FIFTY THIRD DAY

 


MORNING SESSION

 

Senate Chamber, Olympia, Thursday, March 1, 2012

 

The Senate was called to order at 9:30 a.m. by President Owen. The Secretary called the roll and announced to the President that all Senators were present with the exception of Senators Parlette and Pflug.

The Sergeant at Arms Color Guard consisting of Pages Samantha Sullivan and Lian Eytinge, presented the Colors. Reverend Jim Erlandson, Community of Christ Church of Olympia offered the prayer.

 

MOTION

 

On motion of Senator Ericksen, Senators Litzow, Parlette, Pflug and Stevens were excused.

 

MOTION

 

On motion of Senator Harper, Senators Hatfield, Haugen and Murray were excused.

 

MOTION

 

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

 

MOTION

 

On motion of Senator Eide, the Senate advanced to the fourth order of business.

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The House has passed: 

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1820,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2127,

ENGROSSED HOUSE BILL NO. 2814.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The House has passed: 

SUBSTITUTE SENATE BILL NO. 5381,

SUBSTITUTE SENATE BILL NO. 5966,

SENATE BILL NO. 6095.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The House has passed: 

SUBSTITUTE SENATE BILL NO. 5412,

SENATE BILL NO. 6131,

SUBSTITUTE SENATE BILL NO. 6387,

SUBSTITUTE SENATE BILL NO. 6421,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6445.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The House has passed: 

ENGROSSED SUBSTITUTE SENATE BILL NO. 5895,

SUBSTITUTE SENATE BILL NO. 6038.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The Speaker has signed:

SUBSTITUTE HOUSE BILL NO. 1073,

HOUSE BILL NO. 1486,

SUBSTITUTE HOUSE BILL NO. 2056,

HOUSE BILL NO. 2138,

ENGROSSED HOUSE BILL NO. 2186,

HOUSE BILL NO. 2213,

HOUSE BILL NO. 2244,

HOUSE BILL NO. 2247,

SUBSTITUTE HOUSE BILL NO. 2255,

HOUSE BILL NO. 2274,

HOUSE BILL NO. 2304,

HOUSE BILL NO. 2306,

HOUSE BILL NO. 2356,

SUBSTITUTE HOUSE BILL NO. 2422,

HOUSE BILL NO. 2653,

HOUSE CONCURRENT RESOLUTION NO. 4410.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The Speaker has signed:

SUBSTITUTE HOUSE BILL NO. 1194,

HOUSE BILL NO. 1381,

SECOND SUBSTITUTE HOUSE BILL NO. 1652,

SUBSTITUTE HOUSE BILL NO. 2181,

SUBSTITUTE HOUSE BILL NO. 2352,

HOUSE BILL NO. 2362,

SUBSTITUTE HOUSE BILL NO. 2367,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2384,

HOUSE BILL NO. 2393,

HOUSE BILL NO. 2440,

HOUSE BILL NO. 2651,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2664,

HOUSE BILL NO. 2705,

SUBSTITUTE HOUSE BILL NO. 2757,

HOUSE BILL NO. 2758.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The Speaker has signed:

SENATE BILL NO. 5259,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5292,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5575,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5620,

SUBSTITUTE SENATE BILL NO. 5627,

SUBSTITUTE SENATE BILL NO. 5631,

SENATE BILL NO. 5913,

SUBSTITUTE SENATE BILL NO. 6005,

SENATE BILL NO. 6030,

SUBSTITUTE SENATE BILL NO. 6100,

SENATE BILL NO. 6108,

SUBSTITUTE SENATE BILL NO. 6121,

SENATE BILL NO. 6133,

ENGROSSED SENATE BILL NO. 6141,

SENATE BILL NO. 6157.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MESSAGE FROM THE HOUSE

 

February 29, 2012

 

MR. PRESIDENT:

The Speaker has signed:

SENATE BILL NO. 6172,

SENATE BILL NO. 6175,

SUBSTITUTE SENATE BILL NO. 6187,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6251,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6252,

SUBSTITUTE SENATE BILL NO. 6258,

SENATE BILL NO. 6289,

SUBSTITUTE SENATE BILL NO. 6295,

ENGROSSED SENATE BILL NO. 6296,

SUBSTITUTE SENATE BILL NO. 6315,

SENATE BILL NO. 6385,

SUBSTITUTE SENATE BILL NO. 6423,

SENATE BILL NO. 6465,

SUBSTITUTE SENATE BILL NO. 6472,

SENATE BILL NO. 6566.

and the same are herewith transmitted.

 

BARBARA BAKER, Chief Clerk

 

MOTION

 

On motion of Senator Eide, the Senate advanced to the fifth order of business.

 

INTRODUCTION AND FIRST READING OF HOUSE BILLS

 

E2SHB 2373      by House Committee on Ways & Means (originally sponsored by Representatives Van De Wege and Tharinger)

 

AN ACT Relating to the state's management of its recreational resources; amending RCW 79A.80.010, 79A.80.020, 79A.80.030, 79A.80.040, 79A.80.050, 79A.80.080, 79A.05.070, 46.16A.090, and 46.01.140; adding a new section to chapter 79A.80 RCW; adding a new section to chapter 46.01 RCW; creating new sections; providing expiration dates; and declaring an emergency.

 

MOTION

 

On motion of Senator Eide and without objection, the rules were suspended and Engrossed Second Substitute House Bill No. 2373, was placed on the second reading calendar.

 

MOTION

 

On motion of Senator Eide, the Senate advanced to the sixth order of business.

 

SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENTS

 

MOTION

 

      Senator King moved that Gubernatorial Appointment No. 9216, Lisa Parker, as a member of the Board of Trustees, Yakima Valley Community College District No. 16, be confirmed.

      Senator King spoke in favor of the motion.

 

MOTION

 

On motion of Senator Holmquist Newbry, Senator Benton was excused.

 

APPOINTMENT OF LISA PARKER

 

The President declared the question before the Senate to be the confirmation of Gubernatorial Appointment No. 9216, Lisa Parker as a member of the Board of Trustees, Yakima Valley Community College District No. 16.

 

      The Secretary called the roll on the confirmation of Gubernatorial Appointment No. 9216, Lisa Parker as a member of the Board of Trustees, Yakima Valley Community College District No. 16 and the appointment was confirmed by the following vote:  Yeas, 46; Nays, 1; Absent, 0; Excused, 2.

      Voting yea: Senators Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senator Baumgartner

      Excused: Senators Parlette and Pflug

Gubernatorial Appointment No. 9216, Lisa Parker, having received the constitutional majority was declared confirmed as a member of the Board of Trustees, Yakima Valley Community College District No. 16.

 

SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENTS

 

MOTION

 

      Senator Eide moved that Gubernatorial Appointment No. 9124, Stephen Warner, as a member of the Board of Trustees, Olympic Community College District No. 3, be confirmed.

      Senators Rolfes and Pridemore spoke in favor of passage of the motion.

 

APPOINTMENT OF STEPHEN WARNER

 

The President declared the question before the Senate to be the confirmation of Gubernatorial Appointment No. 9124, Stephen Warner as a member of the Board of Trustees, Olympic Community College District No. 3.

 

      The Secretary called the roll on the confirmation of Gubernatorial Appointment No. 9124, Stephen Warner as a member of the Board of Trustees, Olympic Community College District No. 3 and the appointment was confirmed by the following vote:  Yeas, 47; Nays, 1; Absent, 0; Excused, 1.

      Voting yea: Senators Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senator Baumgartner

      Excused: Senator Pflug

Gubernatorial Appointment No. 9124, Stephen Warner, having received the constitutional majority was declared confirmed as a member of the Board of Trustees, Olympic Community College District No. 3.

 

SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENTS

 

MOTION

 

      Senator Pridemore moved that Gubernatorial Appointment No. 9146, Peter Mayer, as a member of the Recreation and Conservation Funding Board, be confirmed.

      Senator Pridemore spoke in favor of the motion.

 

APPOINTMENT OF PETER MAYER

 

The President declared the question before the Senate to be the confirmation of Gubernatorial Appointment No. 9146, Peter Mayer as a member of the Recreation and Conservation Funding Board.

 

      The Secretary called the roll on the confirmation of Gubernatorial Appointment No. 9146, Peter Mayer as a member of the Recreation and Conservation Funding Board and the appointment was confirmed by the following vote:  Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senator Pflug

Gubernatorial Appointment No. 9146, Peter Mayer, having received the constitutional majority was declared confirmed as a member of the Recreation and Conservation Funding Board.

 

SIGNED BY THE PRESIDENT

 

The President signed:

SUBSTITUTE HOUSE BILL NO. 1073,

SUBSTITUTE HOUSE BILL NO. 1194,

HOUSE BILL NO. 1381,

HOUSE BILL NO. 1486,

SECOND SUBSTITUTE HOUSE BILL NO. 1652,

SUBSTITUTE HOUSE BILL NO. 2056,

HOUSE BILL NO. 2138,

SUBSTITUTE HOUSE BILL NO. 2181,

ENGROSSED HOUSE BILL NO. 2186,

HOUSE BILL NO. 2213,

HOUSE BILL NO. 2244,

HOUSE BILL NO. 2247,

SUBSTITUTE HOUSE BILL NO. 2255,

HOUSE BILL NO. 2274,

HOUSE BILL NO. 2304,

HOUSE BILL NO. 2306,

SUBSTITUTE HOUSE BILL NO. 2352,

HOUSE BILL NO. 2356,

HOUSE BILL NO. 2362,

SUBSTITUTE HOUSE BILL NO. 2367,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2384,

HOUSE BILL NO. 2393,

SUBSTITUTE HOUSE BILL NO. 2422,

HOUSE BILL NO. 2440,

HOUSE BILL NO. 2651,

HOUSE BILL NO. 2653,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2664,

HOUSE BILL NO. 2705,

SUBSTITUTE HOUSE BILL NO. 2757,

HOUSE BILL NO. 2758,

HOUSE CONCURRENT RESOLUTION NO. 4410.

 

SECOND READING

CONFIRMATION OF GUBERNATORIAL APPOINTMENTS

 

MOTION

 

      Senator Eide moved that Gubernatorial Appointment No. 9274, Pete Lewis, as a member of the Board of Trustees, Green River Community College District No. 10, be confirmed.

      Senators Eide and Fain spoke in favor of passage of the motion.

 

MOTION

 

On motion of Senator Harper, Senator McAuliffe was excused.

 

APPOINTMENT OF PETE LEWIS

 

The President declared the question before the Senate to be the confirmation of Gubernatorial Appointment No. 9274, Pete Lewis as a member of the Board of Trustees, Green River Community College District No. 10.

 

      The Secretary called the roll on the confirmation of Gubernatorial Appointment No. 9274, Pete Lewis as a member of the Board of Trustees, Green River Community College District No. 10 and the appointment was confirmed by the following vote:  Yeas, 47; Nays, 1; Absent, 0; Excused, 1.

      Voting yea: Senators Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senator Baumgartner

      Excused: Senator Pflug

Gubernatorial Appointment No. 9274, Pete Lewis, having received the constitutional majority was declared confirmed as a member of the Board of Trustees, Green River Community College District No. 10.

 

SECOND READING

 

SECOND SUBSTITUTE HOUSE BILL NO. 2156, by House Committee on Labor & Workforce Development (originally sponsored by Representatives Kenney, Sells, Haler, Seaquist, Hansen, Maxwell and Carlyle)

 

Regarding coordination and evaluation of workforce training for aerospace and materials manufacturing.

 

The measure was read the second time.

 

MOTION

 

Senator Prentice moved that the following amendment by Senator Prentice and others be adopted:

0)On page 3, after line 34, insert the following:

"Sec. 4.  RCW 28B.122.010 and 2011 c 8 s 1 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Aerospace training or educational program" means a course in the aerospace industry offered ((either)) by the Washington aerospace training and research center ((or)), the Spokane aerospace technology center, or Renton technical college.

      (2) (("Board" means the higher education coordinating board.
      (3))) "Eligible student" means a student who is registered for an aerospace training or educational program, is making satisfactory progress as defined by the program, and has a declared intention to work in the aerospace industry in the state of Washington.

(3) "Office" means the office of student financial assistance.

      (4) "Participant" means an eligible student who has received an aerospace training student loan.

      (5) "Student loan" means a loan that is approved by the ((board)) office and awarded to an eligible student.

Sec. 5.  RCW 28B.122.020 and 2011 c 8 s 2 are each amended to read as follows:

      (1) The aerospace training student loan program is established.

      (2) The program shall be designed in consultation with representatives of aerospace employers, aerospace workers, and aerospace training or educational programs.

      (3) The program shall be administered by the ((board)) office.  In administering the program, the ((board)) office has the following powers and duties:

      (a) To screen and select, in coordination with representatives of aerospace training or educational programs, eligible students to receive an aerospace training student loan;

      (b) To consider an eligible student's financial inability to meet the total cost of the aerospace training or educational program in the selection process;

      (c) To issue low-interest student loans;

      (d) To establish an annual loan limit equal to the cost of attendance minus any other financial aid received;

      (e) To define the terms of repayment, including applicable interest rates, fees, and deferments;

      (f) To collect and manage repayments from students who do not meet their obligations under this chapter;

      (g) To solicit and accept grants and donations from public and private sources for the program; and

      (h) To adopt necessary rules.

Sec. 6.  RCW 28B.122.040 and 2011 c 8 s 4 are each amended to read as follows:

      The ((board)) office may award aerospace training student loans to eligible students from the funds available in the aerospace training student loan account for this program.  The amount of the student loan awarded an individual may not exceed tuition and fees for the program of study.

Sec. 7.  RCW 28B.122.050 and 2011 c 8 s 5 are each amended to read as follows:

      (1) The aerospace training student loan account is created in the custody of the state treasurer.  No appropriation is required for expenditures of funds from the account for student loans.  An appropriation is required for expenditures of funds from the account for costs associated with program administration by the ((board)) office.  The account is not subject to allotment procedures under chapter 43.88 RCW.

      (2) The ((board)) office shall deposit into the account all moneys received for the program.  The account shall be self-sustaining and consist of moneys received for the program by the ((board)) office, and receipts from participant repayments, including principal and interest.

      (3) Expenditures from the account may be used solely for student loans to participants in the program established by this chapter and costs associated with program administration by the ((board)) office.

      (4) Disbursements from the account may be made only on the authorization of the ((board)) office.

Sec. 8.  RCW 28B.122.060 and 2011 c 8 s 6 are each amended to read as follows:

      (1) The ((board)) office, in collaboration with aerospace training or educational programs, shall submit an annual report regarding the aerospace training student loan program to the governor and to the appropriate committees of the legislature.

      (2) The annual report shall describe the design and implementation of the aerospace training student loan program, and shall include the following:

      (a) The number of applicants for loans;

      (b) The number of participants in the loan program;

      (c) The number of participants in the loan program who complete an aerospace training or educational program;

      (d) The number of participants in the loan program who are placed in employment;

      (e) The nature of that employment, including:  (i) The type of job; (ii) whether the job is full-time, part-time, or temporary; (iii) whether the job pays annual wages that are:  (A) Less than thirty thousand dollars; (B) thirty thousand dollars or greater, but less than sixty thousand dollars; or (C) sixty thousand dollars or more; and

      (f) Demographic profiles of applicants for loans and participants in the loan programs.

      (3) The annual report shall be submitted by December 1st of each year after July 22, 2011.

NEW SECTION.  Sec. 9.  Sections 4 through 8 of this act take effect July 1, 2012."

Senator Prentice spoke in favor of adoption of the amendment.

 

The President declared the question before the Senate to be the adoption of the amendment by Senator Prentice and others on page 3, after line 34 to Second Substitute House Bill No. 2156.

The motion by Senator Prentice carried and the amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

      On page 1, line 2 of the title, after "manufacturing;" insert "amending RCW 28B.122.010, 28B.122.020, 28B.122.040, 28B.122.050, and 28B.122.060;"

On page 1, line 4 of the title, after "RCW;" strike the remainder of the title and insert "creating a new section; and providing an effective date."

 

MOTION

 

On motion of Senator Tom, the rules were suspended, Second Substitute House Bill No. 2156 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Tom, Prentice, Eide, Conway and Chase spoke in favor of passage of the bill.

 

MOTION

 

On motion of Senator Harper, Senators Brown, McAuliffe and Murray were excused.

 

The President declared the question before the Senate to be the final passage of Second Substitute House Bill No. 2156 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Second Substitute House Bill No. 2156 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senator Pflug

SECOND SUBSTITUTE HOUSE BILL NO. 2156 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 1775, by House Committee on Early Learning & Human Services (originally sponsored by Representatives Goodman and Kagi)

 

Encouraging juvenile restorative justice programs.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Regala, the rules were suspended, Substitute House Bill No. 1775 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Regala spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1775.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 1775 and the bill passed the Senate by the following vote:  Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senator Pflug

SUBSTITUTE HOUSE BILL NO. 1775, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 2360, by House Committee on Business & Financial Services (originally sponsored by Representatives Stanford, Rivers and Ryu)

 

Concerning deposit and investment provisions for the prearrangement trust funds of cemetery authorities and funeral establishments.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Pridemore, the rules were suspended, Substitute House Bill No. 2360 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Pridemore and Swecker spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2360.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 2360 and the bill passed the Senate by the following vote:  Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senator Pflug

SUBSTITUTE HOUSE BILL NO. 2360, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 2152, by Representatives Angel, Takko, Dammeier, Rivers, Kristiansen, Springer, Buys, Tharinger and Liias

 

Clarifying timelines associated with plats.

 

The measure was read the second time.

 

MOTION

 

Senator Pridemore moved that the following committee striking amendment by the Committee on Government Operations, Tribal Relations & Elections be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 58.17.140 and 2010 c 79 s 1 are each amended to read as follows:

(1) Preliminary plats of any proposed subdivision and dedication shall be approved, disapproved, or returned to the applicant for modification or correction within ninety days from date of filing thereof unless the applicant consents to an extension of such time period or the ninety day limitation is extended to include up to twenty-one days as specified under RCW 58.17.095(3):  PROVIDED, That if an environmental impact statement is required as provided in RCW 43.21C.030, the ninety day period shall not include the time spent preparing and circulating the environmental impact statement by the local government agency.

(2) Final plats and short plats shall be approved, disapproved, or returned to the applicant within thirty days from the date of filing thereof, unless the applicant consents to an extension of such time period.

(3)(a) Except as provided by (b) of this subsection, a final plat meeting all requirements of this chapter shall be submitted to the legislative body of the city, town, or county for approval within seven years of the date of preliminary plat approval if the date of preliminary plat approval is on or before December 31, 2014, and within five years of the date of preliminary plat approval if the date of preliminary plat approval is on or after January 1, 2015.
      (b) A final plat meeting all requirements of this chapter shall be submitted to the legislative body of the city for approval within nine years of the date of preliminary plat approval if the project is within city limits, not subject to requirements adopted under chapter 90.58 RCW, and the date of preliminary plat approval is on or before December 31, 2007.

(4) Nothing contained in this section shall act to prevent any city, town, or county from adopting by ordinance procedures which would allow extensions of time that may or may not contain additional or altered conditions and requirements.

Sec. 2.  RCW 58.17.170 and 2010 c 79 s 2 are each amended to read as follows:

(1) When the legislative body of the city, town or county finds that the subdivision proposed for final plat approval conforms to all terms of the preliminary plat approval, and that said subdivision meets the requirements of this chapter, other applicable state laws, and any local ordinances adopted under this chapter which were in effect at the time of preliminary plat approval, it shall suitably inscribe and execute its written approval on the face of the plat.  The original of said final plat shall be filed for record with the county auditor.  One reproducible copy shall be furnished to the city, town or county engineer.  One paper copy shall be filed with the county assessor.  Paper copies shall be provided to such other agencies as may be required by ordinance.

(2)(a) Except as provided by (b) of this subsection, any lots in a final plat filed for record shall be a valid land use notwithstanding any change in zoning laws for a period of seven years from the date of filing if the date of filing is on or before December 31, 2014, and for a period of five years from the date of filing if the date of filing is on or after January 1, 2015.
      (b) Any lots in a final plat filed for record shall be a valid land use notwithstanding any change in zoning laws for a period of nine years from the date of filing if the project is within city limits, not subject to requirements adopted under chapter 90.58 RCW, and the date of filing is on or before December 31, 2007.

(3)(a) Except as provided by (b) of this subsection, a subdivision shall be governed by the terms of approval of the final plat, and the statutes, ordinances, and regulations in effect at the time of approval under RCW 58.17.150 (1) and (3) for a period of seven years after final plat approval if the date of final plat approval is on or before December 31, 2014, and for a period of five years after final plat approval if the date of final plat approval is on or after January 1, 2015, unless the legislative body finds that a change in conditions creates a serious threat to the public health or safety in the subdivision.

(b) A subdivision shall be governed by the terms of approval of the final plat, and the statutes, ordinances, and regulations in effect at the time of approval under RCW 58.17.150 (1) and (3) for a period of nine years after final plat approval if the project is within city limits, not subject to requirements adopted under chapter 90.58 RCW, and the date of final plat approval is on or before December 31, 2007, unless the legislative body finds that a change in conditions creates a serious threat to the public health or safety in the subdivision.

NEW SECTION.  Sec. 3.  2010 c 79 s 3 (uncodified) is hereby repealed."

      Senator Pridemore spoke in favor of adoption of the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Government Operations, Tribal Relations & Elections to Engrossed House Bill No. 2152.

The motion by Senator Pridemore carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "plats;" strike the remainder of the title and insert "amending RCW 58.17.140 and 58.17.170; and repealing 2010 c 79 s 3 (uncodified)."

