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FIFTY-FIFTH DAY

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MORNING SESSION

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Senate Chamber, Olympia, Saturday, March 7, 1998

      The Senate was called to order at 9:00 a.m. by President Owen. The Secretary called the roll and announced to the President that all Senators were present except Senators Bauer, Heavey, Schow, Strannigan and Zarelli. On motion of Senator Franklin, Senators Bauer and Heavey were excused. On motion of Senator Hale, Senators Schow, Strannigan and Zarelli were excused.

      The Sergeant at Arms Color Guard, consisting of Pages Phillip Youngren and Erin Peach, presented the Colors. Senator Margarita Prentice offered the prayer.


MOTION


      On motion of Senator Johnson, the reading of the Journal of the previous day was dispensed with and it was approved.


MESSAGE FROM THE HOUSE

March 5, 1998

MR. PRESIDENT:

      The Speaker has signed:

      SUBSTITUTE HOUSE BILL NO. 1211,

      HOUSE BILL NO. 1248,

      HOUSE BILL NO. 1250,

      SUBSTITUTE HOUSE BILL NO. 1253,

      SUBSTITUTE HOUSE BILL NO. 1971,

      HOUSE BILL NO. 2309,

      HOUSE BILL NO. 2429,

      HOUSE BILL NO. 2436,

      SUBSTITUTE HOUSE BILL NO. 2452,

      ENGROSSED HOUSE BILL NO. 2465,

      HOUSE BILL NO. 2537,

      HOUSE BILL NO. 2598,

      SUBSTITUTE HOUSE BILL NO. 2634,

      SUBSTITUTE HOUSE BILL NO. 2680,

      HOUSE BILL NO. 2692,

      HOUSE BILL NO. 2732,

      HOUSE BILL NO. 2784,

      SUBSTITUTE HOUSE BILL NO. 2790,

      SUBSTITUTE HOUSE BILL NO. 2822,

      HOUSE BILL NO. 2837,

      ENGROSSED SUBSTITUTE HOUSE BILL NO. 2900,

      ENGROSSED SUBSTITUTE HOUSE BILL NO. 2901,

      HOUSE BILL NO. 2990,

      HOUSE BILL NO. 3053, 

      HOUSE BILL NO. 3103,

      HOUSE JOINT MEMORIAL NO. 4030, and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


SIGNED BY THE PRESIDENT


      The President signed:

      SUBSTITUTE HOUSE BILL NO. 1211,

      HOUSE BILL NO. 1248,

      HOUSE BILL NO. 1250,

      SUBSTITUTE HOUSE BILL NO. 1253,

      SUBSTITUTE HOUSE BILL NO. 1971,

      HOUSE BILL NO. 2309,

      HOUSE BILL NO. 2429,

      HOUSE BILL NO. 2436,

      SUBSTITUTE HOUSE BILL NO. 2452,

      ENGROSSED HOUSE BILL NO. 2465,

      HOUSE BILL NO. 2537,

      HOUSE BILL NO. 2598,

      SUBSTITUTE HOUSE BILL NO. 2634,

      SUBSTITUTE HOUSE BILL NO. 2680,

      HOUSE BILL NO. 2692,

      HOUSE BILL NO. 2732,

      HOUSE BILL NO. 2784,

      SUBSTITUTE HOUSE BILL NO. 2790,

      SUBSTITUTE HOUSE BILL NO. 2822,

      HOUSE BILL NO. 2837,

      ENGROSSED SUBSTITUTE HOUSE BILL NO. 2900,

      ENGROSSED SUBSTITUTE HOUSE BILL NO. 2901,

      HOUSE BILL NO. 2990,

      HOUSE BILL NO. 3053, 

      HOUSE BILL NO. 3103,

      HOUSE JOINT MEMORIAL NO. 4030.


INTRODUCTION AND FIRST READING

 

SB 6762             by Senators Horn and McCaslin


                           AN ACT Relating to taxation authority of cities for zoos and aquariums; amending RCW 84.52.010; and adding a new chapter to Title 35 RCW.

 

Referred to Committee on Government Operations.


MOTION


      On motion of Senator Brown, the following resolution was adopted:


SENATE RESOLUTION 1998-8691

By Senator Brown


      WHEREAS, Our senior population and retirees are important segments of society capable of providing such joy to their communities; and

      WHEREAS, Bringing joy to others through community service is one of the greatest personal joys in life; and

      WHEREAS, In May 1972, Marion Herzer designed an innovative arts program for seniors in the Spokane area; and

      WHEREAS, The Washington State Office on Aging, the Spokane Parks and Recreation Department and private organizations supported this senior cultural service program; and

      WHEREAS, Today, Project JOY provides multiple entertainment programs for Spokane seniors and the general public; and

      WHEREAS, Both the young and old benefit from Project JOY’s performances at nursing homes, hospitals, civic organizations, retirement centers, and schools; and

      WHEREAS, Project JOY’s two hundred and eighty volunteer entertainers include clowns, square dancers, choirs, puppeteers, vaudeville actors, a senior orchestra and a kitchen band; and

      WHEREAS, The program also provides employment and leadership opportunities for qualified seniors;

      NOW, THEREFORE, BE IT RESOLVED, That the members of the Washington State Senate do hereby recognize the value of twenty-five years of entertainment and cultural value Project JOY has provided the Spokane community.


MOTION


      On motion of Senator Johnson, the Senate reverted to the sixth order of business.


SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENT


MOTION


      On motion of Senator Fraser, Gubernatorial Appointment No. 9224, Joan K. Thomas, as a member of the Parks and Recreation Commission, was confirmed.

      Senators Fraser, Oke and Thibaudeau spoke to the confirmation of Joan K. Thomas as a member of the Parks and Recreation Commission.


APPOINTMENT OF JOAN K. THOMAS


       The Secretary called the roll. The appointment was confirmed by the following vote: Yeas, 44; Nays, 0; Absent, 0; Excused, 5.

      Voting yea: Senators Anderson, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 44.                Excused: Senators Bauer, Heavey, Schow, Strannigan and Zarelli - 5.

MOTION


      At 9:21 a.m., on motion of Senator Johnson, the Senate was declared to be at ease.


      The Senate was called to order at 10:22 a.m. by President Owen.

      There being no objection, the President returned the Senate to the fourth order of business.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SENATE BILL NO. 5164 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 59.20.030 and 1993 c 66 s 15 are each amended to read as follows:

       For purposes of this chapter:

       (1) "Abandoned" as it relates to a mobile home owned by a tenant in a mobile home park, mobile home park cooperative, or mobile home park subdivision or tenancy in a mobile home lot means the tenant has defaulted in rent and by absence and by words or actions reasonably indicates the intention not to continue tenancy;

       (2) "Landlord" means the owner of a mobile home park and includes the agents of a landlord;

       (3) "Mobile home lot" means a portion of a mobile home park designated as the location of one mobile home and its accessory buildings, and intended for the exclusive use as a primary residence by the occupants of that mobile home;

       (4) "Mobile home park" means any real property which is rented or held out for rent to others for the placement of two or more mobile homes for the primary purpose of production of income, except where such real property is rented or held out for rent for seasonal recreational purpose only and is not intended for year-round occupancy;

       (5) "Mobile home park cooperative" means real property consisting of common areas and two or more lots held out for placement of mobile homes in which both the individual lots and the common areas are owned by an association of shareholders which leases or otherwise extends the right to occupy individual lots to its own members;

       (6) "Mobile home park subdivision" means real property, whether it is called a subdivision, condominium, or planned unit development, consisting of common areas and two or more lots held for placement of mobile homes in which there is private ownership of the individual lots and common, undivided ownership of the common areas by owners of the individual lots;

       (7) "Recreational vehicle" means a travel trailer, motor home, truck camper, or camping trailer that is primarily designed and used as temporary living quarters, is either self-propelled or mounted on or drawn by another vehicle, is transient, is not occupied as a primary residence, and is not immobilized or permanently affixed to a mobile home lot;

       (8) "Tenant" means any person, except a transient, who rents a mobile home lot; ((and))

       (9) "Transient" means a person who rents a mobile home lot for a period of less than one month for purposes other than as a primary residence;

       (10) "Occupant" means any person, including a live-in care provider, other than a tenant, who occupies a mobile home and mobile home lot.

       Sec. 2. RCW 59.20.080 and 1993 c 66 s 19 are each amended to read as follows:

       (1) A landlord shall not terminate or fail to renew a tenancy of a tenant or the occupancy of an occupant, of whatever duration except for one or more of the following reasons:

       (a) Substantial violation, or repeated or periodic violations of the rules of the mobile home park as established by the landlord at the inception of the tenancy or as assumed subsequently with the consent of the tenant or for violation of the tenant's duties as provided in RCW 59.20.140. The tenant shall be given written notice to cease the rule violation immediately. The notice shall state that failure to cease the violation of the rule or any subsequent violation of that or any other rule shall result in termination of the tenancy, and that the tenant shall vacate the premises within fifteen days: PROVIDED, That for a periodic violation the notice shall also specify that repetition of the same violation shall result in termination: PROVIDED FURTHER, That in the case of a violation of a "material change" in park rules with respect to pets, tenants with minor children living with them, or recreational facilities, the tenant shall be given written notice under this chapter of a six month period in which to comply or vacate;

       (b) Nonpayment of rent or other charges specified in the rental agreement, upon five days written notice to pay rent and/or other charges or to vacate;

       (c) Conviction of the tenant of a crime, commission of which threatens the health, safety, or welfare of the other mobile home park tenants. The tenant shall be given written notice of a fifteen day period in which to vacate;

       (d) Failure of the tenant to comply with local ordinances and state laws and regulations relating to mobile homes or mobile home living within a reasonable time after the tenant's receipt of notice of such noncompliance from the appropriate governmental agency;

       (e) Change of land use of the mobile home park including, but not limited to, conversion to a use other than for mobile homes or conversion of the mobile home park to a mobile home park cooperative or mobile home park subdivision: PROVIDED, That the landlord shall give the tenants twelve months' notice in advance of the effective date of such change, except that for the period of six months following April 28, 1989, the landlord shall give the tenants eighteen months' notice in advance of the proposed effective date of such change;

       (f) Engaging in "criminal activity." "Criminal activity" means a criminal act defined by statute or ordinance that threatens the health, safety, or welfare of the tenants. A park owner seeking to evict a tenant or occupant under this subsection need not produce evidence of a criminal conviction, even if the alleged misconduct constitutes a criminal offense. Notice from a law enforcement agency of criminal activity constitutes sufficient grounds, but not the only grounds, for an eviction under this subsection. Notification of the seizure of illegal drugs under RCW 59.20.155 is evidence of criminal activity and is grounds for an eviction under this subsection. The requirement that any tenant or occupant register as a sex offender under RCW 9A.44.130 is grounds for eviction under this subsection. If criminal activity is alleged to be a basis of termination, the park owner may proceed directly to an unlawful detainer action;

       (g) The tenant's application for tenancy contained a material misstatement that induced the park owner to approve the tenant as a resident of the park, and the park owner discovers and acts upon the misstatement within one year of the time the resident began paying rent;

       (h) If the landlord serves a tenant three fifteen-day notices within a twelve-month period to comply or vacate for failure to comply with the material terms of the rental agreement or park rules. The applicable twelve-month period shall commence on the date of the first violation;

       (i) Failure of the tenant to comply with obligations imposed upon tenants by applicable provisions of municipal, county, and state codes, statutes, ordinances, and regulations, including chapter 59.20 RCW. The landlord shall give the tenant written notice to comply immediately. The notice must state that failure to comply will result in termination of the tenancy and that the tenant shall vacate the premises within fifteen days;

       (j) The tenant engages in disorderly or substantially annoying conduct upon the park premises that results in the destruction of the rights of others to the peaceful enjoyment and use of the premises. The landlord shall give the tenant written notice to comply immediately. The notice must state that failure to comply will result in termination of the tenancy and that the tenant shall vacate the premises within fifteen days;

       (k) The tenant creates a nuisance that materially affects the health, safety, and welfare of other park residents. The landlord shall give the tenant written notice to cease the conduct that constitutes a nuisance immediately. The notice must state that failure to cease the conduct will result in termination of the tenancy and that the tenant shall vacate the premises in five days;

       (l) Any other substantial just cause that materially affects the health, safety, and welfare of other park residents. The landlord shall ((be)) give (([shall give])) the tenant written notice to comply immediately. The notice must state that failure to comply will result in termination of the tenancy and that the tenant shall vacate the premises within fifteen days; or

       (m) Failure to pay rent by the due date provided for in the rental agreement three or more times in a twelve-month period, commencing with the date of the first violation, after service of a five-day notice to comply or vacate.

       (2) Within five days of a notice of eviction as required by subsection (1)(a) of this section, the landlord and tenant shall submit any dispute to mediation. The parties may agree in writing to mediation by an independent third party or through industry mediation procedures. If the parties cannot agree, then mediation shall be through industry mediation procedures. A duty is imposed upon both parties to participate in the mediation process in good faith for a period of ten days for an eviction under subsection (1)(a) of this section. It is a defense to an eviction under subsection (1)(a) of this section that a landlord did not participate in the mediation process in good faith.

       (3) Chapters 59.12 and 59.18 RCW govern the eviction of recreational vehicles from mobile home parks.

       Sec. 3. RCW 59.20.090 and 1980 c 152 s 2 are each amended to read as follows:

       (1) Unless otherwise agreed rental agreements shall be for a term of one year. Any rental agreement of whatever duration shall be automatically renewed for the term of the original rental agreement, unless((:

       (a))) a different specified term is agreed upon((; or

       (b) The landlord serves notice of termination without cause upon the tenant prior to the expiration of the rental agreement: PROVIDED, That under such circumstances, at the expiration of the prior rental agreement the tenant shall be considered a month-to-month tenant upon the same terms as in the prior rental agreement until the tenancy is terminated)).

       (2) A landlord seeking to increase the rent upon expiration of the term of a rental agreement of any duration shall notify the tenant in writing three months prior to the effective date of any increase in rent((: PROVIDED, That if a landlord serves a tenant with notice of a rental increase at the same time or subsequent to serving the tenant with notice of termination without cause, such rental increase shall not become effective until the date the tenant is required to vacate the leased premises pursuant to the notice of termination or three months from the date notice of rental increase is served, whichever is later)).

       (3) A tenant shall notify the landlord in writing one month prior to the expiration of a rental agreement of an intention not to renew.

       (4)(a) The tenant may terminate the rental agreement upon thirty days written notice whenever a change in the location of the tenant's employment requires a change in his residence, and shall not be liable for rental following such termination unless after due diligence and reasonable effort the landlord is not able to rent the mobile home lot at a fair rental. If the landlord is not able to rent the lot, the tenant shall remain liable for the rental specified in the rental agreement until the lot is rented or the original term ends;

       (b) Any tenant who is a member of the armed forces may terminate a rental agreement with less than thirty days notice if he receives reassignment orders which do not allow greater notice."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      On motion of Senator Winsley, the Senate concurred in the House amendment to Senate Bill No. 5164.

      The President declared the question before the Senate to be the roll call on the final passage of Senate Bill No. 5164, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Senate Bill No. 5164, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 37; Nays, 6; Absent, 4; Excused, 2.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Hochstatter, Horn, Jacobsen, Johnson, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Sellar, Sheldon, B., Sheldon, T., Stevens, Swecker, Winsley, Wood and Zarelli - 37.          Voting nay: Senators Fairley, Heavey, Kline, Kohl, Thibaudeau and Wojahn - 6.    Absent: Senators Oke, Snyder, Spanel and West - 4.            Excused: Senators Schow and Strannigan - 2.   SENATE BILL NO. 5164, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 5527 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:

       "NEW SECTION. Sec. 1. The legislature finds that significant water savings may be realized through the installation and use of more efficient irrigation systems and techniques. The legislature also finds that positive economic incentives, establishment of necessary legal procedures, and removal of legal barriers are needed to stimulate the development of workable technologies and farming systems that rely on lesser quantities of water.

       The purpose of this act is to foster the use of water-efficient irrigation systems by allowing the saved water to be voluntarily transferred by the water right holder to other uses or other places of use.  Additionally, the purpose is to establish incentives through enabling self-funded, private capital or public funds to provide improved market-based incentives for adopting water saving technologies and to allow the benefits of the conserved water to be fully realized. It is the intent of this act that sufficient protections be provided to assure that existing water users are not adversely affected by transfers approved under this act.

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

       (1) "Contract" means a written legal instrument that provides for the transfer of a portion of a water right from an existing water right holder to another person for consideration.

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

       (3) "Net water savings" has the same meaning as defined in RCW 90.42.020.

       (4) "Person" means a person, corporation, quasi-municipal corporation, municipal corporation, or state agency.

       (5) "Reduction in evaporative loss" means the amount of water that is no longer lost to further use as a result of changing from a conventional irrigation system to a water-efficient irrigation system. "Reduction in evaporative loss" includes the reduction in the amount of water consumed through evaporation during the conveyance and/or the application of water to crops and through transpiration by nonproductive plants such as cover crops associated with the change in irrigation systems, but does not include any water that contributed to return flows used to satisfy existing rights.

       (6) "Transfer" means a transfer of, change in, or amendment to a surface or ground water right described in RCW 90.03.380 and 90.44.100 or to transfer, change, or amend such a right.

       (7) "Trust water right" means a water right transferred to and managed by the department for the benefit of instream flows or for the allocation to new uses as provided in chapter 90.38 or 90.42 RCW.

       (8) "Water-efficient irrigation system" means a system, the use of which results in a water savings when compared to the use or loss of water experienced in conveying water and/or applying water to a crop or crops before the installation of the system.

       NEW SECTION. Sec. 3. (1) A person holding a valid water right who installs a water-efficient irrigation system for use under the right may apply to the department for a transfer of the use of the water resulting from the reduction in evaporative loss plus any additional net water savings resulting from the installation. The water use may be transferred:

       (a) To other land owned by the person with less senior water rights or that lacks a full and sufficient supply of water or for the irrigation of an additional parcel or parcels of land owned by the person. The application for such a transfer must be processed based upon the same criteria as if the transfer were to be made to another person; or

       (b) To another person for use on other land.

       In the latter case, the person holding the valid water right may enter into a contract with another person for the transfer of water saved through installation of the water-efficient irrigation system. A contract may allow for a permanent transfer of a portion of the original water right, or for lease agreements with set expiration dates. The applicant shall state that the contract is not permanent in the application if the contract is not permanent. Such a contract shall be filed with the department with or as a supplement to the application and the department shall maintain a record of such a contract with the certificate of water right for the transferred water.

       (2) In determining the amount that is transferrable as a result of the installation of a water-efficient irrigation system, the department shall allow the transfer of an amount equal to the reduction in the evaporative loss. The reduction in evaporative loss is a readily transferrable component of net water savings.

       In addition, the department shall evaluate whether there are additional net water savings that result directly from installation of the water-efficient irrigation system that could be transferred without detriment to other existing water users. The department may not delay because of decisions on the determination of additional net water savings the approval of the transfer of the water that constitutes the reduction in evaporative loss.

       (3) The use of water supplied by an irrigation district that is saved through installation of a water-efficient irrigation system as described in this section shall be regulated solely as provided by the board of directors of the irrigation district.

       (4) A person wishing to make application for a transfer of a water right under this chapter, whether for surface or ground water, shall comply with RCW 90.03.380. The transferred portion of the water right has the same date of priority as the water right from which it originated, but between them the transferred portion of the right is inferior in priority unless otherwise provided by the parties by contract filed with the department.

       NEW SECTION. Sec. 4. The department may adopt rules, in accordance with chapter 34.05 RCW, for procedures to be used to facilitate the processing of requests for water right transfers made under this chapter and to establish a streamlined procedure to quantify the reduction in the evaporative loss. The methods used by the department for calculating reductions in evaporative loss, including but not limited to those for determining the exposure of water to evaporative loss using various irrigation systems, and the pan evaporation data to be used shall be the methods and data recommended by the Washington state cooperative extension service.

       The rules may establish procedures for the department to make preliminary findings that can be used as an initial basis for developing contracts by applicants.

       NEW SECTION. Sec. 5. An applicant shall accompany an application for a water right transfer under this chapter with a fee established in RCW 90.03.470.

       NEW SECTION. Sec. 6. In processing applications for transfers of portions of water rights under this chapter, if the department is unable to conclusively determine the validity of the original water right, the department may include a presumption of validity in the certificate of water rights. The presumption must provide to the contract purchaser the same right to the use of water embodied in the original water right.

       The presumption of validity may not be used as evidence as to the existence or nonexistence in a water right adjudication conducted under chapter 90.03 RCW.

       NEW SECTION. Sec. 7. A holder of a water right may voluntarily enter into a contract with the department. The department may utilize funds that are now or hereafter authorized for the purchase of water savings made available under this chapter. The department shall utilize the same methods of calculating water that is transferrable to another party under this chapter in determining the amount of water that is transferrable to the state. If additional net water saved is available for the benefit of only a stream segment, the calculations may be made on a case-by-case basis while assuring no detriment to existing water users occurs.

       NEW SECTION. Sec. 8. This chapter may be known and cited as the agricultural water conservation incentives act.

       Sec. 9. RCW 90.03.380 and 1997 c 442 s 801 are each amended to read as follows:

       (1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the same is used((: PROVIDED, HOWEVER, That the)). However, all or a portion of a right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if such change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if such change can be made without detriment or injury to existing rights. A change in the place of use, point of diversion, and/or purpose of use of a water right to enable irrigation of additional acreage or the addition of new uses may be permitted if such change results in no increase in the annual consumptive quantity of water used under the water right. For purposes of this section, "annual consumptive quantity" means the estimated or actual annual amount of water diverted pursuant to the water right, reduced by the estimated annual amount of return flows, averaged over the most recent five-year period of continuous beneficial use of the water right. Before any transfer of such right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department, and the application shall not be granted until notice of the application is published as provided in RCW 90.03.280. If it shall appear that such transfer or such change may be made without injury or detriment to existing rights, the department shall issue to the applicant an authorization to make the change or transfer. When the applicant has completed the change or transfer, the department shall issue to the applicant a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant may be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water.

       (2) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts.

       (3) A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights. The board of directors of an irrigation district may approve such a change if the board determines that the change: Will not adversely affect the district's ability to deliver water to other landowners; will not require the construction by the district of diversion or drainage facilities unless the board finds that the construction by the district is in the interest of the district; will not impair the financial or operational integrity of the district; and is consistent with the contractual obligations of the district.

       (4) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070.

       NEW SECTION. Sec. 10. Sections 2 through 8 of this act constitute a new chapter in Title 90 RCW."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      On motion of Senator Morton, the Senate concurred in the House amendment to Engrossed Substitute Senate Bill No. 5527.


MOTION


      On motion of Senator Hale, Senators Deccio and Johnson were excused.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 5527, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5527, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 42; Nays, 4; Absent, 0; Excused, 3.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley, Wood and Zarelli - 42.        Voting nay: Senators Fairley, Kline, Kohl and Wojahn - 4.             Excused: Senators Deccio, Johnson and Strannigan - 3.      ENGROSSED SUBSTITUTE SENATE BILL NO. 5527, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 5769 with the following amendment(s):

       On page 5, beginning on line 12, strike everything through "misdemeanor." on line 19, and insert the following:

       "(1) A person is guilty of possessing stolen property in the third degree if he or she possesses (a) stolen property which does not exceed two hundred fifty dollars in value, or (b) ten or more stolen merchandise pallets, or ten or more stolen beverage crates, or a combination of ten or more stolen merchandise pallets and beverage crates.

       (2) Possessing stolen property in the third degree is a gross misdemeanor."

       On page 6, beginning on line 6, strike everything through "misdemeanor." on line 12, and insert the following:

       "(1) A person is guilty of theft in the third degree if he or she commits theft of property or services which (a) does not exceed two hundred and fifty dollars in value, or (b) includes ten or more merchandise pallets, or ten or more beverage crates, or a combination of ten or more merchandise pallets and beverage crates.

       (2) Theft in the third degree is a gross misdemeanor.", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      Senator Roach moved that the Senate concur in the House amendments to Engrossed Substitute Senate Bill No. 5769.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Roach that the Senate concur in the House amendments to Engrossed Substitute Senate Bill No. 5769.

      The motion by Senator Roach carried and the Senate concurred in the House amendments to Engrossed Substitute Senate Bill No. 5769.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 5769, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5769, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 32; Nays, 16; Absent, 0; Excused, 1.

      Voting yea: Senators Anderson, Bauer, Benton, Fraser, Goings, Hale, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 32.        Voting nay: Senators Brown, Fairley, Finkbeiner, Franklin, Hargrove, Haugen, Kohl, Loveland, McAuliffe, Patterson, Prentice, Sheldon, T., Snyder, Spanel, Thibaudeau and Wojahn - 16.      Excused: Senator Deccio - 1.      ENGROSSED SUBSTITUTE SENATE BILL NO. 5769, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6114 with the following amendment(s):

       On page 3, beginning on line 16, strike all of sections 5 and 6

       Renumber the remaining sections consecutively and correct internal references accordingly.

       On page 4, after line 2, insert the following:

       "NEW SECTION. Sec. 9. 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."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      Senator Oke moved that the Senate concur in the House amendments to Substitute Senate Bill No. 6114.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Oke that the Senate concur in the House amendments to Substitute Senate Bill No. 6114.

      The motion by Senator Oke carried and the Senate concurred in the House amendments to Substitute Senate Bill No. 6114.


MOTION


      On motion of Senator Loveland, Senator Spanel was excused.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute Senate Bill No. 6114, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Substitute Senate Bill No. 6114, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 47.    Excused: Senators Deccio and Spanel - 2.            SUBSTITUTE SENATE BILL NO. 6114, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

February 27, 1998

MR. PRESIDENT:

      The House has passed SENATE BILL NO. 6122 with the following amendment(s):

      On page 22, line 12, delete subsection (15)

       Renumber the remaining subsections consecutively and correct the title accordingly

       On page 22, after line 25, insert the following new section:

       NEW SECTION. Sec. 38. RCW 15.17.950 is decodified.”

       Correct the title accordingly., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Morton moved that the Senate concur in the House amendments to Senate Bill No. 6122.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Morton that the Senate concur in the House amendments to Senate Bill No. 6122.

      The motion by Senator Morton carried and the Senate concurred in the House amendments to Senate Bill No. 6122.

      The President declared the question before the Senate to be the roll call on the final passage of Senate Bill No. 6122, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Senate Bill No. 6122, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 48.     Excused: Senator Spanel - 1.                 SENATE BILL NO. 6122, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6130 with the following amendment(s):

       On page 6, line 26, after “to” strike “July 1" and insert “June 30"

       On page 6, line 35, after “to” strike “July 1st" and insert “June 30th, and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Morton moved that the Senate concur in the House amendments to Substitute Senate Bill No. 6130.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Morton that the Senate concur in the House amendments to Substitute Senate Bill No. 6130.

      The motion by Senator Morton carried and the Senate concurred in the House amendments to Substitute Senate Bill No. 6130.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute Senate Bill No. 6130, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Substitute Senate Bill No. 6130, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49.     SUBSTITUTE SENATE BILL NO. 6130, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SENATE BILL NO. 6139 with the following amendment(s):

       On page 10, after line 33, insert the following:

       "NEW SECTION. Sec. 3. 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."

       Correct the title accordingly., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Roach moved that the Senate concur in the House amendment to Engrossed Senate Bill No. 6139.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Roach that the Senate concur in the House amendment to Engrossed Senate Bill No. 6139.

      The motion by Senator Roach carried and the Senate concurred in the House amendment to Engrossed Senate Bill No. 6139.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Senate Bill No. 6139, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6139, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49.     ENGROSSED SENATE BILL NO. 6139, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 5, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SENATE BILL NO. 6142 with the following amendment(s):

       On page 11, after line 2, insert the following:

       "NEW SECTION. Sec. 5. 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."

       On page 11, after line 2, add the following:

       "NEW SECTION. Sec. 6 This act takes effect January 1, 1999."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Roach moved that the Senate concur in the House amendments to Engrossed Senate Bill No. 6142.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Roach that the Senate concur in the House amendments to Engrossed Senate Bill No. 6142.

      The motion by Senator Roach carried and the Senate concurred in the House amendments to Engrossed Senate Bill No. 6142.      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Senate Bill No. 6142, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6142, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 43; Nays, 5; Absent, 1; Excused, 0.

      Voting yea: Senators Anderson, Bauer, Deccio, Fairley, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn and Wood - 43.      Voting nay: Senators Benton, Brown, Finkbeiner, Horn and Zarelli - 5.              Absent: Senator Hochstatter - 1.            ENGROSSED SENATE BILL NO. 6142, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


PERSONAL PRIVILEGE


      Senator Roach: “I rise to a point of personal privilege, Mr. President. I would like the attention of the members of the Senate, those in the galleries, security, everybody up at the desk and anybody who is going to listen. I came in here today and noticed that there was something, that everybody knew, was very conspicuous on the corner of my desk. Everybody knows I had a very nice array of flowers here. But, my flowers were not on my desk when I came here today and nobody asked me if they could pick up them up and move them. I asked around and nobody knows who moved them. We did find them; they are housed carefully over here in a little cubby hole. But, I want to go on record, 'I don't want even a pencil moved on my desk.' I certainly don't want anything removed from my desk and I think every member of the Senate would feel the same way.

      “Now, before the cutoff time--right at the cutoff--when we had Senate Bills that we had finished passing over to the House, I came in here to get my personal notes on our DUI legislation, because I was keeping them as a history of what we were doing here in the state of Washington-and they were gone--missing from my desk, along with other things. It was so offensive to me that I had a little sign brought up and I put it on my desk. I am incensed that anyone would move or touch anything on a Senator's desk and I want to find out who took my flowers and moved them and I intend to take action on whoever in the world would move something as personal and private as that. I did inquire-- nobody had asked the President of the Senate to have them moved. It was just done. Thank you, Mr. President. That is why I rose.”


REPLY BY THE PRESIDENT


      President Owen: “Message received. I would note, Senator Roach, that there were considerable requests to the President about a policy on that, because of the magnitude and size of the arrangements and I think that we need to address that in the future. You are correct. Members should not interfere with other people's personal property or anything on their desks. Message received.”


PERSONAL PRIVILEGE


      Senator McCaslin: “A point of personal privilege, Mr. President. I did not take them, Pam. But, I want to give this body permission to wipe my desk clean anytime they want.”


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SECOND SUBSTITUTE SENATE BILL NO. 6156 with the following amendment(s):

      On page 2, line 7, after "revenue;" strike "and"

       On page 2, line 8, after "(f)" insert "Evaluate the impacts of water-dependent rates on economic development in economically distressed counties; and

       (g)"

       On page 4, after line 17, insert the following:

       "NEW SECTION. Sec. 4. 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."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      On motion of Senator West, the Senate concurred in the House amendments to Second Substitute Senate Bill No. 6156.      The President declared the question before the Senate to be the roll call on the final passage of Second Substitute Senate Bill No. 6156, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Second Substitute Senate Bill No. 6156, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49.     SECOND SUBSTITUTE SENATE BILL NO. 6156, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6181 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:


"PART I--TESTAMENTARY DISPOSITION OF NONPROBATE ASSETS


       NEW SECTION. Sec. 101. SHORT TITLE. This chapter may be known and cited as the testamentary disposition of nonprobate assets act.

       NEW SECTION. Sec. 102. PURPOSES. The purposes of this chapter are to:

       (1) Enhance and facilitate the power of testators to control the disposition of assets that pass outside their wills;

       (2) Provide simple procedures for resolution of disputes regarding entitlement to such assets; and

       (3) Protect any financial institution or other third party having possession of or control over such an asset and transferring it to a beneficiary duly designated by the testator, unless that third party has been provided notice of a testamentary disposition as required in this chapter.

       NEW SECTION. Sec. 103. CONSTRUCTION--JURISDICTION. (1) When construing sections and provisions of this chapter, the sections and provisions must:

       (a) Be liberally construed and applied to promote the purposes of this chapter;

       (b) Be considered part of a general act that is intended as unified coverage of the subject matter, and no part of this chapter may be deemed impliedly repealed by subsequent legislation if the construction can be reasonably avoided;

       (c) Not be held invalid because of the invalidity of other sections or provisions of this chapter as long as the section or provision in question can be given effect without regard to the invalid section or provision, and to this end the sections or provisions of this chapter are severable;

       (d) Not be construed by reference to section or subsection headings as used in this chapter, since these do not constitute any part of the law;

       (e) Not be deemed to alter the community or separate property nature of any asset passing outside a testator's will or any individual's community or separate rights to the asset, and a testator's community or separate property rights to the asset are not affected by whether it passes outside the will or, under this chapter, by disposition under the will; and

       (f) Not be construed as authorizing or extending the authority of any financial institution or other third party to sell or otherwise create assets that would pass outside a testator's will upon such terms as would contravene any other applicable federal or state law.

       (2) The sections and provisions of this chapter apply to an owner who dies while a resident of this state on or after the effective date of this section and to a nonprobate asset the disposition of which on the death of the owner would otherwise be governed by the law of this state.

       NEW SECTION. Sec. 104. DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

       (1)(a) "Actual knowledge" means:

       (i) For a financial institution, whether acting as personal representative or otherwise, or other third party in possession or control of a nonprobate asset, receipt of written notice that: (A) Complies with section 109 of this act; (B) pertains to the testamentary disposition or ownership of a nonprobate asset in its possession or control; and (C) is received by the financial institution or third party after the death of the owner in a time sufficient to afford the financial institution or third party a reasonable opportunity to act upon the knowledge; and

       (ii) For a personal representative that is not a financial institution, personal knowledge or possession of documents relating to the testamentary disposition or ownership of a nonprobate asset of the owner sufficient to afford the personal representative reasonable opportunity to act upon the knowledge, including reasonable opportunity for the personal representative to provide the written notice under section 109 of this act.

       (b) For the purposes of (a) of this subsection, notice of more than thirty days is presumed to be notice that is sufficient to afford the party a reasonable opportunity to act upon the knowledge, but notice of less than five business days is presumed not to be a sufficient notice for these purposes. These presumptions may be rebutted only by clear and convincing evidence to the contrary.

       (2) "Beneficiary" means the person designated to receive a nonprobate asset upon the death of the owner by means other than the owner's will.

       (3) "Broker" means a person defined as a broker or dealer under the federal securities laws.

       (4) "Date of will" means, as to any nonprobate asset, the date of signature of the will or codicil that refers to the asset and disposes of it.

       (5) "Designate" means a written means by which the owner selects a beneficiary, including but not limited to instruments under contractual arrangements and registration of accounts, and "designation" means the selection.

       (6) "Financial institution" means: A bank, trust company, mutual savings bank, savings and loan association, credit union, broker, or issuer of stock or its transfer agent.

       (7)(a) "Nonprobate asset" means a nonprobate asset within the meaning of RCW 11.02.005, but excluding the following:

       (i) A right or interest in real property passing under a joint tenancy with right of survivorship;

       (ii) A deed or conveyance for which possession has been postponed until the death of the owner;

       (iii) A right or interest passing under a community property agreement; and

       (iv) An individual retirement account or bond.

       (b) For the definition of "nonprobate asset" relating to revocation of a provision for a former spouse upon dissolution of marriage or declaration of invalidity of marriage, see RCW 11.07.010(5).

       (8) "Owner" means a person who, during life, has beneficial ownership of the nonprobate asset.

       (9) "Request" means a request by the beneficiary for transfer of a nonprobate asset after the death of the owner, if it complies with all conditions of the arrangement, including reasonable special requirements concerning necessary signatures and regulations of the financial institution or other third party, or by the personal representative of the owner's estate or the testamentary beneficiary, if it complies with the owner's will and any additional conditions of the financial institution or third party for such transfer.

       (10) "Testamentary beneficiary" means a person named under the owner's will to receive a nonprobate asset under this chapter, including but not limited to the trustee of a testamentary trust.

       (11) "Third party" means a person, including a financial institution, having possession of or control over a nonprobate asset at the death of the owner, including the trustee of a revocable living trust and surviving joint tenant or tenants.

       NEW SECTION. Sec. 105. DISPOSITION OF NONPROBATE ASSETS UNDER WILL. (1) Subject to community property rights, upon the death of an owner the owner's interest in any nonprobate asset specifically referred to in the owner's will belongs to the testamentary beneficiary named to receive the nonprobate asset, notwithstanding the rights of any beneficiary designated before the date of the will.

       (2) A general residuary gift in an owner's will, or a will making general disposition of all of the owner's property, does not entitle the devisees or legatees to receive nonprobate assets of the owner.

       (3) A disposition in a will of the owner's interest in "all nonprobate assets" or of all of a category of nonprobate asset under section 104(7) of this act, such as "all of my payable on death bank accounts" or similar language, is deemed to be a disposition of all the nonprobate assets the beneficiaries of which are designated before the date of the will.

       (4) If the owner designates a beneficiary for a nonprobate asset after the date of the will, the will does not govern the disposition of that nonprobate asset. If the owner revokes the later beneficiary designation, the prior will does not govern the disposition of the nonprobate asset. A beneficiary designation with respect to an asset that renews without the signature of the owner is deemed to have been made on the date on which the account was first opened.

       NEW SECTION. Sec. 106. WAIVER OF RIGHT TO DISPOSE OF A NONPROBATE ASSET UNDER WILL. An owner may waive the right to dispose of a specific nonprobate asset by will under this chapter, with or without consideration, by a written instrument signed by the owner and delivered to the financial institution or other third party, including but not limited to signature cards or deposit agreements. The waiver is revocable by written instrument delivered to the financial institution or other third party unless the owner has stated that the waiver is to be irrevocable.

       NEW SECTION. Sec. 107. CONTROVERSIES BETWEEN BENEFICIARIES AND TESTAMENTARY BENEFICIARIES. This chapter is intended to establish ownership rights to nonprobate assets upon the death of the owner, as between beneficiaries and testamentary beneficiaries. This chapter is relevant only as to controversies between these persons, and has no bearing on the right of a person to transfer a nonprobate asset under its terms in the absence of a testamentary provision under this chapter.

       NEW SECTION. Sec. 108. RIGHT TO RELY ON FORM OF NONPROBATE ASSET--DISCHARGE OF FINANCIAL INSTITUTION OR OTHER THIRD PARTY. In transferring nonprobate assets, a financial institution or other third party may rely conclusively and entirely upon the form of the nonprobate asset and the terms of the nonprobate asset arrangement in effect on the date of death of the owner, unless the financial institution or other third party has actual knowledge of the existence of a claim by a testamentary beneficiary. A financial institution or other third party is not required to inquire as to either the source or ownership of any nonprobate asset in its possession or under its control, or as to the proposed application of an asset so transferred. A transfer of a nonprobate asset in accordance with this section constitutes a complete release and discharge of the financial institution or other third party from all claims relating to the nonprobate asset, regardless of whether or not the transfer is consistent with the actual ownership of the nonprobate asset.

       NEW SECTION. Sec. 109. NOTICE--FORM--LIMITATION ON LIABILITY FOR FAILURE TO PROVIDE NOTICE. (1) Written notice under this chapter must be served personally or by certified mail, return receipt requested and postage prepaid, on the financial institution or other third party having the nonprobate asset in its possession or control, on the beneficiary, on the testamentary beneficiary, and on the personal representative, and proof of the mailing or service must be made by affidavit and filed under the cause number assigned to the owner's estate. Notice to a financial institution must include notice delivered as follows:

       (a) If the nonprobate asset was maintained at a specific office of the financial institution, notice must be delivered to the office at which the nonprobate asset was maintained, which notice must be directed to the manager of the office;

       (b) If the nonprobate asset was held in a trust administered by a financial institution, notice must be delivered to the office at which the trust was administered, which notice must be directed to a named officer responsible for the administration of the trust; and

       (c) In all cases, notice must be delivered to any other location and in any other manner specifically designated in a written agreement signed by the owner and the financial institution, including but not limited to a signature card or deposit agreement.

       (2) Written notice to a financial institution or other third party of the testamentary disposition of a nonprobate asset under this chapter must be in a form substantially similar to the following:

NOTICE OF TESTAMENTARY

DISPOSITION OF NONPROBATE ASSET

 

The undersigned personal representative, petitioner for appointment as personal representative, attorney for the personal representative or petitioner, or testamentary beneficiary under the will of the decedent named above (as that term is defined in section 104 of this act) hereby notifies you that the decedent named above died on (DATE MUST BE SUPPLIED) and left a will dated (DATE OF WILL MUST BE SUPPLIED) disposing of the following nonprobate asset or assets in your possession or control:

 

(EACH SUCH ASSET MUST BE DESCRIBED WITH REASONABLE SPECIFICITY. FOR ACCOUNTS AT FINANCIAL INSTITUTIONS, THE WRITTEN NOTICE MUST SPECIFY THE OFFICE AT WHICH THE ACCOUNT WAS MAINTAINED, THE NAME OR NAMES IN WHICH THE ACCOUNT WAS HELD, AND THE FULL ACCOUNT NUMBER. FOR ASSETS HELD IN TRUST, THE WRITTEN NOTICE MUST SPECIFY THE NAME OR NAMES OF THE GRANTOR, THE NAME OF THE TRUST, IF ANY, AND THE DATE OF THE TRUST INSTRUMENT.)

 

Under chapter 11.-- RCW (sections 101 through 116 of this act), you may not transfer, deliver, or otherwise dispose of the asset or assets listed above in accordance with the beneficiary designation, account registration, or other arrangement made with you by the decedent. You may transfer, deliver, or otherwise dispose of the asset or assets listed above only upon receipt of the written direction of the personal representative or of the testamentary beneficiary, if the personal representative consents.

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                                                                                                                                     (CAPACITY OF SIGNER)


       (3) The personal representative of the estate of the owner, a petitioner for appointment as personal representative, or the testamentary beneficiary may provide written notice under this section. The personal representative has no duty to provide written notice under this section and has no liability for failing or refusing to give the notice.

       (4) Written notice under this section may be provided at any time after the death of the owner and before discharge of the personal representative on closing of the estate, and may be provided before admission to probate of the will.

       NEW SECTION. Sec. 110. VESTING OF RIGHTS AND POWERS UNDER CHAPTER. The right to provide notice under section 109 of this act and the entitlement of the testamentary beneficiary to the nonprobate asset vest immediately upon death of the owner. The power of the personal representative to direct the financial institution or other third party having the nonprobate asset in its possession or under its control to transfer or otherwise dispose of the asset arises upon the later of appointment of the personal representative or admission of the will to probate.

       NEW SECTION. Sec. 111. OWNERSHIP RIGHTS AS BETWEEN INDIVIDUALS PRESERVED--TESTAMENTARY BENEFICIARY MAY RECOVER NONPROBATE ASSET FROM BENEFICIARY--LIMITATION ON ACTION TO RECOVER. (1) The protection accorded to financial institutions and other third parties under section 108 of this act has no bearing on the actual rights of ownership to nonprobate assets as between beneficiaries and testamentary beneficiaries, and their heirs, successors, personal representatives, and assigns.

       (2) A testamentary beneficiary entitled to a nonprobate asset otherwise transferred to a beneficiary not so entitled, and a personal representative of the owner's estate on behalf of the testamentary beneficiary, may petition the superior court having jurisdiction over the owner's estate for an order declaring that the testamentary beneficiary is so entitled, the hearing of the petition to be held in accordance with chapter 11.96 RCW.

       (3) A testamentary beneficiary claiming a nonprobate asset who has not filed such a petition within the earlier of: (a) Six months from the date of admission of the will to probate; and (b) one year from the date of the owner's death, shall be forever barred from making such a claim or commencing such an action.

       NEW SECTION. Sec. 112. NONPROBATE ASSETS NOT PROPERTY OF ESTATE. (1) Notwithstanding any provision of this chapter, a nonprobate asset disposed of under the owner's will may not be treated as a part of the owner's probate estate for any other purpose under this title, unless:

       (a) The nonprobate asset is subject to liabilities and claims, estate taxes, and expenses of administration under RCW 11.18.200; or

       (b) Any section of this title directs otherwise, by specifically referring to this section.

       (2) Provision of notice under this chapter has no effect on the administration of other assets of the estate of the owner. The personal representative has no duty to administer upon a nonprobate asset because of providing the notice, unless specifically required by this chapter or under RCW 11.18.200.

       (3) RCW 11.12.110, regarding death of a devisee or legatee before the testator, does not apply to disposition of a nonprobate asset under a will.

       NEW SECTION. Sec. 113. TRANSFER OF NONPROBATE ASSET TO TESTAMENTARY BENEFICIARY. (1) A financial institution's or third party's obligation to transfer a nonprobate asset to a testamentary beneficiary arises only after it has actual knowledge of the claim of the testamentary beneficiary, and after receiving written direction from the personal representative of the owner's estate, or if the personal representative consents in writing, from the testamentary beneficiary, to make the transfer. The financial institution may also require that its customary procedures be followed in effectuating a transfer of the nonprobate asset.

       (2) Subject to subsection (1) of this section, financial institutions and other third parties may transfer a nonprobate asset that has not already been distributed to the testamentary beneficiary entitled to the nonprobate asset under the owner's will, subject to liabilities and claims, estate taxes, and expenses of administration under RCW 11.18.200.

