective employer or an agent acting on behalf of an employer or prospective employer receiving the certified abstract shall use it exclusively for his or her own purpose to determine whether the licensee should be permitted to operate a commercial vehicle or school bus upon the public highways of this state and shall not divulge any information contained in it to a third party.

             Any alcohol/drug assessment or treatment agency approved by the department of social and health services receiving the certified abstract shall use it exclusively for the purpose of assisting its employees in making a determination as to what level of treatment, if any, is appropriate. The agency, or any of its employees, shall not divulge any information contained in the abstract to a third party.

             Release of a certified abstract of the driving record of an employee or prospective employee requires a statement signed by: (1) The employee or prospective employee that authorizes the release of the record, and (2) the employer attesting that the information is necessary to determine whether the licensee should be employed to operate a commercial vehicle or school bus upon the public highways of this state. If the employer or prospective employer authorizes an agent to obtain this information on their behalf, this must be noted in the statement.

             Any violation of this section is a gross misdemeanor.

 

             Sec. 12. RCW 46.20.291 and 1997 c 58 s 806 are each amended to read as follows:

             The department is authorized to suspend the license of a driver upon a showing by its records or other sufficient evidence that the licensee:

             (1) Has committed an offense for which mandatory revocation or suspension of license is provided by law;

             (2) Has, by reckless or unlawful operation of a motor vehicle, caused or contributed to an accident resulting in death or injury to any person or serious property damage;

             (3) Has been convicted of offenses against traffic regulations governing the movement of vehicles, or found to have committed traffic infractions, with such frequency as to indicate a disrespect for traffic laws or a disregard for the safety of other persons on the highways;

             (4) Is incompetent to drive a motor vehicle under RCW 46.20.031(3);

             (5) Has failed to respond to a notice of traffic infraction, failed to appear at a requested hearing, violated a written promise to appear in court, or has failed to comply with the terms of a notice of traffic infraction or citation, as provided in RCW 46.20.289;

             (6) Is subject to suspension under RCW 46.20.305;

             (7) Has committed one of the prohibited practices relating to drivers' licenses defined in RCW 46.20.336; or

             (((7))) (8) Has been certified by the department of social and health services as a person who is not in compliance with a child support order or a residential or visitation order as provided in RCW 74.20A.320.

 

             Sec. 13. RCW 46.20.305 and 1965 ex.s. c 121 s 26 are each amended to read as follows:

             (1) The department, having good cause to believe that a licensed driver is incompetent or otherwise not qualified to be licensed may upon notice require him or her to submit to an examination.

             (2) The department shall require a driver reported under RCW 46.52.070(2), when a fatality occurred, to submit to an examination. The examination must be completed no later than one hundred twenty days after the accident report required under RCW 46.52.070(2) is received by the department unless the department, at the request of the operator, extends the time for examination.

             (3) The department may require a driver reported under RCW 46.52.070(2) to submit to an examination, or suspend the person's license subject to RCW 46.20.322, when a serious injury occurred. The examination must be completed no later than one hundred twenty days after the accident report required under RCW 46.52.070(2) is received by the department.

             (4) The department may in addition to an examination under this section require such person to obtain a certificate showing his or her condition signed by a licensed physician or other proper authority designated by the department.

             (5) Upon the conclusion of ((such)) an examination under this section the department shall take driver improvement action as may be appropriate and may suspend or revoke the license of such person or permit him or her to retain such license, or may issue a license subject to restrictions as permitted under RCW 46.20.041. The department may suspend or revoke the license of such person who refuses or neglects to submit to such examination.

             (6) The department may require payment of a fee by a person subject to examination under this section. The department shall set the fee in an amount that is sufficient to cover the additional cost of administering examinations required by this section.

 

             NEW SECTION. Sec. 14. The department of licensing may adopt rules as necessary to implement this act.

 

             NEW SECTION. Sec. 15. Sections 8 through 14 of this act take effect January 1, 1999.