 

MOTION

 

On motion of Senator Pridemore, the rules were suspended, Engrossed House Bill No. 2152 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Pridemore and Swecker spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 2152 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 2152 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senator Pflug

ENGROSSED HOUSE BILL NO. 2152 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 1234, by Representatives Moscoso, Hope, Klippert, Lytton, Johnson, Rivers, Jinkins, Ladenburg, Ryu, Reykdal, Fitzgibbon and Maxwell

 

Addressing law enforcement crime prevention efforts regarding security alarm systems and crime watch programs for residential and commercial locations.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Fraser, the rules were suspended, Engrossed House Bill No. 1234 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Fraser and King spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 1234.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 1234 and the bill passed the Senate by the following vote:  Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

ENGROSSED HOUSE BILL NO. 1234, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

HOUSE BILL NO. 2305, by Representatives Angel, Takko and Green

 

Changing authority for contracts with community service organizations for public improvements.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Pridemore, the rules were suspended, House Bill No. 2305 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Pridemore and Swecker spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of House Bill No. 2305.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of House Bill No. 2305 and the bill passed the Senate by the following vote:  Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

HOUSE BILL NO. 2305, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 2509, by Representatives Chandler, Bailey and Pearson

 

Promoting workplace safety and health by enacting the blueprint for safety program.

 

The measure was read the second time.

 

MOTION

 

Senator Holmquist Newbry moved that the following committee striking amendment by the Committee on Labor, Commerce & Consumer Protection be adopted:

0)Strike everything after the enacting clause and insert the following:

"NEW SECTION.  Sec. 1.  A new section is added to chapter 49.17 RCW to read as follows:

      The blueprint for safety program is established.  The goal of the program is to improve safety for employees and lower costs for employers by assisting those employers for which the traditional safety and health model has not been effective.  The department shall design the program to promote management and labor leadership in safety and health as essential for long-term success.  The criteria for participation may include, but are not limited to:  A history with the department indicating a less than optimal leadership commitment to safety and health, a rising experience modification factor, a recent catastrophic workplace injury, a change in the employer's safety management, and a request by the employer to participate.  The department shall offer the program statewide in a phased manner.  The department shall post information on its web page to provide information about the program to employers.  Participation by an employer is voluntary and subject to approval by the department.  The program shall supplement, but not replace any of, the department's existing compliance or consultation programs.  The department shall adopt rules to establish criteria for participation in the blueprint for safety program, and shall initiate rule making in 2012.  Funding for the blueprint for safety program created in this section cannot be appropriated from the medical aid fund or the accident fund, but shall be implemented within existing resources."

      Senator Holmquist Newbry spoke in favor of adoption of the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Labor, Commerce & Consumer Protection to Engrossed House Bill No. 2509.

The motion by Senator Holmquist Newbry carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 2 of the title, after "program;" strike the remainder of the title and insert "and adding a new section to chapter 49.17 RCW."

 

MOTION

 

On motion of Senator Holmquist Newbry, the rules were suspended, Engrossed House Bill No. 2509 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Holmquist Newbry, Conway and Kohl-Welles spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 2509 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 2509 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

ENGROSSED HOUSE BILL NO. 2509 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

HOUSE BILL NO. 2459, by Representatives Kagi, Armstrong and Johnson

 

Authorizing the Washington state patrol to confiscate license plates from a motor carrier who operates a commercial motor vehicle with a revoked registration.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Haugen, the rules were suspended, House Bill No. 2459 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Haugen and King spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of House Bill No. 2459.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of House Bill No. 2459 and the bill passed the Senate by the following vote:  Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

HOUSE BILL NO. 2459, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

At 10:56 a.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

 

AFTERNOON SESSION

 

The Senate was called to order at 12:02 p.m. by President Owen.

 

MOTION

 

On motion of Senator Eide, the Senate advanced to the eighth order of business.

 

MOTION

 

Senator Regala moved adoption of the following resolution:

 

 SENATE RESOLUTION
8701

 

By Senators Regala, Honeyford, Rolfes, Ranker, King, and Prentice

      WHEREAS, The State of Washington has previously recognized the proud history of Filipino-Americans; and

      WHEREAS, The earliest documented proof of Filipino presence in the continental United States was the date of October 18, 1587, when the first "Luzones Indios" set foot in Morro Bay, California; and

      WHEREAS, The Filipino-American National Historical Society recognizes the year of 1763 as the date of the first permanent Filipino settlement in the United States in St. Malo, in St. Bernard Parish, Louisiana; and

      WHEREAS, Washington State contributed to this history with the recognition of the 1888 documents of Port Blakely on Bainbridge Island, Washington, at the time the largest lumber mill in the world, as listing a "Manilla," the first known employee from the Philippines in the Pacific Northwest; and

      WHEREAS, These events set in motion the focus on the story of our nation's past from a new perspective by concentrating on the economic, cultural, social, and other notable contributions that Filipino-Americans have made in countless ways toward the development of the United States; and

      WHEREAS, Efforts must continue to promote the study of Filipino-American history and culture, as mandated in the mission statement of the Filipino-American National Historical Society; and

      WHEREAS, It is imperative for Filipino-American youth to have positive role models to instill in them the importance of education, complemented with the richness of their ethnicity and the value of their legacy; and

      WHEREAS, Washington State is home to Filipinos, one of the largest Asian/Pacific Islander populations found in the state, and is the location of historic Filipino-American communities; and

      WHEREAS, Filipinos have served with special distinction in all of the United States military branches; and

      WHEREAS, The United States and the Republic of the Philippines continue to hold a special bond;

      NOW, THEREFORE, BE IT RESOLVED, That the Senate of the State of Washington recognize October 2012 as the 425th anniversary of the presence of Filipinos in the United States, as a significant time to study the advancement of Filipino-Americans in the history of the State of Washington, and celebrate October 2012 as Filipino-American history month; and

      BE IT FURTHER RESOLVED, That a copy of this resolution be immediately transmitted by the Washington State Senate to Rey Pascua, President of the Filipino-American Community of the Yakima Valley for further distribution to the Filipino-American National Historical Society, Pacific Islander organizations, and the superintendent of public instruction.

      Senators Regala, Roach, Prentice, Conway, King, Shin and Honeyford spoke in favor of adoption of the resolution.

      The President declared the question before the Senate to be the adoption of Senate Resolution No. 8701.

The motion by Senator Regala carried and the resolution was adopted by voice vote.

INTRODUCTION OF SPECIAL GUESTS

 

The President welcomed and introduced Rey Pascua and other representatives of the Filipino community who were seated in the gallery.

 

MOTION

 

On motion of Senator Eide, Rule 15 was suspended for the remainder of the day for the purpose of allowing continued floor action.

 

EDITOR’S NOTE:  Senate Rule 15 establishes the floor schedule and calls for a lunch and dinner break of 90 minutes each per day during regular daily sessions.

 

MOTION

 

At 12:18 p.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

 

The Senate was called to order at 1:35 p.m. by President Owen.

 

MOTION

 

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

 

SECOND READING

 

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2747, by House Committee on Capital Budget (originally sponsored by Representative Hansen)

 

Modifying the use of funds in the fire service training account.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Murray, the rules were suspended, Engrossed Substitute House Bill No. 2747 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Murray spoke in favor of passage of the bill.

 

MOTION

 

On motion of Senator Holmquist Newbry, Senators Becker, Benton, Carrell, Ericksen, Hewitt, Padden, Parlette, Stevens, Swecker and Zarelli were excused.

 

MOTION

 

On motion of Senator Harper, Senator Frockt was excused.

 

The President declared the question before the Senate to be the final passage of Engrossed Substitute House Bill No. 2747.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2747 and the bill passed the Senate by the following vote:  Yeas, 47; Nays, 0; Absent, 1; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Carrell, Chase, Conway, Delvin, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Absent: Senator Brown

      Excused: Senator Ericksen

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2747, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

On motion of Senator Harper, Senator Brown was excused.

 

MOTION

 

On motion of Senator Hewitt, Senator Ericksen was excused.

INTRODUCTION OF SPECIAL GUESTS

 

The President welcomed Ms. Jan Binks and Ms. Terri Suzuki and other representatives of the Washington Poison Center who were present in the gallery celebrating the 50th anniversary of the national “Poison Prevention Week” march 18 through 24, 2012. They were joined by: Miss Jenna Hardman, 12, of Seattle, a St. Joseph School student and first place winner in the Washington Poison Center’s Poison Prevention Week’s “Everyone Needs Mr. Yuk” poster contest; her mother, Mrs. Kim Hardman; her grandmother, Susie Heck; and “Mr. Yuk.”

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 2212, by House Committee on Agriculture & Natural Resources (originally sponsored by Representatives Blake and Chandler)

 

Extending the expiration date of RCW 90.90.030.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Hatfield, the rules were suspended, Substitute House Bill No. 2212 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Hatfield and Honeyford spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2212.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 2212 and the bill passed the Senate by the following vote:  Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

      Voting yea: Senators Baumgartner, Becker, Benton, Carrell, Chase, Conway, Delvin, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senators Brown and Ericksen

SUBSTITUTE HOUSE BILL NO. 2212, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SIGNED BY THE PRESIDENT

 

The President signed:

SUBSTITUTE SENATE BILL NO. 5381,

SUBSTITUTE SENATE BILL NO. 5412,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5895,

SUBSTITUTE SENATE BILL NO. 5966,

SUBSTITUTE SENATE BILL NO. 6038,

SENATE BILL NO. 6095,

SENATE BILL NO. 6131,

SUBSTITUTE SENATE BILL NO. 6387,

SUBSTITUTE SENATE BILL NO. 6421,

ENGROSSED SUBSTITUTE SENATE BILL NO. 6445.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 2312, by House Committee on Transportation (originally sponsored by Representatives Zeiger, Clibborn, Armstrong, Ladenburg, Hargrove, Billig, Dammeier, Orwall, Bailey, Takko, Finn, Asay, Smith, Tharinger, Kelley, Pearson, Miloscia and Moscoso)

 

Making military service award emblems available for purchase.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator King, the rules were suspended, Substitute House Bill No. 2312 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator King spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2312.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 2312 and the bill passed the Senate by the following vote:  Yeas, 45; Nays, 2; Absent, 0; Excused, 2.

      Voting yea: Senators Baumgartner, Becker, Benton, Carrell, Chase, Conway, Delvin, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Swecker, Tom and Zarelli

      Voting nay: Senators Holmquist Newbry and Stevens

      Excused: Senators Brown and Ericksen

SUBSTITUTE HOUSE BILL NO. 2312, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

HOUSE BILL NO. 2224, by Representatives Nealey and Pedersen

 

Concerning Washington estate tax apportionment.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Kline, the rules were suspended, House Bill No. 2224 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Kline, Padden and Pflug spoke in favor of passage of the bill.

      Senator Ericksen spoke against passage of the bill.

 

The President declared the question before the Senate to be the final passage of House Bill No. 2224.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of House Bill No. 2224 and the bill passed the Senate by the following vote:  Yeas, 45; Nays, 3; Absent, 1; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Swecker, Tom and Zarelli

      Voting nay: Senators Ericksen, Holmquist Newbry and Stevens

      Absent: Senator Fain

HOUSE BILL NO. 2224, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

On motion of Senator Ericksen, Senator Fain was excused.

 

SECOND READING

 

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2347, by House Committee on Judiciary (originally sponsored by Representatives Dammeier, Kelley, Wilcox, Van De Wege, Pearson, Hurst, Zeiger, Seaquist, Rodne, Ladenburg, Hope, Green, Klippert and Moscoso)

 

Concerning the possession of spring blade knives.

 

The measure was read the second time.

 

MOTION

 

Senator Kline moved that the following committee striking amendment by the Committee on Judiciary be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 9.41.250 and 2011 c 13 s 1 are each amended to read as follows:

      (1) Every person who:

      (a) Manufactures, sells, or disposes of or possesses any instrument or weapon of the kind usually known as slung shot, sand club, or metal knuckles, or spring blade knife((, or any knife the blade of which is automatically released by a spring mechanism or other mechanical device, or any knife having a blade which opens, or falls, or is ejected into position by the force of gravity, or by an outward, downward, or centrifugal thrust or movement));

      (b) Furtively carries with intent to conceal any dagger, dirk, pistol, or other dangerous weapon; or

      (c) Uses any contrivance or device for suppressing the noise of any firearm unless the suppressor is legally registered and possessed in accordance with federal law, is guilty of a gross misdemeanor punishable under chapter 9A.20 RCW.

      (2) ((Subsection (1)(a) of this section does not apply to:
      (a) The possession of a spring blade knife by a law enforcement officer while the officer:
      (i) Is on official duty; or
      (ii) Is transporting the knife to or from the place where the knife is stored when the officer is not on official duty; or
      (b) The storage of a spring blade knife by a law enforcement officer.)) "Spring blade knife" means any knife, including a prototype, model, or other sample, with a blade that is automatically released by a spring mechanism or other mechanical device, or any knife having a blade which opens, or falls, or is ejected into position by the force of gravity, or by an outward, downward, or centrifugal thrust or movement.  A knife that contains a spring, detent, or other mechanism designed to create a bias toward closure of the blade and that requires physical exertion applied to the blade by hand, wrist, or arm to overcome the bias toward closure to assist in opening the knife is not a spring blade knife.

NEW SECTION.  Sec. 2.  A new section is added to chapter 9.41 RCW to read as follows:

      (1) RCW 9.41.250 does not apply to:

      (a) The possession or use of a spring blade knife by a general authority law enforcement officer, firefighter or rescue member, Washington state patrol officer, or military member, while the officer or member:

      (i) Is on official duty; or

      (ii) Is transporting a spring blade knife to or from the place where the knife is stored when the officer or member is not on official duty; or

      (iii) Is storing a spring blade knife;

      (b) The manufacture, sale, transportation, transfer, distribution, or possession of spring blade knives pursuant to contract with a general authority law enforcement agency, fire or rescue agency, Washington state patrol, or military service, or pursuant to a contract with another manufacturer or a commercial distributor of knives for use, sale, or other disposition by the manufacturer or commercial distributor;

      (c) The manufacture, transportation, transfer, distribution, or possession of spring blade knives, with or without compensation and with or without a contract, solely for trial, test, or other provisional use for evaluation and assessment purposes, by a general authority law enforcement agency, fire or rescue agency, Washington state patrol, military service, or a manufacturer or commercial distributor of knives.

      (2) For the purposes of this section:

      (a) "Military member" means an active member of the United States military or naval forces, or a Washington national guard member called to active duty or during training.

      (b) "General law enforcement agency" means any agency, department, or division of a municipal corporation, political subdivision, or other unit of local government of this state or any other state, and any agency, department, or division of any state government, having as its primary function the detection and apprehension of persons committing infractions or violating the traffic or criminal laws in general.

      (c) "General law enforcement officer" means any person who is commissioned and employed by an employer on a full-time, fully compensated basis to enforce the criminal laws of the state of Washington generally.  No person who is serving in a position that is basically clerical or secretarial in nature, or who is not commissioned shall be considered a law enforcement officer.

      (d) "Fire or rescue agency" means any agency, department, or division of a municipal corporation, political subdivision, or other unit of local government of this state or any other state, and any agency, department, or division of any state government, having as its primary function the prevention, control, or extinguishment of fire or provision of emergency medical services or rescue actions for persons.

      (e) "Firefighter or rescue member" means any person who is serving on a full-time, fully compensated basis as a member of a fire or rescue agency to prevent, control, or extinguish fire or provide emergency medical services or rescue actions for persons.  No person who is serving in a position that is basically clerical or secretarial in nature shall be considered a firefighter or rescue member.

      (f) "Military service" means the active, reserve, or national guard components of the United States military, including the army, navy, air force, marines, and coast guard."

      Senator Kline spoke in favor of adoption of the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Judiciary to Engrossed Substitute House Bill No. 2347.

The motion by Senator Kline carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "knives;" strike the remainder of the title and insert "amending RCW 9.41.250; adding a new section to chapter 9.41 RCW; and prescribing penalties."

 

MOTION

 

On motion of Senator Kline, the rules were suspended, Engrossed Substitute House Bill No. 2347 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Kline spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed Substitute House Bill No. 2347 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2347 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 47; Nays, 2; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senators Benton and Frockt

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2347 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 1398, by Representatives Fitzgibbon, Seaquist, Orwall, Springer, Upthegrove and Kenney

 

Creating an exemption from impact fees for low-income housing.

 

The measure was read the second time.

 

MOTION

 

Senator Hobbs moved that the following committee striking amendment by the Committee on Financial Institutions, Housing & Insurance be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 82.02.060 and 1990 1st ex.s. c 17 s 44 are each amended to read as follows:

      The local ordinance by which impact fees are imposed:

      (1) Shall include a schedule of impact fees which shall be adopted for each type of development activity that is subject to impact fees, specifying the amount of the impact fee to be imposed for each type of system improvement.  The schedule shall be based upon a formula or other method of calculating such impact fees.  In determining proportionate share, the formula or other method of calculating impact fees shall incorporate, among other things, the following:

      (a) The cost of public facilities necessitated by new development;

      (b) An adjustment to the cost of the public facilities for past or future payments made or reasonably anticipated to be made by new development to pay for particular system improvements in the form of user fees, debt service payments, taxes, or other payments earmarked for or proratable to the particular system improvement;

      (c) The availability of other means of funding public facility improvements;

      (d) The cost of existing public facilities improvements; and

      (e) The methods by which public facilities improvements were financed;

      (2) May provide an exemption for low-income housing((,)) and other development activities with broad public purposes((,)) from these impact fees, provided that the impact fees for ((such)) development ((activity)) activities with broad public purposes shall be paid from public funds other than impact fee accounts.  Local governments that grant exemptions for low-income housing under this subsection (2) are not obligated to pay the exempted fees.  An exemption for low-income housing granted under this subsection (2) must be conditioned upon requiring the developer to record a covenant that, except as provided otherwise by this subsection, prohibits using the property for any purpose other than for low-income housing.  At a minimum, the covenant must address price restrictions and household income limits for the low-income housing, and that if the property is converted to a use other than for low-income housing, the property owner must pay the applicable impact fees in effect at the time of conversion.  Covenants required by this subsection must be recorded with the applicable county auditor or recording officer.  A local government granting an exemption under this subsection for low-income housing may not collect revenue lost through granting an exemption by increasing impact fees unrelated to the exemption;

      (3) Shall provide a credit for the value of any dedication of land for, improvement to, or new construction of any system improvements provided by the developer, to facilities that are identified in the capital facilities plan and that are required by the county, city, or town as a condition of approving the development activity;

      (4) Shall allow the county, city, or town imposing the impact fees to adjust the standard impact fee at the time the fee is imposed to consider unusual circumstances in specific cases to ensure that impact fees are imposed fairly;

      (5) Shall include a provision for calculating the amount of the fee to be imposed on a particular development that permits consideration of studies and data submitted by the developer to adjust the amount of the fee;

      (6) Shall establish one or more reasonable service areas within which it shall calculate and impose impact fees for various land use categories per unit of development;

      (7) May provide for the imposition of an impact fee for system improvement costs previously incurred by a county, city, or town to the extent that new growth and development will be served by the previously constructed improvements provided such fee shall not be imposed to make up for any system improvement deficiencies; and
      (8) For purposes of this section, "low-income housing" means housing with a monthly housing expense, that is no greater than thirty percent of eighty percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States department of housing and urban development."

 

MOTION

 

Senator Haugen moved that the following amendment by Senator Haugen and others to the committee striking amendment be adopted:

0)On page 1, line 24 of the amendment, after "exemption" insert "of up to sixty percent"

Senators Haugen and Benton spoke in favor of adoption of the amendment to the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the amendment by Senator Haugen and others on page 1, line 24 to the committee striking amendment to Engrossed House Bill No. 1398.

The motion by Senator Haugen carried and the amendment to the committee striking amendment was adopted by voice vote.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Financial Institutions, Housing & Insurance as amended to Engrossed House Bill No. 1398.

The motion by Senator Hobbs carried and the committee striking amendment as amended was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "fees;" strike the remainder of the title and insert "and amending RCW 82.02.060."

 

MOTION

 

On motion of Senator Hobbs, the rules were suspended, Engrossed House Bill No. 1398 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Hobbs spoke in favor of passage of the bill.

      Senator Benton spoke against passage of the bill.

 

POINT OF ORDER

 

Senator Brown:  “Is it part of the Senate Rules that referring to the motives of members of the Legislature is inappropriate?”

 

REPLY BY THE PRESIDENT

 

President Owen:  “It is Senator. Senator Benton you were walking pretty close to that line and stepping over just a little bit there on a couple comments that you’d made. I know it was probably inadvertent but please be careful in the future.”

 

      Senator Haugen spoke in favor of passage of the bill.

 

MOTION

 

On motion of Senator Ericksen, Senator Carrell was excused.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 1398 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 1398 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 32; Nays, 16; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Brown, Chase, Conway, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hill, Hobbs, Kastama, Keiser, Kilmer, Kline, Kohl-Welles, Litzow, McAuliffe, Murray, Nelson, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Sheldon, Shin and Tom

      Voting nay: Senators Becker, Benton, Delvin, Ericksen, Hewitt, Holmquist Newbry, Honeyford, King, Morton, Padden, Parlette, Roach, Schoesler, Stevens, Swecker and Zarelli

      Excused: Senator Carrell

ENGROSSED HOUSE BILL NO. 1398 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

HOUSE BILL NO. 2523, by Representatives Bailey, Cody and Kirby

 

Regulating insurers and insurance products.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Hobbs, the rules were suspended, House Bill No. 2523 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Hobbs and Benton spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of House Bill No. 2523.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of House Bill No. 2523 and the bill passed the Senate by the following vote:  Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

HOUSE BILL NO. 2523, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

HOUSE BILL NO. 2420, by Representatives Cody, Roberts and Upthegrove

 

Repealing the requirement for a study and report concerning direct practices that the office of the insurance commissioner must provide to the legislature.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Keiser, the rules were suspended, House Bill No. 2420 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Keiser and Becker spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of House Bill No. 2420.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of House Bill No. 2420 and the bill passed the Senate by the following vote:  Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

HOUSE BILL NO. 2420, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2238, by House Committee on General Government Appropriations & Oversight (originally sponsored by Representatives Wilcox, Clibborn, Armstrong, Billig, Takko, Rivers, Angel, Hinkle, Schmick, Orcutt, Johnson, Warnick, Dahlquist, Blake and Chandler)

 

Regarding wetlands mitigation. Revised for 2nd Substitute: Regarding wetlands mitigation. (REVISED FOR ENGROSSED: Regarding environmental mitigation. )

 

The measure was read the second time.