       NEW SECTION. Sec. 114. AUTHORITY TO WITHHOLD TRANSFER. (1) This chapter does not require any financial institution or other third party to transfer a nonprobate asset to a beneficiary, testamentary beneficiary, or other person claiming an interest in the nonprobate asset if the financial institution or third party has actual knowledge of the existence of a dispute between beneficiaries, testamentary beneficiaries, or other persons concerning rights or ownership to the nonprobate asset under this chapter, or if the financial institution or third party is otherwise uncertain as to who is entitled to receive the nonprobate asset under this chapter. In any such case, the financial institution or third party may, without liability, notify in writing all beneficiaries, testamentary beneficiaries, or other persons claiming an interest in the nonprobate asset of either its uncertainty as to who is entitled to transfer of the nonprobate asset or the existence of any dispute, and it may also, without liability, refuse to transfer a nonprobate asset to a beneficiary or a testamentary beneficiary until such time as either:

       (a) All the beneficiaries, testamentary beneficiaries, and other interested persons have consented in writing to the transfer; or

       (b) The transfer is authorized or directed by a court of proper jurisdiction.

       (2) The expense of obtaining the written consent or court authorization or direction may, by order of the court, be paid by the personal representative as an expense of administration.

       NEW SECTION. Sec. 115. ADVERSE CLAIM BOND. Notwithstanding section 114 of this act, a financial institution or other third party having actual knowledge of the existence of a dispute between beneficiaries, a testamentary beneficiary, or other persons concerning rights to a nonprobate asset under this chapter may condition transfer of the nonprobate asset on execution, in form and with security acceptable to the financial institution or other third party, of a bond in an amount that is double the fair market value of the nonprobate asset on the date of the owner's death or the amount of any adverse claim, whichever is the lesser, indemnifying the financial institution or other third party from any and all liability, loss, damage, costs, and expenses, for and on account of transfer of the nonprobate asset.

       NEW SECTION. Sec. 116. APPLICATION OF CHAPTER. This chapter applies to any will of an owner who dies while a resident of this state on or after the effective date of this section, regardless of whether the will was executed or republished before or after the effective date of this section and regardless of whether the beneficiary of the nonprobate asset was designated before or after the effective date of this section.

       Sec. 117. RCW 11.02.005 and 1997 c 252 s 1 are each amended to read as follows:

       When used in this title, unless otherwise required from the context:

       (1) "Personal representative" includes executor, administrator, special administrator, and guardian or limited guardian and special representative.

       (2) "Net estate" refers to the real and personal property of a decedent exclusive of homestead rights, exempt property, the family allowance and enforceable claims against, and debts of, the deceased or the estate.

       (3) "Representation" refers to a method of determining distribution in which the takers are in unequal degrees of kinship with respect to the intestate, and is accomplished as follows: After first determining who, of those entitled to share in the estate, are in the nearest degree of kinship, the estate is divided into equal shares, the number of shares being the sum of the number of persons who survive the intestate who are in the nearest degree of kinship and the number of persons in the same degree of kinship who died before the intestate but who left issue surviving the intestate; each share of a deceased person in the nearest degree shall be divided among those of the deceased person's issue who survive the intestate and have no ancestor then living who is in the line of relationship between them and the intestate, those more remote in degree taking together the share which their ancestor would have taken had he or she survived the intestate. Posthumous children are considered as living at the death of their parent.

       (4) "Issue" includes all the lawful lineal descendants of the ancestor and all lawfully adopted children.

       (5) "Degree of kinship" means the degree of kinship as computed according to the rules of the civil law; that is, by counting upward from the intestate to the nearest common ancestor and then downward to the relative, the degree of kinship being the sum of these two counts.

       (6) "Heirs" denotes those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the real and personal property of a decedent on the decedent's death intestate.

       (7) "Real estate" includes, except as otherwise specifically provided herein, all lands, tenements, and hereditaments, and all rights thereto, and all interest therein possessed and claimed in fee simple, or for the life of a third person.

       (8) "Will" means an instrument validly executed as required by RCW 11.12.020.

       (9) "Codicil" means a will that modifies or partially revokes an existing earlier will. A codicil need not refer to or be attached to the earlier will.

       (10) "Guardian" or "limited guardian" means a personal representative of the person or estate of an incompetent or disabled person as defined in RCW 11.88.010 and the term may be used in lieu of "personal representative" wherever required by context.

       (11) "Administrator" means a personal representative of the estate of a decedent and the term may be used in lieu of "personal representative" wherever required by context.

       (12) "Executor" means a personal representative of the estate of a decedent appointed by will and the term may be used in lieu of "personal representative" wherever required by context.

       (13) "Special administrator" means a personal representative of the estate of a decedent appointed for limited purposes and the term may be used in lieu of "personal representative" wherever required by context.

       (14) "Trustee" means an original, added, or successor trustee and includes the state, or any agency thereof, when it is acting as the trustee of a trust to which chapter 11.98 RCW applies.

       (15) "Nonprobate asset" means those rights and interests of a person having beneficial ownership of an asset that pass on the person's death under a written instrument or arrangement other than the person's will. "Nonprobate asset" includes, but is not limited to, a right or interest passing under a joint tenancy with right of survivorship, joint bank account with right of survivorship, payable on death or trust bank account, transfer on death security or security account, deed or conveyance if possession has been postponed until the death of the person, trust of which the person is grantor and that becomes effective or irrevocable only upon the person's death, community property agreement, individual retirement account or bond, or note or other contract the payment or performance of which is affected by the death of the person. "Nonprobate asset" does not include: A payable-on-death provision of a life insurance policy, annuity, or other similar contract, or of an employee benefit plan; a right or interest passing by descent and distribution under chapter 11.04 RCW; a right or interest if, before death, the person has irrevocably transferred the right or interest, the person has waived the power to transfer it or, in the case of contractual arrangement, the person has waived the unilateral right to rescind or modify the arrangement; or a right or interest held by the person solely in a fiduciary capacity. For the definition of "nonprobate asset" relating to revocation of a provision for a former spouse upon dissolution of marriage or declaration of invalidity of marriage, RCW 11.07.010(5) applies. For the definition of "nonprobate asset" relating to revocation of a provision for a former spouse upon dissolution of marriage or declaration of invalidity of marriage, see RCW 11.07.010(5). For the definition of "nonprobate asset" relating to testamentary disposition of nonprobate assets, see section 104(7) of this act.

       (16) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended or renumbered on January 1, ((1997)) 1998.

        Words that import the singular number may also be applied to the plural of persons and things.

        Words importing the masculine gender only may be extended to females also.

       Sec. 118. RCW 11.07.010 and 1997 c 252 s 2 are each amended to read as follows:

       (1) This section applies to all nonprobate assets, wherever situated, held at the time of entry by a superior court of this state of a decree of dissolution of marriage or a declaration of invalidity.

       (2)(a) If a marriage is dissolved or invalidated, a provision made prior to that event that relates to the payment or transfer at death of the decedent's interest in a nonprobate asset in favor of or granting an interest or power to the decedent's former spouse is revoked. A provision affected by this section must be interpreted, and the nonprobate asset affected passes, as if the former spouse failed to survive the decedent, having died at the time of entry of the decree of dissolution or declaration of invalidity.

       (b) This subsection does not apply if and to the extent that:

       (i) The instrument governing disposition of the nonprobate asset expressly provides otherwise;

       (ii) The decree of dissolution or declaration of invalidity requires that the decedent maintain a nonprobate asset for the benefit of a former spouse or children of the marriage, payable on the decedent's death either outright or in trust, and other nonprobate assets of the decedent fulfilling such a requirement for the benefit of the former spouse or children of the marriage do not exist at the decedent's death; or

       (iii) If not for this subsection, the decedent could not have effected the revocation by unilateral action because of the terms of the decree or declaration, or for any other reason, immediately after the entry of the decree of dissolution or declaration of invalidity.

       (3)(a) A payor or other third party in possession or control of a nonprobate asset at the time of the decedent's death is not liable for making a payment or transferring an interest in a nonprobate asset to a decedent's former spouse whose interest in the nonprobate asset is revoked under this section, or for taking another action in reliance on the validity of the instrument governing disposition of the nonprobate asset, before the payor or other third party has actual knowledge of the dissolution or other invalidation of marriage. A payor or other third party is liable for a payment or transfer made or other action taken after the payor or other third party has actual knowledge of a revocation under this section.

       (b) This section does not require a payor or other third party to pay or transfer a nonprobate asset to a beneficiary designated in a governing instrument affected by the dissolution or other invalidation of marriage, or to another person claiming an interest in the nonprobate asset, if the payor or third party has actual knowledge of the existence of a dispute between the former spouse and the beneficiaries or other persons concerning rights of ownership of the nonprobate asset as a result of the application of this section among the former spouse and the beneficiaries or among other persons, or if the payor or third party is otherwise uncertain as to who is entitled to the nonprobate asset under this section. In such a case, the payor or third party may, without liability, notify in writing all beneficiaries or other persons claiming an interest in the nonprobate asset of either the existence of the dispute or its uncertainty as to who is entitled to payment or transfer of the nonprobate asset. The payor or third party may also, without liability, refuse to pay or transfer a nonprobate asset in such a circumstance to a beneficiary or other person claiming an interest until the time that either:

       (i) All beneficiaries and other interested persons claiming an interest have consented in writing to the payment or transfer; or

       (ii) The payment or transfer is authorized or directed by a court of proper jurisdiction.

       (c) Notwithstanding subsections (1) and (2) of this section and (a) and (b) of this subsection, a payor or other third party having actual knowledge of the existence of a dispute between beneficiaries or other persons concerning rights to a nonprobate asset as a result of the application of this section may condition the payment or transfer of the nonprobate asset on execution, in a form and with security acceptable to the payor or other third party, of a bond in an amount that is double the fair market value of the nonprobate asset at the time of the decedent's death or the amount of an adverse claim, whichever is the lesser, or of a similar instrument to provide security to the payor or other third party, indemnifying the payor or other third party for any liability, loss, damage, costs, and expenses for and on account of payment or transfer of the nonprobate asset.

       (d) As used in this subsection, "actual knowledge" means, for a payor or other third party in possession or control of the nonprobate asset at or following the decedent's death, written notice to the payor or other third party, or to an officer of a payor or third party in the course of his or her employment, received after the decedent's death and within a time that is sufficient to afford the payor or third party a reasonable opportunity to act upon the knowledge. The notice must identify the nonprobate asset with reasonable specificity. The notice also must be sufficient to inform the payor or other third party of the revocation of the provisions in favor of the decedent's spouse by reason of the dissolution or invalidation of marriage, or to inform the payor or third party of a dispute concerning rights to a nonprobate asset as a result of the application of this section. Receipt of the notice for a period of more than thirty days is presumed to be received within a time that is sufficient to afford the payor or third party a reasonable opportunity to act upon the knowledge, but receipt of the notice for a period of less than five business days is presumed not to be a sufficient time for these purposes. These presumptions may be rebutted only by clear and convincing evidence to the contrary.

       (4)(a) A person who purchases a nonprobate asset from a former spouse or other person, for value and without actual knowledge, or who receives from a former spouse or other person payment or transfer of a nonprobate asset without actual knowledge and in partial or full satisfaction of a legally enforceable obligation, is neither obligated under this section to return the payment, property, or benefit nor is liable under this section for the amount of the payment or the value of the nonprobate asset. However, a former spouse or other person who, with actual knowledge, not for value, or not in satisfaction of a legally enforceable obligation, receives payment or transfer of a nonprobate asset to which that person is not entitled under this section is obligated to return the payment or nonprobate asset, or is personally liable for the amount of the payment or value of the nonprobate asset, to the person who is entitled to it under this section.

       (b) As used in this subsection, "actual knowledge" means, for a person described in (a) of this subsection who purchases or receives a nonprobate asset from a former spouse or other person, personal knowledge or possession of documents relating to the revocation upon dissolution or invalidation of marriage of provisions relating to the payment or transfer at the decedent's death of the nonprobate asset, received within a time after the decedent's death and before the purchase or receipt that is sufficient to afford the person purchasing or receiving the nonprobate asset reasonable opportunity to act upon the knowledge. Receipt of the personal knowledge or possession of the documents for a period of more than thirty days is presumed to be received within a time that is sufficient to afford the payor or third party a reasonable opportunity to act upon the knowledge, but receipt of the notice for a period of less than five business days is presumed not to be a sufficient time for these purposes. These presumptions may be rebutted only by clear and convincing evidence to the contrary.

       (5) As used in this section, "nonprobate asset" means those rights and interests of a person having beneficial ownership of an asset that pass on the person's death under only the following written instruments or arrangements other than the decedent's will:

       (a) A payable-on-death provision of a life insurance policy, employee benefit plan, annuity or similar contract, or individual retirement account;

       (b) A payable-on-death, trust, or joint with right of survivorship bank account;

       (c) A trust of which the person is a grantor and that becomes effective or irrevocable only upon the person's death; or

       (d) Transfer on death beneficiary designations of a transfer on death or pay on death security, if such designations are authorized under Washington law.

       ((However, for the general definition of "nonprobate asset" in this title, RCW 11.02.005 applies.)) For the general definition in this title of "nonprobate asset," see RCW 11.02.005(15) and for the definition of "nonprobate asset" relating to testamentary disposition of nonprobate assets, see section 104(7) of this act.

       (6) This section is remedial in nature and applies as of July 25, 1993, to decrees of dissolution and declarations of invalidity entered after July 24, 1993, and this section applies as of January 1, 1995, to decrees of dissolution and declarations of invalidity entered before July 25, 1993.


PART II--PROBATE


       Sec. 201. RCW 11.54.070 and 1997 c 252 s 54 are each amended to read as follows:

       (1) Except as provided in ((subsection)) RCW 11.54.060(2) ((of this section)), property awarded and cash paid under this chapter is immune from all debts, including judgments and judgment liens, of the decedent and of the surviving spouse existing at the time of death.

       (2) Both the decedent's and the surviving spouse's interests in any community property awarded to the spouse under this chapter are immune from the claims of creditors.

       Sec. 202. RCW 11.68.110 and 1997 c 252 s 68 are each amended to read as follows:

       (1) If a personal representative who has acquired nonintervention powers does not apply to the court for either of the final decrees provided for in RCW 11.68.100 as now or hereafter amended, the personal representative shall, when the administration of the estate has been completed, file a declaration that must state as follows:

       (a) The date of the decedent's death and the decedent's residence at the time of death;

       (b) Whether or not the decedent died testate or intestate;

       (c) If the decedent died testate, the date of the decedent's last will and testament and the date of the order probating the will;

       (d) That each creditor's claim which was justly due and properly presented as required by law has been paid or otherwise disposed of by agreement with the creditor, and that the amount of estate taxes due as the result of the decedent's death has been determined, settled, and paid;

       (e) That the personal representative has completed the administration of the decedent's estate without court intervention, and the estate is ready to be closed;

       (f) If the decedent died intestate, the names, addresses (if known), and relationship of each heir of the decedent, together with the distributive share of each heir; and

       (g) The amount of fees paid or to be paid to each of the following: (i) Personal representative or representatives; (ii) lawyer or lawyers; (iii) appraiser or appraisers; and (iv) accountant or accountants; and that the personal representative believes the fees to be reasonable and does not intend to obtain court approval of the amount of the fees or to submit an estate accounting to the court for approval.

       (2) Subject to the requirement of notice as provided in this section, unless an heir, devisee, or legatee of a decedent petitions the court either for an order requiring the personal representative to obtain court approval of the amount of fees paid or to be paid to the personal representative, lawyers, appraisers, or accountants, or for an order requiring an accounting, or both, within thirty days from the date of filing a declaration of completion of probate, the personal representative will be automatically discharged without further order of the court and the representative's powers will cease thirty days after the filing of the declaration of completion of probate, and the declaration of completion of probate shall, at that time, be the equivalent of the entry of a decree of distribution in accordance with chapter 11.76 RCW for all legal intents and purposes.

       (3) Within five days of the date of the filing of the declaration of completion, the personal representative or the personal representative's lawyer shall mail a copy of the declaration of completion to each heir, legatee, or devisee of the decedent, who: (a) Has not waived notice of the filing, in writing, filed in the cause((, or who, not having waived notice,)); and (b) either has not received the full amount of the distribution to which the heir, legatee, or devisee is entitled or has a property right that might be affected adversely by the discharge of the personal representative under this section, together with a notice which shall be substantially as follows:


                          CAPTION                                                                     NOTICE OF FILING OF

                            OF                                                                      DECLARATION OF COMPLETION

                          CASE                                                                                     OF PROBATE


       NOTICE IS GIVEN that the attached Declaration of Completion of Probate was filed by the undersigned in the above-entitled court on the . . . . day of . . . . . ., 19. . .; unless you shall file a petition in the above-entitled court requesting the court to approve the reasonableness of the fees, or for an accounting, or both, and serve a copy thereof upon the personal representative or the personal representative's lawyer, within thirty days after the date of the filing, the amount of fees paid or to be paid will be deemed reasonable, the acts of the personal representative will be deemed approved, the personal representative will be automatically discharged without further order of the court, and the Declaration of Completion of Probate will be final and deemed the equivalent of a Decree of Distribution entered under chapter 11.76 RCW.

       If you file and serve a petition within the period specified, the undersigned will request the court to fix a time and place for the hearing of your petition, and you will be notified of the time and place thereof, by mail, or personal service, not less than ten days before the hearing on the petition.


       Dated this . . . . day of . . . . . ., 19. . .


                                                                               . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

                                                                                                                                   Personal Representative


       (4) If all heirs, devisees, and legatees of the decedent entitled to notice under this section waive, in writing, the notice required by this section, the personal representative will be automatically discharged without further order of the court and the declaration of completion of probate will become effective as a decree of distribution upon the date of filing thereof. In those instances where the personal representative has been required to furnish bond, and a declaration of completion is filed pursuant to this section, any bond furnished by the personal representative shall be automatically discharged upon the discharge of the personal representative.

       Sec. 203. RCW 11.68.114 and 1997 c 252 s 70 are each amended to read as follows:

       (1) The personal representative retains the powers to: Deal with the taxing authority of any federal, state, or local government; hold a reserve in an amount not to exceed three thousand dollars, for the determination and payment of any additional taxes, interest, and penalties, and of all reasonable expenses related directly or indirectly to such determination or payment; pay from the reserve the reasonable expenses, including compensation for services rendered or goods provided by the personal representative or by the personal representative's employees, independent contractors, and other agents, in addition to any taxes, interest, or penalties assessed by a taxing authority; receive and hold any credit, including interest, from any taxing authority; and distribute the residue of the reserve to the intended beneficiaries of the reserve; if:

       (a) In lieu of the statement set forth in RCW 11.68.110(1)(e), the declaration of completion of probate states that:

 

The personal representative has completed the administration of the decedent's estate without court intervention, and the estate is ready to be closed, except for the determination of taxes and of interest and penalties thereon as permitted under this section;

and

       (b) The notice of the filing of declaration of completion of probate must be in substantially the following form:

                              CAPTION                                                 NOTICE OF FILING OF

                                OF                                           DECLARATION OF COMPLETION

                               CASE                                                        OF PROBATE

 

NOTICE IS GIVEN that the attached Declaration of Completion of Probate was filed by the undersigned in the above-entitled court on the . . . day of . . . . , . . . .; unless you file a petition in the above-entitled court requesting the court to approve the reasonableness of the fees, or for an accounting, or both, and serve a copy thereof upon the personal representative or the personal representative's lawyer, within thirty days after the date of the filing:

(i) The schedule of fees set forth in the Declaration of Completion of Probate will be deemed reasonable;

(ii) The Declaration of Completion of Probate will be final and deemed the equivalent of a Decree of Distribution entered under chapter 11.76 RCW;

(iii) The acts that the personal representative performed before the Declaration of Completion of Probate was filed will be deemed approved, and the personal representative will be automatically discharged without further order of the court with respect to all such acts; and

(iv) The personal representative will retain the power to deal with the taxing authorities, together with $. . . . for the determination and payment of all remaining tax obligations. Only that portion of the reserve that remains after the settlement of any tax liability, and the payment of any expenses associated with such settlement, will be distributed to the persons legally entitled to the reserve.


       (2) If the requirements in subsection (1) of this section are met, the personal representative is discharged from all claims other than those relating to the settlement of any tax obligations and the actual distribution of the reserve, at the effective date of the declaration of completion. The personal representative is discharged from liability from the settlement of any tax obligations and the distribution of the reserve, and the personal representative's powers cease, thirty days after the personal representative((:

       (a))) has mailed to those persons who would have shared in the distribution of the reserve had the reserve remained intact((;)) and

       (((b))) has filed with the court copies of checks or receipts showing how the reserve was in fact distributed, unless a person with an interest in the reserve petitions the court earlier within the thirty-day period for an order requiring an accounting of the reserve or an order determining the reasonableness, or lack of reasonableness, of distributions made from the reserve. If the personal representative has been required to furnish a bond, any bond furnished by the personal representative is automatically discharged upon the final discharge of the personal representative.

       Sec. 204. 1997 c 252 s 87 (uncodified) is amended to read as follows:

       The following acts or parts of acts are each repealed, effective December 31, 1997, for estates of decedents dying after December 31, 1997:

       (1) RCW 11.40.011 and 1989 c 333 s 2, 1983 c 201 s 1, & 1967 ex.s. c 106 s 3;

       (2) RCW 11.40.012 and 1989 c 333 s 3;

       (3) RCW 11.40.013 and 1994 c 221 s 26 & 1989 c 333 s 4;

       (4) RCW 11.40.014 and 1989 c 333 s 5;

       (5) RCW 11.40.015 and 1994 c 221 s 27 & 1989 c 333 s 6;

       (6) RCW 11.42.160 and 1994 c 221 s 46;

       (7) RCW 11.42.170 and 1994 c 221 s 47;

       (8) RCW 11.42.180 and 1994 c 221 s 48;

       (9) RCW 11.44.066 and 1990 c 180 s 1 & 1974 ex.s. c 117 s 49;

       (10) RCW 11.52.010 and 1987 c 442 s 1116, 1984 c 260 s 17, 1974 ex.s. c 117 s 7, 1971 ex.s. c 12 s 2, 1967 c 168 s 12, & 1965 c 145 s 11.52.010;

       (11) RCW 11.52.012 and 1985 c 194 s 1, 1984 c 260 s 18, 1977 ex.s. c 234 s 9, 1974 ex.s. c 117 s 8, & 1965 c 145 s 11.52.012;

       (12) RCW 11.52.014 and 1965 c 145 s 11.52.014;

       (13) RCW 11.52.016 and 1988 c 202 s 18, 1972 ex.s. c 80 s 1, & 1965 c 145 s 11.52.016;

       (14) RCW 11.52.020 and 1985 c 194 s 2, 1984 c 260 s 19, 1974 ex.s. c 117 s 9, 1971 ex.s. c 12 s 3, 1967 c 168 s 13, & 1965 c 145 s 11.52.020;

       (15) RCW 11.52.022 and 1985 c 194 s 3, 1984 c 260 s 20, 1977 ex.s. c 234 s 10, 1974 ex.s. c 117 s 10, 1971 ex.s. c 12 s 4, & 1965 c 145 s 11.52.022;

       (16) RCW 11.52.024 and 1972 ex.s. c 80 s 2 & 1965 c 145 s 11.52.024;

       (17) RCW 11.52.030 and 1965 c 145 s 11.52.030;

       (18) RCW 11.52.040 and 1965 c 145 s 11.52.040;

       (19) RCW 11.52.050 and 1967 c 168 s 14;

       (20) RCW 11.68.010 and 1994 c 221 s 50, 1977 ex.s. c 234 s 18, 1974 ex.s. c 117 s 13, 1969 c 19 s 1, & 1965 c 145 s 11.68.010;

       (21) RCW 11.68.020 and 1974 ex.s. c 117 s 14 & 1965 c 145 s 11.68.020;

       (22) RCW 11.68.030 and 1977 ex.s. c 234 s 19, 1974 ex.s. c 117 s 15, & 1965 c 145 s 11.68.030; and

       (23) RCW 11.68.040 and 1977 ex.s. c 234 s 20, 1974 ex.s. c 117 s 16, & 1965 c 145 s 11.68.040.

       Sec. 205. 1997 c 252 s 89 (uncodified) is amended to read as follows:

       Sections 1 through ((73 of this act)) 72, chapter 252, Laws of 1997 apply to estates of decedents dying after December 31, 1997. Sections 81 through 86, chapter 252, Laws of 1997 apply to all estates, trusts, and governing instruments in existence on or at any time after March 7, 1984, and to all proceedings with respect thereto after March 7, 1984, whether the proceedings commenced before or after March 7, 1984, and including distributions made after March 7, 1984. Sections 81 through 86, chapter 252, Laws of 1997 do not apply to any governing instrument, the terms of which expressly or by necessary implication make the application of sections 81 through 86, chapter 252, Laws of 1997 inapplicable. The judicial and nonjudicial dispute resolution procedures of chapter 11.96 RCW apply to sections 81 through 86, chapter 252, Laws of 1997.

PART III--UNIFORM TRANSFERS TO MINORS ACT


       Sec. 301. RCW 11.114.030 and 1991 c 193 s 3 are each amended to read as follows:

       (1) A person having the right to designate the recipient of property transferable upon the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary upon the occurrence of the event by naming the custodian followed in substance by the words: ". . . . . . as custodian for . . . . . . (name of minor) under the Washington uniform transfers to minors act." The nomination may name one or more persons as substitute custodians to whom the property shall be transferred, in the order named, if the first nominated custodian dies before the transfer or is unable, declines, or is ineligible to serve. The nomination may be made in a will, a trust, a deed, an instrument exercising a power of appointment, or in a writing designating a beneficiary of contractual rights which is registered with or delivered to the payor, issuer, or other obligor of the contractual rights.

       As an alternative to naming a specific person as custodian, the nomination may provide that the custodian may be designated by the legal representative of, or other person specified by, the person having the right to designate the recipient of the property described in this subsection. The person having the right of designation of the custodian is authorized to designate himself or herself as custodian, if he or she falls within the class of persons eligible to serve as custodian under RCW 11.114.090(1).

       (2) A custodian nominated under this section shall be a person to whom a transfer of property of that kind may be made under RCW 11.114.090(1).

       (3) Instead of designating one specific minor, the designation may specify multiple persons or a class or classes of persons, but when the custodial property is actually created under subsection (4) of this section, it must be constituted as a separate custodianship for each beneficiary, and each beneficiary's interest in it must be determined in accordance with the governing instrument and applicable law.

       (4) The nomination of a custodian under this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed under RCW 11.114.090. Unless the nomination of a custodian has been revoked, upon the occurrence of the future event the custodianship becomes effective and the custodian shall enforce a transfer of the custodial property pursuant to RCW 11.114.090.


PART IV--INTERNAL REVENUE CODE REFERENCES


       Sec. 401. RCW 83.100.020 and 1994 c 221 s 70 are each amended to read as follows:

       As used in this chapter:

       (1) "Decedent" means a deceased individual;

       (2) "Department" means the department of revenue, the director of that department, or any employee of the department exercising authority lawfully delegated to him by the director;

       (3) "Federal credit" means (a) for a transfer, the maximum amount of the credit for state taxes allowed by section 2011 of the Internal Revenue Code; and (b) for a generation-skipping transfer, the maximum amount of the credit for state taxes allowed by section 2604 of the Internal Revenue Code;

       (4) "Federal return" means any tax return required by chapter 11 or 13 of the Internal Revenue Code;

       (5) "Federal tax" means (a) for a transfer, a tax under chapter 11 of the Internal Revenue Code; and (b) for a generation-skipping transfer, the tax under chapter 13 of the Internal Revenue Code;

       (6) "Generation-skipping transfer" means a "generation-skipping transfer" as defined and used in section 2611 of the Internal Revenue Code;

       (7) "Gross estate" means "gross estate" as defined and used in section 2031 of the Internal Revenue Code;

       (8) "Nonresident" means a decedent who was domiciled outside Washington at his death;

       (9) "Person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate, or other entity and, to the extent permitted by law, any federal, state, or other governmental unit or subdivision or agency, department, or instrumentality thereof;

       (10) "Person required to file the federal return" means any person required to file a return required by chapter 11 or 13 of the Internal Revenue Code, such as the personal representative of an estate; or a transferor, trustee, or beneficiary of a generation-skipping transfer; or a qualified heir with respect to qualified real property, as defined and used in section 2032A(c) of the Internal Revenue Code;

       (11) "Property" means (a) for a transfer, property included in the gross estate; and (b) for a generation-skipping transfer, all real and personal property subject to the federal tax;

       (12) "Resident" means a decedent who was domiciled in Washington at time of death;

       (13) "Transfer" means "transfer" as used in section 2001 of the Internal Revenue Code, or a disposition or cessation of qualified use as defined and used in section 2032A(c) of the Internal Revenue Code;

       (14) "Trust" means "trust" under Washington law and any arrangement described in section 2652 of the Internal Revenue Code; and

       (15) "Internal Revenue Code" means, for the purposes of this chapter and RCW 83.110.010, the United States Internal Revenue Code of 1986, as amended or renumbered on January 1, ((1995)) 1998.

       Sec. 402. RCW 83.110.010 and 1994 c 221 s 71 are each amended to read as follows:

       As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

       (1) "Estate" means the gross estate of a decedent as determined for the purpose of federal estate tax and the estate tax payable to this state;

       (2) "Excise tax" means the federal excise tax imposed by section 4980A(d) of the Internal Revenue Code, and interest and penalties imposed in addition to the excise tax;

       (3) "Fiduciary" means executor, administrator of any description, and trustee;

       (4) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as ((amended or renumbered on January 1, 1995)) defined in and as of the date specified in RCW 83.100.020;

       (5) "Person" means any individual, partnership, association, joint stock company, corporation, government, political subdivision, governmental agency, or local governmental agency;

       (6) "Persons interested in retirement distributions" means any person determined as of the date the excise tax is due, including a personal representative, guardian, trustee, or beneficiary, entitled to receive, or who has received, by reason of or following the death of a decedent, any property or interest therein which constitutes a retirement distribution as defined in section 4980A(e) of the Internal Revenue Code, but this definition excludes any alternate payee under a qualified domestic relations order as such terms are defined in section 414(p) of the Internal Revenue Code;

       (7) "Person interested in the estate" means any person, including a personal representative, guardian, or trustee, entitled to receive, or who has received, from a decedent while alive or by reason of the death of a decedent any property or interest therein included in the decedent's taxable estate;

       (8) "Qualified heir" means a person interested in the estate who is entitled to receive, or who has received, an interest in qualified real property;

       (9) "Qualified real property" means real property for which the election described in section 2032A of the Internal Revenue Code has been made;

       (10) "State" means any state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; and

       (11) "Tax" means the federal estate tax, the excise tax defined in subsection (2) of this section, and the estate tax payable to this state and interest and penalties imposed in addition to the tax.

PART V--MISCELLANEOUS--EFFECTIVE DATES


       NEW SECTION. Sec. 501. Part headings and section captions used in this act are not any part of the law.

       NEW SECTION. Sec. 502. Sections 101 through 116 of this act constitute a new chapter in Title 11 RCW.

       NEW SECTION. Sec. 503. (1) Sections 101 through 116 and 118 of this act take effect July 1, 1999.

       (2) Sections 117, 201 through 205, 301, 401, and 504 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. 504. (1) Sections 201 through 205 of this act are remedial in nature and apply retroactively to July 27, 1997, and thereafter.

       (2) Section 301 of this act is remedial in nature and applies retroactively to July 1, 1991, and thereafter.", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Roach moved that the Senate refuse to concur in the House amendment to Substitute Senate Bill No. 6181 and requests of the House a conference thereon.

MOTION


      Senator Fairley moved that the Senate concur in the House amendment to Substitute Senate Bill No. 6181.

      Debate ensued.

      Senator Snyder demanded a roll call and the demand was sustained.


MOTION


      On motion of Senator Winsley, further consideration of Substitute Senate Bill No. 6181 was deferred.


MOTION


      On motion of Senator Loveland, Senator McAuliffe was excused.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6182 with the following amendment(s):

      On page 5, after line 29, insert the following:

       "Sec. 6. RCW 18.100.114 and 1983 c 51 s 8 are each amended to read as follows:

       (((1))) A corporation organized under this chapter may merge or consolidate with another corporation, domestic or foreign, organized to render the same specific professional services, only if every shareholder of each corporation is eligible to be a shareholder of the surviving or new corporation.

       (((2) Upon the merger or consolidation of a corporation organized under this chapter, the surviving or new corporation, as the case may be, may render professional services in this state only if it is organized under, and complies with, the provisions of this chapter.))

       NEW SECTION. Sec. 7 A new section is added to chapter 18.100 RCW to read as follows:

       A foreign professional corporation may render professional services in this state so long as it complies with chapter 23B.15 RCW and each individual rendering professional services in this state is duly licensed or otherwise legally authorized to render such professional services within this state."

       Correct the title.,and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      On motion of Senator Fairley, the Senate concurred in the House amendment to Substitute Senate Bill No. 6182.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute Senate Bill No. 6182, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Substitute Senate Bill No. 6182, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 48.          Excused: Senator McAuliffe - 1.           SUBSTITUTE SENATE BILL NO. 6182, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


PERSONAL PRIVILEGE


      Senator Franklin: “Mr. President, I rise to a point of personal privilege. Since it is Saturday morning and most of us probably would prefer being someplace else other than this wonderful chamber that we have--with your permission, Mr. President, may I read from this little booklet?”


REPLY BY THE PRESIDENT


      President Owen: “Fine with me.”

      Senator Franklin: “Thank you, Mr. President. We pass so many bills--so many bills--and we are out to regulate the world, but this one I think we missed. We missed the monkeys, shoplifting--shoplifting, because they do shoplift sometimes. A monkey once served five days in jail for shoplifting in Illinois. We need to probably put that on our list for the next time we make a bill.”


MESSAGE FROM THE HOUSE

March 3, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 6191 with the following amendment(s):

      On page 27, line 8, after "property" insert "((,))"

       On page 27, line 9, after "7.28.230(3)" strike "," and insert "; or", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Johnson moved that the Senate concur in the House amendments to Engrossed Substitute Senate Bill No. 6191.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Johnson that the Senate concur in the House amendments to Engrossed Substitute Senate Bill No. 6191.

      The motion by Senator Johnson carried and the Senate concurred in the House amendments to Engrossed Substitute Senate Bill No. 6191.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 6191, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 6191, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 49.     ENGROSSED SUBSTITUTE SENATE BILL NO. 6191, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 3, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SENATE BILL NO. 6203 with the following amendment(s):

      Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 70.95.020 and 1985 c 345 s 2 are each amended to read as follows:

       The purpose of this chapter is to establish a comprehensive state-wide program for solid waste handling, and solid waste recovery and/or recycling which will prevent land, air, and water pollution and conserve the natural, economic, and energy resources of this state. To this end it is the purpose of this chapter:

       (1) To assign primary responsibility for adequate solid waste handling to local government, reserving to the state, however, those functions necessary to assure effective programs throughout the state;

       (2) To provide for adequate planning for solid waste handling by local government;

       (3) To provide for the adoption and enforcement of basic minimum performance standards for solid waste handling;

       (4) To provide technical and financial assistance to local governments in the planning, development, and conduct of solid waste handling programs;

       (5) To encourage storage, proper disposal, and recycling of discarded vehicle tires and to stimulate private recycling programs throughout the state; and

       (6) To encourage the development and operation of waste recycling facilities and activities needed to accomplish the management priority of waste recycling and to promote consistency in the permitting requirements for such facilities and activities throughout the state.

       It is the intent of the legislature that local governments be encouraged to use the expertise of private industry and to contract with private industry to the fullest extent possible to carry out solid waste recovery and/or recycling programs.

       NEW SECTION. Sec. 2. A new section is added to chapter 70.95 RCW to read as follows:

       (1) The department may by rule exempt a solid waste from the permitting requirements of this chapter for one or more beneficial uses. In adopting such rules, the department shall specify both the solid waste that is exempted from the permitting requirements and the beneficial use or uses for which the solid waste is so exempted. The department shall consider: (a) Whether the material will be beneficially used or reused; and (b) whether the beneficial use or reuse of the material will present threats to human health or the environment.

       (2) The department may also exempt a solid waste from the permitting requirements of this chapter for one or more beneficial uses by approving an application for such an exemption. The department shall establish by rule procedures under which a person may apply to the department for such an exemption. The rules shall establish criteria for providing such an exemption, which shall include, but not be limited to: (a) The material will be beneficially used or reused; and (b) the beneficial use or reuse of the material will not present threats to human health or the environment. Rules adopted under this subsection shall identify the information that an application shall contain. Persons seeking such an exemption shall apply to the department under the procedures established by the rules adopted under this subsection.

       (3) After receipt of an application filed under rules adopted under subsection (2) of this section, the department shall review the application to determine whether it is complete, and forward a copy of the completed application to all jurisdictional health departments for review and comment. Within forty-five days, the jurisdictional health departments shall forward to the department their comments and any other information they deem relevant to the department's decision to approve or disapprove the application. Every complete application shall be approved or disapproved by the department within ninety days of receipt. If the application is approved by the department, the solid waste is exempt from the permitting requirements of this chapter when used anywhere in the state in the manner approved by the department. If the composition, use, or reuse of the solid waste is not consistent with the terms and conditions of the department's approval of the application, the use of the solid waste remains subject to the permitting requirements of this chapter.

       (4) The department shall establish procedures by rule for providing to the public and the solid waste industry notice of and an opportunity to comment on each application for an exemption under subsection (2) of this section. 

       (5) Any jurisdictional health department or applicant may appeal the decision of the department to approve or disapprove an application under subsection (3) of this section. The appeal shall be made to the pollution control hearings board by filing with the hearings board a notice of appeal within thirty days of the decision of the department. The hearings board's review of the decision shall be made in accordance with chapter 43.21B RCW and any subsequent appeal of a decision of the board shall be made in accordance with RCW 43.21B.180.

       (6) This section shall not be deemed to invalidate the exemptions or determinations of nonapplicability in the department's solid waste rules as they exist on the effective date of this section, which exemptions and determinations are recognized and confirmed subject to the department's continuing authority to modify or revoke those exemptions or determinations by rule.

       Sec. 3. RCW 70.95.170 and 1997 c 213 s 2 are each amended to read as follows:

       Except as provided otherwise in section 5 or 6 of this act, after approval of the comprehensive solid waste plan by the department no solid waste handling facility or facilities shall be maintained, established, or modified until the county, city, or other person operating such site has obtained a permit ((from the jurisdictional health department)) pursuant to ((the provisions of)) RCW 70.95.180 or 70.95.190.

       Sec. 4. RCW 70.95.190 and 1997 c 213 s 4 are each amended to read as follows:

       (1) Every permit for an existing solid waste handling facility issued pursuant to RCW 70.95.180 shall be renewed at least every five years on a date established by the jurisdictional health department having jurisdiction of the site and as specified in the permit. If a permit is to be renewed for longer than one year, the local jurisdictional health department may hold a public hearing before making such a decision. Prior to renewing a permit, the health department shall conduct a review as it deems necessary to assure that the solid waste handling facility or facilities located on the site continues to meet minimum functional standards of the department, applicable local regulations, and are not in conflict with the approved solid waste management plan. A jurisdictional health department shall approve or disapprove a permit renewal within forty-five days of conducting its review. The department shall review and may appeal the renewal as set forth for the approval of permits in RCW 70.95.185.

       (2) The jurisdictional board of health may establish reasonable fees for permits reviewed under this section. All permit fees collected by the health department shall be deposited in the treasury and to the account from which the health department's operating expenses are paid.

       NEW SECTION. Sec. 5. A new section is added to chapter 70.95 RCW to read as follows:

       (1) Notwithstanding any other provision of this chapter, the department may by rule exempt from the requirements to obtain a solid waste handling permit any category of solid waste handling facility that it determines to:

       (a) Present little or no environmental risk; and

       (b) Meet the environmental protection and performance requirements required for other similar solid waste facilities.

       (2) This section does not apply to any facility or category of facilities that:

       (a) Receives municipal solid waste destined for final disposal, including but not limited to transfer stations, landfills, and incinerators;

       (b) Applies putrescible solid waste on land for final disposal purposes;

       (c) Handles mixed solid wastes that have not been processed to segregate solid waste materials destined for disposal from other solid waste materials destined for a beneficial use;

       (d) Receives or processes organic waste materials into compost in volumes that generally far exceed those handled by municipal park departments, master gardening programs, and households; or

       (e) Receives solid waste destined for recycling or reuse, the operation of which is determined by the department to present risks to human health and the environment.

       (3) Rules adopted under this section shall contain such terms and conditions as the department deems necessary to ensure compliance with applicable statutes and rules. If a facility does not operate in compliance with the terms and conditions established for an exemption under subsection (1) of this section, the facility is subject to the permitting requirements for solid waste handling under this chapter.

       (4) This section shall not be deemed to invalidate the exemptions or determinations of nonapplicability in the department's solid waste rules as they exist on the effective date of this section, which exemptions and determinations are recognized and confirmed subject to the department's continuing authority to modify or revoke those exemptions or determinations by rule.

       NEW SECTION. Sec. 6. A new section is added to chapter 70.95 RCW to read as follows:

       (1) Notwithstanding any other provisions of this chapter, the department shall adopt rules:

       (a) Describing when a jurisdictional health department may, at its discretion, waive the requirement that a permit be issued for a facility under this chapter if other air, water, or environmental permits are issued for the same facility. As used in this section, a jurisdictional health department's waiving the requirement that a permit be issued for a facility under this chapter based on the issuance of such other permits for the facility is the health department's "deferring" to the other permits; and

       (b) Allowing deferral only if the applicant and the jurisdictional health department demonstrate that other permits for the facility will provide a comparable level of protection for human health and the environment that would be provided by a solid waste handling permit.

       (2) This section does not apply to any transfer station, landfill, or incinerator that receives municipal solid waste destined for final disposal.

       (3) If, before the effective date of this section, either the department or a jurisdictional health department has deferred solid waste permitting or regulation of a solid waste facility to permitting or regulation under other environmental permits for the same facility, such deferral is valid and shall not be affected by the rules developed under subsection (1) of this section.

       (4) Rules adopted under this section shall contain such terms and conditions as the department deems necessary to ensure compliance with applicable statutes and rules.

       NEW SECTION. Sec. 7. A new section is added to chapter 70.95 RCW to read as follows:

       The department may assess a civil penalty in an amount not to exceed one thousand dollars per day per violation to any person exempt from solid waste permitting in accordance with section 2 or 5 of this act who fails to comply with the terms and conditions of the exemption. Each such violation shall be a separate and distinct offense, and in the case of a continuing violation, each day's continuance shall be a separate and distinct violation.

       Sec. 8. RCW 43.21B.110 and 1993 c 387 s 22 are each amended to read as follows:

       (1) The hearings board shall only have jurisdiction to hear and decide appeals from the following decisions of the department, the director, the administrator of the office of marine safety, and the air pollution control boards or authorities as established pursuant to chapter 70.94 RCW, or local health departments:

       (a) Civil penalties imposed pursuant to RCW 18.104.155, 70.94.431, 70.105.080, 70.107.050, 88.46.090, 90.03.600, 90.48.144, 90.56.310, and 90.56.330.

       (b) Orders issued pursuant to RCW 18.104.043, 18.104.060, 43.27A.190, 70.94.211, 70.94.332, 70.105.095, 86.16.020, 88.46.070, 90.14.130, and 90.48.120.

       (c) The issuance, modification, or termination of any permit, certificate, or license by the department or any air authority in the exercise of its jurisdiction, including the issuance or termination of a waste disposal permit, the denial of an application for a waste disposal permit, ((or)) the modification of the conditions or the terms of a waste disposal permit, or a decision to approve or deny an application for a solid waste permit exemption under section 2 of this act.

       (d) Decisions of local health departments regarding the grant or denial of solid waste permits pursuant to chapter 70.95 RCW.

       (e) Decisions of local health departments regarding the issuance and enforcement of permits to use or dispose of biosolids under RCW 70.95J.080.

       (f) Any other decision by the department, the administrator of the office of marine safety, or an air authority which pursuant to law must be decided as an adjudicative proceeding under chapter 34.05 RCW.

       (2) The following hearings shall not be conducted by the hearings board:

       (a) Hearings required by law to be conducted by the shorelines hearings board pursuant to chapter 90.58 RCW.

       (b) Hearings conducted by the department pursuant to RCW 70.94.332, 70.94.390, 70.94.395, 70.94.400, 70.94.405, 70.94.410, and 90.44.180.

       (c) Proceedings by the department relating to general adjudications of water rights pursuant to chapter 90.03 or 90.44 RCW.

       (d) Hearings conducted by the department to adopt, modify, or repeal rules.

       (3) Review of rules and regulations adopted by the hearings board shall be subject to review in accordance with the provisions of the Administrative Procedure Act, chapter 34.05 RCW.

       NEW SECTION. Sec. 9. A new section is added to chapter 70.95 RCW to read as follows:

       Nothing in chapter . . ., Laws of 1998 (this act) may be construed to affect chapter 81.77 RCW and the authority of the utilities and transportation commission."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      On motion of Senator Morton, the Senate concurred in the House amendment to Engrossed Substitute Senate Bill No. 6203.


MOTION


      On motion of Senator Hale, Senator Johnson was excused.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 6203, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 6203, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 46; Nays, 2; Absent, 0; Excused, 1.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, West, Winsley, Wojahn, Wood and Zarelli - 46.   Voting nay: Senators Kline and Thibaudeau - 2.   Excused: Senator Johnson - 1.               ENGROSSED SUBSTITUTE SENATE BILL NO. 6203, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6253 with the following amendment(s):

      Strike everything after the enacting clause and insert the following:

       "NEW SECTION. Sec. 1. It is the intent of the legislature that expenditures associated with the implementation of using credit and debit cards in state liquor stores and agency liquor vendor stores not have a negative impact to the liquor revolving fund balance and that transfers to the state general fund, the cities, and the counties not be reduced because of these costs.