 

             Sec. 16. RCW 46.37.280 and 1987 c 330 s 713 are each amended to read as follows:

             (1) During the times specified in RCW 46.37.020, any lighted lamp or illuminating device upon a motor vehicle, other than head lamps, spot lamps, auxiliary lamps, flashing turn signals, emergency vehicle warning lamps, warning lamps authorized by the state patrol and school bus warning lamps, which projects a beam of light of an intensity greater than three hundred candlepower shall be so directed that no part of the high intensity portion of the beam will strike the level of the roadway on which the vehicle stands at a distance of more than seventy-five feet from the vehicle.

             (2) Except as required in RCW 46.37.190 no person shall drive or move any vehicle or equipment upon any highway with any lamp or device thereon displaying a red light visible from directly in front of the center thereof.

             (3) Flashing lights are prohibited except as required in RCW 46.37.190, 46.37.200, 46.37.210, 46.37.215, and 46.37.300, ((and)) warning lamps authorized by the state patrol, and light-emitting diode flashing taillights on bicycles.

 

             Sec. 17. RCW 46.61.780 and 1987 c 330 s 746 are each amended to read as follows:

             (1) Every bicycle when in use during the hours of darkness as defined in RCW 46.37.020 shall be equipped with a lamp on the front which shall emit a white light visible from a distance of at least five hundred feet to the front and with a red reflector on the rear of a type approved by the state patrol which shall be visible from all distances ((from one hundred feet)) up to six hundred feet to the rear when directly in front of lawful lower beams of head lamps on a motor vehicle. A lamp emitting a red light visible from a distance of five hundred feet to the rear may be used in addition to the red reflector. A light-emitting diode flashing taillight visible from a distance of five hundred feet to the rear may also be used in addition to the red reflector.

             (2) Every bicycle shall be equipped with a brake which will enable the operator to make the braked wheels skid on dry, level, clean pavement.

 

             NEW SECTION. Sec. 18. The sum of one hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1999, from the highway safety account to the bicycle and pedestrian safety account for the purposes of this act."

 

             In line 1 of the title, after "education;" strike the remainder of the title and insert "amending RCW 43.59.010, 46.20.095, 46.82.430, 46.83.040, 46.52.070, 46.52.100, 46.52.120, 46.52.130, 46.20.291, 46.20.305, 46.37.280, and 46.61.780; adding new sections to chapter 43.59 RCW; adding a new section to chapter 46.20 RCW; creating a new section; prescribing penalties; making an appropriation; and providing an effective date."

 

and the same are herewith transmitted.

Susan Carlson, Deputy Secretary

 

             There being no objection, the House concurred in the Senate amendment(s) to Engrossed Substitute House Bill No. 2439 and advanced the bill as amended by the Senate to final passage.

 

FINAL PASSAGE OF HOUSE BILL AS AMENDED BY SENATE

 

             Representatives D. Sommers, Wood, L. Thomas, Sterk, Dunshee, Clements and K. Schmidt spoke in favor of passage of the bill as amended by the Senate.

 

             The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 2439 as amended by the Senate.

 

ROLL CALL

 

             The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 2439, as amended by the Senate and the bill passed the House by the following vote: Yeas - 98, Nays - 0, Absent - 0, Excused - 0.

             Voting yea: Representatives Alexander, Anderson, Appelwick, Backlund, Ballasiotes, Benson, Boldt, Buck, Bush, Butler, Cairnes, Carlson, Carrell, Chandler, Chopp, Clements, Cody, Cole, Constantine, Conway, Cooke, Cooper, Costa, Crouse, DeBolt, Delvin, Dickerson, Doumit, Dunn, Dunshee, Dyer, Eickmeyer, Fisher, Gardner, Gombosky, Grant, Hankins, Hatfield, Hickel, Honeyford, Huff, Johnson, Kastama, Keiser, Kenney, Kessler, Koster, Lambert, Lantz, Linvill