 

MOTION

 

Senator Haugen moved that the following committee striking amendment by the Committee on Transportation be not adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 47.01.300 and 1994 c 258 s 4 are each amended to read as follows:

      The department shall, in cooperation with environmental regulatory authorities:

      (1) Identify and document environmental resources in the development of the statewide multimodal plan under RCW 47.06.040;

      (2) Allow for public comment regarding changes to the criteria used for prioritizing projects under chapter 47.05 RCW before final adoption of the changes by the commission;

      (3) Use an environmental review as part of the project prospectus identifying potential environmental impacts, mitigation, the utilization of the mitigation option available in section 5 of this act, and costs during the early project identification and selection phase, submit the prospectus to the relevant environmental regulatory authorities, and maintain a record of comments and proposed revisions received from the authorities;

      (4) Actively work with the relevant environmental regulatory authorities during the design alternative analysis process and seek written concurrence from the authorities that they agree with the preferred design alternative selected;

      (5) Develop a uniform methodology, in consultation with relevant environmental regulatory authorities, for submitting plans and specifications detailing project elements that impact environmental resources, and proposed mitigation measures including the mitigation option available in section 5 of this act, to the relevant environmental regulatory authorities during the preliminary specifications and engineering phase of project development;

      (6) Screen construction projects to determine which projects will require complex or multiple permits.  The permitting authorities shall develop methods for initiating review of the permit applications for the projects before the final design of the projects;

      (7) Conduct special prebid meetings for those projects that are environmentally complex; and

      (8) Review environmental considerations related to particular projects during the preconstruction meeting held with the contractor who is awarded the bid.

Sec. 2.  RCW 90.74.005 and 1997 c 424 s 1 are each amended to read as follows:

      (1) The legislature finds that:

      (a) The state lacks a clear policy relating to the mitigation of wetlands and aquatic habitat for infrastructure development;

      (b) Regulatory agencies have generally required project proponents to use compensatory mitigation only at the site of the project's impacts and to mitigate narrowly for the habitat or biological functions impacted by a project;

      (c) This practice of considering traditional on-site, in-kind mitigation may provide fewer environmental benefits when compared to innovative mitigation proposals that provide benefits in advance of a project's planned impacts and that restore functions or habitat other than those impacted at a project site; ((and))

      (d) Regulatory decisions on development proposals that attempt to incorporate innovative mitigation measures take an unreasonably long period of time and are subject to a great deal of uncertainty and additional expenses; and
      (e) Greater environmental benefits may be achievable through compensatory environmental mitigation when the collective mitigation investments of project proponents is paired with the structure of successful state programs that are referenced in statute and are designed to enhance and preserve aquatic and riparian functions when there is a clear linkage between the environmental impacts and the goals of the state program.  Programs such as the forestry riparian easement program, the family forest fish passage program, and the riparian open space program created pursuant to RCW 76.09.040 may have a logical and physical nexus with many underlying projects, especially road projects, and are proven to create a sustained benefit in the aquatic environment.

      (2) The legislature therefore declares that it is the policy of the state to authorize innovative mitigation measures by requiring state regulatory agencies to consider mitigation proposals for ((infrastructure)) projects that are timed, designed, and located in a manner to provide equal or better biological functions and values compared to traditional on-site, in-kind mitigation proposals.

      (3) It is the intent of the legislature to authorize local governments to accommodate the goals of this chapter.  It is not the intent of the legislature to:  (a) Restrict the ability of a project proponent to pursue project specific mitigation; or (b) create any new authority for regulating wetlands or aquatic habitat beyond what is specifically provided for in this chapter.

Sec. 3.  RCW 90.74.010 and 1997 c 424 s 2 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Mitigation" means sequentially avoiding impacts, minimizing impacts, or compensating for remaining unavoidable impacts.

      (2) "Compensatory mitigation" means the restoration, creation, enhancement, or preservation of uplands, wetlands, or other aquatic resources for the purposes of compensating for unavoidable adverse impacts that remain after all appropriate and practicable avoidance and minimization has been achieved.  "Compensatory mitigation" includes mitigation that:

      (a) Occurs at the same time as, or in advance of, a project's planned environmental impacts;

      (b) Is located in a site either on, near, or distant from the project's impacts; and

      (c) Provides either the same or different biological functions and values as the functions and values impacted by the project.

      (3) "Infrastructure development" means an action that is critical for the maintenance or expansion of an existing infrastructure feature such as a highway, rail line, airport, marine terminal, utility corridor, harbor area, or hydroelectric facility and is consistent with an approved land use planning process.  This planning process may include the growth management act, chapter 36.70A RCW, or the shoreline management act, chapter 90.58 RCW, in areas covered by those chapters.

      (4) "Mitigation plan" means a document or set of documents developed through joint discussions between a project proponent and environmental regulatory agencies that describe the unavoidable wetland or aquatic resource impacts of ((the)) a proposed infrastructure development or noninfrastructure development and the proposed compensatory mitigation for those impacts.

      (5) "Project proponent" means a public or private entity responsible for preparing a mitigation plan.

      (6) "Watershed" means an area identified as a state of Washington water resource inventory area under WAC 173-500-040 as it exists on ((July 27, 1997)) the effective date of this section.

(7) "Family forest fish passage program" means the program administered by the recreation and conservation office created pursuant to RCW 76.09.410 that provides public cost assistance to small forest landowners associated with the road maintenance and abandonment processes.
      (8) "Forestry riparian easement program" means the program established in RCW 76.13.120.

(9) "Noninfrastructure development" means a development project that requires the completion of compensatory mitigation that does not meet the definition of "infrastructure development" and is consistent with an approved land use planning process.  This planning process may include the growth management act, chapter 36.70A RCW, or the shoreline management act, chapter 90.58 RCW, in areas covered by those chapters.
      (10) "Riparian open space program" means the program created pursuant to RCW 76.09.040.

Sec. 4.  RCW 90.74.020 and 1997 c 424 s 3 are each amended to read as follows:

      (1) Project proponents may use a mitigation plan to propose compensatory mitigation within a watershed.  A mitigation plan shall:

      (a) Contain provisions that guarantee the long-term viability of the created, restored, enhanced, or preserved habitat, including assurances for protecting any essential biological functions and values defined in the mitigation plan;

      (b) Contain provisions for long-term monitoring of any created, restored, or enhanced mitigation site; and

      (c) Be consistent with the local comprehensive land use plan and any other applicable planning process in effect for the development area, such as an adopted subbasin or watershed plan.

      (2)(a) The departments of ecology and fish and wildlife may not limit the scope of options in a mitigation plan to areas on or near the project site, or to habitat types of the same type as contained on the project site.  The departments of ecology and fish and wildlife shall fully review and give due consideration to compensatory mitigation proposals that improve the overall biological functions and values of the watershed or bay and accommodate the mitigation needs of the infrastructure development or noninfrastructure development, including proposals or portions of proposals that are explored or developed in section 5 of this act.

(b) The departments of ecology and fish and wildlife are not required to grant approval to a mitigation plan that the departments find does not provide equal or better biological functions and values within the watershed or bay.

      (3) When making a permit or other regulatory decision under the guidance of this chapter, the departments of ecology and fish and wildlife shall consider whether the mitigation plan provides equal or better biological functions and values, compared to the existing conditions, for the target resources or species identified in the mitigation plan.  This consideration shall be based upon the following factors:

      (a) The relative value of the mitigation for the target resources, in terms of the quality and quantity of biological functions and values provided;

      (b) The compatibility of the proposal with the intent of broader resource management and habitat management objectives and plans, such as existing resource management plans, watershed plans, critical areas ordinances, the forestry riparian easement program, the riparian open space program, the family forest fish passage program, and shoreline master programs;

      (c) The ability of the mitigation to address scarce functions or values within a watershed;

      (d) The benefits of the proposal to broader watershed landscape, including the benefits of connecting various habitat units or providing population-limiting habitats or functions for target species;

      (e) The benefits of early implementation of habitat mitigation for projects that provide compensatory mitigation in advance of the project's planned impacts; and

      (f) The significance of any negative impacts to nontarget species or resources.

      (4) A mitigation plan may be approved through a memorandum of agreement between the project proponent and either the department of ecology or the department of fish and wildlife, or both.

NEW SECTION.  Sec. 5.  A new section is added to chapter 90.74 RCW to read as follows:

      (1)(a) To the degree that resources are deemed available by the affected departments, the department of ecology and the department of fish and wildlife shall allow, when appropriate, programs that are related to environmental mitigation, or explore the potential of developing new programs, to utilize the forestry riparian easement program, the riparian open space program, or the family forest fish passage program to mitigate for environmental impacts from projects conducted in the state where compatible with existing regulations.  The use of these programs may not be additive to existing compensatory mitigation requirements.

      (b) In implementing this subsection, the department of natural resources may be used as a resource, consistent with section 8 of this act, to assist in identifying potential projects that can be used for the mitigation of infrastructure and noninfrastructure development.

      (2) The department of ecology and the department of fish and wildlife are authorized to seek federal or private funds and in-kind contributions to implement this section.  The scope of effort in implementing this section may be defined by the success of the department of ecology and the department of fish and wildlife in securing specific funding.

NEW SECTION.  Sec. 6.  (1) The department of ecology and the department of fish and wildlife must provide a report to the legislature, consistent with RCW 43.01.036, by December 31, 2012, on:

      (a) Any successes in using existing programs to mitigate impacts for infrastructure and noninfrastructure development, as those terms are defined in RCW 90.74.010, as provided in section 5 of this act; and

      (b) Any constraints discovered that limits the applicability of section 5 of this act.

      (2) The department of ecology and the department of fish and wildlife must provide a report to the legislature, consistent with RCW 43.01.036, by December 31, 2013, on:

      (a) The identification of any additional programs that may be appropriate for inclusion in an environmental mitigation plan;

      (b) The feasibility of developing new programs that may be appropriate for inclusion in an environmental mitigation plan, including the identification of:

      (i) How often a program would be suitable for inclusion;

      (ii) When and where a new program would be suitable for inclusion;

      (iii) Constraints on the suitability of any new program; and

      (iv) Timelines, implementation costs, agency resource needs, and requests for new legal authority.

      (3) The report required in subsection (2) of this section should, if deemed appropriate and funding allows, be developed in consultation with the department of commerce, the department of transportation, the department of natural resources, and other stakeholders such as counties, cities, affected tribes, forest landowners, environmental interests, and the development community.

      (4) The authority provided in section 5(2) of this act relating to the acceptance of nonstate money may be utilized to fund the implementation of this section.  The scope of effort in implementing this section may be defined by the success of the department of ecology and the department of fish and wildlife in securing specific funding.

      (5) This section expires July 30, 2014.

Sec. 7.  RCW 90.74.030 and 1997 c 424 s 4 are each amended to read as follows:

      (1) In making regulatory decisions relating to wetland or aquatic resource mitigation, the departments of ecology and fish and wildlife shall, at the request of the project proponent, follow the guidance of ((RCW 90.74.005 through 90.74.020)) this chapter.

      (2) If the department of ecology or the department of fish and wildlife receives multiple requests for review of mitigation plans, each department may schedule its review of these proposals to conform to available budgetary resources.

NEW SECTION.  Sec. 8.  A new section is added to chapter 76.09 RCW to read as follows:

      The department and, when appropriate, the small forest landowner office established in RCW 76.13.110 must assist in identifying potential projects that can be used for the mitigation of infrastructure and noninfrastructure development, as those terms are defined in RCW 90.74.010, as provided in section 5 of this act."

On page 1, line 4 of the title, after "functions;" strike the remainder of the title and insert "amending RCW 47.01.300, 90.74.005, 90.74.010, 90.74.020, and 90.74.030; adding a new section to chapter 90.74 RCW; adding a new section to chapter 76.09 RCW; creating a new section; and providing an expiration date."

 

The President declared the question before the Senate to be the motion by Senator Haugen to not adopt the committee striking amendment by the Committee on Transportation to Engrossed Second Substitute House Bill No. 2238.

The motion by Senator Haugen carried and the committee striking amendment was not adopted by voice vote.

 

MOTION

 

On motion of Senator Haugen, the rules were suspended, Engrossed Second Substitute House Bill No. 2238 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Haugen spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed Second Substitute House Bill No. 2238.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed Second Substitute House Bill No. 2238 and the bill passed the Senate by the following vote:  Yeas, 42; Nays, 7; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Padden, Parlette, Pflug, Regala, Roach, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senators Frockt, Harper, Nelson, Prentice, Pridemore, Ranker and Rolfes

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2238, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 2673, by House Committee on Transportation (originally sponsored by Representatives Clibborn, Hunt, Liias, Kenney, Lytton, Green, Probst, Goodman, Dickerson, Ryu, Seaquist, Darneille, Cody, Carlyle, Sullivan, Kirby, Ormsby, Ladenburg, Moscoso, Springer, Hasegawa, Maxwell, Wylie, Tharinger and Pollet)

 

Addressing transportation workforce development.

 

The measure was read the second time.

 

MOTION

 

Senator Haugen moved that the following committee striking amendment by the Committee on Transportation be adopted:

0)Strike everything after the enacting clause and insert the following:

"NEW SECTION.  Sec. 1.  A new section is added to chapter 47.01 RCW to read as follows:

      (1) The department shall expend federal funds received by the department under 23 U.S.C. Sec. 140(b) to increase diversity in the highway construction workforce and prepare individuals interested in entering the highway construction workforce by conducting activities in subsection (4) of this section.

      (2) The requirements contained in subsection (1) of this section do not apply to or reduce the federal funds that would be otherwise allocated to local government agencies.

      (3) The department may, in coordination with the apprenticeship and training council described in chapter 49.04 RCW, expend moneys from other sources than those specified in subsection (1) of this section for the activities in subsection (4) of this section.

      (4) The department shall coordinate with the apprenticeship and training council to provide any portion of the following services:

      (a) Preapprenticeship programs approved by the apprenticeship and training council;

      (b) Preemployment counseling;

      (c) Orientations on the highway construction industry, including outreach to women, minorities, and other disadvantaged individuals;

      (d) Basic skills improvement classes;

      (e) Career counseling;

      (f) Remedial training;

      (g) Entry requirements for training programs;

      (h) Supportive services and assistance with transportation;

      (i) Child care and special needs;

      (j) Job site mentoring and retention services; and

      (k) Assistance with tools, protective clothing, and other related support for employment costs.

      (5) The department, in coordination with the apprenticeship and training council, shall submit a report to the transportation committees of the legislature by December 1st of each year beginning in 2012.  The report must contain:

      (a) An analysis of the results of the activities in subsection (4) of this section;

      (b) The amount available to the department from federal funds for the activities in subsection (4) of this section and the amount expended for those activities; and

      (c) The performance outcomes achieved from each activity, including the number of persons receiving services, training, and employment."

 

MOTION

 

Senator Haugen moved that the following amendment by Senators Haugen and King to the committee striking amendment be adopted:

0)On page 1, line 6 of the amendment, after "department", insert ", and funds that may be available to the department,"

      On page 1, line 13 of the amendment, after "department", strike "may" and insert "shall, to the greatest extent practicable"

Senator Haugen spoke in favor of adoption of the amendment to the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the amendment by Senators Haugen and King on page 1, line 6 to the committee striking amendment to Substitute House Bill No. 2673.

The motion by Senator Haugen carried and the amendment to the committee striking amendment was adopted by voice vote.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Transportation as amended to Substitute House Bill No. 2673.

The motion by Senator Haugen carried and the committee striking amendment as amended was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "development;" strike the remainder of the title and insert "and adding a new section to chapter 47.01 RCW."

 

MOTION

 

On motion of Senator Haugen, the rules were suspended, Substitute House Bill No. 2673 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Haugen, King and Frockt spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2673 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 2673 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 40; Nays, 9; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Benton, Brown, Carrell, Chase, Conway, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hobbs, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Murray, Nelson, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senators Becker, Delvin, Ericksen, Hill, Holmquist Newbry, Honeyford, Morton, Padden and Schoesler

SUBSTITUTE HOUSE BILL NO. 2673 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

At 2:39 p.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

 

The Senate was called to order at 4:02 p.m. by President Owen.

 

SECOND READING

 

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2319, by House Committee on Ways & Means (originally sponsored by Representatives Cody, Jinkins and Ormsby)

 

Implementing the affordable care act. Revised for 2nd Substitute: Implementing the federal patient and protection affordable care act. (REVISED FOR ENGROSSED: Implementing the federal patient protection and affordable care act. )

 

The measure was read the second time.

 

MOTION

 

Senator Keiser moved that the following committee striking amendment by the Committee on Health & Long-Term Care be not adopted:

0)Strike everything after the enacting clause and insert the following:

 

"PART I
DEFINITIONS

 

Sec. 1.  RCW 48.43.005 and 2011 c 315 s 2 and 2011 c 314 s 3 are each reenacted and amended to read as follows:

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

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

      (2) "Adverse benefit determination" means a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit, including a denial, reduction, termination, or failure to provide or make payment that is based on a determination of an enrollee's or applicant's eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit resulting from the application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.

      (3) "Applicant" means a person who applies for enrollment in an individual health plan as the subscriber or an enrollee, or the dependent or spouse of a subscriber or enrollee.

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

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

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

      (7) "Board" means the governing board of the Washington health benefit exchange established in chapter 43.71 RCW.
      (8)(a) For grandfathered health benefit plans issued before January 1, 2014, and renewed thereafter, "catastrophic health plan" means:

      (((a))) (i) In the case of a contract, agreement, or policy covering a single enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, one thousand seven hundred fifty dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least three thousand five hundred dollars, both amounts to be adjusted annually by the insurance commissioner; and

      (((b))) (ii) In the case of a contract, agreement, or policy covering more than one enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, three thousand five hundred dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least six thousand dollars, both amounts to be adjusted annually by the insurance commissioner((; or
      (c) Any health benefit plan that provides benefits for hospital inpatient and outpatient services, professional and prescription drugs provided in conjunction with such hospital inpatient and outpatient services, and excludes or substantially limits outpatient physician services and those services usually provided in an office setting)).

(b) In July 2008, and in each July thereafter, the insurance commissioner shall adjust the minimum deductible and out-of-pocket expense required for a plan to qualify as a catastrophic plan to reflect the percentage change in the consumer price index for medical care for a preceding twelve months, as determined by the United States department of labor.  The adjusted amount shall apply on the following January 1st.

(c) For health benefit plans issued on or after January 1, 2014, "catastrophic health plan" means:
      (i) A health benefit plan that meets the definition of catastrophic plan set forth in section 1302(e) of P.L. 111-148 of 2010, as amended; or
      (ii) A health benefit plan offered outside the exchange marketplace that requires a calendar year deductible or out-of-pocket expenses under the plan, other than for premiums, for covered benefits, that meets or exceeds the commissioner's annual adjustment under (b) of this subsection.

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

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

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

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

      (((12))) (13) "Emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition (a) placing the health of the individual, or with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy, (b) serious impairment to bodily functions, or (c) serious dysfunction of any bodily organ or part.

      (((13))) (14) "Emergency services" means a medical screening examination, as required under section 1867 of the social security act (42 U.S.C. 1395dd), that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate that emergency medical condition, and further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under section 1867 of the social security act (42 U.S.C. 1395dd) to stabilize the patient.  Stabilize, with respect to an emergency medical condition, has the meaning given in section 1867(e)(3) of the social security act (42 U.S.C. 1395dd(e)(3)).

      (((14))) (15) "Employee" has the same meaning given to the term, as of January 1, 2008, under section 3(6) of the federal employee retirement income security act of 1974.

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

      (((16))) (17) "Exchange" means the Washington health benefit exchange established under chapter 43.71 RCW.
      (18) "Final external review decision" means a determination by an independent review organization at the conclusion of an external review.

      (((17))) (19) "Final internal adverse benefit determination" means an adverse benefit determination that has been upheld by a health plan or carrier at the completion of the internal appeals process, or an adverse benefit determination with respect to which the internal appeals process has been exhausted under the exhaustion rules described in RCW 48.43.530 and 48.43.535.

      (((18))) (20) "Grandfathered health plan" means a group health plan or an individual health plan that under section 1251 of the patient protection and affordable care act, P.L. 111‑148 (2010) and as amended by the health care and education reconciliation act, P.L. 111‑152 (2010) is not subject to subtitles A or C of the act as amended.

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

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

      (((21))) (23) "Health care provider" or "provider" means:

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

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

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

      (((23))) (25) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020, and includes "issuers" as that term is used in the patient protection and affordable care act (P.L. 111-148).

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

      (a) Long-term care insurance governed by chapter 48.84 or 48.83 RCW;

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

      (c) Coverage supplemental to the coverage provided under chapter 55, Title 10, United States Code;

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

      (e) Disability income;

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

      (g) Workers' compensation coverage;

      (h) Accident only coverage;

      (i) Specified disease or illness‑triggered fixed payment insurance, hospital confinement fixed payment insurance, or other fixed payment insurance offered as an independent, noncoordinated benefit;

      (j) Employer-sponsored self-funded health plans;

      (k) Dental only and vision only coverage; and

      (l) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

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

      (((26))) (28) "Open enrollment" means a period of time as defined in rule to be held at the same time each year, during which applicants may enroll in a carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

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

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

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

      (((30))) (32) "Small employer" or "small group" means any person, firm, corporation, partnership, association, political subdivision, sole proprietor, or self-employed individual that is actively engaged in business that employed an average of at least one but no more than fifty employees, during the previous calendar year and employed at least one employee on the first day of the plan year, is not formed primarily for purposes of buying health insurance, and in which a bona fide employer-employee relationship exists.  In determining the number of employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer.  Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually.  Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition.  A self-employed individual or sole proprietor who is covered as a group of one must also:  (a) Have been employed by the same small employer or small group for at least twelve months prior to application for small group coverage, and (b) verify that he or she derived at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year, except a self-employed individual or sole proprietor in an agricultural trade or business, must have derived at least fifty-one percent of his or her income from the trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, for the previous taxable year.

      (((31))) (33) "Special enrollment" means a defined period of time of not less than thirty-one days, triggered by a specific qualifying event experienced by the applicant, during which applicants may enroll in the carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

      (((32))) (34) "Standard health questionnaire" means the standard health questionnaire designated under chapter 48.41 RCW.