       Sec. 2. RCW 66.08.026 and 1997 c 148 s 1 are each amended to read as follows:

       All administrative expenses of the board incurred on and after April 1, 1963 shall be appropriated and paid from the liquor revolving fund. These administrative expenses shall include, but not be limited to: The salaries and expenses of the board and its employees, the cost of establishing, leasing, maintaining, and operating state liquor stores and warehouses, legal services, pilot projects, annual or other audits, and other general costs of conducting the business of the board, and the costs of supplying, installing, and maintaining equipment used in state liquor stores and agency liquor vendor stores for the purchase of liquor by nonlicensees using debit or credit cards. The administrative expenses shall not, however, be deemed to include costs of liquor and lottery tickets purchased, the cost of transportation and delivery to the point of distribution, other costs pertaining to the acquisition and receipt of liquor and lottery tickets, packaging and repackaging of liquor, transaction fees associated with credit or debit card purchases for liquor in state liquor stores and in the stores of agency liquor vendors pursuant to RCW 66.16.040 and 66.16.041, sales tax, and those amounts distributed pursuant to RCW 66.08.180, 66.08.190, 66.08.200, 66.08.210 and 66.08.220.

       Sec. 3. RCW 66.16.041 and 1997 c 148 s 2 are each amended to read as follows:

       (1) The state liquor control board shall accept bank credit card and debit cards from nonlicensees for purchases in state liquor stores, under such rules as the board may adopt. The board shall authorize liquor vendors appointed under RCW 66.08.050 to accept bank credit cards and debit cards for liquor purchases under this title, under such rules as the board may adopt.

       (2) If a liquor vendor operating an agency store chooses to use credit or debit cards for liquor purchases by nonlicensees, the board shall provide equipment and installation and maintenance of the equipment necessary to implement the use of credit and debit cards. Any equipment provided by the board to an agency liquor vendor store for this purpose may be used only for the purchase of liquor.

       (3) If the revenues and expenditures associated with implementing the use of credit and debit cards for the purchase of alcohol by nonlicensees from state liquor stores and agency stores operated by liquor vendors results in a reduction of the liquor revolving fund balance for fiscal year 1999 and the 1999-01 biennium, the board shall consider increasing the price of alcohol products to offset the reduction.

       (4) The board shall provide a report evaluating the implementation of this section, including revenue and expenditures, to the appropriate committees of the legislature by ((January)) December 1, 1998."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Schow moved that the Senate refuse to concur in the House amendment to Substitute Senate Bill No. 6253 and requests of the House a conference thereon.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Schow that the Senate refuse to concur in the House amendment to Substitute Senate Bill No. 6253 and requests of the House a conference thereon.

      The motion by Senator Schow carried and the Senate refuses to concur in the House amendment to Substitute Senate Bill No. 6253 and requests of the House a conference thereon.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 5582 with the following amendment(s):

      Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 66.44.200 and 1933 ex.s. c 62 s 36 are each amended to read as follows:

       (1) No person shall sell any liquor to any person apparently under the influence of liquor.

       (2) No person who is apparently under the influence of liquor may purchase or consume liquor on any premises licensed by the board.

       (a) A violation of this subsection is a civil infraction punishable by a fine of not more than five hundred dollars.

       (b) A defendant's intoxication may not be used as a defense in a civil action under this subsection.

       (c) Until July 1, 2000, every establishment licensed under RCW 66.24.330 or 66.24.420 shall conspicuously post in the establishment notice of the prohibition against the purchase or consumption of liquor under this subsection.

       NEW SECTION. Sec. 2. This act takes effect July 1, 1998.", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Roach moved that the Senate refuse to concur in the House amendment to Substitute Senate Bill No. 5582 and requests of the House a conference thereon.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Roach that the Senate refuse to concur in the House amendment to Substitute Senate Bill No. 5582 and requests of the House a conference thereon.

      The motion by Senator Roach carried and the Senate refuses to concur in the House amendment to Substitute Senate Bill No. 5582 and requests of the House a conference thereon.


APPOINTMENT OF CONFERENCE COMMITTEE


      The President appointed as members of the Conference Committee on Substitute Senate Bill No. 5582 and the House amendment(s) thereon: Senators Zarelli, Kline and Stevens.

MOTION


      On motion of Senator Johnson, the Conference Committee appointments were confirmed.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SECOND SUBSTITUTE SENATE BILL NO. 6168 with the following amendment(s):

       On page 4, line 27, after “in” strike “chapter 70.114A RCW” and insert “subsection (4) of this section”

       On page 5, beginning on line 7, strike all of subsection (4) and insert the following:

       “(4) For the purpose of this section, “temporary worker housing” means a place, area, or piece of land where sleeping places or housing sites are provided by an employer for his or her employees or by another person, including a temporary worker housing operator, who is providing such accommodations for employees, for temporary, seasonal occupancy, and includes "labor camps" under RCW 70.54.110.”

       On page 6, after line 9, insert the following:

       NEW SECTION. Sec. 8. A new section is added to chapter 43.330 RCW to read as follows:

       (1) The department of community, trade, and economic development shall work with the advisory group established in subsection (2) of this section, to review proposals and make prioritized funding recommendations to the funding approval board that oversees the distribution of housing trust fund grants and loans to be used for the development, maintenance, and operation of housing for low-income farm workers.

       (2) A farm worker housing advisory group representing growers, farm workers, and other interested parties shall be formed to assist the department in the review and priority funding recommendations under this section.”

       Renumber the remaining section consecutively and correct the title of the bill., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Morton moved that the Senate refuse to concur in the House amendments to Second Substitute Senate Bill No. 6168 and requests of the House a conference thereon.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Morton that the Senate refuse to concur in the House amendments to Second Substitute Senate Bill No. 6168 and requests of the House a conference thereon.

      The motion by Senator Morton carried and the Senate refuses to concur in the House amendments to Second Substitute Senate Bill No. 6168 and requests of the House a conference thereon.


APPOINTMENT OF CONFERENCE COMMITTEE


      The President appointed as members of the Conference Committee on Second Substitute Senate Bill No. 6168 and the House amendment(s) thereto: Senators Morton, Prentice and Deccio.


MOTION


      On motion of Senator Johnson, the Conference Committee appointments were confirmed.


MOTION


      On motion of Senator Hale, Senator Benton was excused.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6306 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:

       "NEW SECTION. Sec. 1. The legislature recognizes that teachers and school district employees share the same educational work environment and academic calendar.

       It is the intent of the legislature to achieve similar retirement benefits for all educational employees by transferring the membership of classified school employees in the public employees' retirement system plan II to the Washington school employees' retirement system plan II. The transfer of membership to the Washington school employees' retirement system plan II is not intended to cause a diminution or expansion of benefits for affected members. It is enacted solely to provide public employees working under the same conditions with the same options for retirement planning.

       As members of the Washington school employees' retirement system plan II, classified employees will have the same opportunity to transfer to the Washington school employees' retirement system plan III as their certificated coworkers. The ability to transfer to the Washington school employees' retirement system plan III offers members a new public retirement system that balances flexibility with stability; provides increased employee control of investments and responsible protection of the public's investment in employee benefits; and encourages the pursuit of public sector careers without creating barriers to other public or private sector employment.

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

       (1) "Retirement system" means the Washington school employees' retirement system provided for in this chapter.

       (2) "Department" means the department of retirement systems created in chapter 41.50 RCW.

       (3) "State treasurer" means the treasurer of the state of Washington.

       (4) "Employer," for plan II and plan III members, means a school district or an educational service district.

       (5) "Member" means any employee included in the membership of the retirement system, as provided for in section 4 of this act.

       (6)(a) "Compensation earnable" for plan II and plan III members, means salaries or wages earned by a member during a payroll period for personal services, including overtime payments, and shall include wages and salaries deferred under provisions established pursuant to sections 403(b), 414(h), and 457 of the United States internal revenue code, but shall exclude nonmoney maintenance compensation and lump sum or other payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, or any form of severance pay.

       (b) "Compensation earnable" for plan II and plan III members also includes the following actual or imputed payments, which are not paid for personal services:

       (i) Retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement, which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable to the extent provided in this subsection, and the individual shall receive the equivalent service credit;

       (ii) In any year in which a member serves in the legislature, the member shall have the option of having such member's compensation earnable be the greater of:

       (A) The compensation earnable the member would have received had such member not served in the legislature; or

       (B) Such member's actual compensation earnable received for nonlegislative public employment and legislative service combined. Any additional contributions to the retirement system required because compensation earnable under (b)(ii)(A) of this subsection is greater than compensation earnable under this (b)(ii)(B) of this subsection shall be paid by the member for both member and employer contributions;

       (iii) Assault pay only as authorized by RCW 27.04.100, 72.01.045, and 72.09.240;

       (iv) Compensation that a member would have received but for a disability occurring in the line of duty only as authorized by RCW 41.40.038;

       (v) Compensation that a member receives due to participation in the leave sharing program only as authorized by RCW 41.04.650 through 41.04.670; and

       (vi) Compensation that a member receives for being in standby status. For the purposes of this section, a member is in standby status when not being paid for time actually worked and the employer requires the member to be prepared to report immediately for work, if the need arises, although the need may not arise.

       (7) "Service" for plan II and plan III members, means periods of employment by a member in an eligible position or positions for one or more employers for which compensation earnable is paid. Compensation earnable earned for ninety or more hours in any calendar month shall constitute one service credit month except as provided in section 19 of this act. Compensation earnable earned for at least seventy hours but less than ninety hours in any calendar month shall constitute one-half service credit month of service. Compensation earnable earned for less than seventy hours in any calendar month shall constitute one-quarter service credit month of service. Time spent in standby status, whether compensated or not, is not service.

       Any fraction of a year of service shall be taken into account in the computation of such retirement allowance or benefits.

       (a) Service in any state elective position shall be deemed to be full-time service.

       (b) A member shall receive a total of not more than twelve service credit months of service for such calendar year. If an individual is employed in an eligible position by one or more employers the individual shall receive no more than one service credit month during any calendar month in which multiple service for ninety or more hours is rendered.

       (c) For purposes of plan II and III "forty-five days" as used in RCW 28A.400.300 is equal to two service credit months. Use of less than forty-five days of sick leave is creditable as allowed under this subsection as follows:

       (i) Less than eleven days equals one-quarter service credit month;

       (ii) Eleven or more days but less than twenty-two days equals one-half service credit month;

       (iii) Twenty-two days equals one service credit month;

       (iv) More than twenty-two days but less than thirty-three days equals one and one-quarter service credit month; and

       (v) Thirty-three or more days but less than forty-five days equals one and one-half service credit month.

       (8) "Service credit year" means an accumulation of months of service credit which is equal to one when divided by twelve.

       (9) "Service credit month" means a month or an accumulation of months of service credit which is equal to one.

       (10) "Membership service" means all service rendered as a member.

       (11) "Beneficiary" for plan II and plan III members means any person in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by another person.

       (12) "Regular interest" means such rate as the director may determine.

       (13) "Accumulated contributions" means the sum of all contributions standing to the credit of a member in the member's individual account, including any amount paid under RCW 41.50.165(2), together with the regular interest thereon.

       (14) "Average final compensation" for plan II and plan III members means the member's average compensation earnable of the highest consecutive sixty months of service credit months prior to such member's retirement, termination, or death. Periods constituting authorized leaves of absence may not be used in the calculation of average final compensation except under RCW 41.40.710(2).

       (15) "Final compensation" means the annual rate of compensation earnable by a member at the time of termination of employment.

       (16) "Annuity" means payments for life derived from accumulated contributions of a member. All annuities shall be paid in monthly installments.

       (17) "Pension" means payments for life derived from contributions made by the employer. All pensions shall be paid in monthly installments.

       (18) "Retirement allowance" for plan II and plan III members means monthly payments to a retiree or beneficiary as provided in this chapter.

       (19) "Employee" or "employed" means a person who is providing services for compensation to an employer, unless the person is free from the employer's direction and control over the performance of work. The department shall adopt rules and interpret this subsection consistent with common law.

       (20) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of such mortality and other tables as may be adopted by the director.

       (21) "Retirement" means withdrawal from active service with a retirement allowance as provided by this chapter.

       (22) "Eligible position" means any position that, as defined by the employer, normally requires five or more months of service a year for which regular compensation for at least seventy hours is earned by the occupant thereof. For purposes of this chapter an employer shall not define "position" in such a manner that an employee's monthly work for that employer is divided into more than one position.

       (23) "Ineligible position" means any position which does not conform with the requirements set forth in subsection (22) of this section.

       (24) "Leave of absence" means the period of time a member is authorized by the employer to be absent from service without being separated from membership.

       (25) "Totally incapacitated for duty" means total inability to perform the duties of a member's employment or office or any other work for which the member is qualified by training or experience.

       (26) "Retiree" means any person who has begun accruing a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer while a member.

       (27) "Director" means the director of the department.

       (28) "State elective position" means any position held by any person elected or appointed to state-wide office or elected or appointed as a member of the legislature.

       (29) "State actuary" or "actuary" means the person appointed pursuant to RCW 44.44.010(2).

       (30) "Plan II" means the Washington school employees' retirement system plan II providing the benefits and funding provisions covering persons who first became members of the public employees' retirement system on and after October 1, 1977 and transferred to the Washington school employees' retirement system under section 113 of this act.

       (31) "Plan III" means the Washington school employees' retirement system plan III providing the benefits and funding provisions covering persons who first became members of the system on and after September 1, 2000, or who transfer from plan II under section 114 of this act.

       (32) "Index" means, for any calendar year, that year's annual average consumer price index, Seattle, Washington area, for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor.

       (33) "Index A" means the index for the year prior to the determination of a postretirement adjustment.

       (34) "Index B" means the index for the year prior to index A.

       (35) "Adjustment ratio" means the value of index A divided by index B.

       (36) "Separation from service" occurs when a person has terminated all employment with an employer.

       (37) "Member account" or "member's account" for purposes of plan III means the sum of the contributions and earnings on behalf of the member in the defined contribution portion of plan III.

       (38) "Classified employee" means an employee of a school district or an educational service district who is not eligible for membership in the teachers' retirement system established under chapter 41.32 RCW.

       NEW SECTION. Sec. 3. A retirement system is hereby created for the employees of school districts or educational service districts. The administration and management of the retirement system, the responsibility for making effective the provisions of this chapter, and the authority to make all rules necessary therefor are hereby vested in the department. All such rules shall be governed by the provisions of chapter 34.05 RCW. This retirement system shall be known as the Washington school employees' retirement system.

       NEW SECTION. Sec. 4. Membership in the retirement system shall consist of all regularly compensated classified employees and appointive and elective officials of employers, as defined in this chapter, with the following exceptions:

       (1) Persons in ineligible positions;

       (2)(a) Persons holding elective offices or persons appointed directly by the governor: PROVIDED, That such persons shall have the option of applying for membership during such periods of employment: AND PROVIDED FURTHER, That any persons holding or who have held elective offices or persons appointed by the governor who are members in the retirement system and who have, prior to becoming such members, previously held an elective office, and did not at the start of such initial or successive terms of office exercise their option to become members, may apply for membership to be effective during such term or terms of office, and shall be allowed to establish the service credit applicable to such term or terms of office upon payment of the employee contributions therefor by the employee with interest as determined by the director and employer contributions therefor by the employer or employee with interest as determined by the director: AND PROVIDED FURTHER, That all contributions with interest submitted by the employee under this subsection shall be placed in the employee's individual account in the employee's savings fund and be treated as any other contribution made by the employee, with the exception that any contributions submitted by the employee in payment of the employer's obligation, together with the interest the director may apply to the employer's contribution, shall not be considered part of the member's annuity for any purpose except withdrawal of contributions;

       (b) A member holding elective office who has elected to apply for membership pursuant to (a) of this subsection and who later wishes to be eligible for a retirement allowance shall have the option of ending his or her membership in the retirement system. A member wishing to end his or her membership under this subsection must file on a form supplied by the department a statement indicating that the member agrees to irrevocably abandon any claim for service for future periods served as an elected official. A member who receives more than fifteen thousand dollars per year in compensation for his or her elective service, adjusted annually for inflation by the director, is not eligible for the option provided by this subsection (2)(b);

       (3) Retirement system retirees: PROVIDED, That following reemployment in an eligible position, a retiree may elect to prospectively become a member of the retirement system if otherwise eligible;

       (4) Persons enrolled in state-approved apprenticeship programs, authorized under chapter 49.04 RCW, and who are employed by employers to earn hours to complete such apprenticeship programs, if the employee is a member of a union-sponsored retirement plan and is making contributions to such a retirement plan or if the employee is a member of a Taft-Hartley retirement plan;

       (5) Persons rendering professional services to an employer on a fee, retainer, or contract basis or when the income from these services is less than fifty percent of the gross income received from the person's practice of a profession;

       (6) Employees who (a) are not citizens of the United States, (b) do not reside in the United States, and (c) perform duties outside of the United States;

       (7) Employees who (a) are not citizens of the United States, (b) are not covered by chapter 41.48 RCW, (c) are not excluded from membership under this chapter or chapter 41.04 RCW, (d) are residents of this state, and (e) make an irrevocable election to be excluded from membership, in writing, which is submitted to the director within thirty days after employment in an eligible position;

       (8) Employees who are citizens of the United States and who reside and perform duties for an employer outside of the United States: PROVIDED, That unless otherwise excluded under this chapter or chapter 41.04 RCW, the employee may apply for membership (a) within thirty days after employment in an eligible position and membership service credit shall be granted from the first day of membership service, and (b) after this thirty-day period, but membership service credit shall be granted only if payment is made for the noncredited membership service under RCW 41.50.165(2), otherwise service shall be from the date of application.

       NEW SECTION. Sec. 5. Any person who has been employed in a nonelective position for at least nine months and who has made member contributions required under this chapter throughout such period, shall be deemed to have been in an eligible position during such period of employment.

       NEW SECTION. Sec. 6. Within thirty days after his or her employment or his or her acceptance into membership each employee or appointive or elective official shall submit to the department a statement of his or her name and such other information as the department shall require. Compliance with the provisions set forth in this section shall be considered to be a condition of employment and failure by an employee to comply may result in separation from service.

       NEW SECTION. Sec. 7. (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every eight hours worked during that month. This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

       (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred sixty hours per month. Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

       (2) A retiree who has satisfied the break in employment requirement of subsection (1) of this section, may work up to five months per calendar year in an eligible position without suspension of his or her benefit.

       (3) If the retiree opts to reestablish membership under section 4 of this act, he or she terminates his or her retirement status and becomes a member. Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit. Such a member shall have the right to again retire if eligible in accordance with section 103 or 209 of this act. However, if the right to retire is exercised to become effective before the member has rendered two uninterrupted years of service, the retirement formula and survivor options the member had at the time of the member's previous retirement shall be reinstated.

       NEW SECTION. Sec. 8. Those members subject to this chapter who became disabled in the line of duty and who received or are receiving benefits under Title 51 RCW or a similar federal workers' compensation program shall receive or continue to receive service credit subject to the following:

       (1) No member may receive more than one month's service credit in a calendar month.

       (2) No service credit under this section may be allowed after a member separates or is separated without leave of absence.

       (3) Employer contributions shall be paid by the employer at the rate in effect for the period of the service credited.

       (4) Employee contributions shall be collected by the employer and paid to the department at the rate in effect for the period of service credited.

       (5) Contributions shall be based on the regular compensation which the member would have received had the disability not occurred. If contribution payments are made retroactively, interest shall be charged at the rate set by the director on both employee and employer contributions. No service credit shall be granted until the employee contribution has been paid.

       (6) The service and compensation credit shall not be granted for a period to exceed twelve consecutive months.

       (7) Should the legislature revoke the service credit authorized under this section or repeal this section, no affected employee is entitled to receive the credit as a matter of contractual right.

       NEW SECTION. Sec. 9. The deductions from the compensation of members, provided for in section 104 of this act, shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided for in this chapter and receipt in full for his or her salary or compensation, and payment, less the deductions, shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by the person during the period covered by the payment, except as to benefits provided for under this chapter.

       NEW SECTION. Sec. 10. (1) The director shall report to each employer the contribution rates required for the ensuing biennium or fiscal year, whichever is applicable.

       (2) Beginning September 1, 1990, the amount to be collected as the employer's contribution shall be computed by applying the applicable rates established in chapter 41.45 RCW to the total compensation earnable of employer's members as shown on the current payrolls of the employer. Each employer shall compute at the end of each month the amount due for that month and the same shall be paid as are its other obligations.

       (3) In the event of failure, for any reason, of an employer other than a political subdivision of the state to have remitted amounts due for membership service of any of the employer's members rendered during a prior biennium, the director shall bill such employer for such employer's contribution together with such charges as the director deems appropriate in accordance with RCW 41.50.120. Such billing shall be paid by the employer as, and the same shall be, a proper charge against any moneys available or appropriated to such employer for payment of current biennial payrolls.

       NEW SECTION. Sec. 11. (1) Subject to subsections (2) and (3) of this section, the right of a person to a pension, an annuity, or retirement allowance, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, the various funds created by this chapter, and all moneys and investments and income thereof, are hereby exempt from any state, county, municipal, or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, and shall be unassignable.

       (2) This section does not prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions and which has been approved for deduction in accordance with rules that may be adopted by the state health care authority and/or the department. This section also does not prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of dues and other membership fees to any retirement association or organization the membership of which is composed of retired public employees, if a total of three hundred or more of such retired employees have authorized such deduction for payment to the same retirement association or organization.

       (3) Subsection (1) of this section does not prohibit the department from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a notice of payroll deduction issued pursuant to RCW 26.23.060, (d) a mandatory benefits assignment order issued by the department, (e) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

       NEW SECTION. Sec. 12. A member shall not receive a disability retirement benefit under section 105 or 210 of this act if the disability is the result of criminal conduct by the member committed after April 21, 1997.

       NEW SECTION. Sec. 13. Any person who knowingly makes any false statements, or falsifies or permits to be falsified any record or records of this retirement system in any attempt to defraud the retirement system as a result of such act, is guilty of a gross misdemeanor.

       NEW SECTION. Sec. 14. (1) Any person who was a member of the state-wide city employees' retirement system governed by chapter 41.44 RCW and who was never reemployed by an employer as defined in RCW 41.40.010 and who is employed by an employer as defined in section 2 of this act, may, in a writing filed with the director, elect to:

       (a) Transfer to this retirement system all service currently credited under chapter 41.44 RCW;

       (b) Reestablish and transfer to this retirement system all service which was previously credited under chapter 41.44 RCW but which was canceled by discontinuance of service and withdrawal of accumulated contributions as provided in RCW 41.44.190. The service may be reestablished and transferred only upon payment by the member to the employees' savings fund of this retirement system of the amount withdrawn plus interest thereon from the date of withdrawal until the date of payment at a rate determined by the director. No additional payments are required for service credit described in this subsection if already established under this chapter; and

       (c) Establish service credit for the initial period of employment not to exceed six months, prior to establishing membership under chapter 41.44 RCW, upon payment in full by the member of the total employer's contribution to the benefit account fund of this retirement system that would have been made under this chapter when the initial service was rendered. The payment shall be based on the first month's compensation earnable as a member of the state-wide city employees' retirement system and as defined in RCW 41.44.030(13). However, a person who has established service credit under RCW 41.40.010(13) (c) or (d) shall not establish additional credit under this subsection nor may anyone who establishes credit under this subsection establish any additional credit under RCW 41.40.010(13) (c) or (d). No additional payments are required for service credit described in this subsection if already established under this chapter.

       (2) The written election must be filed and the payments must be completed in full within one year after employment by an employer.

       (3) Upon receipt of the written election and payments required by subsection (1) of this section from any retiree described in subsection (1) of this section, the department shall recompute the retiree's allowance in accordance with this section and shall pay any additional benefit resulting from such recomputation retroactively to the date of retirement from the system governed by this chapter.

       (4) Any person who was a member of the state-wide city employees' retirement system under chapter 41.44 RCW and also became a member of the public employees' retirement system established under chapter 41.40 RCW or the Washington school employees' retirement system established under this chapter, and did not make the election under RCW 41.40.058 or subsection (1) of this section because he or she was not a member of the public employees' retirement system prior to July 27, 1987, or did not meet the time limitations of RCW 41.40.058 or subsection (2) of this section, may elect to do any of the following:

       (a) Transfer to this retirement system all service currently credited under chapter 41.44 RCW;

       (b) Reestablish and transfer to this retirement system all service that was previously credited under chapter 41.44 RCW but was canceled by discontinuance of service and withdrawal of accumulated contributions as provided in RCW 41.44.190; and

       (c) Establish service credit for the initial period of employment not to exceed six months, prior to establishing membership under chapter 41.44 RCW.

       To make the election or elections, the person must pay the amount required under RCW 41.50.165(2) prior to retirement from this retirement system.

       NEW SECTION. Sec. 15. Any person aggrieved by any decision of the department affecting his or her legal rights, duties, or privileges must, before he or she appeals to the courts, file with the director by mail or personally within sixty days from the day the decision was communicated to the person, a notice for a hearing before the director's designee. The notice of hearing shall set forth in full detail the grounds upon which the person considers the decision unjust or unlawful and shall include every issue to be considered by the department, and it must contain a detailed statement of facts upon which the person relies in support of the appeal. These persons shall be deemed to have waived all objections or irregularities concerning the matter on which the appeal is taken, other than those specifically set forth in the notice of hearing or appearing in the records of the retirement system.

       NEW SECTION. Sec. 16. Following its receipt of a notice for hearing in accordance with section 15 of this act, a hearing shall be held by the director or a duly authorized representative, in the county of the residence of the claimant at a time and place designated by the director. Such hearing shall be conducted and governed in all respects by the provisions of chapter 34.05 RCW.

       NEW SECTION. Sec. 17. Judicial review of any final decision and order by the director is governed by the provisions of chapter 34.05 RCW.

       NEW SECTION. Sec. 18. No bond of any kind shall be required of a claimant appealing to the superior court, the court of appeals, or the supreme court from a finding of the department affecting the claimant's right to retirement or disability benefits.

       NEW SECTION. Sec. 19. (1) Except for any period prior to the member's employment in an eligible position, a plan II or plan III member who is employed by a school district or districts or an educational service district:

       (a) Shall receive a service credit month for each month of the period from September through August of the following year if he or she is employed in an eligible position, earns compensation earnable for eight hundred ten hours or more during that period, and is employed during nine months of that period;

       (b) If a member in an eligible position for each month of the period from September through August of the following year does not meet the hours requirements of (a) of this subsection, the member is entitled to one-half service credit month for each month of the period if he or she earns earnable compensation for at least six hundred thirty hours but less than eight hundred ten hours during that period, and is employed nine months of that period;

       (c) In all other instances, a member in an eligible position is entitled to service credit months as follows:

       (i) One service credit month for each month in which compensation is earned for ninety or more hours;

       (ii) One-half service credit month for each month in which compensation is earned for at least seventy hours but less than ninety hours; and

       (iii) One-quarter service credit month for each month in which compensation is earned for less than seventy hours.

       (2) The department shall adopt rules implementing this section.

       NEW SECTION. Sec. 20. RCW 43.01.044 shall not result in any increase in retirement benefits. The rights extended to state officers and employees under RCW 43.01.044 are not intended to and shall not have any effect on retirement benefits under this chapter.

       NEW SECTION. Sec. 21. (1) The annual compensation taken into account in calculating retiree benefits under this system shall not exceed the limits imposed by section 401(a)(17) of the federal internal revenue code for qualified trusts.

       (2) The department shall adopt rules as necessary to implement this section.

       NEW SECTION. Sec. 22. Beginning July 1, 1979, and every year thereafter, the department shall determine the following information for each retired member or beneficiary whose retirement allowance has been in effect for at least one year:

       (1) The original dollar amount of the retirement allowance;

       (2) The index for the calendar year prior to the effective date of the retirement allowance, to be known as "index A";

       (3) The index for the calendar year prior to the date of determination, to be known as "index B"; and

       (4) The ratio obtained when index B is divided by index A.

       The value of the ratio obtained shall be the annual adjustment to the original retirement allowance and shall be applied beginning with the July payment. In no event, however, shall the annual adjustment:

       (a) Produce a retirement allowance which is lower than the original retirement allowance;

       (b) Exceed three percent in the initial annual adjustment; or

       (c) Differ from the previous year's annual adjustment by more than three percent.

       For the purposes of this section, "index" means, for any calendar year, that year's average consumer price index--Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor.

       NEW SECTION. Sec. 23. (1) Upon retirement for service as prescribed in section 103 or 209 of this act or retirement for disability under section 105 or 210 of this act, a member shall elect to have the retirement allowance paid pursuant to one of the following options, calculated so as to be actuarially equivalent to each other.

       (a) Standard allowance. A member electing this option shall receive a retirement allowance payable throughout such member's life. However, if the retiree dies before the total of the retirement allowance paid to such retiree equals the amount of such retiree's accumulated contributions at the time of retirement, then the balance shall be paid to the member's estate, or such person or persons, trust, or organization as the retiree shall have nominated by written designation duly executed and filed with the department; or if there be no such designated person or persons still living at the time of the retiree's death, then to the surviving spouse; or if there be neither such designated person or persons still living at the time of death nor a surviving spouse, then to the retiree's legal representative.

       (b) The department shall adopt rules that allow a member to select a retirement option that pays the member a reduced retirement allowance and upon death, such portion of the member's reduced retirement allowance as the department by rule designates shall be continued throughout the life of and paid to a person nominated by the member by written designation duly executed and filed with the department at the time of retirement. The options adopted by the department shall include, but are not limited to, a joint and one hundred percent survivor option and a joint and fifty percent survivor option.

       (2)(a) A member, if married, must provide the written consent of his or her spouse to the option selected under this section, except as provided in (b) of this subsection. If a member is married and both the member and the member's spouse do not give written consent to an option under this section, the department shall pay a joint and fifty percent survivor benefit calculated to be actuarially equivalent to the benefit options available under subsection (1) of this section unless spousal consent is not required as provided in (b) of this subsection.

       (b) If a copy of a dissolution order designating a survivor beneficiary under RCW 41.50.790 has been filed with the department at least thirty days prior to a member's retirement:

       (i) The department shall honor the designation as if made by the member under subsection (1) of this section; and

       (ii) The spousal consent provisions of (a) of this subsection do not apply.

       NEW SECTION. Sec. 24. (1) Except as provided in section 7 of this act, no retiree under the provisions of plan II shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in section 2 of this act, RCW 41.40.010 or 41.32.010, or as a law enforcement officer or fire fighter as defined in RCW 41.26.030, except that a retiree who ends his or her membership in the retirement system pursuant to RCW 41.40.023(3)(b) is not subject to this section if the retiree's only employment is as an elective official.

       (2) If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused his or her benefits to be suspended. Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.

       (3) The department shall adopt rules implementing this section.

       NEW SECTION. Sec. 25. Sections 1 through 24 of this act apply to members of plan II and plan III.

       NEW SECTION. Sec. 101. A member of the retirement system shall receive a retirement allowance equal to two percent of such member's average final compensation for each service credit year of service.

       NEW SECTION. Sec. 102. (1) The director may pay a member eligible to receive a retirement allowance or the member's beneficiary, subject to the provisions of subsection (5) of this section, a lump sum payment in lieu of a monthly benefit if the initial monthly benefit computed in accordance with section 101 of this act would be less than fifty dollars. The lump sum payment shall be the greater of the actuarial equivalent of the monthly benefits or an amount equal to the individual's accumulated contributions plus accrued interest.

       (2) A retiree or a beneficiary, subject to the provisions of subsection (5) of this section, who is receiving a regular monthly benefit of less than fifty dollars may request, in writing, to convert from a monthly benefit to a lump sum payment. If the director approves the conversion, the calculation of the actuarial equivalent of the total estimated regular benefit will be computed based on the beneficiary's age at the time the benefit initially accrued. The lump sum payment will be reduced to reflect any payments received on or after the initial benefit accrual date.

       (3) Persons covered under the provisions of RCW 41.40.625 or subsection (1) of this section may upon returning to member status reinstate all previous service by depositing the lump sum payment received, with interest as computed by the director, within two years of returning to service or prior to reretiring, whichever comes first. In computing the amount due, the director shall exclude the accumulated value of the normal payments the member would have received while in beneficiary status if the lump sum payment had not occurred.

       (4) If a member fails to meet the time limitations under subsection (3) of this section, reinstatement of all previous service will occur if the member pays the amount required under RCW 41.50.165(2). The amount, however, shall exclude the accumulated value of the normal payments the member would have received while in beneficiary status if the lump sum payment had not occurred.

       (5) Only persons entitled to or receiving a service retirement allowance under section 101 of this act or an earned disability allowance under section 105 of this act qualify for participation under this section.

       (6) It is the intent of the legislature that any member who receives a settlement under this section shall be deemed to be retired from this system.

       NEW SECTION. Sec. 103. (1) NORMAL RETIREMENT. Any member with at least five service credit years who has attained at least age sixty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 101 of this act.

       (2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 101 of this act, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

       NEW SECTION. Sec. 104. The required contribution rates to the retirement system for both members and employers shall be established by the director from time to time as may be necessary upon the advice of the state actuary. The state actuary shall use the aggregate actuarial cost method to calculate contribution rates. The employer contribution rate calculated under this section shall be used only for the purpose of determining the amount of employer contributions to be deposited in the plan II fund from the total employer contributions collected under section 10 of this act.

       Contribution rates required to fund the costs of the retirement system shall always be equal for members and employers, except as herein provided. Any adjustments in contribution rates required from time to time for future costs shall likewise be shared equally by the members and employers.

       Any increase in the contribution rate required as the result of a failure of an employer to make any contribution required by this section shall be borne in full by the employer not making the contribution.

       The director shall notify all employers of any pending adjustment in the required contribution rate and such increase shall be announced at least thirty days prior to the effective date of the change.

       Members contributions required by this section shall be deducted from the members compensation earnable each payroll period. The members contribution and the employers contribution shall be remitted directly to the department within fifteen days following the end of the calendar month during which the payroll period ends.

       NEW SECTION. Sec. 105. (1) A member of the retirement system who becomes totally incapacitated for continued employment by an employer as determined by the department upon recommendation of the department shall be eligible to receive an allowance under the provisions of sections 101 through 112 of this act. The member shall receive a monthly disability allowance computed as provided for in section 101 of this act and shall have this allowance actuarially reduced to reflect the difference in the number of years between age at disability and the attainment of age sixty-five.

       Any member who receives an allowance under the provisions of this section shall be subject to comprehensive medical examinations as required by the department. If these medical examinations reveal that a member has recovered from the incapacitating disability and the member is offered reemployment by an employer at a comparable compensation, the member shall cease to be eligible for the allowance.

       (2) If the recipient of a monthly retirement allowance under this section dies before the total of the retirement allowance paid to the recipient equals the amount of the accumulated contributions at the date of retirement, then the balance shall be paid to the member's estate, or the person or persons, trust, or organization as the recipient has nominated by written designation duly executed and filed with the director, or, if there is no designated person or persons still living at the time of the recipient's death, then to the surviving spouse, or, if there is no designated person or persons still living at the time of his or her death nor a surviving spouse, then to his or her legal representative.

       NEW SECTION. Sec. 106. Any member or beneficiary eligible to receive a retirement allowance under the provisions of section 103, 105, or 107 of this act shall be eligible to commence receiving a retirement allowance after having filed written application with the department.

       (1) Retirement allowances paid to members under the provisions of section 103 of this act shall accrue from the first day of the calendar month immediately following such member's separation from employment.

       (2) Retirement allowances paid to vested members no longer in service, but qualifying for such an allowance pursuant to section 103 of this act, shall accrue from the first day of the calendar month immediately following such qualification.

       (3) Disability allowances paid to disabled members under the provisions of section 105 of this act shall accrue from the first day of the calendar month immediately following such member's separation from employment for disability.

       (4) Retirement allowances paid as death benefits under the provisions of section 107 of this act shall accrue from the first day of the calendar month immediately following the member's death.

       NEW SECTION. Sec. 107. (1) Except as provided in RCW 11.07.010, if a member or a vested member who has not completed at least ten years of service dies, the amount of the accumulated contributions standing to such member's credit in the retirement system at the time of such member's death, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid to the member's estate, or such person or persons, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department. If there be no such designated person or persons still living at the time of the member's death, such member's accumulated contributions standing to such member's credit in the retirement system, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid to the member's surviving spouse as if in fact such spouse had been nominated by written designation, or if there be no such surviving spouse, then to such member's legal representatives.

       (2) If a member who is eligible for retirement or a member who has completed at least ten years of service dies, the surviving spouse or eligible child or children shall elect to receive either:

       (a) A retirement allowance computed as provided for in section 103 of this act, actuarially reduced by the amount of any lump sum benefit identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670 and actuarially adjusted to reflect a joint and one hundred percent survivor option under section 23 of this act and if the member was not eligible for normal retirement at the date of death a further reduction as described in section 103 of this act; if a surviving spouse who is receiving a retirement allowance dies leaving a child or children of the member under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority; if there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance, share and share alike, calculated as herein provided making the assumption that the ages of the spouse and member were equal at the time of the member's death; or

       (b) The member's accumulated contributions, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670.

       (3) If a member who is eligible for retirement or a member who has completed at least ten years of service dies and is not survived by a spouse or an eligible child, then the accumulated contributions standing to the member's credit, less any amount identified as owing to an obligee upon withdrawal of accumulated contributions pursuant to a court order filed under RCW 41.50.670, shall be paid:

       (a) To a person or persons, estate, trust, or organization as the member shall have nominated by written designation duly executed and filed with the department; or

       (b) If there is no such designated person or persons still living at the time of the member's death, then to the member's legal representatives.

       NEW SECTION. Sec. 108. (1) A member who is on a paid leave of absence authorized by a member's employer shall continue to receive service credit as provided for under the provisions of sections 101 through 112 of this act.

       (2) A member who receives compensation from an employer while on an authorized leave of absence to serve as an elected official of a labor organization, and whose employer is reimbursed by the labor organization for the compensation paid to the member during the period of absence, may also be considered to be on a paid leave of absence. This subsection shall only apply if the member's leave of absence is authorized by a collective bargaining agreement that provides that the member retains seniority rights with the employer during the period of leave. The compensation earnable reported for a member who establishes service credit under this subsection may not be greater than the salary paid to the highest paid job class covered by the collective bargaining agreement.

       (3) Except as specified in subsection (4) of this section, a member shall be eligible to receive a maximum of two years service credit during a member's entire working career for those periods when a member is on an unpaid leave of absence authorized by an employer. Such credit may be obtained only if:

       (a) The member makes both the plan II employer and member contributions plus interest as determined by the department for the period of the authorized leave of absence within five years of resumption of service or prior to retirement whichever comes sooner; or

       (b) If not within five years of resumption of service but prior to retirement, pay the amount required under RCW 41.50.165(2).

       The contributions required under (a) of this subsection shall be based on the average of the member's compensation earnable at both the time the authorized leave of absence was granted and the time the member resumed employment.

       (4) A member who leaves the employ of an employer to enter the armed forces of the United States shall be entitled to retirement system service credit for up to five years of military service. This subsection shall be administered in a manner consistent with the requirements of the federal uniformed services employment and reemployment rights act.

       (a) The member qualifies for service credit under this subsection if:

       (i) Within ninety days of the member's honorable discharge from the United States armed forces, the member applies for reemployment with the employer who employed the member immediately prior to the member entering the United States armed forces; and

       (ii) The member makes the employee contributions required under section 104 of this act within five years of resumption of service or prior to retirement, whichever comes sooner; or

       (iii) Prior to retirement and not within ninety days of the member's honorable discharge or five years of resumption of service the member pays the amount required under RCW 41.50.165(2).

       (b) Upon receipt of member contributions under (a)(ii) of this subsection, the department shall establish the member's service credit and shall bill the employer for its contribution required under section 104 of this act for the period of military service, plus interest as determined by the department.

       (c) The contributions required under (a)(ii) of this subsection shall be based on the compensation the member would have earned if not on leave, or if that cannot be estimated with reasonable certainty, the compensation reported for the member in the year prior to when the member went on military leave.

       NEW SECTION. Sec. 109. A member who separates or has separated after having completed at least five years of service may remain a member during the period of such member's absence from service for the exclusive purpose only of receiving a retirement allowance under the provisions of section 103 of this act if such member maintains the member's accumulated contributions intact.

       NEW SECTION. Sec. 110. A member who ceases to be an employee of an employer except by service or disability retirement may request a refund of the member's accumulated contributions. The refund shall be made within ninety days following the receipt of the request and notification of termination through the contribution reporting system by the employer; except that in the case of death, an initial payment shall be made within thirty days of receipt of request for such payment and notification of termination through the contribution reporting system by the employer. A member who files a request for refund and subsequently enters into employment with another employer prior to the refund being made shall not be eligible for a refund. The refund of accumulated contributions shall terminate all rights to benefits under sections 101 through 112 of this act.

       NEW SECTION. Sec. 111. (1) A member, who had left service and withdrawn the member's accumulated contributions, shall receive service credit for such prior service if the member restores all withdrawn accumulated contributions together with interest since the time of withdrawal as determined by the department.

       The restoration of such funds must be completed within five years of the resumption of service or prior to retirement, whichever occurs first.

       (2) If a member fails to meet the time limitations of subsection (1) of this section, the member may receive service credit destroyed by the withdrawn contributions if the amount required under RCW 41.50.165(2) is paid.

       NEW SECTION. Sec. 112. Sections 101 through 111 and 114 of this act apply only to plan II members.

       NEW SECTION. Sec. 113. A new section is added to chapter 41.40 RCW to read as follows:

       (1) Effective September 1, 2000, the membership of all plan II members currently employed in eligible positions in a school district or educational service district and all plan II service credit for such members, is transferred to the Washington school employees' retirement system plan II. Plan II members who have withdrawn their member contributions for prior plan II service may restore contributions and service credit to the Washington school employees' retirement system plan II as provided under RCW 41.40.740.

       (2) The membership and previous service credit of a plan II member not employed in an eligible position on September 1, 2000, will be transferred to the Washington school employees' retirement system plan II when he or she becomes employed in an eligible position. Plan II members not employed in an eligible position on September 1, 2000, who have withdrawn their member contributions for prior plan II service may restore contributions and service credit to the Washington school employees' retirement system plan II as provided under RCW 41.40.740.

       (3) Members who restore contributions and service credit under subsection (1) or (2) of this section shall have their contributions and service credit transferred to the Washington school employees' retirement system.

       NEW SECTION. Sec. 114. (1) Every plan II member employed by an employer in an eligible position has the option to make an irrevocable transfer to plan III.

       (2) All service credit in plan II shall be transferred to the defined benefit portion of plan III.

       (3) Any plan II member who wishes to transfer to plan III after February 28, 2001, may transfer during the month of January in any following year, provided that the member earns service credit for that month.

       (4) The accumulated contributions in plan II, less fifty percent of any contributions made pursuant to RCW 41.50.165(2) shall be transferred to the member's account in the defined contribution portion established in chapter 41.34 RCW, pursuant to procedures developed by the department and subject to RCW 41.34.090. Contributions made pursuant to RCW 41.50.165(2) that are not transferred to the member's account shall be transferred to the fund created in RCW 41.50.075(2), except that interest earned on all such contributions shall be transferred to the member's account.

       (5) The legislature reserves the right to discontinue the right to transfer under this section.

       (6) Anyone previously retired from plan II is prohibited from transferring to plan III.

       NEW SECTION. Sec. 201. (1) Sections 201 through 213 of this act apply only to plan III members.

       (2) Plan III consists of two separate elements: (a) A defined benefit portion covered under this subchapter; and (b) a defined contribution portion covered under chapter 41.34 RCW.

       (3) Unless otherwise specified, all references to "plan III" in this subchapter refer to the defined benefit portion of plan III.

       NEW SECTION. Sec. 202. All classified employees who first become employed by an employer in an eligible position on or after September 1, 2000, shall be members of plan III.

       NEW SECTION. Sec. 203. (1) A member of the retirement system shall receive a retirement allowance equal to one percent of such member's average final compensation for each service credit year.

       (2) The retirement allowance payable under section 209 of this act to a member who separates after having completed at least twenty service credit years shall be increased by twenty-five one-hundredths of one percent, compounded for each month from the date of separation to the date that the retirement allowance commences.

       NEW SECTION. Sec. 204. (1) Anyone who requests to transfer under section 114 of this act before March 1, 2001, and establishes service credit for January 2001, shall have their member account increased by sixty-five percent of:

       (a) The member's public employees' retirement system plan II accumulated contributions as of January 1, 2000, less fifty percent of any payments made pursuant to RCW 41.50.165(2); or

       (b) All amounts withdrawn after January 1, 2000, which are completely restored before March 1, 2001.

       (2) If a member who requests to transfer dies before January 1, 2001, the additional payment provided by this section shall be paid to the member's estate, or the person or persons, trust, or organization the member nominated by written designation duly executed and filed with the department.

       (3) The legislature reserves the right to modify or discontinue the right to an additional payment under this section for any plan II members who have not previously transferred to plan III.

       NEW SECTION. Sec. 205. Any member or beneficiary eligible to receive a retirement allowance under the provisions of section 209, 210, or 212 of this act is eligible to commence receiving a retirement allowance after having filed written application with the department.