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

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

 

PART II
THE WASHINGTON HEALTH BENEFIT EXCHANGE

 

Sec. 2.  RCW 43.71.010 and 2011 c 317 s 2 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.  Terms and phrases used in this chapter that are not defined in this section must be defined as consistent with implementation of a state health benefit exchange pursuant to the affordable care act.

      (1) "Affordable care act" means the federal patient protection and affordable care act, P.L. 111-148, as amended by the federal health care and education reconciliation act of 2010, P.L. 111-152, or federal regulations or guidance issued under the affordable care act.

      (2) "Authority" means the Washington state health care authority, established under chapter 41.05 RCW.

      (3) "Board" means the governing board established in RCW 43.71.020.

      (4) "Commissioner" means the insurance commissioner, established in Title 48 RCW.

      (5) "Exchange" means the Washington health benefit exchange established in RCW 43.71.020.

(6) "Self-sustaining" means capable of operating without direct state tax subsidy.  Self-sustaining sources include, but are not limited to, federal grants, federal premium tax subsidies and credits, charges to participating insurance carriers, and premiums paid by participating enrollees.

Sec. 3.  RCW 43.71.020 and 2011 c 317 s 3 are each amended to read as follows:

      (1) The Washington health benefit exchange is established and constitutes a self-sustaining public-private partnership separate and distinct from the state, exercising functions delineated in chapter 317, Laws of 2011.  The exchange shall be known as the evergreen health marketplace.  By January 1, 2014, the exchange shall operate consistent with the affordable care act subject to statutory authorization.  The exchange shall have a governing board consisting of persons with expertise in the Washington health care system and private and public health care coverage.  The initial membership of the board shall be appointed as follows:

      (a) By October 1, 2011, each of the two largest caucuses in both the house of representatives and the senate shall submit to the governor a list of five nominees who are not legislators or employees of the state or its political subdivisions, with no caucus submitting the same nominee.

      (i) The nominations from the largest caucus in the house of representatives must include at least one employee benefit specialist;

      (ii) The nominations from the second largest caucus in the house of representatives must include at least one health economist or actuary;

      (iii) The nominations from the largest caucus in the senate must include at least one representative of health consumer advocates;

      (iv) The nominations from the second largest caucus in the senate must include at least one representative of small business;

      (v) The remaining nominees must have demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (b) By December 15, 2011, the governor shall appoint two members from each list submitted by the caucuses under (a) of this subsection.  The appointments made under this subsection (1)(b) must include at least one employee benefits specialist, one health economist or actuary, one representative of small business, and one representative of health consumer advocates.  The remaining four members must have a demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (c) By December 15, 2011, the governor shall appoint a ninth member to serve as chair.  The chair may not be an employee of the state or its political subdivisions.  The chair shall serve as a nonvoting member except in the case of a tie.

      (d) The following members shall serve as nonvoting, ex officio members of the board:

      (i) The insurance commissioner or his or her designee; and

      (ii) The administrator of the health care authority, or his or her designee.

      (2) Initial members of the board shall serve staggered terms not to exceed four years.  Members appointed thereafter shall serve two-year terms.

      (3) A member of the board whose term has expired or who otherwise leaves the board shall be replaced by gubernatorial appointment.  When the person leaving was nominated by one of the caucuses of the house of representatives or the senate, his or her replacement shall be appointed from a list of five nominees submitted by that caucus within thirty days after the person leaves.  If the member to be replaced is the chair, the governor shall appoint a new chair within thirty days after the vacancy occurs.  A person appointed to replace a member who leaves the board prior to the expiration of his or her term shall serve only the duration of the unexpired term.  Members of the board may be reappointed to multiple terms.

      (4) No board member may be appointed if his or her participation in the decisions of the board could benefit his or her own financial interests or the financial interests of an entity he or she represents.  A board member who develops such a conflict of interest shall resign or be removed from the board.

      (5) Members of the board must be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060.  The board shall prescribe rules for the conduct of its business.  Meetings of the board are at the call of the chair.

      (6) The exchange and the board are subject only to the provisions of chapter 42.30 RCW, the open public meetings act, and chapter 42.56 RCW, the public records act, and not to any other law or regulation generally applicable to state agencies.  Consistent with the open public meetings act, the board may hold executive sessions to consider proprietary or confidential nonpublished information.

      (7)(a) The board shall establish an advisory committee to allow for the views of the health care industry and other stakeholders to be heard in the operation of the health benefit exchange.

      (b) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in chapter 317, Laws of 2011.

      (8) Members of the board are not civilly or criminally liable and may not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under chapter 317, Laws of 2011.  Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.

      (9) In recognition of the government-to-government relationship between the state of Washington and the federally recognized tribes in the state of Washington, the board shall consult with the American Indian health commission.

Sec. 4.  RCW 43.71.030 and 2011 c 317 s 4 are each amended to read as follows:

      (1) The exchange may, consistent with the purposes of this chapter:  (a) Sue and be sued in its own name; (b) make and execute agreements, contracts, and other instruments, with any public or private person or entity; (c) employ, contract with, or engage personnel; (d) pay administrative costs; ((and)) (e) accept grants, donations, loans of funds, and contributions in money, services, materials or otherwise, from the United States or any of its agencies, from the state of Washington and its agencies or from any other source, and use or expend those moneys, services, materials, or other contributions; (f) aggregate or delegate the aggregation of funds that comprise the premium for a health plan; and (g) complete other duties necessary to begin open enrollment in qualified health plans through the exchange beginning October 1, 2013.

      (2) ((The powers and duties of the exchange and the board are limited to those necessary to apply for and administer grants, establish information technology infrastructure, and undertake additional administrative functions necessary to begin operation of the exchange by January 1, 2014.  Any actions relating to substantive issues included in RCW 43.71.040 must be consistent with statutory direction on those issues.)) The exchange may charge and equitably apportion among participating carriers the administrative costs and expenses incurred consistent with the provisions of this chapter, and must develop the methodology to ensure the exchange is self-sustaining.
      (3) The board shall establish policies that permit city and county governments, Indian tribes, tribal organizations, urban Indian organizations, private foundations, and other entities to pay premiums on behalf of qualified individuals.
      (4) The employees of the exchange may participate in the public employees' retirement system under chapter 41.40 RCW and the public employees' benefits board under chapter 41.05 RCW.
      (5) The exchange shall report its activities and status to the governor and the legislature as requested, and no less often than annually.

Sec. 5.  RCW 43.71.060 and 2011 c 317 s 7 are each amended to read as follows:

(1) The health benefit exchange account is created in the custody of the state treasurer.  All receipts from federal grants received under the affordable care act shall be deposited into the account.  Expenditures from the account may be used only for purposes consistent with the grants.  Until March 15, 2012, only the administrator of the health care authority, or his or her designee, may authorize expenditures from the account.  ((Beginning March 15, 2012, only the board of the Washington health benefit exchange may authorize expenditures from the account.))  The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

(2) This section expires January 1, 2014.

 

PART III
MARKET RULES

 

NEW SECTION.  Sec. 6.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) For plan or policy years beginning January 1, 2014, a carrier must offer individual or small group health benefit plans outside the exchange that meet the definition of silver and gold level plans in section 1302 of P.L. 111-148 of 2010, as amended, if the carrier offers an individual or small group plan outside the exchange that meets the bronze level definition in section 1302 of P.L. 111-148 of 2010, as amended.

      (2) A carrier offering a small group health benefit plan must offer the identical plan inside and outside the exchange.

      (3) A health benefit plan meeting the definition of a catastrophic plan in RCW 48.43.005(8)(c)(i) may only be sold through the exchange.

      (4) The commissioner, in consultation with the exchange, may adopt rules requiring a carrier to offer a plan that meets the definition of a bronze level plan outside the exchange if they offer a bronze level plan inside the exchange.

      (5) By December 1, 2016, the exchange board, in consultation with the commissioner, must complete a review of the impact of subsections (1) through (4) of this section on the health and viability of the markets inside and outside the exchange and submit the recommendations to the legislature on the need to maintain or sunset the market rules.

      (6) The commissioner shall evaluate plans offered at each actuarial value defined in section 1302 of P.L. 111-148 of 2010, as amended, and determine whether variation in prescription drug benefit cost-sharing, both inside and outside the exchange in both the individual and small group markets results in adverse selection.  If so, the commissioner may adopt rules to assure substantial equivalence of prescription drug cost-sharing.

      (7) If the exchange board finds the consumers in the exchange do not have an adequate choice of health plan options among the actuarial value tiers specified in section 1302 of P.L. 111-148 of 2010, as amended, in the exchange, the exchange board in consultation with the commissioner, may authorize the offering of a public plan and pursue the opportunity for a waiver under section 1332 of P.L. 111-148 of 2010, as amended.

NEW SECTION.  Sec. 7.  A new section is added to chapter 48.43 RCW to read as follows:

      All health plans, other than catastrophic health plans, offered outside of the exchange must conform with the actuarial value tiers specified in section 1302 of P.L. 111-148 of 2010, as amended, as bronze, silver, gold, or platinum.

 

PART IV
QUALIFIED HEALTH PLANS

 

NEW SECTION.  Sec. 8.  A new section is added to chapter 43.71 RCW to read as follows:

      (1) The board shall certify a plan as a qualified health plan to be offered through the exchange if the plan:

      (a) Is determined by the insurance commissioner to meet the requirements of Title 48 RCW and rules adopted by the commissioner pursuant to chapter 34.05 RCW;

      (b) Is determined by the board to meet the requirements of the affordable care act for certification as a qualified health plan; and

      (c) Is determined by the board to include tribal clinics and urban Indian clinics as essential community providers in the plan's provider network consistent with federal law.  If consistent with federal law, integrated delivery systems shall be exempt from the requirement to include essential community providers in the provider network.

      (2) Consistent with section 1311 of P.L. 111-148 of 2010, as amended, the board shall allow stand-alone dental plans to offer coverage in the exchange beginning January 1, 2014.  Dental benefits offered in the exchange must be offered and priced separately to assure transparency for consumers.

      (3) Upon request by the board, a state agency shall provide information to the board for its use in determining if the requirements under subsection (1)(b) or (c) of this section have been met.  Unless the agency and the board agree to a later date, the agency shall provide the information within sixty days of the request.  The exchange shall reimburse the agency for the cost of compiling and providing the requested information within one hundred eighty days of its receipt.

      (4) A decision by the board denying a request to certify or recertify a plan as a qualified health plan may be appealed according to procedures adopted by the board.

NEW SECTION.  Sec. 9.  A new section is added to chapter 43.71 RCW to read as follows:

      The board shall establish a rating system for qualified health plans to assist consumers in evaluating plan choices in the exchange.  Rating factors established by the board must include, but are not limited to:

      (1) Affordability with respect to premiums, deductibles, and point-of-service cost-sharing;

      (2) Enrollee satisfaction;

      (3) Provider reimbursement methods that incentivize health homes or chronic care management or care coordination for enrollees with complex, high-cost, or multiple chronic conditions;

      (4) Promotion of appropriate primary care and preventive services utilization;

      (5) High standards for provider network adequacy, including consumer choice of providers and service locations and robust provider participation intended to improve access to underserved populations through participation of essential community providers, family planning providers and pediatric providers;

      (6) High standards for covered services, including languages spoken or transportation assistance; and

      (7) Coverage of benefits for spiritual care services that are deductible under section 213(d) of the internal revenue code.

Sec. 10.  RCW 48.42.010 and 1985 c 264 s 15 are each amended to read as follows:

(1) Notwithstanding any other provision of law, and except as provided in this chapter, any person or other entity which provides coverage in this state for life insurance, annuities, loss of time, medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, the providing of services, or otherwise, shall be subject to the authority of the state insurance commissioner, unless the person or other entity shows that while providing the services it is subject to the jurisdiction and regulation of another agency of this state, any subdivisions thereof, or the federal government.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

Sec. 11.  RCW 48.42.020 and 1983 c 36 s 2 are each amended to read as follows:

(1) A person or entity may show that it is subject to the jurisdiction and regulation of another agency of this state, any subdivision thereof, or the federal government, by providing to the insurance commissioner the appropriate certificate, license, or other document issued by the other governmental agency which permits or qualifies it to provide the coverage as defined in RCW 48.42.010.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

NEW SECTION.  Sec. 12.  A new section is added to chapter 48.43 RCW to read as follows:

      Certification by the Washington health benefit exchange of a plan as a qualified health plan, or of a carrier as a qualified issuer, does not exempt the plan or carrier from any of the requirements of this title or rules adopted by the commissioner pursuant to chapter 34.05 RCW.

 

PART V
 ESSENTIAL HEALTH BENEFITS

 

NEW SECTION.  Sec. 13.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) Consistent with federal law, the commissioner, in consultation with the board and the health care authority, shall, by rule, select the largest small group plan in the state by enrollment as the benchmark plan for the individual and small group market for purposes of establishing the essential health benefits in Washington state under P.L. 111-148 of 2010, as amended.

      (2) If the essential health benefits benchmark plan for the individual and small group market does not include all of the ten benefit categories specified by section 1302 of P.L. 111-148, as amended, the commissioner, in consultation with the board and the health care authority, shall, by rule, supplement the benchmark plan benefits as needed to meet the minimum requirements of section 1302.

      (3) A health plan required to offer the essential health benefits, other than a health plan offered through the federal basic health program or medicaid, under P.L. 111-148 of 2010, as amended, may not be offered in the state unless the commissioner finds that it is substantially equal to the benchmark plan.  When making this determination, the commissioner must ensure that the plan:

      (a) Covers the ten essential health benefits categories specified in section 1302 of P.L. 111-148 of 2010, as amended; and

      (b) May consider whether the health plan has a benefit design that would create a risk of biased selection based on health status and whether the health plan contains meaningful scope and level of benefits in each of the ten essential health benefit categories specified by section 1302 of P.L. 111-148 of 2010, as amended.

      (4) Beginning December 15, 2012, and every year thereafter, the commissioner shall submit to the legislature a list of state-mandated health benefits, the enforcement of which will result in federally imposed costs to the state related to the plans sold through the exchange because the benefits are not included in the essential health benefits designated under federal law.  The list must include the anticipated costs to the state of each state-mandated health benefit on the list.  The commissioner may enforce a mandate on the list for the entire market only if funds are appropriated in an omnibus appropriations act specifically to pay for the identified costs.  During any period of time such funds are not appropriated, the mandate must be suspended for the entire market and may not be enforced by the commissioner.

NEW SECTION.  Sec. 14.  Nothing in this act prohibits the offering of benefits for spiritual care services deductible under section 213(d) of the internal revenue code in health plans inside and outside of the exchange.

 

PART VI
THE BASIC HEALTH OPTION

 

NEW SECTION.  Sec. 15.  A new section is added to chapter 70.47 RCW to read as follows:

      (1) The director of the health care authority shall provide the necessary certifications to the secretary of the federal department of health and human services under section 1331 of P.L. 111-148 of 2010, as amended, for the purposes of Washington state's adoption of the federal basic health program option, unless, by September 1, 2013, the governor finds that:

      (a) Anticipated federal funding under section 1331 will be insufficient, absent any additional funding from the state, to provide at least the essential health benefits to eligible individuals under section 1331 during the period of calendar years 2014 through 2019:

      (i) At enrollee premium levels below the levels that would be applicable to persons with income between one hundred thirty-four and two hundred percent of the federal poverty level through the Washington health benefits exchange;

      (ii) Using health plan payment rates that exceed 2012 medicaid payment rates for the same services and are sufficient to ensure access to care for enrollees and incentivize an adequate provider network, in conjunction with innovative payment methodologies and standard health plan performance measures that will create incentives for the use of effective cost containment and health care quality strategies; and

      (iii) Assuming reasonable basic health program administrative costs and the potential impact of federal basic health plan program funding reconciliation under section 1331(d) of the affordable care act; and

      (b) Sufficient funds are not available to support the design and development work necessary for the program to begin providing health coverage to enrollees beginning January 1, 2014.

      (2) Prior to making this finding, the director shall:

      (a) Actively consult with the board of the Washington health benefit exchange, the office of the insurance commissioner, consumer advocates, provider organizations, carriers, and other interested organizations;

      (b) Consider any available objective analysis specific to Washington state, by an independent nationally recognized consultant that has been actively engaged in analysis and economic modeling of the federal basic health program option for multiple states.

      (3) The director shall report any findings and supporting analysis made under this section to the relevant policy and fiscal committees of the legislature.

      (4) If implemented, the federal basic health program must be guided by the following principles:

      (a) Meeting the minimum state certification standards in section 1331 of the federal patient protection and affordable care act;

      (b) To the extent allowed by the federal department of health and human services, twelve-month continuous eligibility for the basic health program, and corresponding twelve-month continuous enrollment in standard health plans by enrollees; or, in lieu of twelve-month continuous eligibility, financing mechanisms that enable enrollees to remain with a plan for the entire plan year;

      (c) Achieving an appropriate balance between:

      (i) Premiums and cost-sharing minimized to increase the affordability of insurance coverage;

      (ii) Standard health plan contracting requirements that minimize plan and provider administrative costs, while holding standard health plans accountable for performance and enrollee health outcomes, and ensuring adequate enrollee notice and appeal rights; and

      (iii) Health plan payment rates and provider payment rates that exceed the 2012 medicaid payment rates for the same services and are sufficient to ensure access to care for enrollees and incentivize an adequate provider network, in conjunction with innovative payment methodologies and standard health plan performance measures that will create incentives for the use of effective cost containment and health care quality; and

      (d) Transparency in program administration, including active and ongoing consultation with basic health program enrollees and interested organizations.

 

PART VII
RISK ADJUSTMENT AND REINSURANCE

 

NEW SECTION.  Sec. 16.  A new section is added to chapter 48.43 RCW to read as follows:

      (1)(a) The commissioner, in consultation with the board, shall adopt rules establishing the reinsurance and risk adjustment programs required by P.L. 111-148 of 2010, as amended.

      (b) The commissioner must include in deliberations related to reinsurance rule making an analysis of an invisible high risk pool option, in which the full premium and risk associated with certain high-risk or high-cost enrollees would be ceded to the transitional reinsurance program.  The analysis must include a determination as to whether that option would be allowed under the federal reinsurance program regulations, whether the option would provide sufficiently comprehensive coverage for current nonmedicare high risk pool enrollees, and how an invisible high risk pool option could be designed to ensure that carriers ceding risk provide effective care management to high-risk or high-cost enrollees.

      (2) Consistent with federal law, the rules for the reinsurance program must, at a minimum, establish:

      (a) A mechanism to collect reinsurance contribution funds;

      (b) A reinsurance payment formula; and

      (c) A mechanism to disburse reinsurance payments.

      (3)(a) The commissioner may adjust the rules adopted under this section as needed to preserve a healthy market both inside and outside of the exchange.

      (b) The rules adopted under this section shall also identify the data that health carriers, third-party administrators, and other entities must provide to support operation of the reinsurance and risk adjustment programs established under this section, and requirements related to the collection, validation, interpretation, and retention of the data.

      (4) The commissioner shall contract with one or more nonprofit entities to administer the risk adjustment and reinsurance programs.

 

PART VIII
THE WASHINGTON STATE HEALTH INSURANCE POOL

 

NEW SECTION.  Sec. 17.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The board shall evaluate the populations that may need ongoing access to the pool coverage with specific attention to those persons who may be excluded from coverage in 2014, such as persons with end-stage renal disease or HIV/AIDS, or persons not eligible for coverage in the exchange.

      (2) The board shall evaluate the eligibility requirements for the purchase of health care coverage through the pool and submit recommendations regarding any modifications to pool eligibility requirements that might allow new enrollees on or after January 1, 2014.  The recommendations must address any needed modifications to the standard health questionnaire or other eligibility screening tool that could be used in a manner consistent with federal law to determine eligibility for enrollment in the pool.

      (3) The board shall complete an analysis of the pool assessments in relation to the assessments for the reinsurance program and recommend changes for the assessment or any credits that may be considered for the reinsurance program.  The analysis shall also recommend whether the categories of members paying assessments should be adjusted to make the assessment fair and equitable among all payers.

      (4) The board shall report its recommendations to the governor and the legislature by December 1, 2012.

NEW SECTION.  Sec. 18.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The pool is authorized to contract with the commissioner to administer risk management functions, consistent with section 17 of this act, and consistent with P.L. 111-148 of 2010, as amended.  Prior to entering into a contract, the pool may conduct preoperational and planning activities related to these programs, including defining and implementing an appropriate legal structure or structures to administer and coordinate the reinsurance or risk adjustment programs.

      (2) The reasonable costs incurred by the pool for preoperational and planning activities related to the reinsurance program may be reimbursed from federal funds or from the additional contributions collected to pay the administrative costs of the reinsurance program.

      (3) If the pool contracts to administer and coordinate the reinsurance or risk adjustment program, the board must submit recommendations to the legislature with suggestions for additional consumer representatives or other representative members to the board.

 

      (4) The pool shall report on these activities to the appropriate committees of the senate and house of representatives by December 15, 2012, and December 15, 2013.

 

PART IX
EXCHANGE EMPLOYEES

 

NEW SECTION.  Sec. 19.  A new section is added to chapter 41.04 RCW to read as follows:

      Except for chapters 41.05 and 41.40 RCW, this title does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

NEW SECTION.  Sec. 20.  A new section is added to chapter 43.01 RCW to read as follows:

      This chapter does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

NEW SECTION.  Sec. 21.  A new section is added to chapter 43.03 RCW to read as follows:

      This chapter does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

Sec. 22.  RCW 41.05.011 and 2011 1st sp.s. c 15 s 54 are each reenacted and amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Authority" means the Washington state health care authority.

      (2) "Board" means the public employees' benefits board established under RCW 41.05.055.

      (3) "Dependent care assistance program" means a benefit plan whereby state and public employees may pay for certain employment related dependent care with pretax dollars as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 129 or other sections of the internal revenue code.

      (4) "Director" means the director of the authority.

      (5) "Emergency service personnel killed in the line of duty" means law enforcement officers and firefighters as defined in RCW 41.26.030, members of the Washington state patrol retirement fund as defined in RCW 43.43.120, and reserve officers and firefighters as defined in RCW 41.24.010 who die as a result of injuries sustained in the course of employment as determined consistent with Title 51 RCW by the department of labor and industries.

      (6) "Employee" includes all 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; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature.  Pursuant to contractual agreement with the authority, "employee" may also include:  (a) Employees of a county, municipality, or other political subdivision of the state and members of the legislative authority of any county, city, or town who are elected to office after February 20, 1970, if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205 and 41.05.021(1)(g); (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; (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; ((and)) (d) employees of a tribal government, if the governing body of the tribal government seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.05.021(1) (f) and (g); and (e) employees of the Washington health benefit exchange if the governing board of the exchange established in RCW 43.71.020 seeks and receives approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.05.021(1) (g) and (n).  "Employee" does not include:  Adult family homeowners; unpaid volunteers; patients of state hospitals; inmates; employees of the Washington state convention and trade center as provided in RCW 41.05.110; students of institutions of higher education as determined by their institution; and any others not expressly defined as employees under this chapter or by the authority under this chapter.

      (7) "Employer" means the state of Washington.

      (8) "Employing agency" means a division, department, or separate agency of state government, including an institution of higher education; a county, municipality, school district, educational service district, or other political subdivision; and a tribal government covered by this chapter.

      (9) "Faculty" means an academic employee of an institution of higher education whose workload is not defined by work hours but whose appointment, workload, and duties directly serve the institution's academic mission, as determined under the authority of its enabling statutes, its governing body, and any applicable collective bargaining agreement.

      (10) "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.

      (11) "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.

      (12) "Medical flexible spending arrangement" means a benefit plan whereby state and public employees may reduce their salary before taxes to pay for medical expenses not reimbursed by insurance as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (13) "Participant" means an individual who fulfills the eligibility and enrollment requirements under the salary reduction plan.

      (14) "Plan year" means the time period established by the authority.

      (15) "Premium payment plan" means a benefit plan whereby state and public employees may pay their share of group health plan premiums with pretax dollars as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (16) "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, 41.35, 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, 41.35, or 41.40 RCW.

      (17) "Salary" means a state employee's monthly salary or wages.

      (18) "Salary reduction plan" means a benefit plan whereby state and public employees may agree to a reduction of salary on a pretax basis to participate in the dependent care assistance program, medical flexible spending arrangement, or premium payment plan offered pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (19) "Seasonal employee" means an employee hired to work during a recurring, annual season with a duration of three months or more, and anticipated to return each season to perform similar work.

      (20) "Separated employees" means persons who separate from employment with an employer as defined in:

      (a) RCW 41.32.010(17) on or after July 1, 1996; or

      (b) RCW 41.35.010 on or after September 1, 2000; or

      (c) RCW 41.40.010 on or after March 1, 2002;

and who are at least age fifty-five and have at least ten years of service under the teachers' retirement system plan 3 as defined in RCW 41.32.010(33), the Washington school employees' retirement system plan 3 as defined in RCW 41.35.010, or the public employees' retirement system plan 3 as defined in RCW 41.40.010.

      (21) "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.

      (22) "Tribal government" means an Indian tribal government as defined in section 3(32) of the employee retirement income security act of 1974, as amended, or an agency or instrumentality of the tribal government, that has government offices principally located in this state.

Sec. 23.  RCW 41.05.021 and 2011 1st sp.s. c 15 s 56 are each amended to read as follows:

      (1) The Washington state health care authority is created within the executive branch.  The authority shall have a director appointed by the governor, with the consent of the senate.  The director shall serve at the pleasure of the governor.  The director may employ a deputy director, and such assistant directors and special assistants as may be needed to administer the authority, who shall be exempt from chapter 41.06 RCW, and any additional staff members as are necessary to administer this chapter.  The director may delegate any power or duty vested in him or her by law, including authority to make final decisions and enter final orders in hearings conducted under chapter 34.05 RCW.  The primary duties of the authority shall be to:  Administer state employees' insurance benefits and retired or disabled school employees' insurance benefits; administer the basic health plan pursuant to chapter 70.47 RCW; administer the children's health program pursuant to chapter 74.09 RCW; study state-purchased health care programs in order to maximize cost containment in these programs while ensuring access to quality health care; implement state initiatives, joint purchasing strategies, and techniques for efficient administration that have potential application to all state-purchased health services; and administer grants that further the mission and goals of the authority.  The authority's duties include, but are not limited to, the following:

      (a) To administer health care benefit programs for employees and retired or disabled school employees as specifically authorized in RCW 41.05.065 and in accordance with the methods described in RCW 41.05.075, 41.05.140, and other provisions of this chapter;

      (b) To analyze state-purchased health care programs and to explore options for cost containment and delivery alternatives for those programs that are consistent with the purposes of those programs, including, but not limited to:

      (i) Creation of economic incentives for the persons for whom the state purchases health care to appropriately utilize and purchase health care services, including the development of flexible benefit plans to offset increases in individual financial responsibility;

      (ii) Utilization of provider arrangements that encourage cost containment, including but not limited to prepaid delivery systems, utilization review, and prospective payment methods, and that ensure access to quality care, including assuring reasonable access to local providers, especially for employees residing in rural areas;

      (iii) Coordination of state agency efforts to purchase drugs effectively as provided in RCW 70.14.050;

      (iv) Development of recommendations and methods for purchasing medical equipment and supporting services on a volume discount basis;

      (v) Development of data systems to obtain utilization data from state-purchased health care programs in order to identify cost centers, utilization patterns, provider and hospital practice patterns, and procedure costs, utilizing the information obtained pursuant to RCW 41.05.031; and

      (vi) In collaboration with other state agencies that administer state purchased health care programs, private health care purchasers, health care facilities, providers, and carriers:

      (A) Use evidence-based medicine principles to develop common performance measures and implement financial incentives in contracts with insuring entities, health care facilities, and providers that:

      (I) Reward improvements in health outcomes for individuals with chronic diseases, increased utilization of appropriate preventive health services, and reductions in medical errors; and

      (II) Increase, through appropriate incentives to insuring entities, health care facilities, and providers, the adoption and use of information technology that contributes to improved health outcomes, better coordination of care, and decreased medical errors;

      (B) Through state health purchasing, reimbursement, or pilot strategies, promote and increase the adoption of health information technology systems, including electronic medical records, by hospitals as defined in RCW 70.41.020(4), integrated delivery systems, and providers that:

      (I) Facilitate diagnosis or treatment;

      (II) Reduce unnecessary duplication of medical tests;

      (III) Promote efficient electronic physician order entry;

      (IV) Increase access to health information for consumers and their providers; and

      (V) Improve health outcomes;

      (C) Coordinate a strategy for the adoption of health information technology systems using the final health information technology report and recommendations developed under chapter 261, Laws of 2005;

      (c) To analyze areas of public and private health care interaction;

      (d) To provide information and technical and administrative assistance to the board;

      (e) To review and approve or deny applications from counties, municipalities, and other political subdivisions of the state to provide state-sponsored insurance or self-insurance programs to their employees in accordance with the provisions of RCW 41.04.205 and (g) of this subsection, setting the premium contribution for approved groups as outlined in RCW 41.05.050;

      (f) To review and approve or deny the application when the governing body of a tribal government applies to transfer their employees to an insurance or self‑insurance program administered under this chapter.  In the event of an employee transfer pursuant to this subsection (1)(f), members of the governing body are eligible to be included in such a transfer if the members are authorized by the tribal government to participate in the insurance program being transferred from and subject to payment by the members of all costs of insurance for the members.  The authority shall:  (i) Establish the conditions for participation; (ii) have the sole right to reject the application; and (iii) set the premium contribution for approved groups as outlined in RCW 41.05.050.  Approval of the application by the authority transfers the employees and dependents involved to the insurance, self‑insurance, or health care program approved by the authority;

      (g) To ensure the continued status of the employee insurance or self-insurance programs administered under this chapter as a governmental plan under section 3(32) of the employee retirement income security act of 1974, as amended, the authority shall limit the participation of employees of a county, municipal, school district, educational service district, or other political subdivision, the Washington health benefit exchange, or a tribal government, including providing for the participation of those employees whose services are substantially all in the performance of essential governmental functions, but not in the performance of commercial activities;

      (h) To establish billing procedures and collect funds from school districts in a way that minimizes the administrative burden on districts;

      (i) To publish and distribute to nonparticipating school districts and educational service districts by October 1st of each year a description of health care benefit plans available through the authority and the estimated cost if school districts and educational service district employees were enrolled;

      (j) To apply for, receive, and accept grants, gifts, and other payments, including property and service, from any governmental or other public or private entity or person, and make arrangements as to the use of these receipts to implement initiatives and strategies developed under this section;

      (k) To issue, distribute, and administer grants that further the mission and goals of the authority;

      (l) To adopt rules consistent with this chapter as described in RCW 41.05.160 including, but not limited to:

      (i) Setting forth the criteria established by the board under RCW 41.05.065 for determining whether an employee is eligible for benefits;

      (ii) Establishing an appeal process in accordance with chapter 34.05 RCW by which an employee may appeal an eligibility determination;

      (iii) Establishing a process to assure that the eligibility determinations of an employing agency comply with the criteria under this chapter, including the imposition of penalties as may be authorized by the board;

      (m)(i) To administer the medical services programs established under chapter 74.09 RCW as the designated single state agency for purposes of Title XIX of the federal social security act;

      (ii) To administer the state children's health insurance program under chapter 74.09 RCW for purposes of Title XXI of the federal social security act;

      (iii) To enter into agreements with the department of social and health services for administration of medical care services programs under Titles XIX and XXI of the social security act.  The agreements shall establish the division of responsibilities between the authority and the department with respect to mental health, chemical dependency, and long-term care services, including services for persons with developmental disabilities.  The agreements shall be revised as necessary, to comply with the final implementation plan adopted under section 116, chapter 15, Laws of 2011 1st sp. sess.;

      (iv) To adopt rules to carry out the purposes of chapter 74.09 RCW;

      (v) To appoint such advisory committees or councils as may be required by any federal statute or regulation as a condition to the receipt of federal funds by the authority.  The director may appoint statewide committees or councils in the following subject areas:  (A) Health facilities; (B) children and youth services; (C) blind services; (D) medical and health care; (E) drug abuse and alcoholism; (F) rehabilitative services; and (G) such other subject matters as are or come within the authority's responsibilities.  The statewide councils shall have representation from both major political parties and shall have substantial consumer representation.  Such committees or councils shall be constituted as required by federal law or as the director in his or her discretion may determine.  The members of the committees or councils shall hold office for three years except in the case of a vacancy, in which event appointment shall be only for the remainder of the unexpired term for which the vacancy occurs.  No member shall serve more than two consecutive terms.  Members of such state advisory committees or councils may be paid their travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended;
      (n) To review and approve or deny the application from the governing board of the Washington health benefit exchange to provide state-sponsored insurance or self-insurance programs to employees of the exchange.  The authority shall (i) establish the conditions for participation; (ii) have the sole right to reject an application; and (iii) set the premium contribution for approved groups as outlined in RCW 41.05.050.

      (2) On and after January 1, 1996, the public employees' benefits board may implement strategies to promote managed competition among employee health benefit plans.  Strategies may include but are not limited to:

      (a) Standardizing the benefit package;

      (b) Soliciting competitive bids for the benefit package;

      (c) Limiting the state's contribution to a percent of the lowest priced qualified plan within a geographical area;

      (d) Monitoring the impact of the approach under this subsection with regards to:  Efficiencies in health service delivery, cost shifts to subscribers, access to and choice of managed care plans statewide, and quality of health services.  The health care authority shall also advise on the value of administering a benchmark employer-managed plan to promote competition among managed care plans.

 

PART X
MISCELLANEOUS

 

NEW SECTION.  Sec. 24.  The health care authority shall pursue an application for the state to participate in the individual market wellness program demonstration as described in section 2705 of P.L. 111-148 of 2010, as amended.  The health care authority shall pursue activities that will prepare the state to apply for the demonstration project once announced by the United States department of health and human services.

NEW SECTION.  Sec. 25.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 26.  Sections 4 and 19 through 23 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."

      On page 1, line 2 of the title, after "act;" strike the remainder of the title and insert "amending RCW 43.71.010, 43.71.020, 43.71.030, 43.71.060, 48.42.010, 48.42.020, and 41.05.021; reenacting and amending RCW 48.43.005 and 41.05.011; adding new sections to chapter 48.43 RCW; adding new sections to chapter 43.71 RCW; adding a new section to chapter 70.47 RCW; adding new sections to chapter 48.41 RCW; adding a new section to chapter 41.04 RCW; adding a new section to chapter 43.01 RCW; adding a new section to chapter 43.03 RCW; creating new sections; providing an expiration date; and declaring an emergency."

 

The President declared the question before the Senate to be the motion by Senator Keiser to not adopt the committee striking amendment by the Committee on Health & Long-Term Care to Engrossed Second Substitute House Bill No. 2319.

The motion by Senator Keiser carried and the committee striking amendment was not adopted by voice vote.

 

MOTION

 

Senator Becker moved that the following striking amendment by Senators Becker and Kastama be adopted.

0)Strike everything after the enacting clause and insert the following:

 

"PART I
DEFINITIONS

 

Sec. 1.  RCW 48.43.005 and 2011 c 315 s 2 and 2011 c 314 s 3 are each reenacted and amended to read as follows:

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

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

      (2) "Adverse benefit determination" means a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit, including a denial, reduction, termination, or failure to provide or make payment that is based on a determination of an enrollee's or applicant's eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit resulting from the application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.

      (3) "Applicant" means a person who applies for enrollment in an individual health plan as the subscriber or an enrollee, or the dependent or spouse of a subscriber or enrollee.

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

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

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

      (7)(a) For grandfathered health benefit plans issued before January 1, 2014, and renewed thereafter, "catastrophic health plan" means:

      (((a))) (i) In the case of a contract, agreement, or policy covering a single enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, one thousand seven hundred fifty dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least three thousand five hundred dollars, both amounts to be adjusted annually by the insurance commissioner; and

      (((b))) (ii) In the case of a contract, agreement, or policy covering more than one enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, three thousand five hundred dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least six thousand dollars, both amounts to be adjusted annually by the insurance commissioner((; or
      (c) Any health benefit plan that provides benefits for hospital inpatient and outpatient services, professional and prescription drugs provided in conjunction with such hospital inpatient and outpatient services, and excludes or substantially limits outpatient physician services and those services usually provided in an office setting)).

(b) In July 2008, and in each July thereafter, the insurance commissioner shall adjust the minimum deductible and out-of-pocket expense required for a plan to qualify as a catastrophic plan to reflect the percentage change in the consumer price index for medical care for a preceding twelve months, as determined by the United States department of labor.  The adjusted amount shall apply on the following January 1st.

(c) For health benefit plans issued on or after January 1, 2014, "catastrophic health plan" means:
      (i) A health benefit plan that meets the definition of catastrophic plan set forth in section 1302(e) of P.L. 111-148 of 2010, as amended; or
      (ii) A health benefit plan offered outside the exchange marketplace that requires a calendar year deductible or out-of-pocket expenses under the plan, other than for premiums, for covered benefits, that meets or exceeds the commissioner's annual adjustment under (b) of this subsection.

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

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

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

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

      (12) "Emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition (a) placing the health of the individual, or with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy, (b) serious impairment to bodily functions, or (c) serious dysfunction of any bodily organ or part.

      (13) "Emergency services" means a medical screening examination, as required under section 1867 of the social security act (42 U.S.C. 1395dd), that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate that emergency medical condition, and further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under section 1867 of the social security act (42 U.S.C. 1395dd) to stabilize the patient.  Stabilize, with respect to an emergency medical condition, has the meaning given in section 1867(e)(3) of the social security act (42 U.S.C. 1395dd(e)(3)).

      (14) "Employee" has the same meaning given to the term, as of January 1, 2008, under section 3(6) of the federal employee retirement income security act of 1974.

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

      (16) "Final external review decision" means a determination by an independent review organization at the conclusion of an external review.

      (17) "Final internal adverse benefit determination" means an adverse benefit determination that has been upheld by a health plan or carrier at the completion of the internal appeals process, or an adverse benefit determination with respect to which the internal appeals process has been exhausted under the exhaustion rules described in RCW 48.43.530 and 48.43.535.

      (18) "Grandfathered health plan" means a group health plan or an individual health plan that under section 1251 of the patient protection and affordable care act, P.L. 111‑148 (2010) and as amended by the health care and education reconciliation act, P.L. 111‑152 (2010) is not subject to subtitles A or C of the act as amended.

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

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

      (21) "Health care provider" or "provider" means:

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

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

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

      (23) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020, and includes "issuers" as that term is used in the patient protection and affordable care act (P.L. 111-148).

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

      (a) Long-term care insurance governed by chapter 48.84 or 48.83 RCW;

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

      (c) Coverage supplemental to the coverage provided under chapter 55, Title 10, United States Code;

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

      (e) Disability income;

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

      (g) Workers' compensation coverage;

      (h) Accident only coverage;

      (i) Specified disease or illness‑triggered fixed payment insurance, hospital confinement fixed payment insurance, or other fixed payment insurance offered as an independent, noncoordinated benefit;

      (j) Employer-sponsored self-funded health plans;

      (k) Dental only and vision only coverage; and

      (l) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

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

      (26) "Open enrollment" means a period of time as defined in rule to be held at the same time each year, during which applicants may enroll in a carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

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

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

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

      (30) "Small employer" or "small group" means any person, firm, corporation, partnership, association, political subdivision, sole proprietor, or self-employed individual that is actively engaged in business that employed an average of at least one but no more than fifty employees, during the previous calendar year and employed at least one employee on the first day of the plan year, is not formed primarily for purposes of buying health insurance, and in which a bona fide employer-employee relationship exists.  In determining the number of employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer.  Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually.  Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition.  A self-employed individual or sole proprietor who is covered as a group of one must also:  (a) Have been employed by the same small employer or small group for at least twelve months prior to application for small group coverage, and (b) verify that he or she derived at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year, except a self-employed individual or sole proprietor in an agricultural trade or business, must have derived at least fifty-one percent of his or her income from the trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, for the previous taxable year.

      (31) "Special enrollment" means a defined period of time of not less than thirty-one days, triggered by a specific qualifying event experienced by the applicant, during which applicants may enroll in the carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

      (32) "Standard health questionnaire" means the standard health questionnaire designated under chapter 48.41 RCW.

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

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

 

PART II
THE WASHINGTON HEALTH BENEFIT EXCHANGE

 

Sec. 2.  RCW 43.71.020 and 2011 c 317 s 3 are each amended to read as follows:

      (1) The Washington health benefit exchange is established and constitutes a public-private partnership separate and distinct from the state, exercising functions delineated in chapter 317, Laws of 2011.  By January 1, 2014, the exchange shall operate consistent with the affordable care act subject to statutory authorization.  The exchange shall have a governing board consisting of persons with expertise in the Washington health care system and private and public health care coverage.  The initial membership of the board shall be appointed as follows:

      (a) By October 1, 2011, each of the two largest caucuses in both the house of representatives and the senate shall submit to the governor a list of five nominees who are not legislators or employees of the state or its political subdivisions, with no caucus submitting the same nominee.

      (i) The nominations from the largest caucus in the house of representatives must include at least one employee benefit specialist;

      (ii) The nominations from the second largest caucus in the house of representatives must include at least one health economist or actuary;

      (iii) The nominations from the largest caucus in the senate must include at least one representative of health consumer advocates;

      (iv) The nominations from the second largest caucus in the senate must include at least one representative of small business;

      (v) The remaining nominees must have demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (b) By December 15, 2011, the governor shall appoint two members from each list submitted by the caucuses under (a) of this subsection.  The appointments made under this subsection (1)(b) must include at least one employee benefits specialist, one health economist or actuary, one representative of small business, and one representative of health consumer advocates.  The remaining four members must have a demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (c) By December 15, 2011, the governor shall appoint a ninth member to serve as chair.  The chair may not be an employee of the state or its political subdivisions.  The chair shall serve as a nonvoting member except in the case of a tie.  The chair shall serve at the pleasure of the governor.

      (d) The following members shall serve as nonvoting, ex officio members of the board:

      (i) The insurance commissioner or his or her designee; and

      (ii) The administrator of the health care authority, or his or her designee.

      (2) Initial members of the board shall serve staggered terms not to exceed four years.  Members appointed thereafter shall serve two-year terms.

      (3) A member of the board whose term has expired or who otherwise leaves the board shall be replaced by gubernatorial appointment.  When the person leaving was nominated by one of the caucuses of the house of representatives or the senate, his or her replacement shall be appointed from a list of five nominees submitted by that caucus within thirty days after the person leaves.  If the member to be replaced is the chair, the governor shall appoint a new chair within thirty days after the vacancy occurs.  A person appointed to replace a member who leaves the board prior to the expiration of his or her term shall serve only the duration of the unexpired term.  Members of the board may be reappointed to multiple terms.

      (4) No board member may be appointed if his or her participation in the decisions of the board could benefit his or her own financial interests or the financial interests of an entity he or she represents. No board member may be a lobbyist registered under RCW 42.17A.600.  A board member who develops such a conflict of interest or who is a registered lobbyist shall resign or be removed from the board.

      (5) Members of the board must be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060.  The board shall prescribe rules for the conduct of its business.  Meetings of the board are at the call of the chair.

      (6) The exchange and the board are subject only to the provisions of chapter 42.30 RCW, the open public meetings act, and chapter 42.56 RCW, the public records act, and not to any other law or regulation generally applicable to state agencies.  Consistent with the open public meetings act, the board may hold executive sessions to consider proprietary or confidential nonpublished information.

      (7)(a) The board shall establish an advisory committee to allow for the views of the health care industry and other stakeholders to be heard in the operation of the health benefit exchange.

      (b) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in chapter 317, Laws of 2011.

      (8) Members of the board are not civilly or criminally liable and may not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under chapter 317, Laws of 2011.  Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.

      (9) In recognition of the government-to-government relationship between the state of Washington and the federally recognized tribes in the state of Washington, the board shall consult with the American Indian health commission.