       (1) Retirement allowances paid to members shall accrue from the first day of the calendar month immediately following such member's separation from employment.

       (2) Retirement allowances payable to eligible members no longer in service, but qualifying for such an allowance pursuant to section 15 of this act shall accrue from the first day of the calendar month immediately following such qualification.

       (3) Disability allowances paid to disabled members shall accrue from the first day of the calendar month immediately following such member's separation from employment for disability.

       (4) Retirement allowances paid as death benefits shall accrue from the first day of the calendar month immediately following the member's death.

       NEW SECTION. Sec. 206. (1) A member who is on a paid leave of absence authorized by a member's employer shall continue to receive service credit.

       (2) A member who receives compensation from an employer while on an authorized leave of absence to serve as an elected official of a labor organization, and whose employer is reimbursed by the labor organization for the compensation paid to the member during the period of absence, may also be considered to be on a paid leave of absence. This subsection shall only apply if the member's leave of absence is authorized by a collective bargaining agreement that provides that the member retains seniority rights with the employer during the period of leave. The earnable compensation reported for a member who establishes service credit under this subsection may not be greater than the salary paid to the highest paid job class covered by the collective bargaining agreement.

       (3) Except as specified in subsection (4) of this section, a member shall be eligible to receive a maximum of two years service credit during a member's entire working career for those periods when a member is on an unpaid leave of absence authorized by an employer. Such credit may be obtained only if:

       (a) The member makes the contribution on behalf of the employer, plus interest, as determined by the department; and

       (b) The member makes the employee contribution, plus interest, as determined by the department, to the defined contribution portion.

       The contributions required shall be based on the average of the member's earnable compensation at both the time the authorized leave of absence was granted and the time the member resumed employment.

       (4) A member who leaves the employ of an employer to enter the armed forces of the United States shall be entitled to retirement system service credit for up to five years of military service if within ninety days of the member's honorable discharge from the United States armed forces, the member applies for reemployment with the employer who employed the member immediately prior to the member entering the United States armed forces. This subsection shall be administered in a manner consistent with the requirements of the federal uniformed services employment and reemployment rights act.

       The department shall establish the member's service credit and shall bill the employer for its contribution required under section 213 of this act for the period of military service, plus interest as determined by the department. Service credit under this subsection may be obtained only if the member makes the employee contribution to the defined contribution portion as determined by the department.

       The contributions required shall be based on the compensation the member would have earned if not on leave, or if that cannot be estimated with reasonable certainty, the compensation reported for the member in the year prior to when the member went on military leave.

       NEW SECTION. Sec. 207. (1) Contributions on behalf of the employer paid by the employee to purchase plan III service credit shall be allocated to the defined benefit portion of plan III and shall not be refundable when paid to the fund described in RCW 41.50.075(4). Contributions on behalf of the employee shall be allocated to the member account. If the member fails to meet the statutory time limitations to purchase plan III service credit, it may be purchased under the provisions of RCW 41.50.165(2). One-half of the purchase payments under RCW 41.50.165(2), plus interest, shall be allocated to the member's account.

       (2) No purchased plan III membership service will be credited until all payments required of the member are made, with interest. Upon receipt of all payments owed by the member, the department shall bill the employer for any contributions, plus interest, required to purchase membership service.

       NEW SECTION. Sec. 208. (1) The director may pay a member eligible to receive a retirement allowance or the member's beneficiary a lump sum payment in lieu of a monthly benefit if the initial monthly benefit would be less than one hundred dollars. The one hundred dollar limit shall be increased annually as determined by the director. The lump sum payment shall be the actuarial equivalent of the monthly benefit.

       (2) Persons covered under the provisions of subsection (1) of this section may upon returning to member status reinstate all previous service by depositing the lump sum payment received, with interest as computed by the director, within two years of returning to service or prior to retiring again, whichever comes first. In computing the amount due, the director shall exclude the accumulated value of the normal payments the member would have received while in beneficiary status if the lump sum payment had not occurred.

       (3) Any member who receives a settlement under this section is deemed to be retired from this system.

       NEW SECTION. Sec. 209. (1) NORMAL RETIREMENT. Any member who is at least age sixty-five and who has:

       (a) Completed ten service credit years; or

       (b) Completed five service credit years, including twelve service credit months after attaining age fifty-four; or

       (c) Completed five service credit years by September 1, 2000, under the public employees' retirement system plan II and who transferred to plan III under section 114 of this act;

shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 203 of this act.

       (2) EARLY RETIREMENT. Any member who has attained at least age fifty-five and has completed at least ten years of service shall be eligible to retire and to receive a retirement allowance computed according to the provisions of section 203 of this act, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

       NEW SECTION. Sec. 210. (1) A member of the retirement system who becomes totally incapacitated for continued employment by an employer as determined by the department shall be eligible to receive an allowance under the provisions of plan III. The member shall receive a monthly disability allowance computed as provided for in section 203 of this act and shall have this allowance actuarially reduced to reflect the difference in the number of years between age at disability and the attainment of age sixty-five.

       Any member who receives an allowance under the provisions of this section shall be subject to comprehensive medical examinations as required by the department. If these medical examinations reveal that a member has recovered from the incapacitating disability and the member is offered reemployment by an employer at a comparable compensation, the member shall cease to be eligible for the allowance.

       (2) If the recipient of a monthly retirement allowance under this section dies, any further benefit payments shall be conditioned by the payment option selected by the retiree as provided in section 23 of this act.

       NEW SECTION. Sec. 211. (1) Any member who elects to transfer to plan III and has eligible unrestored withdrawn contributions in plan II, may restore such contributions under the provisions of section 113 of this act with interest as determined by the department. The restored plan II service credit will be automatically transferred to plan III. Restoration payments will be transferred to the member account in plan III. If the member fails to meet the time limitations of section 113 of this act, they may restore such contributions under the provisions of RCW 41.50.165(2). The restored plan II service credit will be automatically transferred to plan III. One-half of the restoration payments under RCW 41.50.165(2) plus interest shall be allocated to the member's account.

       (2) Any member who elects to transfer to plan III may purchase plan II service credit under section 113 of this act. Purchased plan II service credit will be automatically transferred to plan III. Contributions on behalf of the employer paid by the employee shall be allocated to the defined benefit portion of plan III and shall not be refundable when paid to the fund described in RCW 41.50.075(4). Contributions on behalf of the employee shall be allocated to the member account. If the member fails to meet the time limitations of section 113 of this act, they may subsequently restore such contributions under the provisions of RCW 41.50.165(2). Purchased plan II service credit will be automatically transferred to plan III. One-half of the payments under RCW 41.50.165(2), plus interest, shall be allocated to the member's account.

       NEW SECTION. Sec. 212. If a member dies prior to retirement, the surviving spouse or eligible child or children shall receive a retirement allowance computed as provided in section 203 of this act actuarially reduced to reflect a joint and one hundred percent survivor option and if the member was not eligible for normal retirement at the date of death a further reduction as described in section 209 of this act.

       If the surviving spouse who is receiving the retirement allowance dies leaving a child or children under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority.

       If there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance, share and share alike. The allowance shall be calculated with the assumption that the age of the spouse and member were equal at the time of the member's death.

       NEW SECTION. Sec. 213. The required contribution rates to the retirement system for employers shall be established by the director from time to time as may be necessary upon the advice of the state actuary. The state actuary shall use the aggregate actuarial cost method to calculate contribution rates. The employer contribution rate calculated under this section shall be used only for the purpose of determining the amount of employer contributions to be deposited in the plan II fund from the total employer contributions collected under section 10 of this act.

       Any increase in the contribution rate required as the result of a failure of an employer to make any contribution required by this section shall be borne in full by the employer not making the contribution.

       The director shall notify all employers of any pending adjustment in the required contribution rate and such increase shall be announced at least thirty days prior to the effective date of the change.

       The employer's contribution shall be remitted directly to the department within fifteen days following the end of the calendar month during which the payroll period ends.

       NEW SECTION. Sec. 214. Sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act constitute a new chapter in Title 41 RCW.

       Sec. 301. RCW 41.34.020 and 1996 c 39 s 13 are each amended to read as follows:

       As used in this chapter, the following terms have the meanings indicated:

       (1) "Actuary" means the state actuary or the office of the state actuary.

       (2) "Board" means the employee retirement benefits board authorized in chapter 41.50 RCW.

       (3) "Department" means the department of retirement systems.

       (4)(a) "Compensation" for teachers for purposes of this chapter is the same as "earnable compensation" for plan III in chapter 41.32 RCW except that the compensation may be reported when paid, rather than when earned.

       (b) "Compensation" for classified employees for purposes of this chapter is the same as "compensation earnable" for plan III in section 2 of this act, except that the compensation may be reported when paid, rather than when earned.

       (5)(a) "Employer" for teachers for purposes of this chapter means the same as "employer" for plan III in chapter 41.32 RCW.

       (b) "Employer" for classified employees for purposes of this chapter means the same as "employer" for plan III in section 2 of this act.

       (6) "Member" means any employee included in the membership of a retirement system as provided for in chapter 41.32 RCW of plan III or chapter 41.-- RCW (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act) of plan III.

       (7) "Member account" or "member's account" means the sum of the contributions and earnings on behalf of the member.

       (8) "Retiree" means any member in receipt of an allowance or other benefit provided by this chapter resulting from service rendered to an employer by such member.

       (9) "Teacher" means a member of the teachers' retirement system plan III as defined in RCW 41.32.010(29).

       (10) "Classified employee" means a member of the school employees' retirement system plan III as defined in section 2 of this act.

       Sec. 302. RCW 41.34.030 and 1995 c 239 s 203 are each amended to read as follows:

       (1) This chapter applies only to members of plan III retirement systems created under chapters 41.32 and 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act) RCW.

       (2) Plan III consists of two separate elements:

       (a) A defined benefit portion covered under:

       (i) Sections 101 through 117, chapter 239, Laws of 1995; or

       (ii) Sections 1 through 25 and 201 through 213 of this act; and

       (b) A defined contribution portion covered under this chapter. Unless specified otherwise, all references to "plan III" in this chapter refer to the defined contribution portion of plan III.

       Sec. 303. RCW 41.34.060 and 1996 c 39 s 15 are each amended to read as follows:

       (1) Except as provided in subsection (2) of this section, the member's account shall be invested by the state investment board. ((All contributions under this subsection shall be invested)) In order to reduce transaction costs and address liquidity issues, based upon recommendations of the state investment board, the department may require members to provide up to ninety days' notice prior to moving funds from the state investment board portfolio to self-directed investment options provided under subsection (2) of this section.

       (a) For members of the retirement system as provided for in chapter 41.32 RCW of plan III, investment shall be in the same portfolio as that of the teachers' retirement system combined plan II and III fund under RCW 41.50.075(2).

       (b) For members of the retirement system as provided for in chapter 41.-- RCW (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act) of plan III, investment shall be in the same portfolio as that of the school employees' retirement system combined plan II and III fund under RCW 41.50.075(4).

       (2) Members may elect to self-direct their investments as ((authorized by the board, other than as provided in subsection (1) of this section. Expenses caused by self-directed investment shall be paid by the member in accordance with rules established by the board under RCW 41.50.088)) set forth in sections 307 and 707 of this act.

       Sec. 304. RCW 41.34.080 and 1995 c 239 s 208 are each amended to read as follows:

       (1) Subject to subsections (2) and (3) of this section, the right of a person to a pension, an annuity, a retirement allowance, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the various funds created by chapter 239, Laws of 1995, and chapter . . ., Laws of 1998 (this act) and all moneys and investments and income thereof, is hereby exempt from any state, county, municipal, or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, and shall be unassignable.

       (2) This section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions and that has been approved for deduction in accordance with rules that may be adopted by the state health care authority and/or the department. This section shall not be deemed

to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of dues and other membership fees to any retirement association or organization the membership of which is composed of retired public employees, if a total of three hundred or more of such retired employees have authorized such deduction for payment to the same retirement association or organization.

       (3) Subsection (1) of this section shall not prohibit the department from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a notice of payroll deduction issued pursuant to RCW 26.23.060, (d) a mandatory benefits assignment order issued by the department, (e) a court order directing the department to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

       Sec. 305. RCW 41.34.100 and 1995 c 239 s 325 are each amended to read as follows:

       (1) The benefits provided pursuant to chapter 239, Laws of 1995 are not provided to employees as a matter of contractual right prior to July 1, 1996. The legislature retains the right to alter or abolish these benefits at any time prior to July 1, 1996.

       (2) The benefits provided pursuant to chapter . . ., Laws of 1998 (this act) are not provided to employees as a matter of contractual right prior to September 1, 2000. The legislature retains the right to alter or abolish these benefits at any time prior to September 1, 2000.

       NEW SECTION. Sec. 306. A new section is added to chapter 41.34 RCW to read as follows:

       All moneys in members' accounts, all property and rights purchased therewith, and all income attributable thereto, shall be held in trust by the state investment board, as set forth under RCW 43.33A.030, for the exclusive benefit of the members and their beneficiaries.

       NEW SECTION. Sec. 307. A new section is added to chapter 41.34 RCW to read as follows:

       (1) The state investment board has the full authority to invest all self-directed investment moneys in accordance with RCW 43.84.150 and 43.33A.140, and cumulative investment directions received pursuant to RCW 41.34.060 and this section. In carrying out this authority the state investment board, after consultation with the employee retirement benefits board regarding any recommendations made pursuant to RCW 41.50.088(2), shall provide a set of options for members to choose from for self-directed investment.

       (2) All investment and operating costs of the state investment board associated with making self-directed investments shall be paid by members and recovered under procedures agreed to by the board and the state investment board pursuant to the principles set forth in RCW 43.33A.160 and 43.84.160. All other expenses caused by self-directed investment shall be paid by the member in accordance with rules established by the board under RCW 41.50.088. With the exception of these expenses, all earnings from self-directed investments shall accrue to the member's account.

       (3) The department shall keep or cause to be kept full and adequate accounts and records of each individual member's account. The department shall account for and report on the investment of defined contribution assets or may enter into an agreement with the state investment board for such accounting and reporting under this chapter.

       NEW SECTION. Sec. 308. A new section is added to chapter 41.34 RCW to read as follows:

       (1) A state board or commission, agency, or any officer, employee, or member thereof is not liable for any loss or deficiency resulting from member defined contribution investments selected or required pursuant to RCW 41.34.060 (1) or (2).

       (2) Neither the board nor the state investment board, nor any officer, employee, or member thereof is liable for any loss or deficiency resulting from reasonable efforts to implement investment directions pursuant to RCW 41.34.060 (1) or (2).

       NEW SECTION. Sec. 309. (1) On July 1, 1998, and January 1, 2000, the member account of a person meeting the requirements of this section shall be credited by the extraordinary investment gain amount.

       (2) The following persons are eligible for the benefit provided in subsection (1) of this section:

       (a) Any member of the teachers' retirement system plan III who earned service credit during the twelve-month period from September 1st to August 31st immediately preceding the distribution and had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution; or

       (b) Any person in receipt of a benefit pursuant to RCW 41.32.875; or

       (c) Any person who is a retiree pursuant to RCW 41.34.020(8) and who:

       (i) Completed ten service credit years; or

       (ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

       (iii) Completed five service credit years by July 1, 1996, under plan II and who transferred to plan III under RCW 41.32.817; or

       (d) Any person who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who:

       (i) Completed ten service credit years; or

       (ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

       (iii) Completed five service credit years by July 1, 1996, under plan II and who transferred to plan III under RCW 41.32.817.

       (3) The extraordinary investment gain amount shall be calculated as follows:

       (a) One-half of the sum of the value of the net assets held in trust for pension benefits in the public employees' retirement system plan II fund and the teachers' retirement system combined plan II and III fund at the close of the previous state fiscal year not including the amount attributable to member accounts;

       (b) Multiplied by the amount which the compound average of investment returns on those assets over the previous four state fiscal years exceeds ten percent;

       (c) Multiplied by the proportion of:

       (i) The sum of the service credit on August 31st of the previous year of all persons eligible for the benefit provided in subsection (1) of this section; to

       (ii) The sum of the service credit on August 31st of the previous year of:

       (A) All persons eligible for the benefit provided in subsection (1) of this section;

       (B) Any person who earned service credit in the teachers' retirement system plan II or the public employees' retirement system plan II during the twelve-month period from September 1st to August 31st immediately preceding the distribution;

       (C) Any person in receipt of a benefit pursuant to RCW 41.32.765 or 41.40.630; and

       (D) Any person with five or more years of service in the teachers' retirement system plan II or the public employees' retirement system plan II;

       (d) Divided proportionally among persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 31st of the previous year.

       (4) The distribution provided for in this section shall be made solely from assets included in the teachers' retirement system combined plan II and III fund.

       NEW SECTION. Sec. 310. Section 309 of this act is added to chapter 41.34 RCW, but because of its temporary nature, shall not be codified.

       NEW SECTION. Sec. 311. The definitions in this section apply throughout this chapter unless the context requires otherwise.

       (1) "Actuary" means the state actuary or the office of the state actuary.

       (2) "Department" means the department of retirement systems.

       (3) "Teacher" means any employee included in the membership of the teachers' retirement system as provided for in chapter 41.32 RCW.

       (4) "Member account" or "member's account" means the sum of any contributions as provided for in chapter 41.34 RCW and the earnings on behalf of the member.

       (5) "Classified employee" means the same as in section 2 of this act.

       NEW SECTION. Sec. 312. (1) On January 1, 2002, and on January 1st of even-numbered years thereafter, the member account of a person meeting the requirements of this section shall be credited by the extraordinary investment gain amount.

       (2) The following persons shall be eligible for the benefit provided in subsection (1) of this section:

       (a) Any member of the teachers' retirement system plan III or the Washington school employees' retirement system plan III who earned service credit during the twelve-month period from September 1st to August 31st immediately preceding the distribution and had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution; or

       (b) Any person in receipt of a benefit pursuant to RCW 41.32.875 or section 209 of this act; or

       (c) Any person who is a retiree pursuant to RCW 41.34.020(8) and who:

       (i) Completed ten service credit years; or

       (ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

       (d) Any teacher who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by July 1, 1996, under plan II and who transferred to plan III under RCW 41.32.817; or

       (e) Any classified employee who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by September 1, 2000, and who transferred to plan III under section 114 of this act; or

       (f) Any person who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who:

       (i) Completed ten service credit years; or

       (ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

       (g) Any teacher who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by July 1, 1996, under plan II and who transferred to plan III under RCW 41.32.817; or

       (h) Any classified employee who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by September 1, 2000, and who transferred to plan III under section 114 of this act.

       (3) The extraordinary investment gain amount shall be calculated as follows:

       (a) One-half of the sum of the value of the net assets held in trust for pension benefits in the teachers' retirement system combined plan II and III fund and the Washington school employees' retirement system combined plan II and III fund at the close of the previous state fiscal year not including the amount attributable to member accounts;

       (b) Multiplied by the amount which the compound average of investment returns on those assets over the previous four state fiscal years exceeds ten percent;

       (c) Multiplied by the proportion of:

       (i) The sum of the service credit on August 31st of the previous year of all persons eligible for the benefit provided in subsection (1) of this section; to

       (ii) The sum of the service credit on August 31st of the previous year of:

       (A) All persons eligible for the benefit provided in subsection (1) of this section;

       (B) Any person who earned service credit in the teachers' retirement system plan II or the Washington school employees' retirement system plan II during the twelve-month period from September 1st to August 31st immediately preceding the distribution;

       (C) Any person in receipt of a benefit pursuant to RCW 41.32.765 or section 103 of this act; and

       (D) Any person with five or more years of service in the teachers' retirement system plan II or the Washington school employees' retirement system plan II;

       (d) Divided proportionally among persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 31st of the previous year.

       (4) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to receive this distribution not granted prior to that time.

       NEW SECTION. Sec. 313. (1) On March 1, 2001, the member account of a person meeting the requirements of this section shall be credited by the 1998 retroactive extraordinary investment gain amount and the 2000 retroactive extraordinary investment gain amount.

       (2) The following persons shall be eligible for the benefits provided in subsection (1) of this section:

       (a) Any classified employee who earned service credit during the twelve-month period from September 1st to August 31st immediately preceding the distribution and who transferred to plan III under section 114 of this act; or

       (b) Any classified employee in receipt of a benefit pursuant to section 209 of this act and who has completed five service credit years by September 1, 2000, and who transferred to plan III under section 114 of this act; or

       (c) Any classified employee who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by September 1, 2000, and who transferred to plan III under section 114 of this act; or

       (d) Any classified employee who has a balance of at least one thousand dollars in his or her member account and who has completed five service credit years by September 1, 2000, and who transferred to plan III under section 114 of this act.

       (3) The 1998 retroactive extraordinary investment gain amount shall be calculated as follows:

       (a) An amount equal to the average benefit per year of service paid to members of the teachers' retirement system plan III pursuant to section 309 of this act in 1998;

       (b) Distributed to persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 31, 1997.

       (4) The 2000 retroactive extraordinary investment gain amount shall be calculated as follows:

       (a) An amount equal to the average benefit per year of service paid to members of the teachers' retirement system plan III pursuant to section 309 of this act in 2000;

       (b) Distributed to persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 31, 1999.

       (5) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to receive this distribution not granted prior to that time.

       NEW SECTION. Sec. 314. Sections 311 through 313 of this act constitute a new chapter in Title 41 RCW.

       Sec. 401. RCW 41.45.010 and 1995 c 239 s 305 are each amended to read as follows:

       It is the intent of the legislature to provide a dependable and systematic process for funding the benefits provided to members and retirees of the public employees' retirement system, chapter 41.40 RCW; the teachers' retirement system, chapter 41.32 RCW; the law enforcement officers' and fire fighters' retirement system, chapter 41.26 RCW; the school employees' retirement system, chapter 41.-- RCW (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act); and the Washington state patrol retirement system, chapter 43.43 RCW.

       The funding process established by this chapter is intended to achieve the following goals:

       (1) To continue to fully fund the public employees' retirement system plan II, the teachers' retirement system plans II and III, the school employees' retirement system plans II and III, and the law enforcement officers' and fire fighters' retirement system plan II as provided by law;

       (2) To fully amortize the total costs of the public employees' retirement system plan I, the teachers' retirement system plan I, and the law enforcement officers' and fire fighters' retirement system plan I not later than June 30, 2024;

       (3) To establish predictable long-term employer contribution rates which will remain a relatively constant proportion of the future state budgets; and

       (4) To fund, to the extent feasible, benefit increases for plan I members and all benefits for plan II and III members over the working lives of those members so that the cost of those benefits are paid by the taxpayers who receive the benefit of those members' service.

       Sec. 402. RCW 41.45.020 and 1995 c 239 s 306 are each amended to read as follows:

       As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

       (1) "Council" means the economic and revenue forecast council created in RCW 82.33.010.

       (2) "Department" means the department of retirement systems.

       (3) "Law enforcement officers' and fire fighters' retirement system plan I" and "law enforcement officers' and fire fighters' retirement system plan II" mean the benefits and funding provisions under chapter 41.26 RCW.

       (4) "Public employees' retirement system plan I" and "public employees' retirement system plan II" mean the benefits and funding provisions under chapter 41.40 RCW.

       (5) "Teachers' retirement system plan I," "teachers' retirement system plan II," and "teachers' retirement system plan III" mean the benefits and funding provisions under chapter 41.32 RCW.

       (6) "School employees' retirement system plan II" and "school employees' retirement system plan III" mean the benefits and funding provisions under chapter 41.-- RCW (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act).

       (7) "Washington state patrol retirement system" means the retirement benefits provided under chapter 43.43 RCW.

       (((7))) (8) "Unfunded liability" means the unfunded actuarial accrued liability of a retirement system.

       (((8))) (9) "Actuary" or "state actuary" means the state actuary employed under chapter 44.44 RCW.

       (((9))) (10) "State retirement systems" means the retirement systems listed in RCW 41.50.030.

       (11) "Classified employee" means a member of the Washington school employees' retirement system plan II or plan III as defined in section 2 of this act.

       (12) "Teacher" means a member of the teachers' retirement system as defined in RCW 41.32.010(15).

       Sec. 403. RCW 41.45.050 and 1995 c 239 s 308 are each amended to read as follows:

       (1) Employers of members of the public employees' retirement system, the teachers' retirement system, the school employees' retirement system, and the Washington state patrol retirement system shall make contributions to those systems based on the rates established in RCW 41.45.060 and 41.45.070.

       (2) The state shall make contributions to the law enforcement officers' and fire fighters' retirement system based on the rates established in RCW 41.45.060 and 41.45.070. The state treasurer shall transfer the required contributions each month on the basis of salary data provided by the department.

       (3) The department shall bill employers, and the state shall make contributions to the law enforcement officers' and fire fighters' retirement system, using the combined rates established in RCW 41.45.060 and 41.45.070 regardless of the level of pension funding provided in the biennial budget. Any member of an affected retirement system may, by mandamus or other appropriate proceeding, require the transfer and payment of funds as directed in this section.

       (4) The contributions received for the public employees' retirement system shall be allocated between the public employees' retirement system plan I fund and public employees' retirement system plan II fund as follows: The contributions necessary to fully fund the public employees' retirement system plan II employer contribution required by RCW 41.40.650 shall first be deposited in the public employees' retirement system plan II fund. All remaining public employees' retirement system employer contributions shall be deposited in the public employees' retirement system plan I fund.

       (5) The contributions received for the teachers' retirement system shall be allocated between the plan I fund and the combined plan II and plan III fund as follows: The contributions necessary to fully fund the combined plan II and plan III employer contribution shall first be deposited in the combined plan II and plan III fund. All remaining teachers' retirement system employer contributions shall be deposited in the plan I fund.

       (6) The contributions received for the school employees' retirement system shall be allocated between the public employees' retirement system plan I fund and the school employees' retirement system combined plan II and plan III fund as follows: The contributions necessary to fully fund the combined plan II and plan III employer contribution shall first be deposited in the combined plan II and plan III fund. All remaining school employees' retirement system employer contributions shall be deposited in the public employees' retirement system plan I fund.

       (7) The contributions received under RCW 41.26.450 for the law enforcement officers' and fire fighters' retirement system shall be allocated between the law enforcement officers' and fire fighters' retirement system plan I and the law enforcement officers' and fire fighters' retirement system plan II fund as follows: The contributions necessary to fully fund the law enforcement officers' and fire fighters' retirement system plan II employer contributions shall be first deposited in the law enforcement officers' and fire fighters' retirement system plan II fund. All remaining law enforcement officers' and fire fighters' retirement system employer contributions shall be deposited in the law enforcement officers' and fire fighters' retirement system plan I fund.

       Sec. 404. RCW 41.45.060 and 1995 c 239 s 309 are each amended to read as follows:

       (1) The state actuary shall provide actuarial valuation results based on the assumptions adopted under RCW 41.45.030.

       (2) Not later than September 30, 1996, and every two years thereafter, consistent with the assumptions adopted under RCW 41.45.030, the council shall adopt both:

       (a) A basic state contribution rate for the law enforcement officers' and fire fighters' retirement system; ((and))

       (b) Basic employer contribution rates for the public employees' retirement system plan I, the teachers' retirement system plan I, and the Washington state patrol retirement system to be used in the ensuing biennial period; and

       (c) A basic employer contribution rate for the school employees' retirement system for funding the public employees' retirement system plan I.

       (3) The employer and state contribution rates adopted by the council shall be the level percentages of pay that are needed:

       (a) To fully amortize the total costs of the public employees' retirement system plan I, the teachers' retirement system plan I, the law enforcement officers' and fire fighters' retirement system plan I, and the unfunded liability of the Washington state patrol retirement system not later than June 30, 2024; and

       (b) To also continue to fully fund the public employees' retirement system plan II, the teachers' retirement system plans II and III, the school employees' retirement system plans II and III, and the law enforcement officers' and fire fighters' retirement system plan II in accordance with RCW 41.40.650, 41.26.450, and this section.

       (4) The aggregate actuarial cost method shall be used to calculate a combined plan II and III employer contribution rate.

       (5) The council shall immediately notify the directors of the office of financial management and department of retirement systems of the state and employer contribution rates adopted.

       (6) The director of the department of retirement systems shall collect those rates adopted by the council.

       Sec. 405. RCW 41.45.061 and 1997 c 10 s 2 are each amended to read as follows:

       (1) The required contribution rate for members of the plan II teachers' retirement system shall be fixed at the rates in effect on July 1, 1996, subject to the following:

       (a) Beginning September 1, 1997, except as provided in (b) of this subsection, the employee contribution rate shall not exceed the employer plan II and III rates adopted under RCW 41.45.060 and 41.45.070 for the teachers' retirement system;

       (b) In addition, the employee contribution rate for plan II shall be increased by fifty percent of the contribution rate increase caused by any plan II benefit increase passed after July 1, 1996((.

       (2) The required plan II and III contribution rates for employers shall be adopted in the manner described in RCW 41.45.060));

       (c) In addition, the employee contribution rate for plan II shall not be increased as a result of any distributions pursuant to sections 309 and 312 of this act.

       (2) The required contribution rate for members of the school employees' retirement system plan II shall be fixed at the rates in effect on September 1, 2000, for members of the public employees' retirement system plan II, subject to the following:

       (a) Except as provided in (b) of this subsection, the member contribution rate shall not exceed the school employees' retirement system employer plan II and III contribution rate adopted under RCW 41.45.060 and 41.45.070;

       (b) The member contribution rate for the school employees' retirement system plan II shall be increased by fifty percent of the contribution rate increase caused by any plan II benefit increase passed after September 1, 2000.

       (3) The employee contribution rate for plan II shall not be increased as a result of any distributions pursuant to sections 312 and 313 of this act.

       (4) The required plan II and III contribution rates for employers shall be adopted in the manner described in RCW 41.45.060.

       Sec. 406. RCW 41.45.070 and 1995 c 239 s 310 are each amended to read as follows:

       (1) In addition to the basic employer contribution rate established in RCW 41.45.060, the department shall also charge employers of public employees' retirement system, teachers' retirement system, school employees' retirement system, or Washington state patrol retirement system members an additional supplemental rate to pay for the cost of additional benefits, if any, granted to members of those systems. Except as provided in subsection (6) of this section, the supplemental contribution rates required by this section shall be calculated by the state actuary and shall be charged regardless of language to the contrary contained in the statute which authorizes additional benefits.

       (2) In addition to the basic state contribution rate established in RCW 41.45.060 for the law enforcement officers' and fire fighters' retirement system the department shall also establish a supplemental rate to pay for the cost of additional benefits, if any, granted to members of the law enforcement officers' and fire fighters' retirement system. This supplemental rate shall be calculated by the state actuary and the state treasurer shall transfer the additional required contributions regardless of language to the contrary contained in the statute which authorizes the additional benefits.

       (3) The supplemental rate charged under this section to fund benefit increases provided to active members of the public employees' retirement system plan I, the teachers' retirement system plan I, the law enforcement officers' and fire fighters' retirement system plan I, and Washington state patrol retirement system, shall be calculated as the level percentage of all members' pay needed to fund the cost of the benefit not later than June 30, 2024.

       (4) The supplemental rate charged under this section to fund benefit increases provided to active and retired members of the public employees' retirement system plan II, the teachers' retirement system plan II and plan III, the school employees' retirement system plan II and plan III, or the law enforcement officers' and fire fighters' retirement system plan II, shall be calculated as the level percentage of all members' pay needed to fund the cost of the benefit, as calculated under RCW 41.40.650((, 41.32.775,)) or 41.26.450, respectively.

       (5) The supplemental rate charged under this section to fund postretirement adjustments which are provided on a nonautomatic basis to current retirees shall be calculated as the percentage of pay needed to fund the adjustments as they are paid to the retirees. The supplemental rate charged under this section to fund automatic postretirement adjustments for active or retired members of the public employees' retirement system plan I and the teachers' retirement system plan I shall be calculated as the level percentage of pay needed to fund the cost of the automatic adjustments not later than June 30, 2024.

       (6) A supplemental rate shall not be charged to pay for the cost of additional benefits granted to members pursuant to chapter 41.-- RCW (sections 311 through 313 of this act); section 309 of this act; or section 701, chapter . . ., Laws of 1998 (section 701 of this act).

       NEW SECTION. Sec. 407. A new section is added to chapter 41.45 RCW to read as follows:

       Upon the advice of the state actuary, the state treasurer shall divide the assets in the public employees' retirement system plan II as of September 1, 2000, in such a manner that sufficient assets remain in plan II to maintain the employee contribution rate calculated in the latest actuarial valuation of the public employees' retirement system plan II. The state actuary shall take into account changes in assets that occur between the latest actuarial valuation and the date of transfer. The balance of the assets shall be transferred to the Washington school employees' retirement system plan II and III.

       Sec. 501. RCW 41.50.030 and 1995 c 239 s 316 are each amended to read as follows:

       (1) As soon as possible but not more than one hundred and eighty days after March 19, 1976, there is transferred to the department of retirement systems, except as otherwise provided in this chapter, all powers, duties, and functions of:

       (a) The Washington public employees' retirement system;

       (b) The Washington state teachers' retirement system;

       (c) The Washington law enforcement officers' and fire fighters' retirement system;

       (d) The Washington state patrol retirement system;

       (e) The Washington judicial retirement system; and

       (f) The state treasurer with respect to the administration of the judges' retirement fund imposed pursuant to chapter 2.12 RCW.

       (2) On July 1, 1996, there is transferred to the department all powers, duties, and functions of the deferred compensation committee.

       (3) The department shall administer chapter 41.34 RCW.

       (4) The department shall administer the Washington school employees' retirement system created under chapter 41.-- RCW (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act).

       Sec. 502. RCW 41.50.060 and 1995 c 239 s 318 are each amended to read as follows:

       The director may delegate the performance of such powers, duties, and functions, other than those relating to rule making, to employees of the department, but the director shall remain and be responsible for the official acts of the employees of the department.

       The director shall be responsible for the public employees' retirement system, the teachers' retirement system, the school employees' retirement system, the judicial retirement system, the law enforcement officers' and fire fighters' retirement system, and the Washington state patrol retirement system. The director shall also be responsible for the deferred compensation program.

       Sec. 503. RCW 41.50.075 and 1996 c 39 s 16 are each amended to read as follows:

       (1) Two funds are hereby created and established in the state treasury to be known as the Washington law enforcement officers' and fire fighters' system plan I retirement fund, and the Washington law enforcement officers' and fire fighters' system plan II retirement fund which shall consist of all moneys paid into them in accordance with the provisions of this chapter and chapter 41.26 RCW, whether such moneys take the form of cash, securities, or other assets. The plan I fund shall consist of all moneys paid to finance the benefits provided to members of the law enforcement officers' and fire fighters' retirement system plan I, and the plan II fund shall consist of all moneys paid to finance the benefits provided to members of the law enforcement officers' and fire fighters' retirement system plan II.

       (2) All of the assets of the Washington state teachers' retirement system shall be credited according to the purposes for which they are held, to two funds to be maintained in the state treasury, namely, the teachers' retirement system plan I fund and the teachers' retirement system combined plan II and III fund. The plan I fund shall consist of all moneys paid to finance the benefits provided to members of the Washington state teachers' retirement system plan I, and the combined plan II and III fund shall consist of all moneys paid to finance the benefits provided to members of the Washington state teachers' retirement system plan II and III.

       (3) There is hereby established in the state treasury two separate funds, namely the public employees' retirement system plan I fund and the public employees' retirement system plan II fund. The plan I fund shall consist of all moneys paid to finance the benefits provided to members of the public employees' retirement system plan I, and the plan II fund shall consist of all moneys paid to finance the benefits provided to members of the public employees' retirement system plan II.

       (4) There is hereby established in the state treasury the school employees' retirement system combined plan II and III fund. The combined plan II and III fund shall consist of all moneys paid to finance the benefits provided to members of the school employees' retirement system plan II and plan III.

       Sec. 504. RCW 41.50.080 and 1981 c 3 s 34 are each amended to read as follows:

       The state investment board shall provide for the investment of all funds of the Washington public employees' retirement system, the teachers' retirement system, the school employees' retirement system, the Washington law enforcement officers' and fire fighters' retirement system, the Washington state patrol retirement system, the Washington judicial retirement system, and the judges' retirement fund, pursuant to RCW 43.84.150, and may sell or exchange investments acquired in the exercise of that authority.

       Sec. 505. RCW 41.50.086 and 1995 c 239 s 301 are each amended to read as follows:

       (1) The employee retirement benefits board is created within the department of retirement systems.

       (2) The board shall be composed of ((eight)) eleven members appointed by the governor and one ex officio member as follows:

       (a) Three members representing the public employees' retirement system: One retired, two active. The members shall be appointed from a list of nominations submitted by organizations representing each category. The initial term of appointment shall be two years for the retired member, one year for one active member, and three years for the remaining active member.

       (b) Three members representing the teachers' retirement system: One retired, two active. The members shall be appointed from a list of nominations submitted by organizations representing each category. The initial term of appointment shall be one year for the retired member, two years for one active member, and three years for the remaining active member.

       (c) Three members representing classified employees of school districts and educational service districts: One retired, two active. The members shall be appointed from a list of nominations submitted by organizations representing each category. The initial term of appointment shall be one year for the retired member, two years for one active member, and three years for the remaining active member.

       (d) Two members with experience in defined contribution plan administration. The initial term for these members shall be two years for one member and three years for the remaining member.

       (((d))) (e) The director of the department shall serve ex officio and shall be the chair of the board.

       (3) After the initial appointments, members shall be appointed to three-year terms.

       (4) The board shall meet at least quarterly during the calendar year, at the call of the chair.

       (5) Members of the board shall serve without compensation but shall receive travel expenses as provided for in RCW 43.03.050 and 43.03.060. Such travel expenses shall be reimbursed by the department from the retirement system expense fund.

       (6) The board shall adopt rules governing its procedures and conduct of business.

       (7) The actuary shall perform all actuarial services for the board and provide advice and support.

       (((8) The state investment board shall provide advice and support to the board.))

       Sec. 506. RCW 41.50.086 and 1995 c 239 s 301 are each amended to read as follows:

       (1) The employee retirement benefits board is created within the department of retirement systems.

       (2) The board shall be composed of ((eight)) eleven members appointed by the governor and one ex officio member as follows:

       (a) Three members representing the public employees' retirement system: One retired, two active. The members shall be appointed from a list of nominations submitted by organizations representing each category. The initial term of appointment shall be two years for the retired member, one year for one active member, and three years for the remaining active member.

       (b) Three members representing the teachers' retirement system: One retired, two active. The members shall be appointed from a list of nominations submitted by organizations representing each category. The initial term of appointment shall be one year for the retired member, two years for one active member, and three years for the remaining active member.

       (c) Three members representing the school employees' retirement system: One retired, two active. The members shall be appointed from a list of nominations submitted by organizations representing each category. The initial term of appointment shall be one year for the retired member, two years for one active member, and three years for the remaining active member.

       (d) Two members with experience in defined contribution plan administration. The initial term for these members shall be two years for one member and three years for the remaining member.

       (((d))) (e) The director of the department shall serve ex officio and shall be the chair of the board.

       (3) After the initial appointments, members shall be appointed to three-year terms.

       (4) The board shall meet at least quarterly during the calendar year, at the call of the chair.

       (5) Members of the board shall serve without compensation but shall receive travel expenses as provided for in RCW 43.03.050 and 43.03.060. Such travel expenses shall be reimbursed by the department from the retirement system expense fund.

       (6) The board shall adopt rules governing its procedures and conduct of business.

       (7) The actuary shall perform all actuarial services for the board and provide advice and support.

       (((8) The state investment board shall provide advice and support to the board.))

       Sec. 507. RCW 41.50.088 and 1995 c 239 s 302 are each amended to read as follows:

       (1) The board shall adopt rules as necessary and exercise all the powers and perform all duties prescribed by law with respect to:

       (((1) The preselection of options for members to choose from for self-directed investment deemed by the board to be in the best interest of the member. At the board's request, the state investment board may provide investment options for purposes of this subsection;

       (2))) (a) The board shall recommend to the state investment board types of options for member self-directed investment in the teachers' retirement system plan III and the school employees' retirement system plan III, as deemed by the board to be reflective of the members' preferences.

       (b) The selection of optional benefit payment schedules available to members and survivors of members upon the death, disability, retirement, or termination of the member. The optional benefit payments may include but not be limited to: Fixed and participating annuities, joint and survivor annuities, and payments that bridge to social security or defined benefit plan payments;

       (((3))) (c) Approval of actuarially equivalent annuities that may be purchased from the combined plan II and plan III funds under RCW 41.50.075 (2) or (3); and

       (((4))) (d) Determination of the basis for administrative charges to the self-directed investment fund to offset self-directed account expenses; ((and

       (5))) (2) Selection of investment options for the deferred compensation program.

       Sec. 508. RCW 41.50.110 and 1996 c 39 s 17 are each amended to read as follows:

       (1) Except as provided by RCW 41.50.255 and subsection (6) of this section, all expenses of the administration of the department and the expenses of administration of the retirement systems created in chapters 2.10, 2.12, 41.26, 41.32, 41.40, 41.34, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act) and 43.43 RCW shall be paid from the department of retirement systems expense fund.

       (2) In order to reimburse the department of retirement systems expense fund on an equitable basis the department shall ascertain and report to each employer, as defined in RCW 41.26.030, 41.32.010, section 2 of this act, or 41.40.010, the sum necessary to defray its proportional share of the entire expense of the administration of the retirement system that the employer participates in during the ensuing biennium or fiscal year whichever may be required. Such sum is to be computed in an amount directly proportional to the estimated entire expense of the administration as the ratio of monthly salaries of the employer's members bears to the total salaries of all members in the entire system. It shall then be the duty of all such employers to include in their budgets or otherwise provide the amounts so required.

       (3) The department shall compute and bill each employer, as defined in RCW 41.26.030, 41.32.010, section 2 of this act, or 41.40.010, at the end of each month for the amount due for that month to the department of retirement systems expense fund and the same shall be paid as are its other obligations. Such computation as to each employer shall be made on a percentage rate of salary established by the department. However, the department may at its discretion establish a system of billing based upon calendar year quarters in which event the said billing shall be at the end of each such quarter.

       (4) The director may adjust the expense fund contribution rate for each system at any time when necessary to reflect unanticipated costs or savings in administering the department.

       (5) An employer who fails to submit timely and accurate reports to the department may be assessed an additional fee related to the increased costs incurred by the department in processing the deficient reports. Fees paid under this subsection shall be deposited in the retirement system expense fund.

       (a) Every six months the department shall determine the amount of an employer's fee by reviewing the timeliness and accuracy of the reports submitted by the employer in the preceding six months. If those reports were not both timely and accurate the department may prospectively assess an additional fee under this subsection.

       (b) An additional fee assessed by the department under this subsection shall not exceed fifty percent of the standard fee.

       (c) The department shall adopt rules implementing this section.

       (6) Expenses other than those under RCW 41.34.060(2) shall be paid pursuant to subsection (1) of this section.

       Sec. 509. RCW 41.50.150 and 1997 c 221 s 1 are each amended to read as follows:

       (1) The employer of any employee whose retirement benefits are based in part on excess compensation, as defined in this section, shall, upon receipt of a billing from the department, pay into the appropriate retirement system the present value at the time of the employee's retirement of the total estimated cost of all present and future benefits from the retirement system attributable to the excess compensation. The state actuary shall determine the estimated cost using the same method and procedure as is used in preparing fiscal note costs for the legislature. However, the director may in the director's discretion decline to bill the employer if the amount due is less than fifty dollars. Accounts unsettled within thirty days of the receipt of the billing shall be assessed an interest penalty of one percent of the amount due for each month or fraction thereof beyond the original thirty-day period.

       (2) "Excess compensation," as used in this section, includes the following payments, if used in the calculation of the employee's retirement allowance:

       (a) A cash out of unused annual leave in excess of two hundred forty hours of such leave. "Cash out" for purposes of this subsection means:

       (i) Any payment in lieu of an accrual of annual leave; or

       (ii) Any payment added to salary or wages, concurrent with a reduction of annual leave;

       (b) A cash out of any other form of leave;

       (c) A payment for, or in lieu of, any personal expense or transportation allowance to the extent that payment qualifies as reportable compensation in the member's retirement system;

       (d) The portion of any payment, including overtime payments, that exceeds twice the regular daily or hourly rate of pay; and

       (e) Any termination or severance payment.

       (3) This section applies to the retirement systems listed in RCW 41.50.030 and to retirements occurring on or after March 15, 1984. Nothing in this section is intended to amend or determine the meaning of any definition in chapter 2.10, 2.12, 41.26, 41.32, 41.40, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), or 43.43 RCW or to determine in any manner what payments are includable in the calculation of a retirement allowance under such chapters.

       (4) An employer is not relieved of liability under this section because of the death of any person either before or after the billing from the department.

       Sec. 510. RCW 41.50.152 and 1995 c 387 s 1 are each amended to read as follows:

       (1) Except as limited by subsection (3) of this section, the governing body of an employer under chapter 41.32, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), or 41.40 RCW shall comply with the provisions of subsection (2) of this section prior to executing a contract or collective bargaining agreement with members under chapter 41.32, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), or 41.40 RCW which provides for:

       (a) A cash out of unused annual leave in excess of two hundred forty hours of such leave. "Cash out" for purposes of this subsection means any payment in lieu of an accrual of annual leave or any payment added to regular salary, concurrent with a reduction of annual leave;

       (b) A cash out of any other form of leave;

       (c) A payment for, or in lieu of, any personal expense or transportation allowance;

       (d) The portion of any payment, including overtime payments, that exceeds twice the regular rate of pay; or

       (e) Any other termination or severance payment.

       (2) Any governing body entering into a contract that includes a compensation provision listed in subsection (1) of this section shall do so only after public notice in compliance with the open public meetings act, chapter 42.30 RCW. This notification requirement may be accomplished as part of the approval process for adopting a contract in whole, and does not require separate or additional open public meetings. At the public meeting, full disclosure shall be made of the nature of the proposed compensation provision, and the employer's estimate of the excess compensation billings under RCW 41.50.150 that the employing entity would have to pay as a result of the proposed compensation provision. The employer shall notify the department of its compliance with this section at the time the department bills the employer under RCW ((41.40.150)) 41.50.150 for the pension impact of compensation provisions listed in subsection (1) of this section that are adopted after July 23, 1995.

       (3) The requirements of subsection (2) of this section shall not apply to the adoption of a compensation provision listed in subsection (1) of this section if the compensation would not be includable in calculating benefits under chapter 41.32, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), or 41.40 RCW for the employees covered by the compensation provision.

       Sec. 511. RCW 41.50.255 and 1995 c 281 s 1 are each amended to read as follows:

       The director is authorized to pay from the interest earnings of the trust funds of the public employees' retirement system, the teachers' retirement system, the Washington state patrol retirement system, the Washington judicial retirement system, the judges' retirement system, the school district employees' retirement system, or the law enforcement officers' and fire fighters' retirement system lawful obligations of the appropriate system for legal expenses and medical expenses which expenses are primarily incurred for the purpose of protecting the appropriate trust fund or are incurred in compliance with statutes governing such funds.

       The term "legal expense" includes, but is not limited to, legal services provided through the legal services revolving fund, fees for expert witnesses, travel expenses, fees for court reporters, cost of transcript preparation, and reproduction of documents.

       The term "medical costs" includes, but is not limited to, expenses for the medical examination or reexamination of members or retirees, the costs of preparation of medical reports, and fees charged by medical professionals for attendance at discovery proceedings or hearings.

       The director may also pay from the interest earnings of the trust funds specified in this section costs incurred in investigating fraud and collecting overpayments, including expenses incurred to review and investigate cases of possible fraud against the trust funds and collection agency fees and other costs incurred in recovering overpayments. Recovered funds must be returned to the appropriate trust funds.

       Sec. 512. RCW 41.50.500 and 1991 c 365 s 1 are each amended to read as follows:

       Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 41.50.500 through 41.50.650, 41.50.670 through 41.50.720, and 26.09.138.

       (1) "Benefits" means periodic retirement payments or a withdrawal of accumulated contributions.

       (2) "Disposable benefits" means that part of the benefits of an individual remaining after the deduction from those benefits of any amount required by law to be withheld. The term "required by law to be withheld" does not include any deduction elective to the member.

       (3) "Dissolution order" means any judgment, decree, or order of spousal maintenance, property division, or court-approved property settlement incident to a decree of divorce, dissolution, invalidity, or legal separation issued by the superior court of the state of Washington or a judgment, decree, or other order of spousal support issued by a court of competent jurisdiction in another state or country, that has been registered or otherwise made enforceable in this state.

       (4) "Mandatory benefits assignment order" means an order issued to the department of retirement systems pursuant to RCW 41.50.570 to withhold and deliver benefits payable to an obligor under chapter 2.10, 2.12, 41.26, 41.32, 41.40, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), or 43.43 RCW.

       (5) "Obligee" means an ex spouse or spouse to whom a duty of spousal maintenance or property division obligation is owed.

       (6) "Obligor" means the spouse or ex spouse owing a duty of spousal maintenance or a property division obligation.

       (7) "Periodic retirement payments" means periodic payments of retirement allowances, including but not limited to service retirement allowances, disability retirement allowances, and survivors' allowances. The term does not include a withdrawal of accumulated contributions.

       (8) "Property division obligation" means any outstanding court-ordered property division or court-approved property settlement obligation incident to a decree of divorce, dissolution, or legal separation.

       (9) "Standard allowance" means a benefit payment option selected under RCW 2.10.146(1)(a), 41.26.460(1)(a), 41.32.785(1)(a), 41.40.188(1)(a), ((or)) 41.40.660(1), or section 23 of this act that ceases upon the death of the retiree. Standard allowance also means the benefit allowance provided under RCW 2.10.110, 2.10.130, 43.43.260, 41.26.100, 41.26.130(1)(a), or chapter 2.12 RCW. Standard allowance also means the maximum retirement allowance available under RCW 41.32.530(1) following member withdrawal of accumulated contributions, if any.

       (10) "Withdrawal of accumulated contributions" means a lump sum payment to a retirement system member of all or a part of the member's accumulated contributions, including accrued interest, at the request of the member including any lump sum amount paid upon the death of the member.

       Sec. 513. RCW 41.50.670 and 1996 c 39 s 18 are each amended to read as follows:

       (1) Nothing in this chapter regarding mandatory assignment of benefits to enforce a spousal maintenance obligation shall abridge the right of an obligee to direct payments of retirement benefits to satisfy a property division obligation ordered pursuant to a court decree of dissolution or legal separation or any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation as provided in RCW 2.10.180, 2.12.090, 41.04.310, 41.04.320, 41.04.330, 41.26.053, 41.32.052, section 11 of this act, 41.34.070(3), 41.40.052, 43.43.310, or 26.09.138, as those statutes existed before July 1, 1987, and as those statutes exist on and after July 28, 1991. The department shall pay benefits under this chapter in a lump sum or as a portion of periodic retirement payments as expressly provided by the dissolution order. A dissolution order may not order the department to pay a periodic retirement payment or lump sum unless that payment is specifically authorized under the provisions of chapter 2.10, 2.12, 41.26, 41.32, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), 41.34, 41.40, or 43.43 RCW, as applicable.

       (2) The department shall pay directly to an obligee the amount of periodic retirement payments or lump sum payment, as appropriate, specified in the dissolution order if the dissolution order filed with the department pursuant to subsection (1) of this section includes a provision that states in the following form:

       If . . . . . . (the obligor) receives periodic retirement payments as defined in RCW 41.50.500, the department of retirement systems shall pay to . . . . . . (the obligee) . . . . . . dollars from such payments or . . . percent of such payments. If the obligor's debt is expressed as a percentage of his or her periodic retirement payment and the obligee does not have a survivorship interest in the obligor's benefit, the amount received by the obligee shall be the percentage of the periodic retirement payment that the obligor would have received had he or she selected a standard allowance.

       If . . . . . . (the obligor) requests or has requested a withdrawal of accumulated contributions as defined in RCW 41.50.500, or becomes eligible for a lump sum death benefit, the department of retirement systems shall pay to . . . . . . (the obligee) . . . . . . dollars plus interest at the rate paid by the department of retirement systems on member contributions. Such interest to accrue from the date of this order's entry with the court of record.

       (3) This section does not require a member to select a standard allowance upon retirement nor does it require the department to recalculate the amount of a retiree's periodic retirement payment based on a change in survivor option.

       (4) A court order under this section may not order the department to pay more than seventy-five percent of an obligor's periodic retirement payment to an obligee.

       (5) Persons whose court decrees were entered between July 1, 1987, and July 28, 1991, shall also be entitled to receive direct payments of retirement benefits to satisfy court-ordered property divisions if the dissolution orders comply or are modified to comply with this section and RCW 41.50.680 through 41.50.720 and, as applicable, RCW 2.10.180, 2.12.090, 41.26.053, 41.32.052, section 11 of this act, 41.34.070, 41.40.052, 43.43.310, and 26.09.138.

       (6) The obligee must file a copy of the dissolution order with the department within ninety days of that order's entry with the court of record.

       (7) A division of benefits pursuant to a dissolution order under this section shall be based upon the obligor's gross benefit prior to any deductions. If the department is required to withhold a portion of the member's benefit pursuant to 26 U.S.C. Sec. 3402 and the sum of that amount plus the amount owed to the obligee exceeds the total benefit, the department shall satisfy the withholding requirements under 26 U.S.C. Sec. 3402 and then pay the remainder to the obligee. The provisions of this subsection do not apply to amounts withheld pursuant to 26 U.S.C. Sec. 3402(i).

       Sec. 514. RCW 41.50.790 and 1996 c 175 s 1 are each amended to read as follows:

       (1) The department shall designate an obligee as a survivor beneficiary of a member under RCW 2.10.146, 41.26.460, 41.32.530, 41.32.785, section 23 of this act, 41.40.188, or 41.40.660 if the department has been served by registered or certified mail with a dissolution order as defined in RCW 41.50.500 at least thirty days prior to the member's retirement. The department's duty to comply with the dissolution order arises only if the order contains a provision that states in substantially the following form:

 

When . . . . . . (the obligor) applies for retirement the department shall designate . . . . . . (the obligee) as survivor beneficiary with a . . . . . . survivor benefit.


       The survivor benefit designated in the dissolution order must be consistent with the survivor benefit options authorized by statute or administrative rule.

       (2) The obligee's entitlement to a survivor benefit pursuant to a dissolution order filed with the department in compliance with subsection (1) of this section shall cease upon the death of the obligee.

       (3)(a) A subsequent dissolution order may order the department to divide a survivor benefit between a survivor beneficiary and an alternate payee. In order to divide a survivor benefit between more than one payee, the dissolution order must:

       (i) Be ordered by a court of competent jurisdiction following notice to the survivor beneficiary;

       (ii) Contain a provision that complies with subsection (1) of this section designating the survivor beneficiary;

       (iii) Contain a provision clearly identifying the alternate payee or payees; and

       (iv) Specify the proportional division of the benefit between the survivor beneficiary and the alternate payee or payees.

       (b) The department will calculate actuarial adjustment for the court-ordered survivor benefit based upon the life of the survivor beneficiary.

       (c) If the survivor beneficiary dies, the department shall terminate the benefit. If the alternate payee predeceases the survivor beneficiary, all entitlement of the alternate payee to a benefit ceases and the entire benefit will revert to the survivor beneficiary.

       (d) For purposes of this section, "survivor beneficiary" means:

       (i) The obligee designated in the provision of dissolution filed in compliance with subsection (1) of this section; or

       (ii) In the event of more than one dissolution order, the obligee named in the first decree of dissolution received by the department.

       (e) For purposes of this section, "alternate payee" means a person, other than the survivor beneficiary, who is granted a percentage of a survivor benefit pursuant to a dissolution order.

       (4) The department shall under no circumstances be held liable for not designating an obligee as a survivor beneficiary under subsection (1) of this section if the dissolution order or amendment thereto is not served on the department by registered or certified mail at least thirty days prior to the member's retirement.

       (5) If a dissolution order directing designation of a survivor beneficiary has been previously filed with the department in compliance with this section, no additional obligation shall arise on the part of the department upon filing of a subsequent dissolution order unless the subsequent dissolution order:

       (a) Specifically amends or supersedes the dissolution order already on file with the department; and

       (b) Is filed with the department by registered or certified mail at least thirty days prior to the member's retirement.

       (6) The department shall designate a court-ordered survivor beneficiary pursuant to a dissolution order filed with the department before June 6, 1996, only if the order:

       (a) Specifically directs the member or department to make such selection;

       (b) Specifies the survivor option to be selected; and

       (c) The member retires after June 6, 1996.

       NEW SECTION. Sec. 515. A new section is added to chapter 41.50 RCW to read as follows:

       (1) If the department determines that due to employer error a member of plan III has suffered a loss of investment return, the employer shall pay the department for credit to the member's account the amount determined by the department as necessary to correct the error.

       (2) If the department determines that due to departmental error a member of plan III has suffered a loss of investment return, the department shall credit to the member's account from the school employees' retirement system combined plan II and III fund the amount determined by the department as necessary to correct the error.

       Sec. 601. RCW 41.40.010 and 1997 c 254 s 10 and 1997 c 88 s 6 are each reenacted and amended to read as follows:

       As used in this chapter, unless a different meaning is plainly required by the context:

       (1) "Retirement system" means the public employees' retirement system provided for in this chapter.

       (2) "Department" means the department of retirement systems created in chapter 41.50 RCW.

       (3) "State treasurer" means the treasurer of the state of Washington.

       (4)(a) "Employer" for plan I members, means every branch, department, agency, commission, board, and office of the state, any political subdivision or association of political subdivisions of the state admitted into the retirement system, and legal entities authorized by RCW 35.63.070 and 36.70.060 or chapter 39.34 RCW; and the term shall also include any labor guild, association, or organization the membership of a local lodge or division of which is comprised of at least forty percent employees of an employer (other than such labor guild, association, or organization) within this chapter. The term may also include any city of the first class that has its own retirement system.

       (b) "Employer" for plan II members, means every branch, department, agency, commission, board, and office of the state, and any political subdivision and municipal corporation of the state admitted into the retirement system, including public agencies created pursuant to RCW 35.63.070, 36.70.060, and 39.34.030; except that after August 31, 2000, school districts and educational service districts will no longer be employers for the public employees' retirement system plan II.

       (5) "Member" means any employee included in the membership of the retirement system, as provided for in RCW 41.40.023. RCW 41.26.045 does not prohibit a person otherwise eligible for membership in the retirement system from establishing such membership effective when he or she first entered an eligible position.

       (6) "Original member" of this retirement system means:

       (a) Any person who became a member of the system prior to April 1, 1949;

       (b) Any person who becomes a member through the admission of an employer into the retirement system on and after April 1, 1949, and prior to April 1, 1951;

       (c) Any person who first becomes a member by securing employment with an employer prior to April 1, 1951, provided the member has rendered at least one or more years of service to any employer prior to October 1, 1947;

       (d) Any person who first becomes a member through the admission of an employer into the retirement system on or after April 1, 1951, provided, such person has been in the regular employ of the employer for at least six months of the twelve-month period preceding the said admission date;

       (e) Any member who has restored all contributions that may have been withdrawn as provided by RCW 41.40.150 and who on the effective date of the individual's retirement becomes entitled to be credited with ten years or more of membership service except that the provisions relating to the minimum amount of retirement allowance for the member upon retirement at age seventy as found in RCW 41.40.190(4) shall not apply to the member;

       (f) Any member who has been a contributor under the system for two or more years and who has restored all contributions that may have been withdrawn as provided by RCW 41.40.150 and who on the effective date of the individual's retirement has rendered five or more years of service for the state or any political subdivision prior to the time of the admission of the employer into the system; except that the provisions relating to the minimum amount of retirement allowance for the member upon retirement at age seventy as found in RCW 41.40.190(4) shall not apply to the member.

       (7) "New member" means a person who becomes a member on or after April 1, 1949, except as otherwise provided in this section.

       (8)(a) "Compensation earnable" for plan I members, means salaries or wages earned during a payroll period for personal services and where the compensation is not all paid in money, maintenance compensation shall be included upon the basis of the schedules established by the member's employer.

       (i) "Compensation earnable" for plan I members also includes the following actual or imputed payments, which are not paid for personal services:

       (A) Retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable and the individual shall receive the equivalent service credit;

       (B) If a leave of absence is taken by an individual for the purpose of serving in the state legislature, the salary which would have been received for the position from which the leave of absence was taken, shall be considered as compensation earnable if the employee's contribution is paid by the employee and the employer's contribution is paid by the employer or employee;

       (C) Assault pay only as authorized by RCW 27.04.100, 72.01.045, and 72.09.240;

       (D) Compensation that a member would have received but for a disability occurring in the line of duty only as authorized by RCW 41.40.038;

       (E) Compensation that a member receives due to participation in the leave sharing program only as authorized by RCW 41.04.650 through 41.04.670; and

       (F) Compensation that a member receives for being in standby status. For the purposes of this section, a member is in standby status when not being paid for time actually worked and the employer requires the member to be prepared to report immediately for work, if the need arises, although the need may not arise. ((Standby compensation is regular salary for the purposes of RCW 41.50.150(2).))

       (ii) "Compensation earnable" does not include:

       (A) Remuneration for unused sick leave authorized under RCW 41.04.340, 28A.400.210, or 28A.310.490;

       (B) Remuneration for unused annual leave in excess of thirty days as authorized by RCW 43.01.044 and 43.01.041.

       (b) "Compensation earnable" for plan II members, means salaries or wages earned by a member during a payroll period for personal services, including overtime payments, and shall include wages and salaries deferred under provisions established pursuant to sections 403(b), 414(h), and 457 of the United States Internal Revenue Code, but shall exclude nonmoney maintenance compensation and lump sum or other payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, or any form of severance pay.

       "Compensation earnable" for plan II members also includes the following actual or imputed payments, which are not paid for personal services:

       (i) Retroactive payments to an individual by an employer on reinstatement of the employee in a position, or payments by an employer to an individual in lieu of reinstatement in a position which are awarded or granted as the equivalent of the salary or wage which the individual would have earned during a payroll period shall be considered compensation earnable to the extent provided above, and the individual shall receive the equivalent service credit;

       (ii) In any year in which a member serves in the legislature, the member shall have the option of having such member's compensation earnable be the greater of:

       (A) The compensation earnable the member would have received had such member not served in the legislature; or

       (B) Such member's actual compensation earnable received for nonlegislative public employment and legislative service combined. Any additional contributions to the retirement system required because compensation earnable under (b)(ii)(A) of this subsection is greater than compensation earnable under (b)(ii)(B) of this subsection shall be paid by the member for both member and employer contributions;

       (iii) Assault pay only as authorized by RCW 27.04.100, 72.01.045, and 72.09.240;

       (iv) Compensation that a member would have received but for a disability occurring in the line of duty only as authorized by RCW 41.40.038;

       (v) Compensation that a member receives due to participation in the leave sharing program only as authorized by RCW 41.04.650 through 41.04.670; and

       (vi) Compensation that a member receives for being in standby status. For the purposes of this section, a member is in standby status when not being paid for time actually worked and the employer requires the member to be prepared to report immediately for work, if the need arises, although the need may not arise. ((Standby compensation is regular salary for the purposes of RCW 41.50.150(2).))

       (9)(a) "Service" for plan I members, except as provided in RCW 41.40.088, means periods of employment in an eligible position or positions for one or more employers rendered to any employer for which compensation is paid, and includes time spent in office as an elected or appointed official of an employer. Compensation earnable earned in full time work for seventy hours or more in any given calendar month shall constitute one service credit month except as provided in RCW 41.40.088. Compensation earnable earned for less than seventy hours in any calendar month shall constitute one-quarter service credit month of service except as provided in RCW 41.40.088. Only service credit months and one-quarter service credit months shall be counted in the computation of any retirement allowance or other benefit provided for in this chapter. Any fraction of a year of service shall be taken into account in the computation of such retirement allowance or benefits. Time spent in standby status, whether compensated or not, is not service.

       (i) Service by a state employee officially assigned by the state on a temporary basis to assist another public agency, shall be considered as service as a state employee: PROVIDED, That service to any other public agency shall not be considered service as a state employee if such service has been used to establish benefits in any other public retirement system.

       (ii) An individual shall receive no more than a total of twelve service credit months of service during any calendar year. If an individual is employed in an eligible position by one or more employers the individual shall receive no more than one service credit month during any calendar month in which multiple service for seventy or more hours is rendered.

       (iii) A school district employee may count up to forty-five days of sick leave as creditable service solely for the purpose of determining eligibility to retire under RCW 41.40.180 as authorized by RCW 28A.400.300. For purposes of plan I "forty-five days" as used in RCW 28A.400.300 is equal to two service credit months. Use of less than forty-five days of sick leave is creditable as allowed under this subsection as follows:

       (A) Less than twenty-two days equals one-quarter service credit month;

       (B) Twenty-two days equals one service credit month;

       (C) More than twenty-two days but less than forty-five days equals one and one-quarter service credit month.

       (b) "Service" for plan II members, means periods of employment by a member in an eligible position or positions for one or more employers for which compensation earnable is paid. Compensation earnable earned for ninety or more hours in any calendar month shall constitute one service credit month except as provided in RCW 41.40.088. Compensation earnable earned for at least seventy hours but less than ninety hours in any calendar month shall constitute one-half service credit month of service. Compensation earnable earned for less than seventy hours in any calendar month shall constitute one-quarter service credit month of service. Time spent in standby status, whether compensated or not, is not service.

       Any fraction of a year of service shall be taken into account in the computation of such retirement allowance or benefits.

       (i) Service in any state elective position shall be deemed to be full time service, except that persons serving in state elective positions who are members of the Washington school employees' retirement system, teachers' retirement system, or law enforcement officers' and fire fighters' retirement system at the time of election or appointment to such position may elect to continue membership in the Washington school employees' retirement system, teachers' retirement system, or law enforcement officers' and fire fighters' retirement system.

       (ii) A member shall receive a total of not more than twelve service credit months of service for such calendar year. If an individual is employed in an eligible position by one or more employers the individual shall receive no more than one service credit month during any calendar month in which multiple service for ninety or more hours is rendered.

       (iii) Up to forty-five days of sick leave may be creditable as service solely for the purpose of determining eligibility to retire under RCW 41.40.180 as authorized by RCW 28A.400.300. For purposes of plan II "forty-five days" as used in RCW 28A.400.300 is equal to two service credit months. Use of less than forty-five days of sick leave is creditable as allowed under this subsection as follows:

       (A) Less than eleven days equals one-quarter service credit month;

       (B) Eleven or more days but less than twenty-two days equals one-half service credit month;

       (C) Twenty-two days equals one service credit month;

       (D) More than twenty-two days but less than thirty-three days equals one and one-quarter service credit month;

       (E) Thirty-three or more days but less than forty-five days equals one and one-half service credit month.

       (10) "Service credit year" means an accumulation of months of service credit which is equal to one when divided by twelve.

       (11) "Service credit month" means a month or an accumulation of months of service credit which is equal to one.

       (12) "Prior service" means all service of an original member rendered to any employer prior to October 1, 1947.

       (13) "Membership service" means:

       (a) All service rendered, as a member, after October 1, 1947;

       (b) All service after October 1, 1947, to any employer prior to the time of its admission into the retirement system for which member and employer contributions, plus interest as required by RCW 41.50.125, have been paid under RCW 41.40.056 or 41.40.057;

       (c) Service not to exceed six consecutive months of probationary service rendered after April 1, 1949, and prior to becoming a member, in the case of any member, upon payment in full by such member of the total amount of the employer's contribution to the retirement fund which would have been required under the law in effect when such probationary service was rendered if the member had been a member during such period, except that the amount of the employer's contribution shall be calculated by the director based on the first month's compensation earnable as a member;

       (d) Service not to exceed six consecutive months of probationary service, rendered after October 1, 1947, and before April 1, 1949, and prior to becoming a member, in the case of any member, upon payment in full by such member of five percent of such member's salary during said period of probationary service, except that the amount of the employer's contribution shall be calculated by the director based on the first month's compensation earnable as a member.

       (14)(a) "Beneficiary" for plan I members, means any person in receipt of a retirement allowance, pension or other benefit provided by this chapter.

       (b) "Beneficiary" for plan II members, means any person in receipt of a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer by another person.

       (15) "Regular interest" means such rate as the director may determine.

       (16) "Accumulated contributions" means the sum of all contributions standing to the credit of a member in the member's individual account, including any amount paid under RCW 41.50.165(2), together with the regular interest thereon.

       (17)(a) "Average final compensation" for plan I members, means the annual average of the greatest compensation earnable by a member during any consecutive two year period of service credit months for which service credit is allowed; or if the member has less than two years of service credit months then the annual average compensation earnable during the total years of service for which service credit is allowed.

       (b) "Average final compensation" for plan II members, means the member's average compensation earnable of the highest consecutive sixty months of service credit months prior to such member's retirement, termination, or death. Periods constituting authorized leaves of absence may not be used in the calculation of average final compensation except under RCW 41.40.710(2).

       (18) "Final compensation" means the annual rate of compensation earnable by a member at the time of termination of employment.

       (19) "Annuity" means payments for life derived from accumulated contributions of a member. All annuities shall be paid in monthly installments.

       (20) "Pension" means payments for life derived from contributions made by the employer. All pensions shall be paid in monthly installments.

       (21) "Retirement allowance" means the sum of the annuity and the pension.

       (22) "Employee" or "employed" means a person who is providing services for compensation to an employer, unless the person is free from the employer's direction and control over the performance of work. The department shall adopt rules and interpret this subsection consistent with common law.

       (23) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of such mortality and other tables as may be adopted by the director.

       (24) "Retirement" means withdrawal from active service with a retirement allowance as provided by this chapter.

       (25) "Eligible position" means:

       (a) Any position that, as defined by the employer, normally requires five or more months of service a year for which regular compensation for at least seventy hours is earned by the occupant thereof. For purposes of this chapter an employer shall not define "position" in such a manner that an employee's monthly work for that employer is divided into more than one position;

       (b) Any position occupied by an elected official or person appointed directly by the governor, or appointed by the chief justice of the supreme court under RCW 2.04.240(2) or 2.06.150(2), for which compensation is paid.

       (26) "Ineligible position" means any position which does not conform with the requirements set forth in subsection (25) of this section.

       (27) "Leave of absence" means the period of time a member is authorized by the employer to be absent from service without being separated from membership.

       (28) "Totally incapacitated for duty" means total inability to perform the duties of a member's employment or office or any other work for which the member is qualified by training or experience.

       (29) "Retiree" means any person who has begun accruing a retirement allowance or other benefit provided by this chapter resulting from service rendered to an employer while a member.

       (30) "Director" means the director of the department.

       (31) "State elective position" means any position held by any person elected or appointed to state-wide office or elected or appointed as a member of the legislature.

       (32) "State actuary" or "actuary" means the person appointed pursuant to RCW 44.44.010(2).

       (33) "Plan I" means the public employees' retirement system, plan I providing the benefits and funding provisions covering persons who first became members of the system prior to October 1, 1977.

       (34) "Plan II" means the public employees' retirement system, plan II providing the benefits and funding provisions covering persons who first became members of the system on and after October 1, 1977.

       (35) "Index" means, for any calendar year, that year's annual average consumer price index, Seattle, Washington area, for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor.

       (36) "Index A" means the index for the year prior to the determination of a postretirement adjustment.

       (37) "Index B" means the index for the year prior to index A.

       (38) "Index year" means the earliest calendar year in which the index is more than sixty percent of index A.

       (39) "Adjustment ratio" means the value of index A divided by index B.

       (40) "Annual increase" means, initially, fifty-nine cents per month per year of service which amount shall be increased each July 1st by three percent, rounded to the nearest cent.

       (41) "Separation from service" occurs when a person has terminated all employment with an employer.

       Sec. 602. RCW 41.40.062 and 1995 c 286 s 4 are each amended to read as follows:

       (1) The members and appointive and elective officials of any political subdivision or association of political subdivisions of the state may become members of the retirement system by the approval of the local legislative authority.

       (2) On and after September 1, 1965, every school district of the state of Washington shall be an employer under this chapter. Every member of each school district who is eligible for membership under RCW 41.40.023 shall be a member of the retirement system and participate on the same basis as a person who first becomes a member through the admission of any employer into the retirement system on and after April 1, 1949, except that after August 31, 2000, school districts will no longer be employers for the public employees' retirement system plan II.

       Sec. 603. RCW 41.40.088 and 1991 c 343 s 9 and 1991 c 35 s 96 are each reenacted and amended to read as follows:

       (1) A plan I member who is employed by a school district or districts, an educational service district, the state school for the deaf, the state school for the blind, institutions of higher education, or community colleges:

       (a) Shall receive a service credit month for each month of the period from September through August of the following year if he or she is employed in an eligible position, earns compensation earnable for six hundred thirty hours or more during that period, and is employed during nine months of that period, except that a member may not receive credit for any period prior to the member's employment in an eligible position;

       (b) If a member in an eligible position does not meet the requirements of (a) of this subsection, the member is entitled to a service credit month for each month of the period he or she earns earnable compensation for seventy or more hours; and the member is entitled to a one-quarter service credit month for those calendar months during which he or she earned compensation for less than seventy hours.

       (2) Except for any period prior to the member's employment in an eligible position, a plan II member who is employed by a school district or districts, an educational service district, the state school for the blind, the state school for the deaf, institutions of higher education, or community colleges:

       (a) Shall receive a service credit month for each month of the period from September through August of the following year if he or she is employed in an eligible position, earns compensation earnable for eight hundred ten hours or more during that period, and is employed during nine months of that period;

       (b) If a member in an eligible position for each month of the period from September through August of the following year does not meet the hours requirements of (a) of this subsection, the member is entitled to one-half service credit month for each month of the period if he or she earns earnable compensation for at least six hundred thirty hours but less than eight hundred ten hours during that period, and is employed nine months of that period.

       (c) In all other instances, a member in an eligible position is entitled to service credit months as follows:

       (i) One service credit month for each month in which compensation is earned for ninety or more hours;

       (ii) One-half service credit month for each month in which compensation is earned for at least seventy hours but less than ninety hours; and

       (iii) One-quarter service credit month for each month in which compensation is earned for less than seventy hours.

       (d) After August 31, 2000, school districts and educational service districts will no longer be employers for the public employees' retirement system plan II.

       (3) The department shall adopt rules implementing this section.

       Sec. 604. RCW 41.26.500 and 1990 c 274 s 12 are each amended to read as follows:

       (1) No retiree under the provisions of plan II shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in RCW 41.40.010 ((or)), 41.32.010, or section 2 of this act, or as a law enforcement officer or fire fighter as defined in RCW 41.26.030. If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused his or her benefits to be suspended. Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.

       (2) The department shall adopt rules implementing this section.

       Sec. 605. RCW 41.32.800 and 1997 c 254 s 6 are each amended to read as follows:

       (1) Except as provided in RCW 41.32.802, no retiree under the provisions of plan II shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in RCW 41.40.010 ((or)), 41.32.010, or section 2 of this act, or as a law enforcement officer or fire fighter as defined in RCW 41.26.030.

       If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused his or her benefits to be suspended. Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.

       (2) The department shall adopt rules implementing this section.

       Sec. 606. RCW 41.40.690 and 1997 c 254 s 13 are each amended to read as follows:

       (1) Except as provided in RCW 41.40.037, no retiree under the provisions of plan II shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in RCW 41.40.010 ((or)), 41.32.010, or section 2 of this act, or as a law enforcement officer or fire fighter as defined in RCW 41.26.030, except that a retiree who ends his or her membership in the retirement system pursuant to RCW 41.40.023(3)(b) is not subject to this section if the retiree's only employment is as an elective official of a city or town.

       (2) If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused his or her benefits to be suspended. Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.

       (3) The department shall adopt rules implementing this section.

       Sec. 701. RCW 41.32.8401 and 1997 c 10 s 1 are each amended to read as follows:

       (1) Anyone who requests to transfer under RCW 41.32.817 before January 1, 1998, and establishes service credit for January 1998, shall have their member account increased by forty percent of:

       (a) Plan II accumulated contributions as of January 1, 1996, less fifty percent of any payments made pursuant to RCW 41.50.165(2); or

       (b) All amounts withdrawn after January 1, 1996, which are completely restored before January 1, 1998.

       (2) A further additional payment of twenty-five percent, for a total of sixty-five percent, shall be paid subject to the conditions contained in subsection (1) of this section on July 1, 1998.

       (3) Substitute teachers shall receive the additional payment provided in subsection (1) of this section if they:

       (a) Establish service credit for January 1998; and

       (b) Establish any service credit from July 1996 through December 1997; and

       (c) Elect to transfer on or before March 1, 1999.

       (((3))) (4) If a member who requests to transfer dies before January 1, 1998, the additional payment provided by this section shall be paid to the member's estate, or the person or persons, trust, or organization the member nominated by written designation duly executed and filed with the department.

       (((4))) (5) The legislature reserves the right to modify or discontinue the right to an incentive payment under this section for any plan II members who have not previously transferred to plan III.

       Sec. 702. RCW 41.54.010 and 1993 c 517 s 8 are each amended to read as follows:

       The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

       (1) "Base salary" means salaries or wages earned by a member of a system during a payroll period for personal services and includes wages and salaries deferred under provisions of the United States internal revenue code, but shall exclude overtime payments, nonmoney maintenance compensation, and lump sum payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, any form of severance pay, any bonus for voluntary retirement, any other form of leave, or any similar lump sum payment.

       (2) "Department" means the department of retirement systems.

       (3) "Director" means the director of the department of retirement systems.

       (4) "Dual member" means a person who (a) is or becomes a member of a system on or after July 1, 1988, (b) has been a member of one or more other systems, and (c) has never been retired for service from a retirement system and is not receiving a disability retirement or disability leave benefit from any retirement system listed in RCW 41.50.030 or subsection (6) of this section.

       (5) "Service" means the same as it may be defined in each respective system. For the purposes of RCW 41.54.030, military service granted under RCW 41.40.170(3) or 43.43.260 may only be based on service accrued under chapter 41.40 or 43.43 RCW, respectively.

       (6) "System" means the retirement systems established under chapters 41.32, 41.40, 41.44, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), and 43.43 RCW; plan II of the system established under chapter 41.26 RCW; and the city employee retirement systems for Seattle, Tacoma, and Spokane. The inclusion of an individual first class city system is subject to the procedure set forth in RCW 41.54.061.

       Sec. 703. RCW 41.54.030 and 1996 c 55 s 4, 1996 c 55 s 3, and 1996 c 39 s 19 are each reenacted and amended to read as follows:

       (1) A dual member may combine service in all systems for the purpose of:

       (a) Determining the member's eligibility to receive a service retirement allowance; and

       (b) Qualifying for a benefit under RCW 41.32.840(2) or section 203 of this act.

       (2) A dual member who is eligible to retire under any system may elect to retire from all the member's systems and to receive service retirement allowances calculated as provided in this section. Each system shall calculate the allowance using its own criteria except that the member shall be allowed to substitute the member's base salary from any system as the compensation used in calculating the allowance.

       (3) The service retirement allowances from a system which, but for this section, would not be allowed to be paid at this date based on the dual member's age may be received immediately or deferred to a later date. The allowances shall be actuarially adjusted from the earliest age upon which the combined service would have made such dual member eligible in that system.

       (4) The service retirement eligibility requirements of RCW 41.40.180 shall apply to any dual member whose prior system is plan I of the public employees' retirement system established under chapter 41.40 RCW.

       Sec. 704. RCW 41.54.040 and 1996 c 55 s 5 are each amended to read as follows:

       (1) The allowances calculated under RCW 41.54.030, 41.54.032, and 41.54.034 shall be paid separately by each respective current and prior system. Any deductions from such separate payments shall be according to the provisions of the respective systems.

       (2) Postretirement adjustments, if any, shall be applied by the respective systems based on the payments made under subsection (1) of this section.

       (3) The department shall adopt rules under chapter 34.05 RCW to ensure that where a dual member has service in a system established under chapter 41.32, 41.40, 41.44, 41.-- (sections 1 through 25, 101 through 112, 114, and 201 through 213 of this act), or 43.43 RCW; service in plan II of the system established under chapter 41.26 RCW; and service under the city employee retirement system for Seattle, Tacoma, or Spokane, the additional cost incurred as a result of the dual member receiving a benefit under this chapter shall be borne by the retirement system incurring the additional cost.

       NEW SECTION. Sec. 705. A new section is added to chapter 41.54 RCW to read as follows:

       Persons who were members of the public employees' retirement system plan II prior to the effective date of this section and were transferred or mandated into membership pursuant to chapter . . ., Laws of 1998 (this act) shall suffer no diminution of benefits guaranteed to public employees' retirement system plan II members as of the date of their change in membership.

       Sec. 706. RCW 41.05.011 and 1996 c 39 s 21 are each amended to read as follows:

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

       (1) "Administrator" means the administrator of the authority.

       (2) "State purchased health care" or "health care" means medical and health care, pharmaceuticals, and medical equipment purchased with state and federal funds by the department of social and health services, the department of health, the basic health plan, the state health care authority, the department of labor and industries, the department of corrections, the department of veterans affairs, and local school districts.

       (3) "Authority" means the Washington state health care authority.

       (4) "Insuring entity" means an insurer as defined in chapter 48.01 RCW, a health care service contractor as defined in chapter 48.44 RCW, or a health maintenance organization as defined in chapter 48.46 RCW.

       (5) "Flexible benefit plan" means a benefit plan that allows employees to choose the level of health care coverage provided and the amount of employee contributions from among a range of choices offered by the authority.

       (6) "Employee" includes all full-time and career seasonal employees of the state, whether or not covered by civil service; elected and appointed officials of the executive branch of government, including full-time members of boards, commissions, or committees; and includes any or all part-time and temporary employees under the terms and conditions established under this chapter by the authority; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature or of the legislative authority of any county, city, or town who are elected to office after February 20, 1970. "Employee" also includes: (a) Employees of a county, municipality, or other political subdivision of the state if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205; (b) employees of employee organizations representing state civil service employees, at the option of each such employee organization, and, effective October 1, 1995, employees of employee organizations currently pooled with employees of school districts for the purpose of purchasing insurance benefits, at the option of each such employee organization; and (c) employees of a school district if the authority agrees to provide any of the school districts' insurance programs by contract with the authority as provided in RCW 28A.400.350.

       (7) "Board" means the public employees' benefits board established under RCW 41.05.055.

       (8) "Retired or disabled school employee" means:

       (a) Persons who separated from employment with a school district or educational service district and are receiving a retirement allowance under chapter 41.32 or 41.40 RCW as of September 30, 1993;

       (b) Persons who separate from employment with a school district or educational service district on or after October 1, 1993, and immediately upon separation receive a retirement allowance under chapter 41.32 or 41.40 RCW;

       (c) Persons who separate from employment with a school district or educational service district due to a total and permanent disability, and are eligible to receive a deferred retirement allowance under chapter 41.32 or 41.40 RCW.

       (9) "Benefits contribution plan" means a premium only contribution plan, a medical flexible spending arrangement, or a cafeteria plan whereby state and public employees may agree to a contribution to benefit costs which will allow the employee to participate in benefits offered pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

       (10) "Salary" means a state employee's monthly salary or wages.

       (11) "Participant" means an individual who fulfills the eligibility and enrollment requirements under the benefits contribution plan.

       (12) "Plan year" means the time period established by the authority.

       (13) "Separated employees" means persons who separate from employment with an employer as defined in:

       (a) RCW 41.32.010(11) on or after July 1, 1996((,)); or

       (b) Section 2 of this act on or after September 1, 2000;

and who are at least age fifty-five and have at least ten years of service under the teachers' retirement system plan III as defined in RCW 41.32.010(40) or the Washington school employees' retirement system plan III as defined in section 2 of this act.

       Sec. 707. RCW 43.33A.190 and 1995 c 239 s 321 are each amended to read as follows:

       Pursuant to ((RCW 41.50.088, the state investment board, at the request of the employee retirement benefits board, is authorized to offer investment options for self-directed investment under plan III)) section 307 of this act, the state investment board shall invest all self-directed investment moneys under teachers' retirement system plan III and the school employees' retirement system plan III, with full power to establish investment policy, develop investment options, and manage self-directed investment funds.

       Sec. 708. RCW 43.84.092 and 1997 c 218 s 5 are each amended to read as follows:

       (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.

       (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.

       (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

       (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:

       (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the Eastern Washington University capital projects account, the education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the perpetual surveillance and maintenance account, the public employees' retirement system plan I account, the public employees' retirement system plan II account, the Puyallup tribal settlement account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the teachers' retirement system plan I account, the teachers' retirement system combined plan II and plan III account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' relief and pension principal account, the volunteer fire fighters' relief and pension administrative account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan I retirement account, the Washington law enforcement officers' and fire fighters' system plan II retirement account, the Washington school employees' retirement system combined plan II and III account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

       (b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the central Puget Sound public transportation account, the city hardship assistance account, the county arterial preservation account, the department of licensing services account, the economic development account, the essential rail assistance account, the essential rail banking account, the ferry bond retirement fund, the gasohol exemption holding account, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway construction stabilization account, the highway safety account, the marine operating fund, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the small city account, the special category C account, the state patrol highway account, the transfer relief account, the transportation capital facilities account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation revolving loan account, and the urban arterial trust account.

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

       NEW SECTION. Sec. 709. (1) The legislature declares that changing the numerical designation of the different retirement plans within the retirement systems from Roman numerals to Arabic numerals is of no substantive importance.

       (2) The code reviser, under RCW 1.08.025, is directed to change the numerical designation of the retirement plans as follows:

       (a) Where "I" is used, replace with "1";

       (b) Where "II" is used, replace with "2"; and

       (c) Where "III" is used, replace with "3."

       NEW SECTION. Sec. 710. The state investment board, in consultation with the employee retirement benefits board, shall develop and implement administrative changes to mitigate the impact on the other pension funds of the movement of plan III members in and out of the state investment board portfolio. The changes shall be designed to meet the goals of minimizing the impact of the self-directed investing option on the state investment board's (1) asset allocation strategy, (2) liquidity needs, and (3) transaction costs. The changes may include but not be limited to restricting the frequency and timing of transfers in and out of the state investment board portfolio and charging appropriate fees to cover additional transaction costs caused by such transfers. At the September 1998 meeting of the joint committee on pension policy, the state investment board shall report on its progress in identifying and implementing administrative changes required by this section. If the state investment board determines that statutory changes are required to achieve the goals specified in this section, the state investment board shall recommend alternatives at the September 1998 meeting of the joint committee on pension policy.

       NEW SECTION. Sec. 711. The joint committee on pension policy shall study the policy and the costs of merging the teachers' retirement system and the Washington school employees' retirement system and shall report their findings to the legislature by January 15, 1999.

       NEW SECTION. Sec. 712. The department of retirement systems shall study the ongoing costs of administering the plan III systems, ways to decrease those costs, and methods of charging members for higher-cost investment options. The department shall report to the joint committee on pension policy by September 1998.

       NEW SECTION. Sec. 713. The benefits provided pursuant to chapter . . ., Laws of 1998 (this act) are not provided to employees as a matter of contractual right prior to September 1, 2000. The legislature retains the right to alter or abolish these benefits at any time prior to September 1, 2000.

       NEW SECTION. Sec. 714. Except for sections 303, 306 through 309, 404, 505, 507, 515, 701, 707, and 710 through 713 of this act, this act takes effect September 1, 2000.

       NEW SECTION. Sec. 715. Section 505 of this act expires September 1, 2000.

       NEW SECTION. Sec. 716. Sections 303, 306 through 309, 404, 505, 507, 515, 701, 707, and 710 through 713 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."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      On motion of Senator Long, the Senate concurred in the House amendment to Substitute Senate Bill No. 6306.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute Senate Bill No. 6306, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Substitute Senate Bill No. 6306, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 46; Nays, 1; Absent, 1; Excused, 1.

      Voting yea: Senators Anderson, Bauer, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wood and Zarelli - 46.  Voting nay: Senator Wojahn - 1.           Absent: Senator Haugen - 1.  Excused: Senator Benton - 1.      SUBSTITUTE SENATE BILL NO. 6306, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


      EDITOR'S NOTE: A conference was granted on Substitute Senate Bill No. 6253 earlier today, but conferees were not appointed at that time.

 

APPOINTMENT OF CONFERENCE COMMITTEE ON SUBSTITUTE SENATE BILL NO. 6253


      The President appointed as members of the Conference Committee on Substitute Senate Bill No. 6253 and the House amendments thereto: Senators Schow, Heavey and Horn.


MOTION


      On motion of Senator Johnson, the Conference Committee appointments were confirmed.


MESSAGE FROM THE HOUSE

February 27, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6302 with the following amendment(s):

      On page 1, line 14, after “RCW” insert “domiciled in this state”

       On page 13, after line 13, insert the following:

       NEW SECTION. Sec. 14. The first RBC report required under section 2 of this act shall be filed on or prior to March 1, 1999, for the 1998 calender year.”

       Renumber remaining sections consecutively and correct prior internal references accordingly.

       On page 13, line 29, after “through” strike “14" and insert “15", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      On motion of Senator Winsley, the Senate concurred in the House amendments to Substitute Senate Bill No. 6302.


MOTION


      On motion of Senator Goings, Senator Patterson was excused.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute Senate Bill No. 6302, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Substitute Senate Bill No. 6302, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

      Voting yea: Senators Anderson, Bauer, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Jacobsen, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 47.    Excused: Senators Benton and Patterson - 2.        SUBSTITUTE SENATE BILL NO. 6302, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SENATE BILL NO. 6301 with the following amendment(s):

       On page 2, after line 12, insert the following:

       "Sec. 2. RCW 19.118.021 and 1995 c 254 s 1 are each amended to read as follows:

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

       (1) "Board" means new motor vehicle arbitration board.

       (2) "Collateral charges" means any sales or lease related charges including but not limited to sales tax, use tax, arbitration service fees, unused license fees, unused registration fees, unused title fees, finance charges, prepayment penalties, credit disability and credit life insurance costs not otherwise refundable, any other insurance costs prorated for time out of service, transportation charges, dealer preparation charges, or any other charges for service contracts, undercoating, rustproofing, or factory or dealer installed options.

       (3) "Condition" means a general problem that results from a defect or malfunction of one or more parts, or their improper installation by the manufacturer, its agents, or the new motor vehicle dealer.

       (4) "Consumer" means any person who has entered into an agreement or contract for the transfer, lease, or purchase of a new motor vehicle, other than for purposes of resale or sublease, during the duration of the warranty period defined under this section.

       (5) "Court" means the superior court in the county where the consumer resides, except if the consumer does not reside in this state, then the superior court in the county where an arbitration hearing or determination was conducted or made pursuant to this chapter.

       (6) "Incidental costs" means any reasonable expenses incurred by the consumer in connection with the repair of the new motor vehicle, including any towing charges and the costs of obtaining alternative transportation.