Sec. 3.  RCW 43.71.030 and 2011 c 317 s 4 are each amended to read as follows:

      (1) The exchange may, consistent with the purposes of this chapter:  (a) Sue and be sued in its own name; (b) make and execute agreements, contracts, and other instruments, with any public or private person or entity; (c) employ, contract with, or engage personnel; (d) pay administrative costs; and (e) accept grants, donations, loans of funds, and contributions in money, services, materials or otherwise, from the United States or any of its agencies, from the state of Washington and its agencies or from any other source, and use or expend those moneys, services, materials, or other contributions.

      (2) The powers and duties of the exchange and the board are limited to those necessary to apply for and administer grants, establish information technology infrastructure, and undertake additional administrative functions as determined by the legislature that are necessary to begin operation of the exchange by January 1, 2014, in a manner consistent with, and not exceeding, the requirements for American health benefit exchanges specified in section 1311(d) of P.L. 111-148 of 2010, as amended.  Any actions relating to substantive issues ((included in RCW 43.71.040)) must be consistent with statutory direction on those issues.

(3) The exchange board shall study financing mechanisms to ensure that the exchange is self-sustaining by January 1, 2015.  The board shall recommend a methodology of financing that takes into account alternative sources of funding and health plan affordability to the legislature by December 15, 2012.

NEW SECTION.  Sec. 4.  A new section is added to chapter 43.71 RCW to read as follows:

      (1) A person or entity functioning as a navigator under section 1311(i) of P.L. 111-148 of 2010, as amended, may not sell, solicit, or negotiate insurance in this state for any line or lines of insurance unless the person or entity is licensed for that line of authority under RCW 48.17.060.

      (2) The exchange shall permit producers licensed under RCW 48.17.060 to enroll qualified individuals, qualified employers, or qualified employees in qualified health plans in the exchange.

 

PART III
QUALIFIED HEALTH PLANS

 

NEW SECTION.  Sec. 5.  A new section is added to chapter 43.71 RCW to read as follows:

      (1) The board shall certify a plan as a qualified health plan to be offered through the exchange if the plan:

      (a) Meets the requirements of Title 48 RCW and rules adopted thereunder by the commissioner pursuant to chapter 34.05 RCW so long as such rules do not exceed (b) of this subsection; and

      (b) Meets the requirements for qualified health plans under section 1311(c) of P.L. 111-148 of 2010, as amended.

      (2) Consistent with section 1311 of P.L. 111-148 of 2010, as amended, the board shall allow stand-alone dental plans to offer coverage in the exchange beginning January 1, 2014.  Dental benefits offered in the exchange must be offered and priced separately to assure transparency for consumers.

      (3) The board may not impose requirements on qualified health plans other than the requirements in subsection (1) of this section.

      (4) A decision by the board denying a request to certify or recertify a plan as a qualified health plan may be appealed pursuant to chapter 34.05 RCW.

Sec. 6.  RCW 48.42.010 and 1985 c 264 s 15 are each amended to read as follows:

(1) Notwithstanding any other provision of law, and except as provided in this chapter, any person or other entity which provides coverage in this state for life insurance, annuities, loss of time, medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, the providing of services, or otherwise, shall be subject to the authority of the state insurance commissioner, unless the person or other entity shows that while providing the services it is subject to the jurisdiction and regulation of another agency of this state, any subdivisions thereof, or the federal government.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

Sec. 7.  RCW 48.42.020 and 1983 c 36 s 2 are each amended to read as follows:

(1) A person or entity may show that it is subject to the jurisdiction and regulation of another agency of this state, any subdivision thereof, or the federal government, by providing to the insurance commissioner the appropriate certificate, license, or other document issued by the other governmental agency which permits or qualifies it to provide the coverage as defined in RCW 48.42.010.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

NEW SECTION.  Sec. 8.  A new section is added to chapter 48.43 RCW to read as follows:

      Certification by the Washington health benefit exchange of a plan as a qualified health plan, or of a carrier as a qualified issuer, does not exempt the plan or carrier from any of the requirements of this title or rules adopted by the commissioner pursuant to chapter 34.05 RCW.

 

PART IV
ESSENTIAL HEALTH BENEFITS

 

NEW SECTION.  Sec. 9.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) Consistent with federal law, the commissioner shall, by rule, select the largest small group plan in the state by enrollment, as determined by an independent actuarial analysis, as the benchmark plan for purposes of establishing the essential health benefits in Washington state under P.L. 111-148 of 2010, as amended.

      (2) If the commissioner determines that the essential health benefits benchmark plan does not include all of the ten benefit categories specified by section 1302 of P.L. 111-148 of 2010, as amended, the commissioner shall only supplement the benchmark plan by reference to another benchmark plan option that includes services in the missing category pursuant to federal rules.  In making this determination the commissioner must:

      (a) Consult with an independent actuary; and

      (b) Take into account affordability and evidence-based medicine.

      (3) Any health plan required to offer the essential health benefits under P.L. 111-148 of 2010, as amended, may be offered in the state unless the commissioner finds that:

      (a) It is not substantially equal to the benchmark plan; or

      (b) It does not cover the ten essential health benefits categories specified in section 1302 of P.L. 111-148 of 2010, as amended.

      (4) A finding by the commissioner under subsection (3) of this section may be appealed pursuant to chapter 34.05 RCW.  In any such proceeding, the insurance commissioner shall have the burden to prove, by clear and convincing evidence, that the plan is not substantially equal to the benchmark plan or does not cover the ten essential health benefits categories.

      (5) Nothing in chapter. . ., Laws of 2012 (this act) prohibits the offering of benefits for spiritual care services deductible under section 213(d) of the internal revenue code (26 U.S.C. Sec. 213(d)) in plans inside or outside of the exchange.

 

PART V
THE WASHINGTON STATE HEALTH INSURANCE POOL

 

Sec. 10.  RCW 48.41.170 and 1987 c 431 s 17 are each amended to read as follows:

(1) The commissioner shall adopt rules pursuant to chapter 34.05 RCW that((:
      (1) Provide for disclosure by the member of the availability of insurance coverage from the pool; and
      (2))) implement this chapter.

(2) The commissioner shall adopt rules establishing the reinsurance program, as approved by the pool in section 11 of this act and reviewed by the exchange board, consistent with P.L. 111-148 of 2010, as amended.  The rules must establish the invisible high risk pool with the following:
      (a) A mechanism to collect reinsurance contribution funds for individuals ceded to the invisible high risk pool; and
      (b) A mechanism to disburse reinsurance payments for individuals ceded to the invisible high risk pool.

NEW SECTION.  Sec. 11.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The pool board may perform all or part of the risk management functions in the federal patient protection and affordable care act.

      (2) To further timely state implementation of the federal patient protection and affordable care act in the state, the pool board is authorized to conduct preoperational and planning activities related to these programs, including defining and implementing an appropriate legal structure or structures to administer and coordinate these programs.  The legislature also directs the pool to develop and design a plan to administer the state-based reinsurance program as a permanent invisible high risk pool consistent with federal law.  The plan must be approved by the pool board and the exchange board by December 1, 2012, prior to establishment and implementation and must include a recommendation for the governance structure of the pool if needed to administer any of the risk management functions per subsection (1) of this section.  The pool shall, no later than January 1, 2013, make recommendations to the legislature for any statutory changes necessary to implement the plan developed according to this subsection.

      (3) Funding for the reinsurance program as provided by contribution amounts pursuant to section 1341 of the federal patient protection and affordable care act may be increased in this state by inclusion of additional contribution amounts to cover the administrative costs of operation of the reinsurance program including reimbursement of the reasonable costs incurred by the pool for preoperational activities undertaken pursuant to this section.

      (4) The pool shall report on these activities to the appropriate committees of the senate and house of representatives by December 15, 2012, and December 15, 2013.  The reports shall also include recommendations on additional mechanisms to address high-risk individuals both inside and outside of the exchange.

 

PART VI
MISCELLANEOUS

 

NEW SECTION.  Sec. 12.  The health care authority shall pursue an application for the state to participate in the individual market wellness program demonstration as described in section 2705 of P.L. 111-184 of 2010, as amended.  The health care authority shall pursue activities that will prepare the state to apply for the demonstration project once announced by the United States department of health and human services.

NEW SECTION.  Sec. 13.  Sections 2, 3, 4, and 11 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. 14.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected."

On page 1, line 2 of the title, after "act;" strike the remainder of the title and insert "amending RCW 43.71.020, 43.71.030, 48.42.010, 48.42.020, and 48.41.170; reenacting and amending RCW 48.43.005; adding new sections to chapter 43.71 RCW; adding new sections to chapter 48.43 RCW; adding a new section to chapter 48.41 RCW; creating a new section; and declaring an emergency."

Senators Becker, Parlette and Ericksen spoke in favor of adoption of the striking amendment.

Senators Keiser, Hargrove, Pflug and Kastama spoke against adoption of the striking amendment.

 

Senator Schoesler demanded a roll call.

The President declared that one-sixth of the members supported the demand and the demand was sustained.

 

The President declared the question before the Senate to be the adoption of the striking amendment by Senators Becker and Kastama to Engrossed Second Substitute House Bill No. 2319.

 

ROLL CALL

 

      The Secretary called the roll on the adoption of the striking amendment by Senators Becker and Kastama and the amendment was not adopted by the following vote:  Yeas, 22; Nays, 26; Absent, 1; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Carrell, Delvin, Ericksen, Fain, Haugen, Hewitt, Hill, Holmquist Newbry, Honeyford, King, Litzow, Morton, Padden, Parlette, Roach, Schoesler, Sheldon, Stevens and Swecker

      Voting nay: Senators Brown, Chase, Conway, Eide, Fraser, Frockt, Hargrove, Harper, Hatfield, Hobbs, Kastama, Keiser, Kilmer, Kline, Kohl-Welles, McAuliffe, Murray, Nelson, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Shin and Tom

      Absent: Senator Zarelli

 

MOTION

 

Senator Hargrove moved that the following striking amendment by Senators Hargrove and Kastama be adopted:

0)Strike everything after the enacting clause and insert the following:

 

"PART I
DEFINITIONS

 

Sec. 1.  RCW 48.43.005 and 2011 c 315 s 2 and 2011 c 314 s 3 are each reenacted and amended to read as follows:

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

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

      (2) "Adverse benefit determination" means a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit, including a denial, reduction, termination, or failure to provide or make payment that is based on a determination of an enrollee's or applicant's eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit resulting from the application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.

      (3) "Applicant" means a person who applies for enrollment in an individual health plan as the subscriber or an enrollee, or the dependent or spouse of a subscriber or enrollee.

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

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

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

      (7) "Board" means the governing board of the Washington health benefit exchange established in chapter 43.71 RCW.
      (8)(a) For grandfathered health benefit plans issued before January 1, 2014, and renewed thereafter, "catastrophic health plan" means:

      (((a))) (i) In the case of a contract, agreement, or policy covering a single enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, one thousand seven hundred fifty dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least three thousand five hundred dollars, both amounts to be adjusted annually by the insurance commissioner; and

      (((b))) (ii) In the case of a contract, agreement, or policy covering more than one enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, three thousand five hundred dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least six thousand dollars, both amounts to be adjusted annually by the insurance commissioner((; or
      (c) Any health benefit plan that provides benefits for hospital inpatient and outpatient services, professional and prescription drugs provided in conjunction with such hospital inpatient and outpatient services, and excludes or substantially limits outpatient physician services and those services usually provided in an office setting)).

(b) In July 2008, and in each July thereafter, the insurance commissioner shall adjust the minimum deductible and out-of-pocket expense required for a plan to qualify as a catastrophic plan to reflect the percentage change in the consumer price index for medical care for a preceding twelve months, as determined by the United States department of labor.  For a plan year beginning in 2014, the out-of-pocket limits must be adjusted as specified in section 1302(c)(1) of P.L. 111-148 of 2010, as amended.  The adjusted amount shall apply on the following January 1st.

(c) For health benefit plans issued on or after January 1, 2014, "catastrophic health plan" means:
      (i) A health benefit plan that meets the definition of catastrophic plan set forth in section 1302(e) of P.L. 111-148 of 2010, as amended; or
      (ii) A health benefit plan offered outside the exchange marketplace that requires a calendar year deductible or out-of-pocket expenses under the plan, other than for premiums, for covered benefits, that meets or exceeds the commissioner's annual adjustment under (b) of this subsection.

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

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

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

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

      (((12))) (13) "Emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition (a) placing the health of the individual, or with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy, (b) serious impairment to bodily functions, or (c) serious dysfunction of any bodily organ or part.

      (((13))) (14) "Emergency services" means a medical screening examination, as required under section 1867 of the social security act (42 U.S.C. 1395dd), that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate that emergency medical condition, and further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under section 1867 of the social security act (42 U.S.C. 1395dd) to stabilize the patient.  Stabilize, with respect to an emergency medical condition, has the meaning given in section 1867(e)(3) of the social security act (42 U.S.C. 1395dd(e)(3)).

      (((14))) (15) "Employee" has the same meaning given to the term, as of January 1, 2008, under section 3(6) of the federal employee retirement income security act of 1974.

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

      (((16))) (17) "Exchange" means the Washington health benefit exchange established under chapter 43.71 RCW.
      (18) "Final external review decision" means a determination by an independent review organization at the conclusion of an external review.

      (((17))) (19) "Final internal adverse benefit determination" means an adverse benefit determination that has been upheld by a health plan or carrier at the completion of the internal appeals process, or an adverse benefit determination with respect to which the internal appeals process has been exhausted under the exhaustion rules described in RCW 48.43.530 and 48.43.535.

      (((18))) (20) "Grandfathered health plan" means a group health plan or an individual health plan that under section 1251 of the patient protection and affordable care act, P.L. 111‑148 (2010) and as amended by the health care and education reconciliation act, P.L. 111‑152 (2010) is not subject to subtitles A or C of the act as amended.

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

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

      (((21))) (23) "Health care provider" or "provider" means:

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

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

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

      (((23))) (25) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020, and includes "issuers" as that term is used in the patient protection and affordable care act (P.L. 111-148).

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

      (a) Long-term care insurance governed by chapter 48.84 or 48.83 RCW;

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

      (c) Coverage supplemental to the coverage provided under chapter 55, Title 10, United States Code;

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

      (e) Disability income;

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

      (g) Workers' compensation coverage;

      (h) Accident only coverage;

      (i) Specified disease or illness‑triggered fixed payment insurance, hospital confinement fixed payment insurance, or other fixed payment insurance offered as an independent, noncoordinated benefit;

      (j) Employer-sponsored self-funded health plans;

      (k) Dental only and vision only coverage; and

      (l) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

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

      (((26))) (28) "Open enrollment" means a period of time as defined in rule to be held at the same time each year, during which applicants may enroll in a carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

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

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

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

      (((30))) (32) "Small employer" or "small group" means any person, firm, corporation, partnership, association, political subdivision, sole proprietor, or self-employed individual that is actively engaged in business that employed an average of at least one but no more than fifty employees, during the previous calendar year and employed at least one employee on the first day of the plan year, is not formed primarily for purposes of buying health insurance, and in which a bona fide employer-employee relationship exists.  In determining the number of employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer.  Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually.  Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition.  A self-employed individual or sole proprietor who is covered as a group of one must also:  (a) Have been employed by the same small employer or small group for at least twelve months prior to application for small group coverage, and (b) verify that he or she derived at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year, except a self-employed individual or sole proprietor in an agricultural trade or business, must have derived at least fifty-one percent of his or her income from the trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, for the previous taxable year.

      (((31))) (33) "Special enrollment" means a defined period of time of not less than thirty-one days, triggered by a specific qualifying event experienced by the applicant, during which applicants may enroll in the carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

      (((32))) (34) "Standard health questionnaire" means the standard health questionnaire designated under chapter 48.41 RCW.

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

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

 

PART II
THE WASHINGTON HEALTH BENEFIT EXCHANGE

 

Sec. 2.  RCW 43.71.010 and 2011 c 317 s 2 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.  Terms and phrases used in this chapter that are not defined in this section must be defined as consistent with implementation of a state health benefit exchange pursuant to the affordable care act.

      (1) "Affordable care act" means the federal patient protection and affordable care act, P.L. 111-148, as amended by the federal health care and education reconciliation act of 2010, P.L. 111-152, or federal regulations or guidance issued under the affordable care act.

      (2) "Authority" means the Washington state health care authority, established under chapter 41.05 RCW.

      (3) "Board" means the governing board established in RCW 43.71.020.

      (4) "Commissioner" means the insurance commissioner, established in Title 48 RCW.

      (5) "Exchange" means the Washington health benefit exchange established in RCW 43.71.020.

(6) "Self-sustaining" means capable of operating without direct state tax subsidy.  Self-sustaining sources include, but are not limited to, federal grants, federal premium tax subsidies and credits, charges to health carriers, and premiums paid by enrollees.

Sec. 3.  RCW 43.71.020 and 2011 c 317 s 3 are each amended to read as follows:

      (1) The Washington health benefit exchange is established and constitutes a self-sustaining public-private partnership separate and distinct from the state, exercising functions delineated in chapter 317, Laws of 2011.  By January 1, 2014, the exchange shall operate consistent with the affordable care act subject to statutory authorization.  The exchange shall have a governing board consisting of persons with expertise in the Washington health care system and private and public health care coverage.  The initial membership of the board shall be appointed as follows:

      (a) By October 1, 2011, each of the two largest caucuses in both the house of representatives and the senate shall submit to the governor a list of five nominees who are not legislators or employees of the state or its political subdivisions, with no caucus submitting the same nominee.

      (i) The nominations from the largest caucus in the house of representatives must include at least one employee benefit specialist;

      (ii) The nominations from the second largest caucus in the house of representatives must include at least one health economist or actuary;

      (iii) The nominations from the largest caucus in the senate must include at least one representative of health consumer advocates;

      (iv) The nominations from the second largest caucus in the senate must include at least one representative of small business;

      (v) The remaining nominees must have demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (b) By December 15, 2011, the governor shall appoint two members from each list submitted by the caucuses under (a) of this subsection.  The appointments made under this subsection (1)(b) must include at least one employee benefits specialist, one health economist or actuary, one representative of small business, and one representative of health consumer advocates.  The remaining four members must have a demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (c) By December 15, 2011, the governor shall appoint a ninth member to serve as chair.  The chair may not be an employee of the state or its political subdivisions.  The chair shall serve as a nonvoting member except in the case of a tie.

      (d) The following members shall serve as nonvoting, ex officio members of the board:

      (i) The insurance commissioner or his or her designee; and

      (ii) The administrator of the health care authority, or his or her designee.

      (2) Initial members of the board shall serve staggered terms not to exceed four years.  Members appointed thereafter shall serve two-year terms.

      (3) A member of the board whose term has expired or who otherwise leaves the board shall be replaced by gubernatorial appointment.  When the person leaving was nominated by one of the caucuses of the house of representatives or the senate, his or her replacement shall be appointed from a list of five nominees submitted by that caucus within thirty days after the person leaves.  If the member to be replaced is the chair, the governor shall appoint a new chair within thirty days after the vacancy occurs.  A person appointed to replace a member who leaves the board prior to the expiration of his or her term shall serve only the duration of the unexpired term.  Members of the board may be reappointed to multiple terms.

      (4) No board member may be appointed if his or her participation in the decisions of the board could benefit his or her own financial interests or the financial interests of an entity he or she represents.  A board member who develops such a conflict of interest shall resign or be removed from the board.

      (5) Members of the board must be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060.  The board shall prescribe rules for the conduct of its business.  Meetings of the board are at the call of the chair.

      (6) The exchange and the board are subject only to the provisions of chapter 42.30 RCW, the open public meetings act, and chapter 42.56 RCW, the public records act, and not to any other law or regulation generally applicable to state agencies.  Consistent with the open public meetings act, the board may hold executive sessions to consider proprietary or confidential nonpublished information.

      (7)(a) The board shall establish an advisory committee to allow for the views of the health care industry and other stakeholders to be heard in the operation of the health benefit exchange.

      (b) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in chapter 317, Laws of 2011.

      (8) Members of the board are not civilly or criminally liable and may not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under chapter 317, Laws of 2011.  Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.

      (9) In recognition of the government-to-government relationship between the state of Washington and the federally recognized tribes in the state of Washington, the board shall consult with the American Indian health commission.

Sec. 4.  RCW 43.71.030 and 2011 c 317 s 4 are each amended to read as follows:

      (1) The exchange may, consistent with the purposes of this chapter:  (a) Sue and be sued in its own name; (b) make and execute agreements, contracts, and other instruments, with any public or private person or entity; (c) employ, contract with, or engage personnel; (d) pay administrative costs; ((and)) (e) accept grants, donations, loans of funds, and contributions in money, services, materials or otherwise, from the United States or any of its agencies, from the state of Washington and its agencies or from any other source, and use or expend those moneys, services, materials, or other contributions; (f) aggregate or delegate the aggregation of funds that comprise the premium for a health plan; and (g) complete other duties necessary to begin open enrollment in qualified health plans through the exchange beginning October 1, 2013.

      (2) ((The powers and duties of the exchange and the board are limited to those necessary to apply for and administer grants, establish information technology infrastructure, and undertake additional administrative functions necessary to begin operation of the exchange by January 1, 2014.  Any actions relating to substantive issues included in RCW 43.71.040 must be consistent with statutory direction on those issues.)) The board shall develop a methodology to ensure the exchange is self-sustaining after December 31, 2014.  The board shall seek input from health carriers to develop funding mechanisms that fairly and equitably apportion among carriers the reasonable administrative costs and expenses incurred to implement the provisions of this chapter.  The board shall submit its recommendations to the legislature by December 1, 2012.  If the legislature does not enact legislation during the 2013 regular session to modify or reject the board's recommendations, the board may proceed with implementation of the recommendations.
      (3) The board shall establish policies that permit city and county governments, Indian tribes, tribal organizations, urban Indian organizations, private foundations, and other entities to pay premiums on behalf of qualified individuals.
      (4) The employees of the exchange may participate in the public employees' retirement system under chapter 41.40 RCW and the public employees' benefits board under chapter 41.05 RCW.
      (5) Qualified employers may access coverage for their employees through the exchange for small groups under section 1311 of P.L. 111-148 of 2010, as amended.  The exchange shall enable any qualified employer to specify a level of coverage so that any of its employees may enroll in any qualified health plan offered through the small group exchange at the specified level of coverage.
      (6) The exchange shall report its activities and status to the governor and the legislature as requested, and no less often than annually.