       (7) "Manufacturer" means any person engaged in the business of constructing or assembling new motor vehicles or engaged in the business of importing new motor vehicles into the United States for the purpose of selling or distributing new motor vehicles to new motor vehicle dealers. "Manufacturer" does not include any person engaged in the business of set-up of motorcycles as an agent of a new motor vehicle dealer if the person does not otherwise construct or assemble motorcycles.

       (8) "Motorcycle" means any motorcycle as defined in RCW 46.04.330 which has an engine displacement of at least seven hundred fifty cubic centimeters.

       (9) "Motor home" means a vehicular unit designed to provide temporary living quarters for recreational, camping, or travel use, built on or permanently attached to a self-propelled motor vehicle chassis or on a chassis cab or van that is an integral part of the completed vehicle.

       (10) "Motor home manufacturer" means the first stage manufacturer, the component manufacturer, and the final stage manufacturer.

       (a) "First stage manufacturer" means a person who manufactures incomplete new motor vehicles such as chassis, chassis cabs, or vans, that are directly warranted by the first stage manufacturer to the consumer, and are completed by a final stage manufacturer into a motor home.

       (b) "Component manufacturer" means a person who manufactures components used in the manufacture or assembly of a chassis, chassis cab, or van that is completed into a motor home and whose components are directly warranted by the component manufacturer to the consumer.

       (c) "Final stage manufacturer" means a person who assembles, installs, or permanently affixes a body, cab, or equipment to an incomplete new motor vehicle such as a chassis, chassis cab, or van provided by a first stage manufacturer, to complete the vehicle into a motor home.

       (11) "New motor vehicle" means any new self-propelled vehicle, including a new motorcycle, primarily designed for the transportation of persons or property over the public highways that was originally purchased or leased at retail from a new motor vehicle dealer or leasing company in this state, and that was initially registered in this state or for which a temporary motor vehicle license was issued pursuant to RCW 46.16.460, but does not include vehicles purchased or leased by a business as part of a fleet of ten or more vehicles at one time or under a single purchase or lease agreement. If the motor vehicle is a motor home, this chapter shall apply to the self-propelled vehicle and chassis, but does not include those portions of the vehicle designated, used, or maintained primarily as a mobile dwelling, office, or commercial space. The term "new motor vehicle" does not include trucks with nineteen thousand pounds or more gross vehicle weight rating. The term "new motor vehicle" includes a demonstrator or lease-purchase vehicle as long as a manufacturer's warranty was issued as a condition of sale.

       (((10))) (12) "New motor vehicle dealer" means a person who holds a dealer agreement with a manufacturer for the sale of new motor vehicles, who is engaged in the business of purchasing, selling, servicing, exchanging, or dealing in new motor vehicles, and who is licensed or required to be licensed as a vehicle dealer by the state of Washington.

       (((11))) (13) "Nonconformity" means a defect, serious safety defect, or condition that substantially impairs the use, value, or safety of a new motor vehicle, but does not include a defect or condition that is the result of abuse, neglect, or unauthorized modification or alteration of the new motor vehicle.

       (((12))) (14) "Purchase price" means the cash price of the new motor vehicle appearing in the sales agreement or contract.

       (a) "Purchase price" in the instance of a lease means the actual written capitalized cost disclosed to the consumer contained in the lease agreement. If there is no disclosed capitalized cost in the lease agreement the "purchase price" is the manufacturer's suggested retail price including manufacturer installed accessories or items of optional equipment displayed on the manufacturer label, required by 15 U.S.C. Sec. 1232.

       (b) "Purchase price" in the instance of both a vehicle purchase or lease agreement includes any allowance for a trade-in vehicle but does not include any manufacturer-to-consumer rebate appearing in the agreement or contract that the consumer received or that was applied to reduce the purchase or lease cost.

       Where the consumer is a subsequent transferee and the consumer selects repurchase of the motor vehicle, "purchase price" means the consumer's subsequent purchase price. Where the consumer is a subsequent transferee and the consumer selects replacement of the motor vehicle, "purchase price" means the original purchase price.

       (((13))) (15) "Reasonable offset for use" means the definition provided in RCW 19.118.041(1)(c) for a new motor vehicle other than a new motorcycle. The reasonable offset for use for a new motorcycle shall be computed by the number of miles that the vehicle traveled before the manufacturer's acceptance of the vehicle upon repurchase or replacement multiplied by the purchase price, and divided by twenty-five thousand.

       (((14))) (16) "Reasonable number of attempts" means the definition provided in RCW 19.118.041.

       (((15))) (17) "Replacement motor vehicle" means a new motor vehicle that is identical or reasonably equivalent to the motor vehicle to be replaced, as the motor vehicle to be replaced existed at the time of original purchase or lease, including any service contract, undercoating, rustproofing, and factory or dealer installed options.

       (((16))) (18) "Serious safety defect" means a life-threatening malfunction or nonconformity that impedes the consumer's ability to control or operate the new motor vehicle for ordinary use or reasonable intended purposes or creates a risk of fire or explosion.

       (((17))) (19) "Subsequent transferee" means a consumer who acquires a motor vehicle, within the warranty period, as defined in this section, with an applicable manufacturer's written warranty and where the vehicle otherwise met the definition of a new motor vehicle at the time of original retail sale or lease.

       (((18))) (20) "Substantially impair" means to render the new motor vehicle unreliable, or unsafe for ordinary use, or to diminish the resale value of the new motor vehicle below the average resale value for comparable motor vehicles.

       (((19))) (21) "Warranty" means any implied warranty, any written warranty of the manufacturer, or any affirmation of fact or promise made by the manufacturer in connection with the sale of a new motor vehicle that becomes part of the basis of the bargain. The term "warranty" pertains to the obligations of the manufacturer in relation to materials, workmanship, and fitness of a new motor vehicle for ordinary use or reasonably intended purposes throughout the duration of the warranty period as defined under this section.

       (((20))) (22) "Warranty period" means the period ending two years after the date of the original delivery to the consumer of a new motor vehicle, or the first twenty-four thousand miles of operation, whichever occurs first.

       Sec. 3. RCW 19.118.031 and 1995 c 254 s 2 are each amended to read as follows:

       (1) The manufacturer shall publish an owner's manual and provide it to the new motor vehicle dealer or leasing company. The owner's manual shall include a list of the addresses and phone numbers for the manufacturer's customer assistance division, or zone or regional offices. A manufacturer shall provide to the new motor vehicle dealer or leasing company all applicable manufacturer's written warranties. The dealer or leasing company shall transfer to the consumer, at the time of original retail sale or lease, the owner's manual and applicable written warranties as provided by a manufacturer.

       (2) At the time of purchase, the new motor vehicle dealer shall provide the consumer with a written statement that explains the consumer's rights under this chapter. The written statement shall be prepared and supplied by the attorney general and shall contain a toll-free number that the consumer can contact for information regarding the procedures and remedies under this chapter.

       (3) For the purposes of this chapter, if a new motor vehicle does not conform to the warranty and the consumer reports the nonconformity during the term of the warranty period or the period of coverage of the applicable manufacturer's written warranty, whichever is less, to the manufacturer, its agent, or the new motor vehicle dealer who sold the new motor vehicle, the manufacturer, its agent, or the new motor vehicle dealer shall make repairs as are necessary to conform the vehicle to the warranty, regardless of whether such repairs are made after the expiration of the warranty period. Any corrections or attempted repairs undertaken by a new motor vehicle dealer under this chapter shall be treated as warranty work and billed by the dealer to the manufacturer in the same manner as other work under the manufacturer's written warranty is billed. For purposes of this subsection, the manufacturer's written warranty shall be at least one year after the date of the original delivery to the consumer of the vehicle or the first twelve thousand miles of operation, whichever occurs first.

       (4) Upon request from the consumer, the manufacturer or new motor vehicle dealer shall provide a copy of any report or computer reading compiled by the manufacturer's field or zone representative regarding inspection, diagnosis, or test-drive of the consumer's new motor vehicle, or shall provide a copy of any technical service bulletin issued by the manufacturer regarding the year and model of the consumer's new motor vehicle as it pertains to any material, feature, component, or the performance thereof.

       (5) The new motor vehicle dealer shall provide to the consumer each time the consumer's vehicle is returned from being diagnosed or repaired under the warranty, a fully itemized, legible statement or repair order indicating any diagnosis made, and all work performed on the vehicle including but not limited to, a general description of the problem reported by the consumer or an identification of the defect or condition, parts and labor, the date and the odometer reading when the vehicle was submitted for repair, and the date when the vehicle was made available to the consumer.

       (6) No manufacturer, its agent, or the new motor vehicle dealer may refuse to diagnose or repair any nonconformity covered by the warranty for the purpose of avoiding liability under this chapter.

       (7) For purposes of this chapter, consumers shall have the rights and remedies, including a cause of action, against manufacturers as provided in this chapter.

       (8) The warranty period and thirty-day out-of-service period, and sixty-day out-of-service period in the case of a motor home, shall be extended by any time that repair services are not available to the consumer as a direct result of a strike, war, invasion, fire, flood, or other natural disaster.

       Sec. 4. RCW 19.118.041 and 1995 c 254 s 3 are each amended to read as follows:

       (1) If the manufacturer, its agent, or the new motor vehicle dealer is unable to conform the new motor vehicle to the warranty by repairing or correcting any nonconformity after a reasonable number of attempts, the manufacturer, within forty calendar days of a consumer's written request to the manufacturer's corporate, dispute resolution, zone, or regional office address shall, at the option of the consumer, replace or repurchase the new motor vehicle.

       (a) The replacement motor vehicle shall be identical or reasonably equivalent to the motor vehicle to be replaced as the motor vehicle to be replaced existed at the time of original purchase or lease, including any service contract, undercoating, rustproofing, and factory or dealer installed options. Where the manufacturer supplies a replacement motor vehicle, the manufacturer shall be responsible for sales tax, license, registration fees, and refund of any incidental costs. Compensation for a reasonable offset for use shall be paid by the consumer to the manufacturer in the event that the consumer accepts a replacement motor vehicle.

       (b) When repurchasing the new motor vehicle, the manufacturer shall refund to the consumer the purchase price, all collateral charges, and incidental costs, less a reasonable offset for use. When repurchasing the new motor vehicle, in the instance of a lease, the manufacturer shall refund to the consumer all payments made by the consumer under the lease including but not limited to all lease payments, trade-in value or inception payment, security deposit, all collateral charges and incidental costs less a reasonable offset for use. The manufacturer shall make such payment to the lessor and/or lienholder of record as necessary to obtain clear title to the motor vehicle and upon the lessor's and/or lienholder's receipt of that payment and payment by the consumer of any late payment charges, the consumer shall be relieved of any future obligation to the lessor and/or lienholder.

       (c) The reasonable offset for use shall be computed by multiplying the number of miles that the vehicle traveled directly attributable to use by the consumer times the purchase price, and dividing the product by one hundred twenty thousand, except in the case of a motor home, in which event it shall be divided by ninety thousand. However, the reasonable offset for use calculation total for a motor home is subject to modification by the board by decreasing or increasing the offset total up to a maximum of one-third of the offset total. The board may modify the offset total in those circumstances where the board determines that the wear and tear on those portions of the motor home designated, used, or maintained primarily as a mobile dwelling, office, or commercial space are significantly greater or significantly less than that which could be reasonably expected based on the mileage attributable to the consumer's use of the motor home. Where the consumer is a second or subsequent purchaser, lessee, or transferee of the motor vehicle and the consumer selects repurchase of the motor vehicle, "the number of miles that the vehicle traveled" shall be calculated from the date of purchase or lease by the consumer. Where the consumer is a second or subsequent purchaser, lessee, or transferee of the motor vehicle and the consumer selects replacement of the motor vehicle, "the number of miles that the vehicle traveled" shall be calculated from the original purchase, lease, or in-service date.

       (2) Reasonable number of attempts, except in the case of a new motor vehicle that is a motor home acquired after June 30, 1998, shall be deemed to have been undertaken by the manufacturer, its agent, or the new motor vehicle dealer to conform the new motor vehicle to the warranty within the warranty period, if: (a) The same serious safety defect has been subject to diagnosis or repair two or more times, at least one of which is during the period of coverage of the applicable manufacturer's written warranty, and the serious safety defect continues to exist; (b) the same nonconformity has been subject to diagnosis or repair four or more times, at least one of which is during the period of coverage of the applicable manufacturer's written warranty, and the nonconformity continues to exist; or (c) the vehicle is out-of-service by reason of diagnosis or repair of one or more nonconformities for a cumulative total of thirty calendar days, at least fifteen of them during the period of the applicable manufacturer's written warranty. For purposes of this subsection, the manufacturer's written warranty shall be at least one year after the date of the original delivery to the consumer of the vehicle or the first twelve thousand miles of operation, whichever occurs first.

       (3)(a) In the case of a new motor vehicle that is a motor home acquired after June 30, 1998, a reasonable number of attempts shall be deemed to have been undertaken by the motor home manufacturers, their respective agents, or their respective new motor vehicle dealers to conform the new motor vehicle to the warranty within the warranty period, if: (i) The same serious safety defect has been subject to diagnosis or repair one or more times during the period of coverage of the applicable motor home manufacturer's written warranty, plus a final attempt to repair the vehicle as provided for in (b) of this subsection, and the serious safety defect continues to exist; (ii) the same nonconformity has been subject to repair three or more times, at least one of which is during the period of coverage of the applicable motor home manufacturer's written warranty, plus a final attempt to repair the vehicle as provided for in (b) of this subsection, and the nonconformity continues to exist; or (iii) the vehicle is out of service by reason of diagnosis or repair of one or more nonconformities for a cumulative total of sixty calendar days aggregating all motor home manufacturer days out-of-service, and the motor home manufacturers have had at least one opportunity to coordinate and complete an inspection and any repairs of the vehicle's nonconformities after receipt of notification from the consumer as provided for in (c) of this subsection. For purposes of this subsection, each motor home manufacturer's written warranty must be at least one year after the date of the original delivery to the consumer of the vehicle or the first twelve thousand miles of operation, whichever occurs first.

       (b) In the case of a new motor vehicle that is a motor home, after one attempt has been made to repair a serious safety defect, or after three attempts have been made to repair the same nonconformity, the consumer shall give written notification of the need to repair the nonconformity to each of the motor home manufacturers at their respective corporate, zone, or regional office addresses to allow the motor home manufacturers to coordinate and complete a final attempt to cure the nonconformity. The motor home manufacturers each have fifteen days, commencing upon receipt of the notification, to respond and inform the consumer of the location of the facility where the vehicle will be repaired. If the vehicle is unsafe to drive due to a serious safety defect, or to the extent the repair facility is more than one hundred miles from the motor home location, the motor home manufacturers are responsible for the cost of transporting the vehicle to and from the repair facility. The motor home manufacturers have a cumulative total of thirty days, commencing upon delivery of the vehicle to the designated repair facility by the consumer, to conform the vehicle to the applicable motor home manufacturer's written warranty. This time period may be extended if the consumer agrees in writing. If a motor home manufacturer fails to respond to the consumer or perform the repairs within the time period prescribed, that motor home manufacturer is not entitled to a final attempt to cure the nonconformity.

       (c) In the case of a new motor vehicle that is a motor home, if the vehicle is out of service by reason of diagnosis or repair of one or more nonconformities by the motor home manufacturers, their respective agents, or their respective new motor vehicle dealers for a cumulative total of thirty or more days aggregating all motor home manufacturer days out of service, the consumer shall so notify each motor home manufacturer in writing at their respective corporate, zone, or regional office addresses to allow the motor home manufacturers, their respective agents, or their respective new motor vehicle dealers an opportunity to coordinate and complete an inspection and any repairs of the vehicle's nonconformities. The motor home manufacturers have fifteen days, commencing upon receipt of the notification, to respond and inform the consumer of the location of the facility where the vehicle will be repaired. If the vehicle is unsafe to drive due to a serious safety defect, or to the extent the repair facility is more than one hundred miles from the motor home location, the motor home manufacturers are responsible for the cost of transporting the vehicle to and from the repair facility. Once the buyer delivers the vehicle to the designated repair facility, the inspection and repairs must be completed by the motor home manufacturers either (i) within ten days or (ii) before the vehicle is out of service by reason of diagnosis or repair of one or more nonconformities for sixty days, whichever time period is longer. This time period may be extended if the consumer agrees in writing. If a motor home manufacturer fails to respond to the consumer or perform the repairs within the time period prescribed, that motor home manufacturer is not entitled to at least one opportunity to inspect and repair the vehicle's nonconformities after receipt of notification from the buyer as provided for in this subsection (3)(c).

       (4) No new motor vehicle dealer may be held liable by the manufacturer for any collateral charges, incidental costs, purchase price refunds, or vehicle replacements. Manufacturers shall not have a cause of action against dealers under this chapter. Consumers shall not have a cause of action against dealers under this chapter, but a violation of any responsibilities imposed upon dealers under this chapter is a per se violation of chapter 19.86 RCW. Consumers may pursue rights and remedies against dealers under any other law, including chapters 46.70 and 46.71 RCW. Manufacturers and consumers may not make dealers parties to arbitration board proceedings under this chapter.

       Sec. 5. RCW 19.118.061 and 1995 c 254 s 4 are each amended to read as follows:

       (1) A manufacturer shall be prohibited from reselling any motor vehicle determined or adjudicated as having a serious safety defect unless the serious safety defect has been corrected and the manufacturer warrants upon the first subsequent resale that the defect has been corrected.

       (2) Before any sale or transfer of a vehicle that has been replaced or repurchased by the manufacturer that was determined or adjudicated as having a nonconformity or to have been out of service for thirty or more calendar days, or sixty or more calendar days in the case of a motor home, under this chapter, the manufacturer shall:

       (a) Notify the attorney general and the department of licensing, by certified mail or by personal service, upon receipt of the motor vehicle;

       (b) Attach a resale disclosure notice to the vehicle in a manner and form to be specified by the attorney general. Only the retail purchaser may remove the resale disclosure notice after execution of the disclosure form required under subsection (3) of this section; and

       (c) Notify the attorney general and the department of licensing if the nonconformity in the motor vehicle is corrected.

       (3) Upon the first subsequent resale, either at wholesale or retail, or transfer of title of a motor vehicle and which was previously returned after a final determination, adjudication, or settlement under this chapter or under a similar statute of any other state, the manufacturer, its agent, or the new motor vehicle dealer who has actual knowledge of said final determination, adjudication or settlement, shall execute and deliver to the buyer before sale an instrument in writing setting forth information identifying the nonconformity in a manner to be specified by the attorney general, and the department of licensing shall place on the certificate of title information indicating the vehicle was returned under this chapter.

       (4) Upon receipt of the manufacturer's notification under subsection (2) of this section that the nonconformity has been corrected and upon the manufacturer's request and payment of any fees, the department of licensing shall issue a new title with information indicating the vehicle was returned under this chapter and that the nonconformity has been corrected. Upon the first subsequent resale, either at wholesale or retail, or transfer of title of a motor vehicle, as provided under subsection (2)(c) of this section, the manufacturer shall warrant upon the resale that the nonconformity has been corrected, and the manufacturer, its agent, or the new motor vehicle dealer who has actual knowledge of the corrected nonconformity, shall execute and deliver to the buyer before sale an instrument in writing setting forth information identifying the nonconformity and indicating that it has been corrected in a manner to be specified by the attorney general.

       (5) After repurchase or replacement and following a manufacturer's receipt of a vehicle under this section and prior to a vehicle's first subsequent retail transfer by resale or lease, any intervening transferor of a vehicle subject to the requirements of this section who has received the disclosure, correction and warranty documents, as specified by the attorney general and required under this chapter, shall deliver the documents with the vehicle to the next transferor, purchaser or lessee to ensure proper and timely notice and disclosure. Any intervening transferor who fails to comply with this subsection shall, at the option of the subsequent transferor or first subsequent retail purchaser or lessee: (a) Indemnify ((and [any])) any subsequent transferor or first subsequent retail purchaser for all damages caused by such violation; or (b) repurchase the vehicle at the full purchase price including all fees, taxes and costs incurred for goods and services which were included in the subsequent transaction.

       Sec. 6. RCW 19.118.090 and 1995 c 254 s 6 are each amended to read as follows:

       (1) A consumer may request arbitration under this chapter by submitting the request to the attorney general. Within ten days after receipt of an arbitration request, the attorney general shall make a reasonable determination of the cause of the request for arbitration and provide necessary information to the consumer regarding the consumer's rights and remedies under this chapter. The attorney general shall assign the dispute to a board, except that if it clearly appears from the materials submitted by the consumer that the dispute is not eligible for arbitration, the attorney general may refuse to assign the dispute and shall explain any required procedures to the consumer.

       (2) Manufacturers shall submit to arbitration if such arbitration is requested by the consumer within thirty months from the date of the original delivery of the new motor vehicle to a consumer at retail and if the consumer's dispute is deemed eligible for arbitration by the board. In the case of a motor home, the thirty-month period will be extended by the amount of time it takes the motor home manufacturers to complete the final repair attempt at the designated repair facility as provided for in RCW 19.118.041(3)(b).

       (3) The new motor vehicle arbitration board may reject for arbitration any dispute that it determines to be frivolous, fraudulent, filed in bad faith, res judicata or beyond its authority. Any dispute deemed by the board to be ineligible for arbitration due to insufficient evidence may be reconsidered by the board upon the submission of other information or documents regarding the dispute that would allegedly qualify for relief under this chapter. Following a second review, the board may reject the dispute for arbitration if evidence is still clearly insufficient to qualify the dispute for relief under this chapter. A rejection by the board is subject to review by the attorney general or may be appealed under RCW 19.118.100.

       A decision to reject any dispute for arbitration shall be sent by certified mail to the consumer and the manufacturer, and shall contain a brief explanation as to the reason therefor.

       (4) The manufacturer shall complete a written manufacturer response to the consumer's request for arbitration. The manufacturer shall provide a response to the consumer and the board within ten calendar days from the date of the manufacturer's receipt of the board's notice of acceptance of a dispute for arbitration. The manufacturer response shall include all issues and affirmative defenses related to the nonconformities identified in the consumer's request for arbitration that the manufacturer intends to raise at the arbitration hearing.

       (5) The arbitration board shall award the remedies under RCW 19.118.041 if it finds a nonconformity and that a reasonable number of attempts have been undertaken to correct the nonconformity. The board shall award reasonable costs and attorneys' fees incurred by the consumer where the manufacturer has been directly represented by counsel: (a) In dealings with the consumer in response to a request to repurchase or replace under RCW 19.118.041; (b) in settlement negotiations; (c) in preparation of the manufacturer's statement; or (d) at an arbitration board hearing or other board proceeding.

       In the case of an arbitration involving a motor home, the board may allocate liability among the motor home manufacturers.

       (6) It is an affirmative defense to any claim under this chapter that: (a) The alleged nonconformity does not substantially impair the use, value, or safety of the new motor vehicle; or (b) the alleged nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the new motor vehicle.

       (7) The board shall have forty-five calendar days from the date the board receives the consumer's request for arbitration to hear the dispute. If the board determines that additional information is necessary, the board may continue the arbitration proceeding on a subsequent date within ten calendar days of the initial hearing. The board shall decide the dispute within sixty calendar days from the date the board receives the consumer's request for arbitration.

       The decision of the board shall be delivered by certified mail or personal service to the consumer and the manufacturer, and shall contain a written finding of whether the new motor vehicle meets the standards set forth under this chapter.

       (8) The consumer may accept the arbitration board decision or appeal to superior court, pursuant to RCW 19.118.100. Upon acceptance by the consumer, the arbitration board decision shall become final. The consumer shall send written notification of acceptance or rejection to the arbitration board within sixty days of receiving the decision and the arbitration board shall immediately deliver a copy of the consumer's acceptance to the manufacturer by certified mail, return receipt requested, or by personal service. Failure of the consumer to respond to the arbitration board within sixty calendar days of receiving the decision shall be considered a rejection of the decision by the consumer. The consumer shall have one hundred twenty calendar days from the date of rejection to file a petition of appeal in superior court. At the time the petition of appeal is filed, the consumer shall deliver, by certified mail or personal service, a conformed copy of such petition to the attorney general.

       (9) Upon receipt of the consumer's acceptance, the manufacturer shall have forty calendar days to comply with the arbitration board decision or thirty calendar days to file a petition of appeal in superior court. At the time the petition of appeal is filed, the manufacturer shall deliver, by certified mail or personal service, a conformed copy of such petition to the attorney general. If the attorney general receives no notice of petition of appeal after forty calendar days, the attorney general shall contact the consumer to verify compliance.

       NEW SECTION. Sec. 7. 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."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk


MOTION


      On motion of Senator Schow, the Senate concurred in the House amendment to Senate Bill No. 6301.


MOTIONS


      On motion of Senator Goings, Senator Jacobsen was excused.

      On motion of Senator Franklin, Senator Loveland was excused.

      The President declared the question before the Senate to be the roll call on the final passage of Senate Bill No. 6301, as amended by the House.


ROLL CALL


      The Secretary called the roll on the final passage of Senate Bill No. 6301, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 46; Nays, 0; Absent, 0; Excused, 3.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Johnson, Kline, Kohl, Long, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 46.   Excused: Senators Jacobsen, Loveland and Patterson - 3.     SENATE BILL NO. 6301, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 5, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SENATE BILL NO. 6257 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 46.20.308 and 1995 c 332 s 1 are each amended to read as follows:

       (1) Any person who operates a motor vehicle within this state is deemed to have given consent, subject to the provisions of RCW 46.61.506, to a test or tests of his or her breath or blood for the purpose of determining the alcohol concentration or presence of any drug in his or her breath or blood if arrested for any offense where, at the time of the arrest, the arresting officer has reasonable grounds to believe the person had been driving or was in actual physical control of a motor vehicle while under the influence of intoxicating liquor or any drug or was in violation of RCW 46.61.503.

       (2) The test or tests of breath shall be administered at the direction of a law enforcement officer having reasonable g60

rounds to believe the person to have been driving or in actual physical control of a motor vehicle within this state while under the influence of intoxicating liquor or the person to have been driving or in actual physical control of a motor vehicle while having alcohol in a concentration ((of 0.02 or more)) in violation of RCW 46.61.503 in his or her system and being under the age of twenty-one. However, in those instances where the person is incapable due to physical injury, physical incapacity, or other physical limitation, of providing a breath sample or where the person is being treated in a hospital, clinic, doctor's office, emergency medical vehicle, ambulance, or other similar facility in which a breath testing instrument is not present or where the officer has reasonable grounds to believe that the person is under the influence of a drug, a blood test shall be administered by a qualified person as provided in RCW 46.61.506(4). The officer shall inform the person of his or her right to refuse the breath or blood test, and of his or her right to have additional tests administered by any qualified person of his or her choosing as provided in RCW 46.61.506. The officer shall warn the driver that:

       (a) His or her license, permit, or privilege to drive will be revoked or denied if he or she refuses to submit to the test;

       (b) His or her license, permit, or privilege to drive will be suspended, revoked, denied, or placed in probationary status if the test is administered and the test indicates the alcohol concentration of the person's breath or blood is ((0.10)) 0.08 or more, in the case of a person age twenty-one or over, or ((0.02 or more)) in violation of RCW 46.61.502, 46.61.503, or 46.61.504 in the case of a person under age twenty-one; and

       (c) His or her refusal to take the test may be used in a criminal trial.

       (3) Except as provided in this section, the test administered shall be of the breath only. If an individual is unconscious or is under arrest for the crime of vehicular homicide as provided in RCW 46.61.520 or vehicular assault as provided in RCW 46.61.522, or if an individual is under arrest for the crime of driving while under the influence of intoxicating liquor or drugs as provided in RCW 46.61.502, which arrest results from an accident in which there has been serious bodily injury to another person, a breath or blood test may be administered without the consent of the individual so arrested.

       (4) Any person who is dead, unconscious, or who is otherwise in a condition rendering him or her incapable of refusal, shall be deemed not to have withdrawn the consent provided by subsection (1) of this section and the test or tests may be administered, subject to the provisions of RCW 46.61.506, and the person shall be deemed to have received the warnings required under subsection (2) of this section.

       (5) If, following his or her arrest and receipt of warnings under subsection (2) of this section, the person arrested refuses upon the request of a law enforcement officer to submit to a test or tests of his or her breath or blood, no test shall be given except as authorized under subsection (3) or (4) of this section.

       (6) If, after arrest and after the other applicable conditions and requirements of this section have been satisfied, a test or tests of the person's blood or breath is administered and the test results indicate that the alcohol concentration of the person's breath or blood is ((0.10)) 0.08 or more if the person is age twenty-one or over, or is ((0.02 or more)) in violation of RCW 46.61.502, 46.61.503, or 46.61.504 if the person is under the age of twenty-one, or the person refuses to submit to a test, the arresting officer or other law enforcement officer at whose direction any test has been given, or the department, where applicable, if the arrest results in a test of the person's blood, shall:

       (a) Serve notice in writing on the person on behalf of the department of its intention to suspend, revoke, deny, or place in probationary status the person's license, permit, or privilege to drive as required by subsection (7) of this section;

       (b) Serve notice in writing on the person on behalf of the department of his or her right to a hearing, specifying the steps he or she must take to obtain a hearing as provided by subsection (8) of this section;

       (c) Mark the person's Washington state driver's license or permit to drive, if any, in a manner authorized by the department;

       (d) Serve notice in writing that the marked license or permit, if any, is a temporary license that is valid for sixty days from the date of arrest or from the date notice has been given in the event notice is given by the department following a blood test, or until the suspension, revocation, or denial of the person's license, permit, or privilege to drive is sustained at a hearing pursuant to subsection (8) of this section, whichever occurs first. No temporary license is valid to any greater degree than the license or permit that it replaces; and

       (e) Immediately notify the department of the arrest and transmit to the department within seventy-two hours, except as delayed as the result of a blood test, a sworn report or report under a declaration authorized by RCW A.72.085 that states:

       (i) That the officer had reasonable grounds to believe the arrested person had been driving or was in actual physical control of a motor vehicle within this state while under the influence of intoxicating liquor or drugs, or both, or was under the age of twenty-one years and had been driving or was in actual physical control of a motor vehicle while having an alcohol concentration ((of 0.02 or more)) in violation of RCW 46.61.503;

       (ii) That after receipt of the warnings required by subsection (2) of this section the person refused to submit to a test of his or her blood or breath, or a test was administered and the results indicated that the alcohol concentration of the person's breath or blood was ((0.10)) 0.08 or more if the person is age twenty-one or over, or was ((0.02 or more)) in violation of RCW 46.61.502, 46.61.503, or 46.61.504 if the person is under the age of twenty-one; and

       (iii) Any other information that the director may require by rule.

       (7) The department of licensing, upon the receipt of a sworn report or report under a declaration authorized by RCW A.72.085 under subsection (6)(e) of this section, shall suspend, revoke, deny, or place in probationary status the person's license, permit, or privilege to drive or any nonresident operating privilege, as provided in RCW 46.20.3101, such suspension, revocation, denial, or placement in probationary status to be effective beginning sixty days from the date of arrest or from the date notice has been given in the event notice is given by the department following a blood test, or when sustained at a hearing pursuant to subsection (8) of this section, whichever occurs first.

       (8) A person receiving notification under subsection (6)(b) of this section may, within thirty days after the notice has been given, request in writing a formal hearing before the department. The person shall pay a fee of one hundred dollars as part of the request. If the request is mailed, it must be postmarked within thirty days after receipt of the notification. Upon timely receipt of such a request for a formal hearing, including receipt of the required one hundred dollar fee, the department shall afford the person an opportunity for a hearing. Except as otherwise provided in this section, the hearing is subject to and shall be scheduled and conducted in accordance with RCW 46.20.329 and 46.20.332. The hearing shall be conducted in the county of the arrest, except that all or part of the hearing may, at the discretion of the department, be conducted by telephone or other electronic means. The hearing shall be held within sixty days following the arrest or following the date notice has been given in the event notice is given by the department following a blood test, unless otherwise agreed to by the department and the person, in which case the action by the department shall be stayed, and any valid temporary license marked under subsection (6)(c) of this section extended, if the person is otherwise eligible for licensing. For the purposes of this section, the scope of the hearing shall cover the issues of whether a law enforcement officer had reasonable grounds to believe the person had been driving or was in actual physical control of a motor vehicle within this state while under the influence of intoxicating liquor or any drug or had been driving or was in actual physical control of a motor vehicle within this state while having alcohol in his or her system in a concentration ((of 0.02 or more)) in violation of RCW 46.61.503 and was under the age of twenty-one, whether the person was placed under arrest, and (a) whether the person refused to submit to the test or tests upon request of the officer after having been informed that such refusal would result in the revocation of the person's license, permit, or privilege to drive, or (b) if a test or tests were administered, whether the applicable requirements of this section were satisfied before the administration of the test or tests, whether the person submitted to the test or tests, or whether a test was administered without express consent as permitted under this section, and whether the test or tests indicated that the alcohol concentration of the person's breath or blood was ((0.10)) 0.08 or more if the person was age twenty-one or over at the time of the arrest, or was ((0.02 or more)) in violation of RCW 46.61.502, 46.61.503, or 46.61.504 if the person was under the age of twenty-one at the time of the arrest. The sworn report or report under a declaration authorized by RCW A.72.085 submitted by a law enforcement officer is prima facie evidence that the officer had reasonable grounds to believe the person had been driving or was in actual physical control of a motor vehicle within this state while under the influence of intoxicating liquor or drugs, or both, or the person had been driving or was in actual physical control of a motor vehicle within this state while having alcohol in his or her system in a concentration ((of 0.02 or more)) in violation of RCW 46.61.503 and was under the age of twenty-one and that the officer complied with the requirements of this section.

       A hearing officer shall conduct the hearing, may issue subpoenas for the attendance of witnesses and the production of documents, and shall administer oaths to witnesses. The hearing officer shall not issue a subpoena for the attendance of a witness at the request of the person unless the request is accompanied by the fee required by RCW 5.56.010 for a witness in district court. The sworn report or report under a declaration authorized by RCW 9A.72.085 of the law enforcement officer and any other evidence accompanying the report shall be admissible without further evidentiary foundation and the certifications authorized by the criminal rules for courts of limited jurisdiction shall be admissible without further evidentiary foundation. The person may be represented by counsel, may question witnesses, may present evidence, and may testify. The department shall order that the suspension, revocation, denial, or placement in probationary status either be rescinded or sustained.

       (9) If the suspension, revocation, denial, or placement in probationary status is sustained after such a hearing, the person whose license, privilege, or permit is suspended, revoked, denied, or placed in probationary status has the right to file a petition in the superior court of the county of arrest to review the final order of revocation by the department in the same manner as an appeal from a decision of a court of limited jurisdiction. The appellant must pay the costs associated with obtaining the record of the hearing before the hearing officer. The filing of the appeal does not stay the effective date of the suspension, revocation, denial, or placement in probationary status. A petition filed under this subsection must include the petitioner's grounds for requesting review. Upon granting petitioner's request for review, the court shall review the department's final order of suspension, revocation, denial, or placement in probationary status as expeditiously as possible. If judicial relief is sought for a stay or other temporary remedy from the department's action, the court shall not grant such relief unless the court finds that the appellant is likely to prevail in the appeal and that without a stay the appellant will suffer irreparable injury. If the court stays the suspension, revocation, denial, or placement in probationary status it may impose conditions on such stay.

       (10) If a person whose driver's license, permit, or privilege to drive has been or will be suspended, revoked, denied, or placed in probationary status under subsection (7) of this section, other than as a result of a breath test refusal, and who has not committed an offense within the last five years for which he or she was granted a deferred prosecution under chapter 10.05 RCW, petitions a court for a deferred prosecution on criminal charges arising out of the arrest for which action has been or will be taken under subsection (7) of this section, the court may direct the department to stay any actual or proposed suspension, revocation, denial, or placement in probationary status for at least forty-five days but not more than ninety days. If the court stays the suspension, revocation, denial, or placement in probationary status, it may impose conditions on such stay. If the person is otherwise eligible for licensing, the department shall issue a temporary license, or extend any valid temporary license marked under subsection (6) of this section, for the period of the stay. If a deferred prosecution treatment plan is not recommended in the report made under RCW 10.05.050, or if treatment is rejected by the court, or if the person declines to accept an offered treatment plan, or if the person violates any condition imposed by the court, then the court shall immediately direct the department to cancel the stay and any temporary marked license or extension of a temporary license issued under this subsection.

       A suspension, revocation, or denial imposed under this section, other than as a result of a breath test refusal, shall be stayed if the person is accepted for deferred prosecution as provided in chapter 10.05 RCW for the incident upon which the suspension, revocation, or denial is based. If the deferred prosecution is terminated, the stay shall be lifted and the suspension, revocation, or denial reinstated. If the deferred prosecution is completed, the stay shall be lifted and the suspension, revocation, or denial canceled.

       (11) When it has been finally determined under the procedures of this section that a nonresident's privilege to operate a motor vehicle in this state has been suspended, revoked, or denied, the department shall give information in writing of the action taken to the motor vehicle administrator of the state of the person's residence and of any state in which he or she has a license.

       Sec. 2. RCW 46.20.3101 and 1995 c 332 s 3 are each amended to read as follows:

       Pursuant to RCW 46.20.308, the department shall suspend, revoke, or deny the arrested person's license, permit, or privilege to drive as follows:

       (1) In the case of a person who has refused a test or tests:

       (a) For a first refusal within five years, where there has not been a previous incident within five years that resulted in administrative action under this section, revocation or denial for one year;

       (b) For a second or subsequent refusal within five years, or for a first refusal where there has been one or more previous incidents within five years that have resulted in administrative action under this section, revocation or denial for two years or until the person reaches age twenty-one, whichever is longer. A revocation imposed under this subsection (1)(b) shall run consecutively to the period of any suspension, revocation, or denial imposed pursuant to a criminal conviction arising out of the same incident.

       (2) In the case of an incident where a person has submitted to or been administered a test or tests indicating that the alcohol concentration of the person's breath or blood was ((0.10)) 0.08 or more:

       (a) For a first incident within five years, where there has not been a previous incident within five years that resulted in administrative action under this section, placement in probationary status as provided in RCW 46.20.355;

       (b) For a second or subsequent incident within five years, revocation or denial for two years.

       (3) In the case of an incident where a person under age twenty-one has submitted to or been administered a test or tests indicating that the alcohol concentration of the person's breath or blood was ((0.02 or more)) in violation of RCW 46.61.502, 46.61.503, or 46.61.504:

       (a) For a first incident within five years, suspension or denial for ninety days;

       (b) For a second or subsequent incident within five years, revocation or denial for one year or until the person reaches age twenty-one, whichever is longer.

       Sec. 3. RCW 46.61.502 and 1994 c 275 s 2 are each amended to read as follows:

       (1) A person is guilty of driving while under the influence of intoxicating liquor or any drug if the person drives a vehicle within this state:

       (a) And the person has, within two hours after driving, an alcohol concentration of ((0.10)) 0.08 or higher as shown by analysis of the person's breath or blood made under RCW 46.61.506; or

       (b) While the person is under the influence of or affected by intoxicating liquor or any drug; or

       (c) While the person is under the combined influence of or affected by intoxicating liquor and any drug.

       (2) The fact that a person charged with a violation of this section is or has been entitled to use a drug under the laws of this state shall not constitute a defense against a charge of violating this section.

       (3) It is an affirmative defense to a violation of subsection (1)(a) of this section which the defendant must prove by a preponderance of the evidence that the defendant consumed a sufficient quantity of alcohol after the time of driving and before the administration of an analysis of the person's breath or blood to cause the defendant's alcohol concentration to be ((0.10)) 0.08 or more within two hours after driving. The court shall not admit evidence of this defense unless the defendant notifies the prosecution prior to the omnibus or pretrial hearing in the case of the defendant's intent to assert the affirmative defense.

       (4) Analyses of blood or breath samples obtained more than two hours after the alleged driving may be used as evidence that within two hours of the alleged driving, a person had an alcohol concentration of ((0.10)) 0.08 or more in violation of subsection (1)(a) of this section, and in any case in which the analysis shows an alcohol concentration above 0.00 may be used as evidence that a person was under the influence of or affected by intoxicating liquor or any drug in violation of subsection (1)(b) or (c) of this section.

       (5) A violation of this section is a gross misdemeanor.

       Sec. 4. RCW 46.61.503 and 1995 c 332 s 2 are each amended to read as follows:

       (1) Notwithstanding any other provision of this title, a person is guilty of driving a motor vehicle after consuming alcohol if the person operates a motor vehicle within this state and the person:

       (a) Is under the age of twenty-one;

       (b) Has, within two hours after operating the motor vehicle, an alcohol concentration of ((0.02 or more)) at least 0.02 but less than the concentration specified in RCW 46.61.502, as shown by analysis of the person's breath or blood made under RCW 46.61.506.

       (2) It is an affirmative defense to a violation of subsection (1) of this section which the defendant must prove by a preponderance of the evidence that the defendant consumed a sufficient quantity of alcohol after the time of driving and before the administration of an analysis of the person's breath or blood to cause the defendant's alcohol concentration to be ((0.02 or more)) in violation of subsection (1) of this section within two hours after driving. The court shall not admit evidence of this defense unless the defendant notifies the prosecution prior to the earlier of: (a) Seven days prior to trial; or (b) the omnibus or pretrial hearing in the case of the defendant's intent to assert the affirmative defense.

       (3) Analyses of blood or breath samples obtained more than two hours after the alleged driving may be used as evidence that within two hours of the alleged driving, a person had an alcohol concentration ((of 0.02 or more)) in violation of subsection (1) of this section.

       (4) A violation of this section is a misdemeanor.

       Sec. 5. RCW 46.61.504 and 1994 c 275 s 3 are each amended to read as follows:

       (1) A person is guilty of being in actual physical control of a motor vehicle while under the influence of intoxicating liquor or any drug if the person has actual physical control of a vehicle within this state:

       (a) And the person has, within two hours after being in actual physical control of the vehicle, an alcohol concentration of ((0.10)) 0.08 or higher as shown by analysis of the person's breath or blood made under RCW 46.61.506; or

       (b) While the person is under the influence of or affected by intoxicating liquor or any drug; or

       (c) While the person is under the combined influence of or affected by intoxicating liquor and any drug.

       (2) The fact that a person charged with a violation of this section is or has been entitled to use a drug under the laws of this state does not constitute a defense against any charge of violating this section. No person may be convicted under this section if, prior to being pursued by a law enforcement officer, the person has moved the vehicle safely off the roadway.

       (3) It is an affirmative defense to a violation of subsection (1)(a) of this section which the defendant must prove by a preponderance of the evidence that the defendant consumed a sufficient quantity of alcohol after the time of being in actual physical control of the vehicle and before the administration of an analysis of the person's breath or blood to cause the defendant's alcohol concentration to be ((0.10)) 0.08 or more within two hours after being in such control. The court shall not admit evidence of this defense unless the defendant notifies the prosecution prior to the omnibus or pretrial hearing in the case of the defendant's intent to assert the affirmative defense.

       (4) Analyses of blood or breath samples obtained more than two hours after the alleged being in actual physical control of a vehicle may be used as evidence that within two hours of the alleged being in such control, a person had an alcohol concentration of ((0.10)) 0.08 or more in violation of subsection (1)(a) of this section, and in any case in which the analysis shows an alcohol concentration above 0.00 may be used as evidence that a person was under the influence of or affected by intoxicating liquor or any drug in violation of subsection (1)(b) or (c) of this section.

       (5) A violation of this section is a gross misdemeanor.

       Sec. 6. RCW 46.61.506 and 1995 c 332 s 18 are each amended to read as follows:

       (1) Upon the trial of any civil or criminal action or proceeding arising out of acts alleged to have been committed by any person while driving or in actual physical control of a vehicle while under the influence of intoxicating liquor or any drug, if the person's alcohol concentration is less than ((0.10)) 0.08, it is evidence that may be considered with other competent evidence in determining whether the person was under the influence of intoxicating liquor or any drug.

       (2) The breath analysis shall be based upon grams of alcohol per two hundred ten liters of breath. The foregoing provisions of this section shall not be construed as limiting the introduction of any other competent evidence bearing upon the question whether the person was under the influence of intoxicating liquor or any drug.

       (3) Analysis of the person's blood or breath to be considered valid under the provisions of this section or RCW 46.61.502 or 46.61.504 shall have been performed according to methods approved by the state toxicologist and by an individual possessing a valid permit issued by the state toxicologist for this purpose. The state toxicologist is directed to approve satisfactory techniques or methods, to supervise the examination of individuals to ascertain their qualifications and competence to conduct such analyses, and to issue permits which shall be subject to termination or revocation at the discretion of the state toxicologist.

       (4) When a blood test is administered under the provisions of RCW 46.20.308, the withdrawal of blood for the purpose of determining its alcoholic or drug content may be performed only by a physician, a registered nurse, or a qualified technician. This limitation shall not apply to the taking of breath specimens.

       (5) The person tested may have a physician, or a qualified technician, chemist, registered nurse, or other qualified person of his or her own choosing administer one or more tests in addition to any administered at the direction of a law enforcement officer. The failure or inability to obtain an additional test by a person shall not preclude the admission of evidence relating to the test or tests taken at the direction of a law enforcement officer.

       (6) Upon the request of the person who shall submit to a test or tests at the request of a law enforcement officer, full information concerning the test or tests shall be made available to him or her or his or her attorney.