Sec. 5.  RCW 43.71.060 and 2011 c 317 s 7 are each amended to read as follows:

(1) The health benefit exchange account is created in the custody of the state treasurer.  All receipts from federal grants received under the affordable care act ((shall)) may be deposited into the account.  Expenditures from the account may be used only for purposes consistent with the grants.  Until March 15, 2012, only the administrator of the health care authority, or his or her designee, may authorize expenditures from the account.  Beginning March 15, 2012, only the board of the Washington health benefit exchange or designee may authorize expenditures from the account.  The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is

 not required for expenditures.

(2) This section expires January 1, 2014.

 

PART III
MARKET RULES

 

NEW SECTION.  Sec. 6.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) For plan or policy years beginning January 1, 2014, a carrier must offer individual or small group health benefit plans that meet the definition of silver and gold level plans in section 1302 of P.L. 111-148 of 2010, as amended, in any market outside the exchange in which it offers a plan that meets the definition of bronze level in section 1302 of P.L. 111-148 of 2010, as amended.

      (2) By December 1, 2016, the exchange board, in consultation with the commissioner, must complete a review of the impact of this section on the health and viability of the markets inside and outside the exchange and submit the recommendations to the legislature on whether to maintain the market rules or let them expire.

      (3) The commissioner shall evaluate plans offered at each actuarial value defined in section 1302 of P.L. 111-148 of 2010, as amended, and determine whether variation in prescription drug benefit cost-sharing, both inside and outside the exchange in both the individual and small group markets results in adverse selection.  If so, the commissioner may adopt rules to assure substantial equivalence of prescription drug cost-sharing.

NEW SECTION.  Sec. 7.  A new section is added to chapter 48.43 RCW to read as follows:

      All health plans, other than catastrophic health plans, offered outside of the exchange must conform with the actuarial value tiers specified in section 1302 of P.L. 111-148 of 2010, as amended, as bronze, silver, gold, or platinum.

 

PART IV
QUALIFIED HEALTH PLANS

 

NEW SECTION.  Sec. 8.  A new section is added to chapter 43.71 RCW to read as follows:

      (1) The board shall certify a plan as a qualified health plan to be offered through the exchange if the plan is determined by the:

      (a) Insurance commissioner to meet the requirements of Title 48 RCW and rules adopted by the commissioner pursuant to chapter 34.05 RCW to implement the requirements of Title 48 RCW;

      (b) Board to meet the requirements of the affordable care act for certification as a qualified health plan; and

      (c) Board to include tribal clinics and urban Indian clinics as essential community providers in the plan's provider network consistent with federal law.  If consistent with federal law, integrated delivery systems shall be exempt from the requirement to include essential community providers in the provider network.

      (2) Consistent with section 1311 of P.L. 111-148 of 2010, as amended, the board shall allow stand-alone dental plans to offer coverage in the exchange beginning January 1, 2014.  Dental benefits offered in the exchange must be offered and priced separately to assure transparency for consumers.

      (3) The board may permit direct primary care medical home plans, consistent with section 1301 of P.L. 111-148 of 2010, as amended, to be offered in the exchange beginning January 1, 2014.

      (4) Upon request by the board, a state agency shall provide information to the board for its use in determining if the requirements under subsection (1)(b) or (c) of this section have been met.  Unless the agency and the board agree to a later date, the agency shall provide the information within sixty days of the request.  The exchange shall reimburse the agency for the cost of compiling and providing the requested information within one hundred eighty days of its receipt.

      (5) A decision by the board denying a request to certify or recertify a plan as a qualified health plan may be appealed according to procedures adopted by the board.

NEW SECTION.  Sec. 9.  A new section is added to chapter 43.71 RCW to read as follows:

      The board shall establish a rating system consistent with section 1311 of P.L. 111-148 of 2010, as amended, for qualified health plans to assist consumers in evaluating plan choices in the exchange.  Rating factors established by the board may include, but are not limited to:

      (1) Affordability with respect to premiums, deductibles, and point-of-service cost-sharing;

      (2) Enrollee satisfaction;

      (3) Provider reimbursement methods that incentivize health homes or chronic care management or care coordination for enrollees with complex, high-cost, or multiple chronic conditions;

      (4) Promotion of appropriate primary care and preventive services utilization;

      (5) High standards for provider network adequacy, including consumer choice of providers and service locations and robust provider participation intended to improve access to underserved populations through participation of essential community providers, family planning providers and pediatric providers;

      (6) High standards for covered services, including languages spoken or transportation assistance; and

      (7) Coverage of benefits for spiritual care services that are deductible under section 213(d) of the internal revenue code.

Sec. 10.  RCW 48.42.010 and 1985 c 264 s 15 are each amended to read as follows:

(1) Notwithstanding any other provision of law, and except as provided in this chapter, any person or other entity which provides coverage in this state for life insurance, annuities, loss of time, medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, the providing of services, or otherwise, shall be subject to the authority of the state insurance commissioner, unless the person or other entity shows that while providing the services it is subject to the jurisdiction and regulation of another agency of this state, any subdivisions thereof, or the federal government.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

Sec. 11.  RCW 48.42.020 and 1983 c 36 s 2 are each amended to read as follows:

(1) A person or entity may show that it is subject to the jurisdiction and regulation of another agency of this state, any subdivision thereof, or the federal government, by providing to the insurance commissioner the appropriate certificate, license, or other document issued by the other governmental agency which permits or qualifies it to provide the coverage as defined in RCW 48.42.010.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

NEW SECTION.  Sec. 12.  A new section is added to chapter 48.43 RCW to read as follows:

      Certification by the Washington health benefit exchange of a plan as a qualified health plan, or of a carrier as a qualified issuer, does not exempt the plan or carrier from any of the requirements of this title or rules adopted by the commissioner pursuant to chapter 34.05 RCW to implement this title.

 

PART V
 ESSENTIAL HEALTH BENEFITS

 

NEW SECTION.  Sec. 13.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) Consistent with federal law, the commissioner, in consultation with the board and the health care authority, shall, by rule, select the largest small group plan in the state by enrollment as the benchmark plan for the individual and small group market for purposes of establishing the essential health benefits in Washington state under P.L. 111-148 of 2010, as amended.

      (2) If the essential health benefits benchmark plan for the individual and small group market does not include all of the ten benefit categories specified by section 1302 of P.L. 111-148, as amended, the commissioner, in consultation with the board and the health care authority, shall, by rule, supplement the benchmark plan benefits as needed to meet the minimum requirements of section 1302.

      (3) A health plan required to offer the essential health benefits, other than a health plan offered through the federal basic health program or medicaid, under P.L. 111-148 of 2010, as amended, may not be offered in the state unless the commissioner finds that it is substantially equal to the benchmark plan.  When making this determination, the commissioner must:

      (a) Ensure that the plan covers the ten essential health benefits categories specified in section 1302 of P.L. 111-148 of 2010, as amended; and

      (b) May consider whether the health plan has a benefit design that would create a risk of biased selection based on health status and whether the health plan contains meaningful scope and level of benefits in each of the ten essential health benefit categories specified by section 1302 of P.L. 111-148 of 2010, as amended.

      (4) Beginning December 15, 2012, and every year thereafter, the commissioner shall submit to the legislature a list of state-mandated health benefits, the enforcement of which will result in federally imposed costs to the state related to the plans sold through the exchange because the benefits are not included in the essential health benefits designated under federal law.  The list must include the anticipated costs to the state of each state-mandated health benefit on the list and any statutory changes needed if funds are not appropriated to defray the state costs for the listed mandate.  The commissioner may enforce a mandate on the list for the entire market only if funds are appropriated in an omnibus appropriations act specifically to pay the state portion of the identified costs.

NEW SECTION.  Sec. 14.  Nothing in this act prohibits the offering of benefits for spiritual care services deductible under section 213(d) of the internal revenue code in health plans inside and outside of the exchange.

 

PART VI
THE BASIC HEALTH OPTION

 

NEW SECTION.  Sec. 15.  A new section is added to chapter 70.47 RCW to read as follows:

      (1) On or before December 1, 2012, the director of the health care authority shall submit a report to the legislature on whether to proceed with implementation of a federal basic health option, under section 1331 of P.L. 111-148 of 2010, as amended.  The report shall address whether:

      (a) Sufficient funding is available to support the design and development work necessary for the program to provide health coverage to enrollees beginning January 1, 2014;

      (b) Anticipated federal funding under section 1331 will be sufficient, absent any additional state funding, to cover the provision of essential health benefits and costs for administering the basic health plan.  Enrollee premium levels will be below the levels that would apply to persons with income between one hundred thirty-four and two hundred percent of the federal poverty level through the exchange; and

      (c) Health plan payment rates will be sufficient to ensure enrollee access to a robust provider network and health homes, as described under RCW 70.47.100.

      (2) If the legislature determines to proceed with implementation of a federal basic health option, the director shall provide the necessary certifications to the secretary of the federal department of health and human services under section 1331 of P.L. 111-148 of 2010, as amended, to proceed with adoption of the federal basic health program option.

      (3) Prior to making this finding, the director shall:

      (a) Actively consult with the board of the Washington health benefit exchange, the office of the insurance commissioner, consumer advocates, provider organizations, carriers, and other interested organizations;

      (b) Consider any available objective analysis specific to Washington state, by an independent nationally recognized consultant that has been actively engaged in analysis and economic modeling of the federal basic health program option for multiple states.

      (4) The director shall report any findings and supporting analysis made under this section to the governor and relevant policy and fiscal committees of the legislature.

      (5) To the extent funding is available specifically for this purpose in the operating budget, the health care authority shall assume the federal basic health plan option will be implemented in Washington state, and initiate the necessary design and development work.  If the legislature determines under subsection (1) of this section not to proceed with implementation, the authority may cease activities related to basic health program implementation.

      (6) If implemented, the federal basic health program must be guided by the following principles:

      (a) Meeting the minimum state certification standards in section 1331 of the federal patient protection and affordable care act;

      (b) To the extent allowed by the federal department of health and human services, twelve-month continuous eligibility for the basic health program, and corresponding twelve-month continuous enrollment in standard health plans by enrollees; or, in lieu of twelve-month continuous eligibility, financing mechanisms that enable enrollees to remain with a plan for the entire plan year;

      (c) Achieving an appropriate balance between:

      (i) Premiums and cost-sharing minimized to increase the affordability of insurance coverage;

      (ii) Standard health plan contracting requirements that minimize plan and provider administrative costs, while incentivizing improvements in quality and enrollee health outcomes; and

      (iii) Health plan payment rates and provider payment rates that  are sufficient to ensure enrollee access to a robust provider network and health homes, as described under RCW 70.47.100; and

      (d) Transparency in program administration, including active and ongoing consultation with basic health program enrollees and interested organizations, and ensuring adequate enrollee notice and appeal rights.

 

PART VII
RISK ADJUSTMENT AND REINSURANCE

 

NEW SECTION.  Sec. 16.  A new section is added to chapter 48.43 RCW to read as follows:

      (1)(a) The commissioner, in consultation with the board, shall adopt rules establishing the reinsurance and risk adjustment programs required by P.L. 111-148 of 2010, as amended.

      (b) The commissioner must include in deliberations related to reinsurance rule making an analysis of an invisible high risk pool option, in which the full premium and risk associated with certain high-risk or high-cost enrollees would be ceded to the transitional reinsurance program.  The analysis must include a determination as to whether that option is authorized under the federal reinsurance program regulations, whether the option would provide sufficiently comprehensive coverage for current nonmedicare high risk pool enrollees, and how an invisible high risk pool option could be designed to ensure that carriers ceding risk provide effective care management to high-risk or high-cost enrollees.

      (2) Consistent with federal law, the rules for the reinsurance program must, at a minimum, establish:

      (a) A mechanism to collect reinsurance contribution funds;

      (b) A reinsurance payment formula; and

      (c) A mechanism to disburse reinsurance payments.

      (3)(a) The commissioner may adjust the rules adopted under this section as needed to preserve a healthy market both inside and outside of the exchange.

      (b) The rules adopted under this section must identify and may require submission of the data needed to support operation of the reinsurance and risk adjustment programs established under this section.  The commissioner must identify by rule the sources of the data, and other requirements related to the collection, validation, correction, interpretation, transmission or exchange, and retention of the data.

      (4) The commissioner shall contract with one or more nonprofit entities to administer the risk adjustment and reinsurance programs.

      (5) Contribution amounts for the transitional reinsurance program under section 1341 of P.L. 111-148 of 2010, as amended, may be increased to include amounts sufficient to cover the costs of administration of the reinsurance program including reasonable costs incurred for preoperational and planning activities related to the reinsurance program.

 

PART VIII
THE WASHINGTON STATE HEALTH INSURANCE POOL

 

NEW SECTION.  Sec. 17.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The board shall review populations that may need ongoing access to coverage through the pool, with specific attention to those persons who may be excluded from or may receive inadequate coverage beginning January 1, 2014, such as persons with end-stage renal disease or HIV/AIDS, or persons not eligible for coverage in the exchange.

      (2) If the review under subsection (1) of this section indicates a continued need for coverage through the pool after December 31, 2013, the board shall submit recommendations regarding any modifications to pool eligibility requirements for new and ongoing enrollment after December 31, 2013.  The recommendations must address any needed modifications to the standard health questionnaire or other eligibility screening tool that could be used in a manner consistent with federal law to determine eligibility for enrollment in the pool.

      (3) The board shall complete an analysis of current pool assessment requirements in relation to assessments that will fund the reinsurance program and recommend changes to pool assessments or any credits against assessments that may be considered for the reinsurance program.  The analysis shall recommend whether the categories of members paying assessments should be adjusted to make the assessment fair and equitable among all payers.

      (4) The board shall report its recommendations to the governor and the legislature by December 1, 2012.

NEW SECTION.  Sec. 18.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The pool is authorized to contract with the commissioner to administer risk management functions if necessary, consistent with section 16 of this act, and consistent with P.L. 111-148 of 2010, as amended.  Prior to entering into a contract, the pool may conduct preoperational and planning activities related to these programs, including defining and implementing an appropriate legal structure or structures to administer and coordinate the reinsurance or risk adjustment programs.

      (2) The reasonable costs incurred by the pool for preoperational and planning activities related to the reinsurance program may be reimbursed from federal funds or from the additional contributions authorized under section 16 of this act to pay the administrative costs of the reinsurance program.

      (3) If the pool contracts to administer and coordinate the reinsurance or risk adjustment program, the board must submit recommendations to the legislature with suggestions for additional consumer representatives or other representative members to the board.

      (4) The pool shall report on these activities to the appropriate committees of the senate and house of representatives by December 15, 2012, and December 15, 2013.

 

PART IX
EXCHANGE EMPLOYEES

 

NEW SECTION.  Sec. 19.  A new section is added to chapter 41.04 RCW to read as follows:

      Except for chapters 41.05 and 41.40 RCW, this title does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

NEW SECTION.  Sec. 20.  A new section is added to chapter 43.01 RCW to read as follows:

      This chapter does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

NEW SECTION.  Sec. 21.  A new section is added to chapter 43.03 RCW to read as follows:

      This chapter does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

Sec. 22.  RCW 41.05.011 and 2011 1st sp.s. c 15 s 54 are each reenacted and amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Authority" means the Washington state health care authority.

      (2) "Board" means the public employees' benefits board established under RCW 41.05.055.

      (3) "Dependent care assistance program" means a benefit plan whereby state and public employees may pay for certain employment related dependent care with pretax dollars as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 129 or other sections of the internal revenue code.

      (4) "Director" means the director of the authority.

      (5) "Emergency service personnel killed in the line of duty" means law enforcement officers and firefighters as defined in RCW 41.26.030, members of the Washington state patrol retirement fund as defined in RCW 43.43.120, and reserve officers and firefighters as defined in RCW 41.24.010 who die as a result of injuries sustained in the course of employment as determined consistent with Title 51 RCW by the department of labor and industries.

      (6) "Employee" includes all 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; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature.  Pursuant to contractual agreement with the authority, "employee" may also include:  (a) Employees of a county, municipality, or other political subdivision of the state and members of the legislative authority of any county, city, or town who are elected to office after February 20, 1970, if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205 and 41.05.021(1)(g); (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; (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; ((and)) (d) employees of a tribal government, if the governing body of the tribal government seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.05.021(1) (f) and (g); and (e) employees of the Washington health benefit exchange if the governing board of the exchange established in RCW 43.71.020 seeks and receives approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.05.021(1) (g) and (n).  "Employee" does not include:  Adult family homeowners; unpaid volunteers; patients of state hospitals; inmates; employees of the Washington state convention and trade center as provided in RCW 41.05.110; students of institutions of higher education as determined by their institution; and any others not expressly defined as employees under this chapter or by the authority under this chapter.

      (7) "Employer" means the state of Washington.

      (8) "Employing agency" means a division, department, or separate agency of state government, including an institution of higher education; a county, municipality, school district, educational service district, or other political subdivision; and a tribal government covered by this chapter.

      (9) "Faculty" means an academic employee of an institution of higher education whose workload is not defined by work hours but whose appointment, workload, and duties directly serve the institution's academic mission, as determined under the authority of its enabling statutes, its governing body, and any applicable collective bargaining agreement.

      (10) "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.

      (11) "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.

      (12) "Medical flexible spending arrangement" means a benefit plan whereby state and public employees may reduce their salary before taxes to pay for medical expenses not reimbursed by insurance as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (13) "Participant" means an individual who fulfills the eligibility and enrollment requirements under the salary reduction plan.

      (14) "Plan year" means the time period established by the authority.

      (15) "Premium payment plan" means a benefit plan whereby state and public employees may pay their share of group health plan premiums with pretax dollars as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (16) "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, 41.35, 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, 41.35, or 41.40 RCW.

      (17) "Salary" means a state employee's monthly salary or wages.

      (18) "Salary reduction plan" means a benefit plan whereby state and public employees may agree to a reduction of salary on a pretax basis to participate in the dependent care assistance program, medical flexible spending arrangement, or premium payment plan offered pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

     (19) "Seasonal employee" means an employee hired to work during a recurring, annual season with a duration of three months or more, and anticipated to return each season to perform similar work.

      (20) "Separated employees" means persons who separate from employment with an employer as defined in:

      (a) RCW 41.32.010(17) on or after July 1, 1996; or

      (b) RCW 41.35.010 on or after September 1, 2000; or

      (c) RCW 41.40.010 on or after March 1, 2002;

and who are at least age fifty-five and have at least ten years of service under the teachers' retirement system plan 3 as defined in RCW 41.32.010(33), the Washington school employees' retirement system plan 3 as defined in RCW 41.35.010, or the public employees' retirement system plan 3 as defined in RCW 41.40.010.

      (21) "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.

      (22) "Tribal government" means an Indian tribal government as defined in section 3(32) of the employee retirement income security act of 1974, as amended, or an agency or instrumentality of the tribal government, that has government offices principally located in this state.