       Sec. 7. RCW 88.12.025 and 1993 c 244 s 8 are each amended to read as follows:

       (1) It shall be unlawful for any person to operate a vessel in a reckless manner.

       (2) It shall be a violation for a person to operate a vessel while under the influence of intoxicating liquor or any drug. A person is considered to be under the influence of intoxicating liquor or any drug if:

       (a) The person has ((0.10)) 0.08 grams or more of alcohol per two hundred ten liters of breath, as shown by analysis of the person's breath made under RCW 46.61.506; or

       (b) The person has ((0.10)) 0.08 percent or more by weight of alcohol in the person's blood, as shown by analysis of the person's blood made under RCW 46.61.506; or

       (c) The person is under the influence of or affected by intoxicating liquor or any drug; or

       (d) The person is under the combined influence of or affected by intoxicating liquor and any drug.

       The fact that any person charged with a violation of this section is or has been entitled to use such drug under the laws of this state shall not constitute a defense against any charge of violating this section. A person cited under this subsection may upon request be given a breath test for breath alcohol or may request to have a blood sample taken for blood alcohol analysis. An arresting officer shall administer field sobriety tests when circumstances permit.

       (3) A violation of this section is a misdemeanor, punishable as provided under RCW 9.92.030. In addition, the court may order the defendant to pay restitution for any damages or injuries resulting from the offense.

       NEW SECTION. Sec. 8. 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. 9. This act takes effect January 1, 1999."

       Correct the title., and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      Senator Roach moved that the Senate concur in the House amendment to Engrossed Senate Bill No. 6257.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Roach that the Senate concur in the House amendment to Engrossed Senate Bill No. 6257.

      The motion by Senator Roach carried and the Senate concurred in the House amendment to Engrossed Senate Bill No. 6257.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Senate Bill No. 6257, as amended by the House.

ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6257, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Anderson, Bauer, Benton, Brown, Deccio, Fairley, Finkbeiner, Franklin, Fraser, Goings, Hale, Hargrove, Haugen, Heavey, Hochstatter, Horn, Johnson, Kline, Kohl, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Newhouse, Oke, Patterson, Prentice, Prince, Rasmussen, Roach, Rossi, Schow, Sellar, Sheldon, B., Sheldon, T., Snyder, Spanel, Stevens, Strannigan, Swecker, Thibaudeau, West, Winsley, Wojahn, Wood and Zarelli - 48.          Excused: Senator Jacobsen - 1.             ENGROSSED SENATE BILL NO. 6257, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed SENATE BILL NO. 6541 with the following amendment(s):

       On page 2, line 33, after "previous" strike "year's"

       On page 3, line 6, after "exceeds" strike "six" and insert "eight"

       On page 3, beginning on line 10, after "exceed" strike "two million dollars per fiscal year for the biennium" and insert "ten percent of the base amount as provided in this section", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      On motion of Senator Schow, the Senate refuses to concur in the House amendments to Senate Bill No. 6541 and requests of the House a conference thereon.


APPOINTMENT OF CONFERENCE COMMITTEE


      The President appointed as members of the Conference Committee on Senate Bill No. 6541 and the House amendment(s) thereto: Senators Sellar, Kohl and Deccio.


MOTION


      On motion of Senator Snyder, the Conference Committee appointments were confirmed.


MESSAGE FROM THE HOUSE

March 3, 1998

MR. PRESIDENT:

      The House has passed SUBSTITUTE SENATE BILL NO. 6240 with the following amendment(s):

       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,)) shall 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. 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)) is a Washington state certified court reporter. However, a superior court judge may select an alternative method for making the record if the court was previously exempted from this requirement, or the court is authorized under court rule to use video, electronic, or mechanical recording devices.

       (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 en 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 en 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.))", and the same are herewith transmitted.

TIMOTHY A. MARTIN, Chief Clerk

MOTION


      Senator Kline moved that the Senate concur in the House amendment to Substitute Senate Bill No. 6240.

      Debate ensued.

      Senator Fairley demanded a roll call and the demand was sustained.

      The President declared the question before the Senate to be the roll call on the motion by Senator Kline that the Senate concur in the House amendment to Substitute Senate Bill No. 6240.


ROLL CALL


      The Secretary called the roll and the motion by Senator Kline to concur in the House amendment to Substitute Senate Bill No. 6240 failed by the following vote: Yeas, 22; Nays, 26; Absent, 0; Excused, 1.

      Voting yea: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Hargrove, Haugen, Heavey, Kline, Kohl, Loveland, McAuliffe, Patterson, Prentice, Rasmussen, Sheldon, B., Sheldon, T., Snyder, Spanel, Thibaudeau and Wojahn - 22.                 Voting nay: Senators Anderson, Benton, Deccio, Finkbeiner, Hale, Hochstatter, Horn, Johnson, Long, McCaslin, McDonald, Morton, Newhouse, Oke, Prince, Roach, Rossi, Schow, Sellar, Stevens, Strannigan, Swecker, West, Winsley, Wood and Zarelli - 26.     Excused: Senator Jacobsen - 1.MOTION


      On motion of Senator Roach, the Senate refuses to concur in the House amendment to Substitute Senate Bill No. 6240 and requests of the House a conference thereon.


APPOINTMENT OF CONFERENCE COMMITTEE


      The President appointed as members of the Conference Committee on Substitute Senate Bill No. 6240 and the House amendment(s) thereto: Senators Stevens, Thibaudeau and Zarelli.


MOTION


      On motion of Senator Johnson, the Conference Committee appointments were confirmed.


MOTION


      On motion of Senator Goings, Senator Patterson was excused.


MESSAGE FROM THE HOUSE

March 4, 1998

MR. PRESIDENT:

      The House has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 6204 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 16.57.010 and 1996 c 105 s 1 are each amended to read as follows:

       For the purpose of this chapter:

       (1) "Department" means the department of agriculture of the state of Washington.

       (2) "Director" means the director of the department or a duly appointed representative.

       (3) "Person" means a natural person, individual, firm, partnership, corporation, company, society, and association, and every officer, agent or employee thereof. This term shall import either the singular or the plural as the case may be.

       (4) "Livestock" includes, but is not limited to, horses, mules, cattle, sheep, swine, goats, poultry and rabbits.

       (5) "Brand" means a permanent fire brand or any artificial mark, other than an individual identification symbol, approved by the ((director)) board to be used in conjunction with a brand or by itself.

       (6) "Production record brand" means a number brand which shall be used for production identification purposes only.

       (7) "((Brand)) Livestock inspection" means the examination of livestock or livestock hides for brands or any means of identifying livestock or livestock hides and/or the application of any artificial identification such as back tags or ear clips necessary to preserve the identity of the livestock or livestock hides examined.

       (8) "Individual identification symbol" means a permanent mark placed on a horse for the purpose of individually identifying and registering the horse and which has been approved for use as such by the ((director)) board.

       (9) "Registering agency" means any person issuing an individual identification symbol for the purpose of individually identifying and registering a horse.

       (10) "Poultry" means chickens, turkeys, ratites, and other domesticated fowl.

       (11) "Ratite" means, but is not limited to, ostrich, emu, rhea, or other flightless bird used for human consumption, whether live or slaughtered.

       (12) "Ratite farming" means breeding, raising, and rearing of an ostrich, emu, or rhea in captivity or an enclosure.

       (13) "Microchipping" means the implantation of an identification microchip or similar electronic identification device to establish the identity of an individual animal:

       (a) In the pipping muscle of a chick ratite or the implantation of a microchip in the tail muscle of an otherwise unidentified adult ratite;

       (b) In the nuchal ligament of a horse unless otherwise specified by rule of the ((director)) board; and

       (c) In locations of other livestock species as specified by rule of the ((director)) board when requested by an association of producers of that species of livestock.

       (14) "Livestock identification board" or "board" means the board established under RCW 16.57.015.

       (15) "Certificate of permit" means a form prescribed by and obtained from the board that is completed by the owner or a person authorized to act on behalf of the owner to show the ownership of livestock. It does not evidence inspection of livestock.

       (16) "Inspection certificate" means a certificate issued by the board documenting the ownership of livestock based on an inspection of livestock by the board. It includes an individual identification certificate issued by the board.

       (17) "Self-inspection certificate" means a form prescribed by and obtained from the board that is used for self-inspection of cattle or horses and is signed by the buyer and seller of the cattle or horses.

       Sec. 2. RCW 16.57.015 and 1993 c 354 s 10 are each amended to read as follows:

       (1) ((The director shall establish a livestock identification advisory board. The board shall be composed of six members appointed by the director. One member shall represent each of the following groups: Beef producers, public livestock market operators, horse owners, dairy farmers, cattle feeders, and meat processors. In making appointments, the director shall solicit nominations from organizations representing these groups state-wide.

       (2) The purpose of the board is to provide advice to the director regarding livestock identification programs administered under this chapter and regarding brand inspection fees and related licensing fees. The director shall consult the board before adopting, amending, or repealing a rule under this chapter or altering a fee under RCW 16.58.050, 16.58.130, 16.65.030, or 16.65.090. If the director publishes in the state register a proposed rule to be adopted under the authority of this chapter or a proposed rule setting a fee under RCW 16.58.050, 16.58.130, 16.65.030, or 16.65.090 and the rule has not received the approval of the advisory board, the director shall file with the board a written statement setting forth the director's reasons for proposing the rule without the board's approval.

       (3) The members of the advisory board serve three-year terms. However, the director shall by rule provide shorter initial terms for some of the members of the board to stagger the expiration of the initial terms. The members serve without compensation. The director may authorize the expenses of a member to be reimbursed if the member is selected to attend a regional or national conference or meeting regarding livestock identification. Any such reimbursement shall be in accordance with RCW 43.03.050 and 43.03.060.)) There is established a Washington state livestock identification board. The board is composed of the director, who shall be a nonvoting member, and six voting members appointed by the governor as follows: One beef producer, one cattle feeder, one dairy producer, one livestock market owner, one meat packer, and one horse producer. Organizations representing the groups represented on the board may submit nominations for these appointments to the governor for the governor's consideration. Three members of the initial board shall be appointed for two years and three members shall be appointed for three years, thereafter gubernatorially appointed members shall be appointed for a three-year term. Members may succeed themselves. As used in this subsection, "meat packer" means a person licensed to operate a slaughtering establishment under chapter 16.49A RCW.

       (2) The board shall be responsible for the administration of the livestock identification program which includes the review of recording and registration of brands, approval of all expenditures from the livestock identification account, administration of this chapter and chapters 16.58 and 16.65 RCW, administration of the inspection, enforcement, and licensing activities, fee setting, and holding hearings and adopting rules for the administration of the livestock identification program. Authorities and responsibilities other than rule making that are granted to the board by this chapter and chapters 16.58 and 16.65 RCW may be delegated by the board to duly authorized representatives of the board. The board shall adopt rules regarding such authorities and responsibilities in accordance with chapter 34.05 RCW.

       (3) Until June 30, 2004, the board shall contract with the department for registration and recording and for livestock inspection or investigation work and fix the compensation and terms of the contract. Beginning July 1, 2004, the board may contract with the department or other entities to provide such registration, recording, inspection, or investigation. The board may also enter into agreements with Washington state licensed and accredited veterinarians, or other persons, who have been certified by the board, to perform livestock inspection. Fees for livestock inspection performed by a certified veterinarian shall be collected by the veterinarian and remitted to the board. Veterinarians providing livestock inspection may charge a fee for livestock inspection that is separate from the fees provided in RCW 16.57.220. The board may adopt rules necessary to implement livestock inspection performed by veterinarians and may adopt fees to cover the cost associated with certification of veterinarians.

       (4) Members of the board shall receive compensation as provided by RCW 43.03.240 and travel expenses to meetings or in otherwise carrying out the duties of the board as provided under RCW 43.03.050 and 43.03.060. The board shall meet at least quarterly in each calendar year. The board shall hire staff as necessary to carry out its duties.

       (5) The board may select the area of the state in which to locate its principal office, which may include an area that is, by and large, near the geographic center of the state. The department shall examine the rental and other costs of locating the principal office from which it administers any contract it has with the board in an area that is, by and large, near the geographic center of the state. The department shall compare these costs with those of maintaining the principal office in its current location. The department shall report its findings to the board and shall consider moving its principal office for such administration to such an area if it would be more cost-effective to do so.

       NEW SECTION. Sec. 3. A new section is added to chapter 16.57 RCW to read as follows:

       There is established a Washington state livestock identification account in the agricultural local fund created under RCW 43.23.230 into which all moneys collected or received from registration, recording, inspection, or enforcement under this chapter and moneys collected or received by the board under chapters 16.58 and 16.65 RCW shall be deposited. These moneys shall be used solely for the Washington state livestock identification program. Only the board may authorize expenditures from this account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

       Sec. 4. RCW 16.57.020 and 1994 c 46 s 7 are each amended to read as follows:

       (1) The ((director)) board shall be the recorder of livestock brands and such brands shall not be recorded elsewhere in this state. Any person desiring to register a livestock brand shall apply on a form prescribed by the ((director)) board. Such application shall be accompanied by a facsimile of the brand applied for and a ((thirty-five)) seventy-dollar recording fee. The ((director)) board shall, upon ((his or her)) their satisfaction that the application and brand facsimile meet the requirements of this chapter and/or rules adopted hereunder, record such brand.

       (2) As provided in RCW 16.57.015, the director of agriculture may be designated by the board as the recorder of livestock brands. If the director is so designated, the recording fee shall be deposited by the director in the Washington state livestock identification account and shall be used solely for livestock identification program purposes as provided in this chapter and only as authorized by the board.

       (3) This section is null and void unless subsections (1) through (5) of section 2 of this act and section 96 of this act become law.

       Sec. 5. RCW 16.57.030 and 1959 c 54 s 3 are each amended to read as follows:

       The ((director)) board shall not record tattoo brands or marks for any purpose subsequent to the enactment of this chapter. However, all tattoo brands and marks of record on the date of the enactment of this chapter shall be recognized as legal ownership brands or marks.

       Sec. 6. RCW 16.57.040 and 1974 ex.s. c 64 s 1 are each amended to read as follows:

       The ((director)) board may provide for the use of production record brands. Numbers for such brands shall be issued at the discretion of the ((director)) board and shall be placed on livestock immediately below the registered ownership brand or any other location prescribed by the ((director)) board.

       Sec. 7. RCW 16.57.070 and 1959 c 54 s 7 are each amended to read as follows:

       The ((director)) board shall determine conflicting claims between applicants to a brand, and in so doing shall consider the priority of applicants.

       Sec. 8. RCW 16.57.080 and 1994 c 46 s 16 are each amended to read as follows:

       ((The director shall establish by rule a schedule for the renewal of registered brands.)) (1) Except as provided in subsection (2) of this section, the fee for the renewal of ((the)) a brand((s)) registration shall be ((no less than twenty-five)) seventy dollars for each two-year period of brand ownership((, except that)). However, the ((director)) board may((, in adopting a renewal schedule,)) provide for the collection of renewal fees on a prorated basis ((and may by rule increase the registration and renewal fee for brands by no more than fifty percent subsequent to a hearing under chapter 34.05 RCW and in conformance with RCW 16.57.015)). At least sixty days before the expiration of a registered brand, the ((director)) board shall notify by letter the owner of record of the brand that on the payment of the requisite application fee and application of renewal the ((director)) board shall issue the proof of payment allowing the brand owner exclusive ownership and use of the brand for the subsequent registration period. The failure of the registered owner to pay the renewal fee by the date required by rule shall cause such owner's brand to revert to the ((department)) board. The ((director)) board may for a period of one year following such reversion, reissue such brand only to the prior registered owner upon payment of the registration fee and a late filing fee ((to be prescribed by the director by rule subsequent to a hearing under chapter 34.05 RCW and in conformance with RCW 16.57.015,)) of twenty dollars for renewal subsequent to the regular renewal period. The ((director)) board may at the ((director's)) board's discretion, if such brand is not reissued within one year to the prior registered owner, issue such brand to any other applicant.

       (2) The board may adopt rules establishing criteria and fees for the permanent renewal of brands registered with the department or the board but renewed as livestock heritage brands. Such heritage brands are not intended for use on livestock.

       (3) This section is null and void unless subsections (1) through (5) of section 2 of this act and section 96 of this act become law.

       Sec. 9. RCW 16.57.090 and 1994 c 46 s 17 are each amended to read as follows:

       A brand is the personal property of the owner of record. Any instrument affecting the title of such brand shall be acknowledged in the presence of the recorded owner and a notary public. The ((director)) board shall record such instrument upon presentation and payment of a recording fee not to exceed fifteen dollars to be prescribed by the ((director)) board by rule subsequent to a hearing under chapter 34.05 RCW and in conformance with RCW 16.57.015. Such recording shall be constructive notice to all the world of the existence and conditions affecting the title to such brand. A copy of all records concerning the brand, certified by the ((director)) board, shall be received in evidence to all intent and purposes as the original instrument. The ((director)) board shall not be personally liable for failure of the ((director's)) board's agents to properly record such instrument.

       Sec. 10. RCW 16.57.100 and 1971 ex.s. c 135 s 3 are each amended to read as follows:

       The right to use a brand shall be evidenced by the original certificate issued by the ((director)) board showing that the brand is of present record or a certified copy of the record of such brand showing that it is of present record. A healed brand of record on livestock shall be prima facie evidence that the recorded owner of such brand has legal title to such livestock and is entitled to its possession: PROVIDED, That the ((director)) board may require additional proof of ownership of any animal showing more than one healed brand.

       Sec. 11. RCW 16.57.105 and 1967 c 240 s 38 are each amended to read as follows:

       Any person having a brand recorded with the ((department)) board shall have a preemptory right to use such brand and its design under any newly approved method of branding adopted by the ((director)) board.

       Sec. 12. RCW 16.57.110 and 1959 c 54 s 11 are each amended to read as follows:

       No brand shall be placed on livestock that is not permanent in nature and of a size that is not readily visible. The ((director)) board, in order to assure that brands are readily visible, may prescribe the size of branding irons to be used for ownership brands.

       Sec. 13. RCW 16.57.120 and 1991 c 110 s 2 are each amended to read as follows:

       No person shall remove or alter a brand of record on livestock without first having secured the written permission of the ((director)) board. Violation of this section shall be a gross misdemeanor punishable to the same extent as a gross misdemeanor that is punishable under RCW 9A.20.021.

       Sec. 14. RCW 16.57.130 and 1959 c 54 s 13 are each amended to read as follows:

       The ((director)) board shall not record a brand that is identical to a brand of present record; nor a brand so similar to a brand of present record that it will be difficult to distinguish between such brands when applied to livestock.

       Sec. 15. RCW 16.57.140 and 1994 c 46 s 18 are each amended to read as follows:

       The owner of a brand of record may procure from the ((director)) board a certified copy of the record of the owner's brand upon payment of a fee not to exceed seven dollars and fifty cents to be prescribed by the ((director)) board by rule subsequent to a hearing under chapter 34.05 RCW and in conformance with RCW 16.57.015.

       Sec. 16. RCW 16.57.150 and 1974 ex.s. c 64 s 5 are each amended to read as follows:

       The ((director)) board shall publish a book to be known as the "Washington State Brand Book", showing all the brands of record. Such book shall contain the name and address of the owners of brands of record and a copy of the brand laws and regulations. Supplements to such brand book showing newly recorded brands, amendments or newly adopted regulations, shall be published biennially, or prior thereto at the discretion of the ((director)) board: PROVIDED, That whenever ((he deems it)) necessary, the ((director)) board may issue a new brand book.

       Sec. 17. RCW 16.57.160 and 1991 c 110 s 3 are each amended to read as follows:

       (1) Except as provided in subsection (3) of this section, the ((director)) board may ((by)) adopt rules ((adopted subsequent to a public hearing designate)): Designating any point for mandatory ((brand)) livestock inspection of cattle or horses or the furnishing of proof that cattle passing or being transported through such points have been ((brand)) livestock inspected and are lawfully being moved; providing for self-inspection of cattle and horses; and providing for issuance of individual horse and cattle identification certificates or other means of horse and cattle identification.

       ((Further,)) (2) The ((director)) board or any peace officer may stop vehicles carrying cattle or horses to determine if ((such)) the cattle or horses are identified, branded, or accompanied by ((the form prescribed by the director under RCW 16.57.240 or a brand certificate issued by the department)) a certificate of permit, inspection certificate, self-inspection certificate, or other satisfactory proof of ownership, as determined by the board.

       (3) Inspection shall not be required for:

       (a) Any individual private sale of any unbranded dairy breed milk production cattle involving fifteen head or less; or

       (b) A sale by the owner of a dairy farm licensed under chapter 15.36 RCW of a male calf or male calves from the farm that are not more than thirty days old, as long as the license number for the dairy is listed on the bill of sale or its equivalent.

       Sec. 18. RCW 16.57.165 and 1971 ex.s. c 135 s 6 are each amended to read as follows:

       The ((director)) board may, in order to reduce the cost of ((brand)) livestock inspection to livestock owners, enter into agreements with any qualified county, municipal, or other local law enforcement agency, or qualified individuals for the purpose of performing ((brand)) livestock inspection in areas where ((department brand)) livestock inspection by the department may not readily be available.

       Sec. 19. RCW 16.57.170 and 1959 c 54 s 17 are each amended to read as follows:

       The ((director)) board may enter at any reasonable time any slaughterhouse or public livestock market to make an examination of the brands on livestock or hides, and may enter at any reasonable time an establishment where hides are held to examine them for brands. The ((director)) board may enter any of these premises at any reasonable time to examine all books and records required by law in matters relating to ((brand)) livestock inspection or other methods of livestock identification.

       Sec. 20. RCW 16.57.180 and 1959 c 54 s 18 are each amended to read as follows:

       Should the ((director)) board be denied access to any premises or establishment where such access was sought for the purposes set forth in RCW 16.57.170, ((he)) the board may apply to any court of competent jurisdiction for a search warrant authorizing access to such premises or establishment for said purposes. The court may upon such application, issue the search warrant for the purposes requested.

       Sec. 21. RCW 16.57.200 and 1959 c 54 s 20 are each amended to read as follows:

       Any owner or ((his)) an agent shall make the brand or brands on livestock being ((brand)) livestock inspected readily visible and shall cooperate with the ((director)) board to carry out such ((brand)) livestock inspection in a safe and expeditious manner.

       Sec. 22. RCW 16.57.210 and 1959 c 54 s 21 are each amended to read as follows:

       The ((director)) board shall have authority to arrest any person without warrant anywhere in the state found in the act of, or whom ((he)) the board has reason to believe is guilty of, driving, holding, selling or slaughtering stolen livestock. Any such person arrested by the ((director)) board shall be turned over to the sheriff of the county where the arrest was made, as quickly as possible.

       Sec. 23. RCW 16.57.220 and 1997 c 356 s 2 are each amended to read as follows:

       (1) The ((director)) livestock identification board shall cause a charge to be made for all ((brand)) livestock inspection of cattle and horses required under this chapter and rules adopted hereunder. Such charges shall be paid to the ((department)) board by the owner or person in possession unless requested by the purchaser and then such ((brand)) livestock inspection shall be paid by the purchaser requesting such ((brand)) livestock inspection. Except as provided by rule, such inspection charges shall be due and payable at the time ((brand)) livestock inspection is performed and shall be paid upon billing by the ((department)) board and if not shall constitute a prior lien on the cattle or cattle hides or horses or horse hides ((brand)) livestock inspected until such charge is paid. The ((director)) board in order to best utilize the services of the ((department)) livestock inspector in performing ((brand)) livestock inspection may establish schedules by days and hours when a ((brand)) livestock inspector will be on duty to perform ((brand)) livestock inspection at established inspection points. Except as provided in rules adopted under subsection (2) of this section, the fees for ((brand)) livestock inspection performed at inspection points according to schedules established by the ((director)) board shall be seventy-five cents per head for cattle and ((not more than)) three dollars per head for horses ((as prescribed by the director subsequent to a hearing under chapter 34.05 RCW and in conformance with RCW 16.57.015)). Fees for ((brand)) livestock inspection of cattle and horses at points other than those designated by the ((director)) board or not in accord with the schedules established by the ((director)) board shall be based on a fee schedule not to exceed actual net cost to the ((department)) board of performing the ((brand)) livestock inspection service. For the purpose of this section, actual costs shall mean fifteen dollars per hour and the current mileage rate set by the office of financial management.

       (2) The board may by rule prescribe a fee for the inspection of cattle performed at inspection points that is not less than seventy-five cents per head and not more than one dollar per head and may by rule prescribe a fee for the inspection of horses performed at inspection points that is not less than three dollars per head and not more than five dollars per head. However, a rule prescribing such a fee may be proposed and adopted by the board only by a unanimous vote of the members of the board entitled to vote under RCW 16.57.015. This subsection constitutes prior legislative approval for the initial fee prescribed by rule of the board for the inspection of cattle and the initial fee prescribed by rule of the board for the inspection of horses to result in an increase of the fee established under subsection (1) of this section for the inspection that is in excess of the fiscal growth factor under chapter 43.135 RCW.

       Sec. 24. RCW 16.57.230 and 1995 c 374 s 50 are each amended to read as follows:

       No person shall collect or make a charge for ((brand)) livestock inspection of livestock unless there has been an actual ((brand)) livestock inspection of such livestock.

       Sec. 25. RCW 16.57.240 and 1995 c 374 s 51 are each amended to read as follows:

       ((Any person purchasing, selling, holding for sale, trading, bartering, transferring title, slaughtering, handling, or transporting cattle shall keep a record on forms prescribed by the director. Such forms)) (1) Certificates of permit, inspection certificates, and self-inspection certificates shall show the owner, number, ((specie)) breed, sex, brand or other method of identification of ((such)) the cattle or horses and any other necessary information required by the ((director)) board. ((The original shall be kept for a period of three years or shall be furnished to the director upon demand or as prescribed by rule, one copy shall accompany the cattle to their destination and shall be subject to inspection at any time by the director or any peace officer or member of the state patrol: PROVIDED, That in the following instances only, cattle may be moved or transported within this state without being accompanied by an official certificate of permit, brand inspection certificate, bill of sale, or self-inspection slip:

       (1) When such cattle are moved or transported upon lands under the exclusive control of the person moving or transporting such cattle;

       (2) When such cattle are being moved or transported for temporary grazing or feeding purposes and have the registered brand of the person having or transporting such cattle.))

       (2) The board may cause certificate of permit forms to be issued to any person on payment of a fee established by rule.

       (3) Inspection certificates, self-inspection certificates, or other proof of ownership deemed satisfactory by the board shall be kept by the owner and/or person in possession of any cattle or horses and shall be furnished to the board or any peace officer upon demand.

       (4) Cattle may not be moved or transported within this state without being accompanied by a certificate of permit, inspection certificate, or self-inspection certificate except:

       (a) When the cattle are moved or transported upon lands under the exclusive control of the person moving or transporting the cattle; or

       (b) When the cattle are being moved or transported for temporary grazing or feeding purposes and have the recorded brand of the person having or transporting the cattle.

       (5) Certificates of permit, inspection certificates, or self-inspection certificates accompanying cattle being moved or transported within this state shall be subject to inspection at any time by the board or any peace officer.

       Sec. 26. RCW 16.57.260 and 1981 c 296 s 19 are each amended to read as follows:

       It shall be unlawful for any person to remove or cause to be removed or accept for removal from this state, any cattle or horses which are not accompanied at all times by an official ((brand)) livestock inspection certificate issued by the ((director)) board on such cattle or horses, except as provided in RCW 16.57.160.

       Sec. 27. RCW 16.57.270 and 1959 c 54 s 27 are each amended to read as follows:

       It shall be unlawful for any person moving or transporting livestock in this state to refuse to assist the ((director)) board or any peace officer in establishing the identity of such livestock being moved or transported.

       Sec. 28. RCW 16.57.275 and 1967 c 240 s 37 are each amended to read as follows:

       Any cattle carcass, or primal part thereof, of any breed or age being transported in this state from other than a state or federal licensed and inspected slaughterhouse or common carrier hauling for such slaughterhouse, shall be accompanied by a certificate of permit signed by the owner of such carcass or primal part thereof and, if such carcass or primal part is delivered to a facility custom handling such carcasses or primal part thereof, such certificate of permit shall be deposited with the owner or manager of such custom handling facility and such certificate of permit shall be retained for a period of one year and be made available to the ((department)) livestock identification board for inspection during reasonable business hours. ((The owner of such carcass or primal part thereof shall mail a copy of the said certificate of permit to the department within ten days of said transportation.))

       Sec. 29. RCW 16.57.280 and 1995 c 374 s 52 are each amended to read as follows:

       No person shall knowingly have unlawful possession of any livestock marked with a recorded brand or tattoo of another person unless:

       (1) Such livestock lawfully bears the person's own healed recorded brand; or

       (2) Such livestock is accompanied by a certificate of permit from the owner of the recorded brand or tattoo; or

       (3) Such livestock is accompanied by a ((brand)) livestock inspection certificate; or

       (4) Such cattle is accompanied by a self-inspection slip; or

       (5) Such livestock is accompanied by a bill of sale from the previous owner or other satisfactory proof of ownership.

       A violation of this section constitutes a gross misdemeanor punishable to the same extent as a gross misdemeanor that is punishable under RCW 9A.20.021.

       Sec. 30. RCW 16.57.290 and 1995 c 374 s 53 are each amended to read as follows:

       All unbranded cattle and horses and those bearing brands not recorded, in the current edition of this state's brand book, which are not accompanied by a certificate of permit, and those bearing brands recorded, in the current edition of this state's brand book, which are not accompanied by a certificate of permit signed by the owner of the brand when presented for inspection by the ((director)) board, shall be sold by the ((director)) board or the ((director's)) board's representative, unless other satisfactory proof of ownership is presented showing the person presenting them to be lawfully in possession. Upon the sale of such cattle or horses, the ((director)) board or the ((director's)) board's representative shall give the purchasers a bill of sale therefor, or, if theft is suspected, the cattle or horses may be impounded by the ((director)) board or the ((director's)) board's representative.

       Sec. 31. RCW 16.57.300 and 1989 c 286 s 24 are each amended to read as follows:

       The proceeds from the sale of cattle and horses as provided for under RCW 16.57.290, after paying the cost thereof, shall be paid to the ((director)) board, who shall make a record showing the brand or marks or other method of identification of the animals and the amount realized from the sale thereof. However, the proceeds from a sale of such cattle or horses at a licensed public livestock market shall be held by the licensee for a reasonable period not to exceed thirty days to permit the consignor to establish ownership or the right to sell such cattle or horses. If such consignor fails to establish legal ownership or the right to sell such cattle or horses, such proceeds shall be paid to the ((director)) board to be disposed of as any other estray proceeds.

       Sec. 32. RCW 16.57.310 and 1959 c 54 s 31 are each amended to read as follows:

       When a person has been notified by registered mail that animals bearing his or her recorded brand have been sold by the ((director)) board, he or she shall present to the ((director)) board a claim on the proceeds within ten days from the receipt of the notice or the ((director)) board may decide that no claim exists.

       Sec. 33. RCW 16.57.320 and 1991 c 110 s 6 are each amended to read as follows:

       If, after the expiration of one year from the date of sale, the person presenting the animals for inspection has not provided the ((director)) board with satisfactory proof of ownership, the proceeds from the sale shall be paid on the claim of the owner of the recorded brand. However, it shall be a gross misdemeanor for the owner of the recorded brand to knowingly accept such funds after he or she has sold, bartered or traded such animals to the claimant or any other person. A gross misdemeanor under this section is punishable to the same extent as a gross misdemeanor that is punishable under RCW 9A.20.021.

       Sec. 34. RCW 16.57.330 and 1959 c 54 s 33 are each amended to read as follows:

       If, after the expiration of one year from the date of sale, no claim is made, the money shall be credited to the ((department of agriculture)) board to be expended in carrying out the provisions of this chapter.

       Sec. 35. RCW 16.57.340 and 1959 c 54 s 34 are each amended to read as follows:

       The ((director)) board shall have the authority to enter into reciprocal agreements with any or all states to prevent the theft, misappropriation or loss of identification of livestock. The ((director)) board may declare any livestock which is shipped or moved into this state from such states estrays if such livestock is not accompanied by the proper official brand certificate or other such certificates required by the law of the state of origin of such livestock. The ((director)) board may hold such livestock subject to all costs of holding or sell such livestock and send the funds, after the deduction of the cost of such sale, to the proper authority in the state of origin of such livestock.

       Sec. 36. RCW 16.57.350 and 1994 c 46 s 8 are each amended to read as follows:

       The ((director)) board may adopt such rules as are necessary to carry out the purposes of this chapter. It shall be the duty of the ((director)) board to enforce and carry out the provisions of this chapter and/or rules adopted hereunder. No person shall interfere with the ((director)) board when ((he or she)) the board is performing or carrying out duties imposed on ((him or her)) it by this chapter and/or rules adopted hereunder.

       Sec. 37. RCW 16.57.360 and 1991 c 110 s 7 are each amended to read as follows:

       The ((department)) board is authorized to issue notices of and enforce civil infractions in the manner prescribed under chapter 7.80 RCW.

       The violation of any provision of this chapter and/or rules and regulations adopted hereunder shall constitute a class I civil infraction as provided under chapter 7.80 RCW unless otherwise specified herein.

       Sec. 38. RCW 16.57.370 and 1959 c 54 s 37 are each amended to read as follows:

       All fees collected under the provisions of this chapter shall be retained and deposited by the ((director)) board to be used only for the enforcement of this chapter.

       Sec. 39. RCW 16.57.400 and 1994 c 46 s 20 are each amended to read as follows:

       The ((director)) board may provide by rules ((and regulations)) adopted pursuant to chapter 34.05 RCW for the issuance of individual horse and cattle identification certificates or other means of horse and cattle identification deemed appropriate. Such certificates or other means of identification shall be valid only for the use of the horse and cattle owner in whose name it is issued.

       Horses and cattle identified pursuant to the provisions of this section and the rules ((and regulations)) adopted hereunder shall not be subject to ((brand)) livestock inspection except when sold at points provided for in RCW ((16.57.380)) 16.57.160. The ((director)) board shall charge a fee for the certificates or other means of identification authorized pursuant to this section and no identification shall be issued until the ((director)) board has received the fee. The schedule of fees shall be established in accordance with the provisions of chapter 34.05 RCW.

       Sec. 40. RCW 16.57.407 and 1996 c 105 s 3 are each amended to read as follows:

       The ((department)) livestock identification board has the authority to conduct an investigation of an incident where scars or other marks indicate that a microchip has been removed from a horse.

       Sec. 41. RCW 16.57.410 and 1993 c 354 s 11 are each amended to read as follows:

       (1) No person may act as a registering agency without a permit issued by the ((department)) board. The ((director)) board may issue a permit to any person or organization to act as a registering agency for the purpose of issuing permanent identification symbols for horses in a manner prescribed by the ((director)) board. Application for such permit, or the renewal thereof by January 1 of each year, shall be on a form prescribed by the ((director)) board, and accompanied by the proof of registration to be issued, any other documents required by the ((director)) board, and a fee of one hundred dollars.

       (2) Each registering agency shall maintain a permanent record for each individual identification symbol. The record shall include, but need not be limited to, the name, address, and phone number of the horse owner and a general description of the horse. A copy of each permanent record shall be forwarded to the ((director)) board, if requested by the ((director)) board.

       (3) Individual identification symbols shall be inspected as required for brands under RCW 16.57.220 ((and 16.57.380)). Any horse presented for inspection and bearing such a symbol, but not accompanied by proof of registration and certificate of permit, shall be sold as provided under RCW 16.57.290 through 16.57.330.

       (4) The ((director)) board shall adopt such rules as are necessary for the effective administration of this section pursuant to chapter 34.05 RCW.

       Sec. 42. RCW 16.57.420 and 1993 c 105 s 3 are each amended to read as follows:

       The ((department)) livestock identification board may, in consultation with representatives of the ratite industry, develop by rule a system that provides for the identification of individual ratites through the use of microchipping. The ((department)) board may establish fees for the issuance or reissuance of microchipping numbers sufficient to cover the expenses of the ((department)) board.

       Sec. 43. RCW 16.58.020 and 1971 ex.s. c 181 s 2 are each amended to read as follows:

       For the purpose of this chapter:

       (1) "Livestock identification board" or "board" means the livestock identification board defined under RCW 16.57.010.

       (2) "Certified feed lot" means any place, establishment, or facility commonly known as a commercial feed lot, cattle feed lot, or the like, which complies with all of the requirements of this chapter, and any ((regulations)) rules adopted pursuant to the provisions of this chapter and which holds a valid license from the ((director)) board as hereinafter provided.

       (((2) "Department" means the department of agriculture of the state of Washington.

       (3) "Director" means the director of the department or his duly authorized representative.

       (4))) (3) "Licensee" means any persons licensed under the provisions of this chapter.

       (((5))) (4) "Person" means a natural person, individual, firm, partnership, corporation, company, society, and association, and every officer, agent or employee thereof. This term shall import either the singular or the plural as the case may be.

       Sec. 44. RCW 16.58.030 and 1971 ex.s. c 181 s 3 are each amended to read as follows:

       The ((director)) board may adopt such rules ((and regulations)) as are necessary to carry out the purpose of this chapter. The adoption of such rules shall be subject to the provisions of this chapter and rules ((and regulations)) adopted hereunder. No person shall interfere with the ((director when he)) board when it is performing or carrying out any duties imposed ((upon him)) by this chapter or rules ((and regulations)) adopted hereunder.

       Sec. 45. RCW 16.58.040 and 1971 ex.s. c 181 s 4 are each amended to read as follows:

       On or after August 9, 1971, any person desiring to engage in the business of operating one or more certified feed lots shall obtain an annual license from the ((director)) board for such purpose. The application for a license shall be on a form prescribed by the ((director)) board and shall include the following:

       (1) The number of certified feed lots the applicant intends to operate and their exact location and mailing address;

       (2) The legal description of the land on which the certified feed lot will be situated;

       (3) A complete description of the facilities used for feeding and handling of cattle at each certified feed lot;

       (4) The estimated number of cattle which can be handled for feeding purposes at each such certified feed lot; and

       (5) Any other information necessary to carry out the purpose and provisions of this chapter and rules ((or regulations)) adopted hereunder.

       Sec. 46. RCW 16.58.050 and 1997 c 356 s 4 are each amended to read as follows:

       The application for an annual license to engage in the business of operating one or more certified feed lots shall be accompanied by a license fee of seven hundred fifty dollars. Upon approval of the application by the ((director)) livestock identification board and compliance with the provisions of this chapter and rules adopted hereunder, the applicant shall be issued a license or a renewal thereof. The board shall conduct an inspection of all cattle and their corresponding ownership documents prior to issuing an original license. The inspection fee shall be the higher of the current inspection fee per head of cattle or time and mileage as set forth in RCW 16.57.220.

       Sec. 47. RCW 16.58.060 and 1991 c 109 s 10 are each amended to read as follows:

       The ((director)) board shall establish by rule an expiration date or dates for all certified feed lot licenses. License fees shall be prorated where necessary to accommodate staggering of expiration dates of a license or licenses. If an application for renewal of a certified feed lot license is not received by the ((department)) board per the date required by rule or should a person fail, refuse, or neglect to apply for renewal of a preexisting license on or before the date of expiration, that person shall be assessed an additional twenty-five dollars which shall be added to the regular license fee and shall be paid before the ((director)) board may issue a license to the applicant.

       Sec. 48. RCW 16.58.070 and 1989 c 175 s 54 are each amended to read as follows:

       The ((director)) livestock identification board is authorized to deny, suspend, or revoke a license in accord with the provisions of chapter 34.05 RCW if ((he)) it finds that there has been a failure to comply with any requirement of this chapter or rules ((and regulations)) adopted hereunder. Hearings for the revocation, suspension, or denial of a license shall be subject to the provisions of chapter 34.05 RCW concerning adjudicative proceedings.

       Sec. 49. RCW 16.58.080 and 1971 ex.s. c 181 s 8 are each amended to read as follows:

       Every certified feed lot shall be equipped with a facility or a livestock pen, approved by the ((director)) livestock identification board as to location and construction within the ((said)) feed lot so that necessary ((brand)) livestock inspection can be carried on in a proper, expeditious and safe manner. Each licensee shall furnish the ((director)) board with sufficient help necessary to carry out ((brand)) livestock inspection in the manner set forth above.

       Sec. 50. RCW 16.58.095 and 1991 c 109 s 11 are each amended to read as follows:

       All cattle entering or reentering a certified feed lot must be inspected for brands upon entry, unless they are accompanied by a ((brand)) livestock inspection certificate issued by the ((director)) livestock identification board, or any other agency authorized in any state or Canadian province by law to issue such a certificate. Licensees shall report a discrepancy between cattle entering or reentering a certified feed lot and the ((brand)) livestock inspection certificate accompanying the cattle to the nearest ((brand)) livestock inspector immediately. A discrepancy may require an inspection of all the cattle entering or reentering the lot, except as may otherwise be provided by rule.

       Sec. 51. RCW 16.58.100 and 1979 c 81 s 3 are each amended to read as follows:

       The ((director)) livestock identification board shall each year conduct audits of the cattle received, fed, handled, and shipped by the licensee at each certified feed lot. Such audits shall be for the purpose of determining if such cattle correlate with the ((brand)) livestock inspection certificates issued in their behalf and that the certificate of assurance furnished the ((director)) board by the licensee correlates with his or her assurance that ((brand)) livestock inspected cattle were not commingled with uninspected cattle.

       Sec. 52. RCW 16.58.110 and 1991 c 109 s 12 are each amended to read as follows:

       All certified feed lots shall furnish the ((director)) livestock identification board with records as requested by ((him)) it from time to time on all cattle entering or on feed in ((said)) certified feed lots and dispersed therefrom. All such records shall be subject to examination by the ((director)) board for the purpose of maintaining the integrity of the identity of all such cattle. The ((director)) board may make the examinations only during regular business hours except in an emergency to protect the interest of the owners of such cattle.

       Sec. 53. RCW 16.58.120 and 1991 c 109 s 13 are each amended to read as follows:

       The licensee shall maintain sufficient records as required by the ((director)) livestock identification board at each certified feed lot, if ((said)) the licensee operates more than one certified feed lot.

       Sec. 54. RCW 16.58.130 and 1997 c 356 s 7 are each amended to read as follows:

       (1) Each licensee shall pay to the ((director)) livestock identification board a fee of ((twelve)) fifteen cents for each head of cattle handled through the licensee's feed lot unless a fee has been adopted under subsection (2) of this section, in which case the licensee shall pay the fee adopted under subsection (2) of this section. Payment of such fee shall be made by the licensee on a monthly basis. Failure to pay as required shall be grounds for suspension or revocation of a certified feed lot license. Further, the ((director)) board shall not renew a certified feed lot license if a licensee has failed to make prompt and timely payments.

       (2) The board may by rule alter the fee prescribed in subsection (1) of this section for each head of cattle handled through a licensee's feed lot. This authority of the board includes, but is not limited to, prescribing a fee for each head of cattle owned by the licensee handled through the licensee's feed lot and prescribing a different fee for each head of cattle owned by a person other than the licensee handled through the licensee's feed lot.

       Sec. 55. RCW 16.58.140 and 1979 c 81 s 5 are each amended to read as follows:

       All fees provided for in this chapter shall be retained by the ((director)) board for the purpose of enforcing and carrying out the purpose and provisions of this chapter or chapter 16.57 RCW.

       Sec. 56. RCW 16.58.150 and 1971 ex.s. c 181 s 15 are each amended to read as follows:

       No ((brand)) livestock inspection shall be required when cattle are moved or transferred from one certified feed lot to another or the transfer of cattle from a certified feed lot to a point within this state, or out of state where this state maintains ((brand)) livestock inspection, for the purpose of immediate slaughter.

       Sec. 57. RCW 16.58.160 and 1991 c 109 s 15 are each amended to read as follows:

       The ((director)) board may, when a certified feed lot's conditions become such that the integrity of reports or records of the cattle therein becomes doubtful, suspend such certified feed lot's license until such time as the ((director)) board can conduct an investigation to carry out the purpose of this chapter.

       Sec. 58. RCW 16.65.010 and 1983 c 298 s 1 are each amended to read as follows:

       For the purposes of this chapter:

       (1) The term "public livestock market" means any place, establishment or facility commonly known as a "public livestock market", "livestock auction market", "livestock sales ring", yards selling on commission, or the like, conducted or operated for compensation or profit as a public livestock market, consisting of pens or other enclosures, and their appurtenances in which livestock is received, held, sold, kept for sale or shipment. The term does not include the operation of a person licensed under this chapter to operate a special open consignment horse sale.

       (2) (("Department" means the department of agriculture of the state of Washington.

       (3) "Director" means the director of the department or his duly authorized representative.

       (4))) "Licensee" means any person licensed under the provisions of this chapter.

       (((5))) (3) "Livestock" includes horses, mules, burros, cattle, sheep, swine, and goats.

       (((6))) (4) "Livestock identification board" or "board" means the board created in RCW 16.57.015.

       (5) "Person" means a natural person, individual, firm, partnership, corporation, company, society, and association, and every officer, agent or employee thereof. This term shall import either the singular or the plural as the case may be.

       (((7))) (6) "Stockyard" means any place, establishment, or facility commonly known as a stockyard consisting of pens or other enclosures and their appurtenances in which livestock services such as feeding, watering, weighing, sorting, receiving and shipping are offered to the public: PROVIDED, That stockyard shall not include any facilities where livestock is offered for sale at public auction, feed lots, or quarantined registered feed lots.

       (((8))) (7) "Packer" means any person engaged in the business of slaughtering, manufacturing, preparing meat or meat products for sale, marketing meat, meat food products or livestock products.

       (((9))) (8) "Deputy state veterinarian" means a graduate veterinarian authorized to practice in the state of Washington and appointed or deputized by the director of agriculture as his or her duly authorized representative.

       (((10))) (9) "Special open consignment horse sale" means a sale conducted by a person other than the operator of a public livestock market which is limited to the consignment of horses and donkeys only for sale on an occasional and seasonal basis.

       Sec. 59. RCW 16.65.015 and 1983 c 298 s 2 are each amended to read as follows:

       This chapter does not apply to:

       (1) A farmer selling his or her own livestock on the farmer's own premises by auction or any other method.

       (2) A farmers' cooperative association or an association of livestock breeders when any class of their own livestock is assembled and offered for sale at a special sale on an occasional and seasonal basis under the association's management and responsibility, and the special sale has been approved by the ((director)) board in writing. However, the special sale shall be subject to brand and health inspection requirements as provided in this chapter for sales at public livestock markets.

       Sec. 60. RCW 16.65.020 and 1983 c 298 s 5 are each amended to read as follows:

       Public livestock markets and special open consignment horse sales shall be under the direction and supervision of the ((director)) livestock identification board, and the ((director)) board, but not ((his)) its duly authorized representative, may adopt such rules ((and regulations)) as are necessary to carry out the purpose of this chapter. It shall be the duty of the ((director)) board to enforce and carry out the provisions of this chapter and rules ((and regulations)) adopted hereunder. No person shall interfere with the ((director)) board when ((he)) it is performing or carrying out any duties imposed upon ((him)) it by this chapter or rules ((and regulations)) adopted hereunder.

       Sec. 61. RCW 16.65.030 and 1995 c 374 s 54 are each amended to read as follows:

       (1) ((On and after June 10, 1959,)) No person shall operate a public livestock market without first having obtained a license from the ((director)) livestock identification board. Application for ((such)) a license shall be in writing on forms prescribed by the ((director)) board, and shall include the following:

       (a) A nonrefundable original license application fee of fifteen hundred dollars.

       (b) A legal description of the property upon which the public livestock market shall be located.

       (c) A complete description and blueprints or plans of the public livestock market physical plant, yards, pens, and all facilities the applicant proposes to use in the operation of such public livestock market.

       (d) ((A detailed statement showing all the assets and liabilities of the applicant which must reflect a sufficient net worth to construct or operate a public livestock market.)) A financial statement, compiled or audited by a certified or licensed public accountant, to determine whether or not the applicant meets the minimum net worth requirements, established by the director by rule, to construct and/or operate a public livestock market. If the applicant is a subsidiary of a larger company, corporation, society, or cooperative association, both the parent company and the subsidiary company must submit a financial statement to determine whether or not the applicant meets the minimum net worth requirements. All financial statement information required by this subsection is confidential information and not subject to public disclosure.

       (e) The schedule of rates and charges the applicant proposes to impose on the owners of livestock for services rendered in the operation of such livestock market.

       (f) The weekly or monthly sales day or days on which the applicant proposes to operate his or her public livestock market sales and the class of livestock that may be sold on these days.

       (g) Projected source and quantity of livestock((, by county,)) anticipated to be handled.

       (h) Projected ((income and expense statements for)) gross dollar volume of business to be carried on, at, or through the public livestock market during the first year's operation.

       (i) Facts upon which ((are)) is based the conclusion that the trade area and the livestock industry will benefit because of the proposed market.

       (j) ((Such)) Other information as the ((director)) board may ((reasonably)) require by rule.

       (2) ((The director shall, after public hearing as provided by chapter 34.05 RCW, grant or deny an application for original license for a public livestock market after considering evidence and testimony relating to all of the requirements of this section and giving reasonable consideration at the same hearing to:

       (a) Benefits to the livestock industry to be derived from the establishment and operation of the public livestock market proposed in the application; and

       (b) The present market services elsewhere available to the trade area proposed to be served.

       (3) Applications for renewal under RCW 16.65.040 shall include all information under subsection (1) of this section, except subsection (1)(a) of this section.)) If the board determines that the applicant meets all the requirements of subsection (1) of this section, the board shall conduct a public hearing as provided by chapter 34.05 RCW, and shall grant or deny an application for original license for a public livestock market after considering evidence and testimony relating to the requirements of this section and giving reasonable consideration to:

       (a) Benefits to the livestock industry to be derived from the establishment and operation of the public livestock market proposed in the application;

       (b) The geographical area that will be affected;

       (c) The conflict, if any, with sales days already allocated in the area;

       (d) The amount and class of livestock available for marketing in the area;

       (e) Buyers available to the proposed market; and

       (f) Any other conditions affecting the orderly marketing of livestock.

       (3) Before a license is issued to operate a public livestock market, the applicant must:

       (a) Execute and deliver to the board a surety bond as required under RCW 16.65.200;

       (b) Provide evidence of a custodial account, as required under RCW 16.65.140, for the consignor's proceeds;

       (c) Pay the appropriate license fee; and

       (d) Provide other information required under this chapter and rules adopted under this chapter.

       Sec. 62. RCW 16.65.037 and 1997 c 356 s 8 are each amended to read as follows:

       (1) Upon the approval of the application by the ((director)) livestock identification board and compliance with the provisions of this chapter, the applicant shall be issued a license or renewal thereof. Any license issued under the provisions of this chapter shall only be valid at location and for the sales day or days for which the license was issued.

       (2) The license fee shall be based on the average gross sales volume per official sales day of that market:

       (a) Markets with an average gross sales volume up to and including ten thousand dollars, a one hundred fifty dollar fee;

       (b) Markets with an average gross sales volume over ten thousand dollars and up to and including fifty thousand dollars, a three hundred fifty dollar fee; and

       (c) Markets with an average gross sales volume over fifty thousand dollars, a four hundred fifty dollar fee.

       The fees for public market licenses shall be set by the ((director)) board by rule subsequent to a hearing under chapter 34.05 RCW and in conformance with RCW 16.57.015.

       (3) Any applicant operating more than one public livestock market shall make a separate application for a license to operate each such public livestock market, and each such application shall be accompanied by the appropriate application fee.

       Sec. 63. RCW 16.65.040 and 1983 c 298 s 6 are each amended to read as follows:

       All public livestock market licenses provided for in this chapter shall expire on March 1st subsequent to the date of issue. Any person who fails, refuses, or neglects to apply for a renewal of a preexisting license on or before the date of expiration, shall pay a penalty of twenty-five dollars, which shall be added to the regular license fee, before such license may be renewed by the ((director)) livestock identification board.

       Sec. 64. RCW 16.65.042 and 1983 c 298 s 3 are each amended to read as follows:

       (1) A person shall not operate a special open consignment horse sale without first obtaining a license from the ((director)) livestock identification board. The application for the license shall include:

       (a) A detailed statement showing all of the assets and liabilities of the applicant;

       (b) The schedule of rates and charges the applicant proposes to impose on the owners of horses for services rendered in the operation of the horse sale;

       (c) The specific date and exact location of the proposed sale;

       (d) Projected quantity and approximate value of horses to be handled; and

       (e) Such other information as the ((director)) board may reasonably require.

       (2) The application shall be accompanied by a license fee of one hundred dollars. Upon the approval of the application by the ((director)) board and compliance with this chapter, the applicant shall be issued a license. A special open consignment horse sale license is valid only for the specific date or dates and exact location for which the license was issued.

       Sec. 65. RCW 16.65.050 and 1959 c 107 s 5 are each amended to read as follows:

       All fees ((provided for)) collected or received by the board under this chapter shall be ((retained by the director)) deposited by the board in the livestock identification account created in section 3 of this act. Moneys collected under this chapter may be expended by the board without appropriation for the purpose of enforcing this chapter.

       Sec. 66. RCW 16.65.080 and 1985 c 415 s 9 are each amended to read as follows:

       (1) The ((director)) livestock identification board is authorized to deny, suspend, or revoke a license in the manner prescribed herein, when there are findings by the ((director)) board that any licensee (a) has been guilty of fraud or misrepresentation as to titles, charges, numbers, brands, weights, proceeds of sale, or ownership of livestock; (b) has attempted payment to a consignor by a check the licensee knows not to be backed by sufficient funds to cover such check; (c) has violated any of the provisions of this chapter or rules ((and regulations)) adopted hereunder; (d) has violated any laws of the state that require health or ((brand)) livestock inspection of livestock; (e) has violated any condition of the bond, as provided in this chapter. However, the ((director)) board may deny a license if the applicant refuses to accept the sales day or days allocated to ((him)) it under the provisions of this chapter.

       (2) In all proceedings for revocation, suspension, or denial of a license the licensee or applicant shall be given an opportunity to be heard in regard to such revocation, suspension or denial of a license. The ((director)) board shall give the licensee or applicant twenty days' notice in writing and such notice shall specify the charges or reasons for such revocation, suspension or denial. The notice shall also state the date, time and place where such hearing is to be held. Such hearings shall be held in the city where the licensee has his or her principal place of business, or where the applicant resides, unless some other place be agreed upon by the parties, and the defendant may be represented by counsel.

       (3) The ((director)) board may issue subpoenas to compel the attendance of witnesses, and/or the production of books or documents anywhere in the state. The applicant or licensee shall have opportunity to be heard, and may have such subpoenas issued as he or she desires. Subpoenas shall be served in the same manner as in civil cases in the superior court. Witnesses shall testify under oath which may be administered by the ((director)) board. Testimony shall be recorded, and may be taken by deposition under such rules as the ((director)) board may prescribe.

       (4) The ((director)) board shall hear and determine the charges, make findings and conclusions upon the evidence produced, and file them in ((his)) its office, together with a record of all of the evidence, and serve upon the accused a copy of such findings and conclusions.

       Sec. 67. RCW 16.65.090 and 1997 c 356 s 10 are each amended to read as follows:

       The ((director)) livestock identification board shall provide for ((brand)) livestock inspection. When such ((brand)) livestock inspection is required the licensee shall collect from the consignor and pay to the ((department)) board, as provided by law, a fee for ((brand)) livestock inspection for each animal consigned to the public livestock market or special open consignment horse sale. However, if in any one sale day the total fees collected for ((brand)) livestock inspection do not exceed ninety dollars, then such licensee shall pay ninety dollars for such ((brand)) livestock inspection or as much thereof as the ((director)) board may prescribe.

       Sec. 68. RCW 16.65.100 and 1983 c 298 s 9 are each amended to read as follows:

       The licensee of each public livestock market or special open consignment horse sale shall collect from any purchaser of livestock requesting ((brand)) livestock inspection a fee as provided by law for each animal inspected. Such fee shall be in addition to the fee charged to the consignor for ((brand)) livestock inspection and shall not apply to the minimum fee chargeable to the licensee.

       Sec. 69. RCW 16.65.140 and 1971 ex.s. c 192 s 4 are each amended to read as follows:

       Each licensee shall establish a custodial account for consignor's proceeds. All funds derived from the sale of livestock handled on a commission or agency basis shall be deposited in that account. Such account shall be drawn on only for the payment of net proceeds to the consignor, or such other person or persons of whom such licensee has knowledge is entitled to such proceeds, and to obtain from such proceeds only the sums due the licensee as compensation for his or her services as are set out in his or her tariffs, and for such sums as are necessary to pay all legal charges against the consignment of livestock which the licensee in his or her capacity as agent is required to pay for on behalf of the consignor or shipper. The licensee in each case shall keep such accounts and records that will at all times disclose the names of the consignors and the amount due and payable to each from the funds in the custodial account for consignor's proceeds. The licensee shall maintain the custodial account for consignor's proceeds in a manner that will expedite examination by the ((director)) livestock identification board and reflect compliance with the requirements of this section.

       Sec. 70. RCW 16.65.190 and 1983 c 298 s 12 are each amended to read as follows:

       No person shall hereafter operate a public livestock market or special open consignment horse sale unless such person has filed a schedule with the application for license to operate such public livestock market or special open consignment horse sale. Such schedule shall show all rates and charges for stockyard services to be furnished by such person at such public livestock market or special open consignment horse sale.

       (1) Schedules shall be posted conspicuously at the public livestock market or special open consignment horse sale, and shall plainly state all such rates and charges in such detail as the ((director)) livestock identification board may require, and shall state any rules ((and regulations)) which in any manner change, affect, or determine any part of the aggregate of such rates or charges, or the value of the stockyard services furnished. The ((director)) board may determine and prescribe the form and manner in which such schedule shall be prepared, arranged and posted.

       (2) No changes shall be made in rates or charges so filed and published except after thirty days' notice to the ((director)) board and to the public filed and posted as aforesaid, which shall plainly state the changes proposed to be made and the time such changes will go into effect.

       (3) No licensee shall charge, demand or collect a greater or a lesser or a different compensation for such service than the rates and charges specified in the schedule filed with the ((director)) board and in effect at the time; nor shall a licensee refund or remit in any manner any portion of the rates or charges so specified (but this shall not prohibit a cooperative association of producers from properly returning to its members, on a patronage basis, its excess earnings on their livestock); nor shall a licensee extend to any person at such public livestock market or special open consignment horse sale any stockyard services except such as are specified in such schedule.

       Sec. 71. RCW 16.65.200 and 1983 c 298 s 13 are each amended to read as follows:

       Before the license is issued to operate a public livestock market or special open consignment horse sale, the applicant shall execute and deliver to the ((director)) livestock identification board a surety bond in a sum as herein provided for, executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety. ((Said)) The bond shall be a standard form and approved by the ((director)) board as to terms and conditions. ((Said)) The bond shall be conditioned that the principal will not commit any fraudulent act and will comply with the provisions of this chapter and the rules ((and/or regulations)) adopted hereunder. ((Said)) The bond shall be to the state in favor of every consignor and/or vendor creditor whose livestock was handled or sold through or at the licensee's public livestock market or special open consignment horse sale: PROVIDED, That if such applicant is bonded as a market agency under the provisions of the packers and stockyards act, (7 U.S.C. 181) as amended, on March 20, 1961, in a sum equal to or greater than the sum required under the provisions of this chapter, and such applicant furnishes the ((director)) board with a bond approved by the United States secretary of agriculture ((naming the department as trustee)), the ((director)) board may accept such bond and its method of termination in lieu of the bond provided for herein and issue a license if such applicant meets all the other requirements of this chapter.

       The total and aggregate liability of the surety for all claims upon the bond shall be limited to the face of such bond. Every bond filed with and approved by the ((director)) board shall, without the necessity of periodic renewal, remain in force and effect until such time as the license of the licensee is revoked for cause or otherwise canceled. The surety on a bond, as provided herein, shall be released and discharged from all liability to the state accruing on such bond upon compliance with the provisions of RCW 19.72.110 concerning notice and proof of service, as enacted or hereafter amended, but this shall not operate to relieve, release or discharge the surety from any liability already accrued or which shall accrue (due and to become due hereunder) before the expiration period provided for in RCW 19.72.110 concerning notice and proof of service as enacted or hereafter amended, and unless the principal shall before the expiration of such period, file a new bond, the ((director)) board shall forthwith cancel the principal's license.

       Sec. 72. RCW 16.65.220 and 1971 ex.s. c 192 s 7 are each amended to read as follows:

       If the application for a license to operate a public livestock market is from a new public livestock market which has not operated in the past twelve-month period, the ((director)) livestock identification board shall determine a bond, in a reasonable sum, that the applicant shall execute in favor of the state, which shall not be less than ten thousand dollars nor greater than twenty-five thousand dollars: PROVIDED, That the ((director)) board may at any time, upon written notice, review the licensee's operations and determine whether, because of increased or decreased sales, the amount of the bond should be altered.

       Sec. 73. RCW 16.65.235 and 1973 c 142 s 3 are each amended to read as follows:

       In lieu of the surety bond required under the provisions of this chapter, an applicant or licensee may file with the ((director)) livestock identification board a deposit consisting of cash or other security acceptable to the ((director)) board. The ((director)) board may adopt rules ((and regulations)) necessary for the administration of such security.

       Sec. 74. RCW 16.65.250 and 1959 c 107 s 25 are each amended to read as follows:

       The ((director)) livestock identification board or any vendor or consignor creditor may also bring action upon ((said)) the bond against both principal and surety in any court of competent jurisdiction to recover the damages caused by any failure to comply with the provisions of this chapter and the rules ((and/or regulations)) adopted hereunder.

       Sec. 75. RCW 16.65.260 and 1983 c 298 s 14 are each amended to read as follows:

       In case of failure by a licensee to pay amounts due a vendor or consignor creditor whose livestock was handled or sold through or at the licensee's public livestock market or special open consignment horse sale, as evidenced by a verified complaint filed with the ((director)) livestock identification board, the ((director)) board may proceed forthwith to ascertain the names and addresses of all vendor or consignor creditors of such licensee, together with the amounts due and owing to them and each of them by such licensee, and shall request all such vendor and consignor creditors to file a verified statement of their respective claims with the ((director)) board. Such request shall be addressed to each known vendor or consignor creditor at his or her last known address.

       Sec. 76. RCW 16.65.270 and 1959 c 107 s 27 are each amended to read as follows:

       If a vendor or consignor creditor so addressed fails, refuses or neglects to file in the office of the ((director his)) livestock identification board a verified claim as requested by the ((director)) board within sixty days from the date of such request, the ((director)) board shall thereupon be relieved of further duty or action hereunder on behalf of ((said)) the producer or consignor creditor.

       Sec. 77. RCW 16.65.280 and 1959 c 107 s 28 are each amended to read as follows:

       Where by reason of the absence of records, or other circumstances making it impossible or unreasonable for the ((director)) livestock identification board to ascertain the names and addresses of all ((said)) the vendor and consignor creditors, the ((director)) board, after exerting due diligence and making reasonable inquiry to secure ((said)) the information from all reasonable and available sources, may make demand on ((said)) the bond on the basis of information then in ((his)) its possession, and thereafter shall not be liable or responsible for claims or the handling of claims which may subsequently appear or be discovered.

       Sec. 78. RCW 16.65.290 and 1959 c 107 s 29 are each amended to read as follows:

       Upon ascertaining all claims and statements in the manner herein set forth, the ((director)) livestock identification board may then make demand upon the bond on behalf of those claimants whose statements have been filed, and shall have the power to settle or compromise ((said)) the claims with the surety company on the bond, and is empowered in such cases to execute and deliver a release and discharge of the bond involved.

       Sec. 79. RCW 16.65.300 and 1959 c 107 s 30 are each amended to read as follows:

       Upon the refusal of the surety company to pay the demand, the ((director)) livestock identification board may thereupon bring an action on the bond in behalf of ((said)) the vendor and consignor creditors. Upon any action being commenced on ((said)) the bond, the ((director)) board may require the filing of a new bond. Immediately upon the recovery in any action on such bond such licensee shall file a new bond. Upon failure to file the same within ten days, in either case, such failure shall constitute grounds for the suspension or revocation of his or her license.

       Sec. 80. RCW 16.65.310 and 1959 c 107 s 31 are each amended to read as follows:

       In any settlement or compromise by the ((director)) livestock identification board with a surety company as provided in RCW 16.65.290, where there are two or more consignor and/or vendor creditors that have filed claims, either fixed or contingent, against a licensee's bond, such creditors shall share pro rata in the proceeds of the bond to the extent of their actual damage: PROVIDED, That the claims of the state and the ((department)) board which may accrue from the conduct of the licensee's public livestock market shall have priority over all other claims.

       Sec. 81. RCW 16.65.320 and 1985 c 415 s 10 are each amended to read as follows:

       For the purpose of enforcing the provisions of this chapter, the ((director)) livestock identification board on the ((director's)) board's own motion or upon the verified complaint of any vendor or consignor against any licensee, or agent, or any person assuming or attempting to act as such, shall have full authority to make any and all necessary investigations. The ((director)) board is empowered to administer oaths of verification of such complaints.

       Sec. 82. RCW 16.65.330 and 1959 c 107 s 33 are each amended to read as follows:

       For the purpose of making investigations as provided for in RCW 16.65.320, the ((director)) livestock identification board may enter a public livestock market and examine any records required under the provisions of this chapter. The ((director)) board shall have full authority to issue subpoenas requiring the attendance of witnesses before ((him)) it, together with all books, memorandums, papers, and other documents relative to the matters under investigation, and to administer oaths and take testimony thereunder.

       Sec. 83. RCW 16.65.340 and 1967 c 192 s 2 are each amended to read as follows:

       The ((director)) livestock identification board shall, when livestock is sold, traded, exchanged or handled at or through a public livestock market, require such testing, treating, identifying, examining and record keeping of such livestock by a ((deputy)) state licensed and accredited veterinarian employed by the market as in the ((director's)) board's judgment may be necessary to prevent the spread of brucellosis, tuberculosis, paratuberculosis, ((hog cholera)) pseudorabies, or any other infectious, contagious or communicable disease among the livestock of this state. The state veterinarian or his or her authorized representative may conduct additional testing and examinations for the same purpose.

       Sec. 84. RCW 16.65.350 and 1959 c 107 s 35 are each amended to read as follows:

       (((1))) The director of the department of agriculture shall ((perform all tests and make all examinations required under the provisions of this chapter and rules and regulations adopted hereunder: PROVIDED, That veterinary inspectors of the United States department of agriculture may be appointed by the director to make such examinations and tests as are provided for in this chapter without bond or compensation, and shall have the same authority and power in this state as a deputy state veterinarian.

       (2) The director shall have the responsibility for the direction and control of)) adopt rules regarding sanitary practices and health practices and standards and for the examination of animals at public livestock markets. ((The deputy state veterinarian at any such public livestock market shall notify the licensee or his managing agent, in writing, of insanitary practices or conditions. Such deputy state veterinarian shall notify the director if the improper sanitary practices or conditions are not corrected within the time specified. The director shall investigate and upon finding such report correct shall take appropriate action to hold a hearing on the suspension or revocation of the licensee's license.))

       Sec. 85. RCW 16.65.360 and 1959 c 107 s 36 are each amended to read as follows:

       Licensees shall provide facilities and sanitation for the prevention of livestock diseases at their public livestock markets, as follows:

       (1) The floors of all pens and alleys that are part of a public livestock market shall be constructed of concrete or similar impervious material and kept in good repair, with a slope of not less than one-fourth inch per foot to adequate drains leading to an approved sewage system: PROVIDED, That the ((director)) livestock identification board may designate certain pens within such public livestock markets as feeding and holding pens and the floors and alleys of such pens shall not be subject to the aforementioned surfacing requirements.

       (2) Feeding and holding pens maintained in an area adjacent to a public livestock market shall be constructed and separated from such public livestock market, in a manner prescribed by the director of agriculture, in order to prevent the spread of communicable diseases to the livestock sold or held for sale in such public livestock market.

       (3) All yards, chutes and pens used in handling livestock shall be constructed of such materials which will render them easily cleaned and disinfected, and such yards, pens and chutes shall be kept clean, sanitary and in good repair at all times, as required by the director of agriculture.

       (4) Sufficient calf pens of adequate size to prevent overcrowding shall be provided, and such pens, when used, shall be cleaned and disinfected no later than the day subsequent to each sale.

       (5) All swine pens, when used, shall be cleaned and disinfected no later than the day subsequent to each sale.

       (6) A water system carrying a pressure of forty pounds and supplying sufficient water to thoroughly wash all pens, floors, alleys and equipment shall be provided.

       (7) Sufficient quarantine pens of adequate capacity shall be provided. Such pens shall be used to hold only cattle reacting to brucellosis and tuberculosis or to quarantine livestock with other contagious or communicable diseases and shall be:

       (a) hard surfaced with concrete or similar impervious material and shall be kept in good repair;

       (b) provided with separate watering facilities;

       (c) painted white with the word "quarantine" painted in red letters not less than four inches high on such quarantine pen's gate;

       (d) provided with a tight board fence not less than five and one-half feet high;

       (e) cleaned and disinfected not later than one day subsequent to the date of sale.

       To prevent the spread of communicable diseases among livestock, the director of agriculture shall have the authority to cause the cleaning and disinfecting of any area or all areas of a public livestock market and equipment or vehicles with a complete coverage of disinfectants approved by the director.

       Sec. 86. RCW 16.65.420 and 1991 c 17 s 3 are each amended to read as follows:

       (1) Any application for sales days or days for a new salesyard, and any application for a change of sales day or days or additional sales day or days for an existing yard shall be subject to approval by the ((director)) livestock identification board, subsequent to a hearing as provided for in this chapter and the ((director)) board is hereby authorized to allocate these dates and type and class of livestock which may be sold on these dates. In considering the allocation of such sales days, the ((director)) board shall give appropriate consideration, among other relevant factors, to the following:

       (a) The geographical area which will be affected;

       (b) The conflict, if any, with sales days already allocated in the area;

       (c) The amount and class of livestock available for marketing in the area;

       (d) Buyers available to such market;

       (e) Any other conditions affecting the orderly marketing of livestock.

       (2) No special sales shall be conducted by the licensee unless the licensee has applied to the ((director)) board in writing fifteen days prior to such proposed sale and such sale date shall be approved at the discretion of the ((director)) board.

       (3) In any case that a licensee fails to conduct sales on the sales days allocated to the licensee, the ((director)) board shall, subsequent to a hearing, be authorized to revoke an allocation for nonuse. The rate of usage required to maintain an allocation shall be established by rule.

       Sec. 87. RCW 16.65.422 and 1963 c 232 s 17 are each amended to read as follows:

       A producer of purebred livestock may, upon obtaining a permit from the ((director)) livestock identification board, conduct a public sale of the purebred livestock on an occasional or seasonal basis on premises other than his or her own farm. Application for such special sale shall be in writing to the ((director)) board for ((his)) its approval at least fifteen days before the proposed public sale is scheduled to be held by such producer.

       Sec. 88. RCW 16.65.423 and 1983 c 298 s 16 are each amended to read as follows:

       The ((director)) livestock identification board shall have the authority to issue a public livestock market license pursuant to the provisions of this chapter limited to the sale of horses and/or mules and to allocate a sales day or days to such licensee. The ((director)) board is hereby authorized and directed to adopt ((regulations)) rules for facilities and sanitation applicable to such a license. The facility requirements of RCW 16.65.360 shall not be applicable to such licensee's operation as provided for in this section.

       Sec. 89. RCW 16.65.424 and 1963 c 232 s 19 are each amended to read as follows:

       The ((director)) livestock identification board shall have the authority to grant a licensee an additional sales day or days limited to the sale of horses and/or mules and may if requested grant the licensee, by permit, the authority to have the sale at premises other than at his or her public livestock market if the facilities are approved by the ((director)) board as being adequate for the protection of the health and safety of such horses and/or mules. For the purpose of such limited sale the facility requirements of RCW 16.65.360 shall not be applicable.

       Sec. 90. RCW 16.65.445 and 1989 c 175 s 55 are each amended to read as follows:

       The ((director)) livestock identification board shall hold public hearings upon a proposal to promulgate any new or amended ((regulations)) rules and all hearings for the denial, revocation, or suspension of a license issued under this chapter or in any other adjudicative proceeding, and shall comply in all respects with chapter 34.05 RCW, the Administrative Procedure Act.

       Sec. 91. RCW 16.65.450 and 1991 c 17 s 4 are each amended to read as follows:

       Any licensee or applicant who feels aggrieved by an order of the ((director)) livestock identification board may appeal to the superior court of the county in the state of Washington of the residence of the licensee or applicant where the trial on such appeal shall be held de novo.

       Sec. 92. RCW 16.04.025 and 1989 c 286 s 21 are each amended to read as follows:

       If the owner or the person having in charge or possession such animals is unknown to the person sustaining the damage, the person retaining such animals shall, within twenty-four hours, notify the county sheriff or the nearest state brand inspector as to the number, description, and location of the animals. The county sheriff or brand inspector shall examine the animals by brand, tattoo, or other identifying characteristics and attempt to ascertain ownership. If the animal is marked with a brand or tattoo which is registered with the ((director of agriculture)) livestock identification board, the brand inspector or county sheriff shall furnish this information and other pertinent information to the person holding the animals who in turn shall send the notice required in RCW 16.04.020 to the animals' owner of record by certified mail.

       If the county sheriff or the brand inspector determines that there is no apparent damage to the property of the person retaining the animals, or if the person sustaining the damage contacts the county sheriff or brand inspector to have the animals removed from his or her property, such animals shall be removed in accordance with chapter 16.24 RCW. Such removal shall not prejudice the property owner's ability to recover damages through civil suit.

       Sec. 93. RCW 41.06.070 and 1996 c 319 s 3, 1996 c 288 s 33, and 1996 c 186 s 109 are each reenacted and amended to read as follows:

       (1) The provisions of this chapter do not apply to:

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

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

       (c) Officers, academic personnel, and employees of technical colleges;

       (d) The officers of the Washington state patrol;

       (e) Elective officers of the state;

       (f) The chief executive officer of each agency;

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

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

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

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

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

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

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

       (j) Assistant attorneys general;

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

       (l) Inmate, student, part-time, or temporary employees, and part-time professional consultants, as defined by the Washington personnel resources board;

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

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

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

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

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

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

       (s) Officers and employees of any commission formed under chapter 15.66 RCW;

       (t) Officers and employees of the state wheat commission formed under chapter 15.63 RCW;

       (u) Officers and employees of agricultural commissions formed under chapter 15.65 RCW;

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

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

       (x) In each agency with fifty or more employees: Deputy agency heads, assistant directors or division directors, and not more than three principal policy assistants who report directly to the agency head or deputy agency heads;

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

       (z) Up to a total of five senior staff positions of the western library network under chapter 27.26 RCW responsible for formulating policy or for directing program management of a major administrative unit. This subsection (1)(z) shall expire on June 30, 1997;

       (aa) Staff employed by the department of community, trade, and economic development to administer energy policy functions and manage energy site evaluation council activities under RCW 43.21F.045(2)(m);

       (bb) Staff employed by Washington State University to administer energy education, applied research, and technology transfer programs under RCW 43.21F.045 as provided in RCW 28B.30.900(5);

       (cc) Officers and employees of the livestock identification board created under RCW 16.57.015.

       (2) The following classifications, positions, and employees of institutions of higher education and related boards are hereby exempted from coverage of this chapter:

       (a) Members of the governing board of each institution of higher education and related boards, all presidents, vice-presidents, and their confidential secretaries, administrative, and personal assistants; deans, directors, and chairs; academic personnel; and executive heads of major administrative or academic divisions employed by institutions of higher education; principal assistants to executive heads of major administrative or academic divisions; other managerial or professional employees in an institution or related board having substantial responsibility for directing or controlling program operations and accountable for allocation of resources and program results, or for the formulation of institutional policy, or for carrying out personnel administration or labor relations functions, legislative relations, public information, development, senior computer systems and network programming, or internal audits and investigations; and any employee of a community college district whose place of work is one which is physically located outside the state of Washington and who is employed pursuant to RCW 28B.50.092 and assigned to an educational program operating outside of the state of Washington;

       (b) Student, part-time, or temporary employees, and part-time professional consultants, as defined by the Washington personnel resources board, employed by institutions of higher education and related boards;

       (c) The governing board of each institution, and related boards, may also exempt from this chapter classifications involving research activities, counseling of students, extension or continuing education activities, graphic arts or publications activities requiring prescribed academic preparation or special training as determined by the board: PROVIDED, That no nonacademic employee engaged in office, clerical, maintenance, or food and trade services may be exempted by the board under this provision;

       (d) Printing craft employees in the department of printing at the University of Washington.

       (3) In addition to the exemptions specifically provided by this chapter, the Washington personnel resources board may provide for further exemptions pursuant to the following procedures. The governor or other appropriate elected official may submit requests for exemption to the Washington personnel resources board stating the reasons for requesting such exemptions. The Washington personnel resources board shall hold a public hearing, after proper notice, on requests submitted pursuant to this subsection. If the board determines that the position for which exemption is requested is one involving substantial responsibility for the formulation of basic agency or executive policy or one involving directing and controlling program operations of an agency or a major administrative division thereof, the Washington personnel resources board shall grant the request and such determination shall be final as to any decision made before July 1, 1993. The total number of additional exemptions permitted under this subsection shall not exceed one percent of the number of employees in the classified service not including employees of institutions of higher education and related boards for those agencies not directly under the authority of any elected public official other than the governor, and shall not exceed a total of twenty-five for all agencies under the authority of elected public officials other than the governor. The Washington personnel resources board shall report to each regular session of the legislature during an odd-numbered year all exemptions granted under subsections (1)(w) and (x) and (2) of this section, together with the reasons for such exemptions.

       The salary and fringe benefits of all positions presently or hereafter exempted except for the chief executive officer of each agency, full-time members of boards and commissions, administrative assistants and confidential secretaries in the immediate office of an elected state official, and the personnel listed in subsections (1)(j) through (v), (y), (z), and (2) of this section, shall be determined by the Washington personnel resources board. However, beginning with changes proposed for the 1997-99 fiscal biennium, changes to the classification plan affecting exempt salaries must meet the same provisions for classified salary increases resulting from adjustments to the classification plan as outlined in RCW 41.06.152.

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

       Any classified employee having civil service status in a classified position who accepts an appointment in an exempt position shall have the right of reversion to the highest class of position previously held, or to a position of similar nature and salary.

       A person occupying an exempt position who is terminated from the position for gross misconduct or malfeasance does not have the right of reversion to a classified position as provided for in this section.

       NEW SECTION. Sec. 94. A new section is added to chapter 42.17 RCW to read as follows:

       Financial statements provided under RCW 16.65.030(1)(d) are exempt from disclosure under this chapter.

       Sec. 95. RCW 43.23.230 and 1988 c 254 s 1 are each amended to read as follows:

       The agricultural local fund is hereby established in the custody of the state treasurer. The fund shall consist of such money as is directed by law for deposit in the fund, and such other money not subject to appropriation that the department authorizes to be deposited in the fund. Any money deposited in the fund, the use of which has been restricted by law, may only be expended in accordance with those restrictions. Except as provided in section 3 of this act, the department may make disbursements from the fund. The fund is not subject to legislative appropriation.

       NEW SECTION. Sec. 96. (1) On the effective date of this section, all powers, duties, and functions of the department of agriculture under chapters 16.57, 16.58, and 16.65 RCW except those identified as remaining with the department in RCW 16.65.350 and 16.65.360 are transferred to the livestock identification board. The authority to adopt rules regarding those powers, duties, and functions is transferred to the livestock identification board and the administration of those powers, duties, and functions is transferred to the board.

       (2)(a) All funds, credits, or other assets, including but not limited to those in the agricultural local fund, held by the department of agriculture in connection with the powers, functions, and duties transferred shall be assigned to the board.

       (b) At any time after June 30, 2004, and at the conclusion of a contract under which the department of agriculture conducts by contract activities for the livestock identification board, the board may request the transfer and the department shall, upon such a request, transfer to the custody of the board all reports, documents, surveys, books, records, files, papers, or written material in the possession of the department of agriculture pertaining to the functions performed by contract by the department for the board and all cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the department to perform such duties on behalf of the board.

       (c) Whenever any question arises as to the transfer of any funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

       (3) All rules of the department of agriculture adopted under chapter 16.57 RCW in effect on the effective date of this section, all rules adopted by the department under chapter 16.58 RCW in effect on the effective date of this section, and all rules adopted by the department under chapter 16.65 RCW, except for those adopted under the authorities retained by the department under RCW 16.65.350 and 16.65.360, in effect on the effective date of this section are, on the effective date of this section, rules of the livestock identification board. All proposed rules and all pending business before the department of agriculture pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the board. All existing contracts and obligations shall remain in full force and shall be performed by the board. All registrations made with the department under chapter 16.57 RCW, all licenses issued by the department under chapter 16.58 RCW, and all licenses issued by the department under chapter 16.65 RCW before the effective date of this section shall be considered to be registrations with and licenses issued by the board.

       (4) The transfer of the powers, duties, and functions of the department of agriculture shall not affect the validity of any act performed before the effective date of this section. The board shall take action to enforce against violations of chapters 16.57, 16.58, and 16.65 RCW and rules adopted thereunder regarding authorities transferred to the board by this act which occurred before the effective date of this section and for which enforcement is not taken by the department before the effective date of this section with the same force and effect as it may take actions to enforce chapters 16.57 and 16.58 RCW and rules adopted thereunder after the effective date of this section. Any enforcement action taken by the department of agriculture under chapter 16.57, 16.58, or 16.65 RCW regarding authorities transferred to the board by this act, or the rules adopted thereunder and not concluded before the effective date of this section, shall be continued in the name of the board.

       (5) As used in this section "livestock identification board" and "board" means the board created under RCW 16.57.015.

       NEW SECTION. Sec. 97. (1) The following acts or parts of acts are each repealed:

       (a) 1997 c 356 s 3;

       (b) 1997 c 356 s 5;

       (c) 1997 c 356 s 9;

       (d) 1997 c 356 s 11;

       (e) RCW 16.57.380 and 1991 c 110 s 8, 1981 c 296 s 22, & 1974 ex.s. c 38 s 1; and

       (f) RCW 16.65.110 and 1959 c 107 s 11.

       (2) This section is null and void unless subsections (1) through (5) of section 2 of this act and section 96 of this act become law.

       NEW SECTION. Sec. 98. This act takes effect July 1, 1998, except that appointments may be made by the governor and proposed contracts may be developed under RCW 16.57.015 prior to July 1, 1998, to provide for an orderly transition of authority under this act.

       NEW SECTION. Sec. 99. 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."

       Correct the title.,and the same are herewith transmitted.                                                                       TIMOTHY A. MARTIN, Chief Clerk


MOTION


      Senator Morton moved that the Senate refuse to concur in the House amendment to Engrossed Substitute Senate Bill No. 6204 and requests of the House a conference thereon.

      Debate ensued.

      The President declared the question before the Senate to be the motion by Senator Morton that the Senate refuse to concur in the House amendment to Engrossed Substitute Senate Bill No. 6204 and requests of the House a conference thereon.

      The motion by Senator Morton carried and the Senate refuses to concur in the House amendment to Engrossed Substitute Senate Bill No. 6204 and requests of the House a conference thereon.


APPOINTMENT OF CONFERENCE COMMITTEE


      The President appointed as members of the Conference Committee on Engrossed Substitute Senate Bill No. 6204 and the House amendment(s) thereto: Senators Morton, Rasmussen and Swecker.


MOTION


      On motion of Senator Johnson, the Conference Committee appointments were confirmed.


MESSAGE FROM THE HOUSE

March 5, 1998

MR. PRESIDENT:

      The House has passed SECOND SUBSTITUTE SENATE BILL NO. 6190 with the following amendment(s):

       Strike everything after the enacting clause and insert the following:

       "Sec. 1. RCW 46.16.381 and 1995 c 384 s 1 are each amended to read as follows:

       (1) The director shall grant special parking privileges to any person who has a disability that limits or impairs the ability to walk and meets one of the following criteria, as determined by a licensed physician:

       (a) Cannot walk two hundred feet without stopping to rest;

       (b) Is severely limited in ability to walk due to arthritic, neurological, or orthopedic condition;

       (c) Is so severely disabled, that the person cannot walk without the use of or assistance from a brace, cane, another person, prosthetic device, wheelchair, or other assistive device;

       (d) Uses portable oxygen;

       (e) Is restricted by lung disease to such an extent that forced expiratory respiratory volume, when measured by spirometry is less than one liter per second or the arterial oxygen tension is less than sixty mm/hg on room air at rest;

       (f) Impairment by cardiovascular disease or cardiac condition to the extent that the person's functional limitations are classified as class III or IV under standards accepted by the American Heart Association; or

       (g) Has a disability resulting from an acute sensitivity to automobile emissions which limits or impairs the ability to walk. The personal physician of the applicant shall document that the disability is comparable in severity to the others listed in this subsection.

       (2) The applications for disabled parking permits and temporary disabled parking permits are official state documents. Knowingly providing false information in conjunction with the application is a gross misdemeanor punishable under chapter 9A.20 RCW. The following statement must appear on each application form immediately below the physician's signature and immediately below the applicant's signature: "A disabled parking permit may be issued only for a medical necessity that severely affects mobility (RCW 46.16.381). Knowingly providing false information on this application is a gross misdemeanor. The penalty is up to one year in jail and a fine of up to $5,000 or both."

       (3) Those individuals who have one or both legs amputated and do not use a prosthetic device are exempt from the physician certification requirement necessary to receive special parking privileges. In order to qualify for special parking privileges, leg amputees must apply at a licensing office and the licensing office supervisor must visually confirm the amputation. Based on this confirmation, the certification of the person's disability is satisfied.

       (4) Persons who qualify for special parking privileges are entitled to receive from the department of licensing a removable windshield placard bearing the international symbol of access and an individual serial number, along with a special identification card bearing the photograph and name of the person to whom the placard is issued, and the placard's serial number. The department shall design the placard to be displayed when the vehicle is parked by suspending it from the rearview mirror, or in the absence of a rearview mirror the card may be displayed on the dashboard of any vehicle used to transport the disabled person. Instead of regular motor vehicle license plates, disabled persons are entitled to receive special license plates bearing the international symbol of access for one vehicle registered in the disabled person's name. Disabled persons who are not issued the special license plates are entitled to receive a second special placard upon submitting a written request to the department. Persons who have been issued the parking privileges and who are using a vehicle or are riding in a vehicle displaying the special license plates or placard may park in places reserved for mobility disabled persons. The director shall adopt rules providing for the issuance of special placards and license plates to public transportation authorities, nursing homes licensed under chapter 18.51 RCW, boarding homes licensed under chapter 18.20 RCW, senior citizen centers, private nonprofit agencies as defined in chapter 24.03 RCW, and vehicles registered with the department as cabulances that regularly transport disabled persons who have been determined eligible for special parking privileges provided under this section. The director may issue special license plates for a vehicle registered in the name of the public transportation authority, nursing home, boarding homes, senior citizen center, private nonprofit agency, or cabulance service if the vehicle is primarily used to transport persons with disabilities described in this section. Public transportation authorities, nursing homes, boarding homes, senior citizen centers, private nonprofit agencies, and cabulance services are responsible for insuring that the special placards and license plates are not used improperly and are responsible for all fines and penalties for improper use.

       (((3))) (5) Whenever the disabled person transfers or assigns his or her interest in the vehicle, the special license plates shall be removed from the motor vehicle. If another vehicle is acquired by the disabled person and the vehicle owner qualifies for a special plate, the plate shall be attached to the vehicle, and the director shall be immediately notified of the transfer of the plate. If another vehicle is not acquired by the disabled person, the removed plate shall be immediately surrendered to the director.

       (((4))) (6) The special license plate shall be renewed in the same manner and at the time required for the renewal of regular motor vehicle license plates under this chapter. No special license plate may be issued to a person who is temporarily disabled. A person who has a condition expected to improve within six months may be issued a temporary placard for a period not to exceed six months. ((The director may issue a second temporary placard during that period if requested by the person who is temporarily disabled.)) If the condition exists after six months a new temporary placard shall be issued upon receipt of a new certification from the disabled person's physician. The permanent parking placard and photo identification card of a disabled person shall be renewed((, when)) at least every five years, as required by the director, by satisfactory proof of the right to continued use of the privileges. In the event of the permit holder's death, the parking placard and photo identification card must be immediately surrendered to the department. The department shall match and purge its disabled permit data base with available death record information at least every twelve months.

       (((5))) (7) Each person who has been issued a permanent disabled parking permit on or before July 1, 1998, must renew the permit no later than July 1, 2003, subject to a schedule to be set by the department, or the permit will expire.

       (8) Additional fees shall not be charged for the issuance of the special placards or the photo identification cards. No additional fee may be charged for the issuance of the special license plates except the regular motor vehicle registration fee and any other fees and taxes required to be paid upon registration of a motor vehicle.

       (((6))) (9) Any unauthorized use of the special placard ((or the)), special license plate, or photo identification card is a ((misdemeanor)) traffic infraction with a monetary penalty of two hundred fifty dollars.

       (((7))) (10) It is a parking infraction, with a monetary penalty of one hundred seventy-five dollars for a person to make inaccessible the access aisle located next to a space reserved for physically disabled persons. The clerk of the court shall report all violations related to this subsection to the department.

       (11) It is a parking infraction, with a monetary penalty of one hundred seventy-five dollars for any person to park a vehicle in a parking place provided on private property without charge or on public property reserved for physically disabled persons without a special license plate or placard. If a person is charged with a violation, the person shall not be determined to have committed an infraction if the person produces in court or before the court appearance the special license plate or placard required under this section. A local jurisdiction providing nonmetered, on-street parking places reserved for physically disabled persons may impose by ordinance time restrictions of no less than four hours on the use of these parking places. A local jurisdiction may impose by ordinance time restrictions of no less than four hours on the use of nonreserved, on-street parking spaces by vehicles displaying the special parking placards. All time restrictions must be clearly posted.

       (((8))) (12) The ((penalty)) penalties imposed under subsections (((7))) (10) and (11) of this section shall be used by that local jurisdiction exclusively for law enforcement. The court may also impose an additional penalty sufficient to reimburse the local jurisdiction for any costs it may have incurred in removal and storage of the improperly parked vehicle.

       (((9))) (13) Except as provided by subsection (2) of this section, it is a ((misdemeanor)) traffic infraction with a monetary penalty of two hundred fifty dollars for any person ((to)) willfully to obtain a special license plate ((or)), placard, or photo identification card in a manner other than that established under this section.

       (14)(a) A law enforcement agency authorized to enforce parking laws may