Sec. 23.  RCW 41.05.021 and 2011 1st sp.s. c 15 s 56 are each amended to read as follows:

      (1) The Washington state health care authority is created within the executive branch.  The authority shall have a director appointed by the governor, with the consent of the senate.  The director shall serve at the pleasure of the governor.  The director may employ a deputy director, and such assistant directors and special assistants as may be needed to administer the authority, who shall be exempt from chapter 41.06 RCW, and any additional staff members as are necessary to administer this chapter.  The director may delegate any power or duty vested in him or her by law, including authority to make final decisions and enter final orders in hearings conducted under chapter 34.05 RCW.  The primary duties of the authority shall be to:  Administer state employees' insurance benefits and retired or disabled school employees' insurance benefits; administer the basic health plan pursuant to chapter 70.47 RCW; administer the children's health program pursuant to chapter 74.09 RCW; study state-purchased health care programs in order to maximize cost containment in these programs while ensuring access to quality health care; implement state initiatives, joint purchasing strategies, and techniques for efficient administration that have potential application to all state-purchased health services; and administer grants that further the mission and goals of the authority.  The authority's duties include, but are not limited to, the following:

      (a) To administer health care benefit programs for employees and retired or disabled school employees as specifically authorized in RCW 41.05.065 and in accordance with the methods described in RCW 41.05.075, 41.05.140, and other provisions of this chapter;

      (b) To analyze state-purchased health care programs and to explore options for cost containment and delivery alternatives for those programs that are consistent with the purposes of those programs, including, but not limited to:

      (i) Creation of economic incentives for the persons for whom the state purchases health care to appropriately utilize and purchase health care services, including the development of flexible benefit plans to offset increases in individual financial responsibility;

      (ii) Utilization of provider arrangements that encourage cost containment, including but not limited to prepaid delivery systems, utilization review, and prospective payment methods, and that ensure access to quality care, including assuring reasonable access to local providers, especially for employees residing in rural areas;

      (iii) Coordination of state agency efforts to purchase drugs effectively as provided in RCW 70.14.050;

      (iv) Development of recommendations and methods for purchasing medical equipment and supporting services on a volume discount basis;

      (v) Development of data systems to obtain utilization data from state-purchased health care programs in order to identify cost centers, utilization patterns, provider and hospital practice patterns, and procedure costs, utilizing the information obtained pursuant to RCW 41.05.031; and

      (vi) In collaboration with other state agencies that administer state purchased health care programs, private health care purchasers, health care facilities, providers, and carriers:

      (A) Use evidence-based medicine principles to develop common performance measures and implement financial incentives in contracts with insuring entities, health care facilities, and providers that:

      (I) Reward improvements in health outcomes for individuals with chronic diseases, increased utilization of appropriate preventive health services, and reductions in medical errors; and

      (II) Increase, through appropriate incentives to insuring entities, health care facilities, and providers, the adoption and use of information technology that contributes to improved health outcomes, better coordination of care, and decreased medical errors;

      (B) Through state health purchasing, reimbursement, or pilot strategies, promote and increase the adoption of health information technology systems, including electronic medical records, by hospitals as defined in RCW 70.41.020(4), integrated delivery systems, and providers that:

      (I) Facilitate diagnosis or treatment;

      (II) Reduce unnecessary duplication of medical tests;

      (III) Promote efficient electronic physician order entry;

      (IV) Increase access to health information for consumers and their providers; and

      (V) Improve health outcomes;

      (C) Coordinate a strategy for the adoption of health information technology systems using the final health information technology report and recommendations developed under chapter 261, Laws of 2005;

      (c) To analyze areas of public and private health care interaction;

      (d) To provide information and technical and administrative assistance to the board;

      (e) To review and approve or deny applications from counties, municipalities, and other political subdivisions of the state to provide state-sponsored insurance or self-insurance programs to their employees in accordance with the provisions of RCW 41.04.205 and (g) of this subsection, setting the premium contribution for approved groups as outlined in RCW 41.05.050;

      (f) To review and approve or deny the application when the governing body of a tribal government applies to transfer their employees to an insurance or self‑insurance program administered under this chapter.  In the event of an employee transfer pursuant to this subsection (1)(f), members of the governing body are eligible to be included in such a transfer if the members are authorized by the tribal government to participate in the insurance program being transferred from and subject to payment by the members of all costs of insurance for the members.  The authority shall:  (i) Establish the conditions for participation; (ii) have the sole right to reject the application; and (iii) set the premium contribution for approved groups as outlined in RCW 41.05.050.  Approval of the application by the authority transfers the employees and dependents involved to the insurance, self‑insurance, or health care program approved by the authority;

      (g) To ensure the continued status of the employee insurance or self-insurance programs administered under this chapter as a governmental plan under section 3(32) of the employee retirement income security act of 1974, as amended, the authority shall limit the participation of employees of a county, municipal, school district, educational service district, or other political subdivision, the Washington health benefit exchange, or a tribal government, including providing for the participation of those employees whose services are substantially all in the performance of essential governmental functions, but not in the performance of commercial activities;

      (h) To establish billing procedures and collect funds from school districts in a way that minimizes the administrative burden on districts;

      (i) To publish and distribute to nonparticipating school districts and educational service districts by October 1st of each year a description of health care benefit plans available through the authority and the estimated cost if school districts and educational service district employees were enrolled;

      (j) To apply for, receive, and accept grants, gifts, and other payments, including property and service, from any governmental or other public or private entity or person, and make arrangements as to the use of these receipts to implement initiatives and strategies developed under this section;

      (k) To issue, distribute, and administer grants that further the mission and goals of the authority;

      (l) To adopt rules consistent with this chapter as described in RCW 41.05.160 including, but not limited to:

      (i) Setting forth the criteria established by the board under RCW 41.05.065 for determining whether an employee is eligible for benefits;

      (ii) Establishing an appeal process in accordance with chapter 34.05 RCW by which an employee may appeal an eligibility determination;

      (iii) Establishing a process to assure that the eligibility determinations of an employing agency comply with the criteria under this chapter, including the imposition of penalties as may be authorized by the board;

      (m)(i) To administer the medical services programs established under chapter 74.09 RCW as the designated single state agency for purposes of Title XIX of the federal social security act;

      (ii) To administer the state children's health insurance program under chapter 74.09 RCW for purposes of Title XXI of the federal social security act;

      (iii) To enter into agreements with the department of social and health services for administration of medical care services programs under Titles XIX and XXI of the social security act.  The agreements shall establish the division of responsibilities between the authority and the department with respect to mental health, chemical dependency, and long-term care services, including services for persons with developmental disabilities.  The agreements shall be revised as necessary, to comply with the final implementation plan adopted under section 116, chapter 15, Laws of 2011 1st sp. sess.;

      (iv) To adopt rules to carry out the purposes of chapter 74.09 RCW;

      (v) To appoint such advisory committees or councils as may be required by any federal statute or regulation as a condition to the receipt of federal funds by the authority.  The director may appoint statewide committees or councils in the following subject areas:  (A) Health facilities; (B) children and youth services; (C) blind services; (D) medical and health care; (E) drug abuse and alcoholism; (F) rehabilitative services; and (G) such other subject matters as are or come within the authority's responsibilities.  The statewide councils shall have representation from both major political parties and shall have substantial consumer representation.  Such committees or councils shall be constituted as required by federal law or as the director in his or her discretion may determine.  The members of the committees or councils shall hold office for three years except in the case of a vacancy, in which event appointment shall be only for the remainder of the unexpired term for which the vacancy occurs.  No member shall serve more than two consecutive terms.  Members of such state advisory committees or councils may be paid their travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended;
      (n) To review and approve or deny the application from the governing board of the Washington health benefit exchange to provide state-sponsored insurance or self-insurance programs to employees of the exchange.  The authority shall (i) establish the conditions for participation; (ii) have the sole right to reject an application; and (iii) set the premium contribution for approved groups as outlined in RCW 41.05.050.

      (2) On and after January 1, 1996, the public employees' benefits board may implement strategies to promote managed competition among employee health benefit plans.  Strategies may include but are not limited to:

      (a) Standardizing the benefit package;

      (b) Soliciting competitive bids for the benefit package;

      (c) Limiting the state's contribution to a percent of the lowest priced qualified plan within a geographical area;

      (d) Monitoring the impact of the approach under this subsection with regards to:  Efficiencies in health service delivery, cost shifts to subscribers, access to and choice of managed care plans statewide, and quality of health services.  The health care authority shall also advise on the value of administering a benchmark employer-managed plan to promote competition among managed care plans.

 

PART X
MISCELLANEOUS

 

NEW SECTION.  Sec. 24.  The health care authority shall pursue an application for the state to participate in the individual market wellness program demonstration as described in section 2705 of P.L. 111-148 of 2010, as amended.  The health care authority shall pursue activities that will prepare the state to apply for the demonstration project once announced by the United States department of health and human services.

NEW SECTION.  Sec. 25.  A new section is added to chapter 43.71 RCW to read as follows:

      A person or entity functioning as a navigator consistent with the requirements of section 1311(i) of P.L. 111-148 of 2010, as amended, shall not be considered soliciting or negotiating insurance as stated under chapter 48.17 RCW.

NEW SECTION.  Sec. 26.  A new section is added to chapter 43.71 RCW to read as follows:

      If at any time the exchange is no longer self-sustaining as defined in RCW 43.71.010, the operations of the exchange shall be suspended.

NEW SECTION.  Sec. 27.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 28.  Sections 4, 16, 18, and 19 through 23 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."

On page 1, line 2 of the title, after "act;" strike the remainder of the title and insert "amending RCW 43.71.010, 43.71.020, 43.71.030, 43.71.060, 48.42.010, 48.42.020, and 41.05.021; reenacting and amending RCW 48.43.005 and 41.05.011; adding new sections to chapter 48.43 RCW; adding new sections to chapter 43.71 RCW; adding a new section to chapter 70.47 RCW; adding new sections to chapter 48.41 RCW; adding a new section to chapter 41.04 RCW; adding a new section to chapter 43.01 RCW; adding a new section to chapter 43.03 RCW; creating new sections; providing an expiration date; and declaring an emergency."

 

WITHDRAWAL OF AMENDMENT

 

On motion of Senator Hargrove, the striking amendment by Senators Hargrove and Kastama to Engrossed Second Substitute House Bill No. 2319 was withdrawn.

 

MOTION

 

Senator Hargrove moved that the following striking amendment by Senators Hargrove, Kastama and Pflug be adopted:

0)Strike everything after the enacting clause and insert the following:

 

"PART I
DEFINITIONS

 

Sec. 1.  RCW 48.43.005 and 2011 c 315 s 2 and 2011 c 314 s 3 are each reenacted and amended to read as follows:

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

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

      (2) "Adverse benefit determination" means a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit, including a denial, reduction, termination, or failure to provide or make payment that is based on a determination of an enrollee's or applicant's eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for a benefit resulting from the application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.

      (3) "Applicant" means a person who applies for enrollment in an individual health plan as the subscriber or an enrollee, or the dependent or spouse of a subscriber or enrollee.

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

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

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

      (7) "Board" means the governing board of the Washington health benefit exchange established in chapter 43.71 RCW.
      (8)(a) For grandfathered health benefit plans issued before January 1, 2014, and renewed thereafter, "catastrophic health plan" means:

      (((a))) (i) In the case of a contract, agreement, or policy covering a single enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, one thousand seven hundred fifty dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least three thousand five hundred dollars, both amounts to be adjusted annually by the insurance commissioner; and

      (((b))) (ii) In the case of a contract, agreement, or policy covering more than one enrollee, a health benefit plan requiring a calendar year deductible of, at a minimum, three thousand five hundred dollars and an annual out-of-pocket expense required to be paid under the plan (other than for premiums) for covered benefits of at least six thousand dollars, both amounts to be adjusted annually by the insurance commissioner((; or
      (c) Any health benefit plan that provides benefits for hospital inpatient and outpatient services, professional and prescription drugs provided in conjunction with such hospital inpatient and outpatient services, and excludes or substantially limits outpatient physician services and those services usually provided in an office setting)).

(b) In July 2008, and in each July thereafter, the insurance commissioner shall adjust the minimum deductible and out-of-pocket expense required for a plan to qualify as a catastrophic plan to reflect the percentage change in the consumer price index for medical care for a preceding twelve months, as determined by the United States department of labor.  For a plan year beginning in 2014, the out-of-pocket limits must be adjusted as specified in section 1302(c)(1) of P.L. 111-148 of 2010, as amended.  The adjusted amount shall apply on the following January 1st.

(c) For health benefit plans issued on or after January 1, 2014, "catastrophic health plan" means:
      (i) A health benefit plan that meets the definition of catastrophic plan set forth in section 1302(e) of P.L. 111-148 of 2010, as amended; or
      (ii) A health benefit plan offered outside the exchange marketplace that requires a calendar year deductible or out-of-pocket expenses under the plan, other than for premiums, for covered benefits, that meets or exceeds the commissioner's annual adjustment under (b) of this subsection.

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

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

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

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

      (((12))) (13) "Emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition (a) placing the health of the individual, or with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy, (b) serious impairment to bodily functions, or (c) serious dysfunction of any bodily organ or part.

      (((13))) (14) "Emergency services" means a medical screening examination, as required under section 1867 of the social security act (42 U.S.C. 1395dd), that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate that emergency medical condition, and further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under section 1867 of the social security act (42 U.S.C. 1395dd) to stabilize the patient.  Stabilize, with respect to an emergency medical condition, has the meaning given in section 1867(e)(3) of the social security act (42 U.S.C. 1395dd(e)(3)).

      (((14))) (15) "Employee" has the same meaning given to the term, as of January 1, 2008, under section 3(6) of the federal employee retirement income security act of 1974.

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

      (((16))) (17) "Exchange" means the Washington health benefit exchange established under chapter 43.71 RCW.
      (18) "Final external review decision" means a determination by an independent review organization at the conclusion of an external review.

      (((17))) (19) "Final internal adverse benefit determination" means an adverse benefit determination that has been upheld by a health plan or carrier at the completion of the internal appeals process, or an adverse benefit determination with respect to which the internal appeals process has been exhausted under the exhaustion rules described in RCW 48.43.530 and 48.43.535.

      (((18))) (20) "Grandfathered health plan" means a group health plan or an individual health plan that under section 1251 of the patient protection and affordable care act, P.L. 111‑148 (2010) and as amended by the health care and education reconciliation act, P.L. 111‑152 (2010) is not subject to subtitles A or C of the act as amended.

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

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

      (((21))) (23) "Health care provider" or "provider" means:

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

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

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

      (((23))) (25) "Health carrier" or "carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020, and includes "issuers" as that term is used in the patient protection and affordable care act (P.L. 111-148).

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

      (a) Long-term care insurance governed by chapter 48.84 or 48.83 RCW;

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

      (c) Coverage supplemental to the coverage provided under chapter 55, Title 10, United States Code;

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

      (e) Disability income;

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

      (g) Workers' compensation coverage;

      (h) Accident only coverage;

      (i) Specified disease or illness‑triggered fixed payment insurance, hospital confinement fixed payment insurance, or other fixed payment insurance offered as an independent, noncoordinated benefit;

      (j) Employer-sponsored self-funded health plans;

      (k) Dental only and vision only coverage; and

      (l) Plans deemed by the insurance commissioner to have a short-term limited purpose or duration, or to be a student-only plan that is guaranteed renewable while the covered person is enrolled as a regular full-time undergraduate or graduate student at an accredited higher education institution, after a written request for such classification by the carrier and subsequent written approval by the insurance commissioner.

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

      (((26))) (28) "Open enrollment" means a period of time as defined in rule to be held at the same time each year, during which applicants may enroll in a carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

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

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

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

      (((30))) (32) "Small employer" or "small group" means any person, firm, corporation, partnership, association, political subdivision, sole proprietor, or self-employed individual that is actively engaged in business that employed an average of at least one but no more than fifty employees, during the previous calendar year and employed at least one employee on the first day of the plan year, is not formed primarily for purposes of buying health insurance, and in which a bona fide employer-employee relationship exists.  In determining the number of employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer.  Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually.  Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition.  A self-employed individual or sole proprietor who is covered as a group of one must also:  (a) Have been employed by the same small employer or small group for at least twelve months prior to application for small group coverage, and (b) verify that he or she derived at least seventy-five percent of his or her income from a trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, schedule C or F, for the previous taxable year, except a self-employed individual or sole proprietor in an agricultural trade or business, must have derived at least fifty-one percent of his or her income from the trade or business through which the individual or sole proprietor has attempted to earn taxable income and for which he or she has filed the appropriate internal revenue service form 1040, for the previous taxable year.

      (((31))) (33) "Special enrollment" means a defined period of time of not less than thirty-one days, triggered by a specific qualifying event experienced by the applicant, during which applicants may enroll in the carrier's individual health benefit plan without being subject to health screening or otherwise required to provide evidence of insurability as a condition for enrollment.

      (((32))) (34) "Standard health questionnaire" means the standard health questionnaire designated under chapter 48.41 RCW.

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

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

 

PART II
THE WASHINGTON HEALTH BENEFIT EXCHANGE

 

Sec. 2.  RCW 43.71.010 and 2011 c 317 s 2 are each amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.  Terms and phrases used in this chapter that are not defined in this section must be defined as consistent with implementation of a state health benefit exchange pursuant to the affordable care act.

      (1) "Affordable care act" means the federal patient protection and affordable care act, P.L. 111-148, as amended by the federal health care and education reconciliation act of 2010, P.L. 111-152, or federal regulations or guidance issued under the affordable care act.

      (2) "Authority" means the Washington state health care authority, established under chapter 41.05 RCW.

      (3) "Board" means the governing board established in RCW 43.71.020.

      (4) "Commissioner" means the insurance commissioner, established in Title 48 RCW.

      (5) "Exchange" means the Washington health benefit exchange established in RCW 43.71.020.

(6) "Self-sustaining" means capable of operating without direct state tax subsidy.  Self-sustaining sources include, but are not limited to, federal grants, federal premium tax subsidies and credits, charges to health carriers, and premiums paid by enrollees.

Sec. 3.  RCW 43.71.020 and 2011 c 317 s 3 are each amended to read as follows:

      (1) The Washington health benefit exchange is established and constitutes a self-sustaining public-private partnership separate and distinct from the state, exercising functions delineated in chapter 317, Laws of 2011.  By January 1, 2014, the exchange shall operate consistent with the affordable care act subject to statutory authorization.  The exchange shall have a governing board consisting of persons with expertise in the Washington health care system and private and public health care coverage.  The initial membership of the board shall be appointed as follows:

      (a) By October 1, 2011, each of the two largest caucuses in both the house of representatives and the senate shall submit to the governor a list of five nominees who are not legislators or employees of the state or its political subdivisions, with no caucus submitting the same nominee.

      (i) The nominations from the largest caucus in the house of representatives must include at least one employee benefit specialist;

      (ii) The nominations from the second largest caucus in the house of representatives must include at least one health economist or actuary;

      (iii) The nominations from the largest caucus in the senate must include at least one representative of health consumer advocates;

      (iv) The nominations from the second largest caucus in the senate must include at least one representative of small business;

      (v) The remaining nominees must have demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (b) By December 15, 2011, the governor shall appoint two members from each list submitted by the caucuses under (a) of this subsection.  The appointments made under this subsection (1)(b) must include at least one employee benefits specialist, one health economist or actuary, one representative of small business, and one representative of health consumer advocates.  The remaining four members must have a demonstrated and acknowledged expertise in at least one of the following areas:  Individual health care coverage, small employer health care coverage, health benefits plan administration, health care finance and economics, actuarial science, or administering a public or private health care delivery system.

      (c) By December 15, 2011, the governor shall appoint a ninth member to serve as chair.  The chair may not be an employee of the state or its political subdivisions.  The chair shall serve as a nonvoting member except in the case of a tie.

      (d) The following members shall serve as nonvoting, ex officio members of the board:

      (i) The insurance commissioner or his or her designee; and

      (ii) The administrator of the health care authority, or his or her designee.

      (2) Initial members of the board shall serve staggered terms not to exceed four years.  Members appointed thereafter shall serve two-year terms.

      (3) A member of the board whose term has expired or who otherwise leaves the board shall be replaced by gubernatorial appointment.  When the person leaving was nominated by one of the caucuses of the house of representatives or the senate, his or her replacement shall be appointed from a list of five nominees submitted by that caucus within thirty days after the person leaves.  If the member to be replaced is the chair, the governor shall appoint a new chair within thirty days after the vacancy occurs.  A person appointed to replace a member who leaves the board prior to the expiration of his or her term shall serve only the duration of the unexpired term.  Members of the board may be reappointed to multiple terms.

      (4) No board member may be appointed if his or her participation in the decisions of the board could benefit his or her own financial interests or the financial interests of an entity he or she represents.  A board member who develops such a conflict of interest shall resign or be removed from the board.

      (5) Members of the board must be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060.  The board shall prescribe rules for the conduct of its business.  Meetings of the board are at the call of the chair.

      (6) The exchange and the board are subject only to the provisions of chapter 42.30 RCW, the open public meetings act, and chapter 42.56 RCW, the public records act, and not to any other law or regulation generally applicable to state agencies.  Consistent with the open public meetings act, the board may hold executive sessions to consider proprietary or confidential nonpublished information.

      (7)(a) The board shall establish an advisory committee to allow for the views of the health care industry and other stakeholders to be heard in the operation of the health benefit exchange.

      (b) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in chapter 317, Laws of 2011.

      (8) Members of the board are not civilly or criminally liable and may not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under chapter 317, Laws of 2011.  Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.

      (9) In recognition of the government-to-government relationship between the state of Washington and the federally recognized tribes in the state of Washington, the board shall consult with the American Indian health commission.

Sec. 4.  RCW 43.71.030 and 2011 c 317 s 4 are each amended to read as follows:

      (1) The exchange may, consistent with the purposes of this chapter:  (a) Sue and be sued in its own name; (b) make and execute agreements, contracts, and other instruments, with any public or private person or entity; (c) employ, contract with, or engage personnel; (d) pay administrative costs; ((and)) (e) accept grants, donations, loans of funds, and contributions in money, services, materials or otherwise, from the United States or any of its agencies, from the state of Washington and its agencies or from any other source, and use or expend those moneys, services, materials, or other contributions; (f) aggregate or delegate the aggregation of funds that comprise the premium for a health plan; and (g) complete other duties necessary to begin open enrollment in qualified health plans through the exchange beginning October 1, 2013.

      (2) ((The powers and duties of the exchange and the board are limited to those necessary to apply for and administer grants, establish information technology infrastructure, and undertake additional administrative functions necessary to begin operation of the exchange by January 1, 2014.  Any actions relating to substantive issues included in RCW 43.71.040 must be consistent with statutory direction on those issues.)) The board shall develop a methodology to ensure the exchange is self-sustaining after December 31, 2014.  The board shall seek input from health carriers to develop funding mechanisms that fairly and equitably apportion among carriers the reasonable administrative costs and expenses incurred to implement the provisions of this chapter.  The board shall submit its recommendations to the legislature by December 1, 2012.  If the legislature does not enact legislation during the 2013 regular session to modify or reject the board's recommendations, the board may proceed with implementation of the recommendations.
      (3) The board shall establish policies that permit city and county governments, Indian tribes, tribal organizations, urban Indian organizations, private foundations, and other entities to pay premiums on behalf of qualified individuals.
      (4) The employees of the exchange may participate in the public employees' retirement system under chapter 41.40 RCW and the public employees' benefits board under chapter 41.05 RCW.
      (5) Qualified employers may access coverage for their employees through the exchange for small groups under section 1311 of P.L. 111-148 of 2010, as amended.  The exchange shall enable any qualified employer to specify a level of coverage so that any of its employees may enroll in any qualified health plan offered through the small group exchange at the specified level of coverage.
      (6) The exchange shall report its activities and status to the governor and the legislature as requested, and no less often than annually.

Sec. 5.  RCW 43.71.060 and 2011 c 317 s 7 are each amended to read as follows:

(1) The health benefit exchange account is created in the custody of the state treasurer.  All receipts from federal grants received under the affordable care act ((shall)) may be deposited into the account.  Expenditures from the account may be used only for purposes consistent with the grants.  Until March 15, 2012, only the administrator of the health care authority, or his or her designee, may authorize expenditures from the account.  Beginning March 15, 2012, only the board of the Washington health benefit exchange or designee may authorize expenditures from the account.  The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

(2) This section expires January 1, 2014.

 

PART III
MARKET RULES

 

NEW SECTION.  Sec. 6.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) For plan or policy years beginning January 1, 2014, a carrier must offer individual or small group health benefit plans that meet the definition of silver and gold level plans in section 1302 of P.L. 111-148 of 2010, as amended, in any market outside the exchange in which it offers a plan that meets the definition of bronze level in section 1302 of P.L. 111-148 of 2010, as amended.

      (2) A health benefit plan meeting the definition of a catastrophic plan in RCW 48.43.005(8)(c)(i)may only be sold through the exchange.

      (3) By December 1, 2016, the exchange board, in consultation with the commissioner, must complete a review of the impact of this section on the health and viability of the markets inside and outside the exchange and submit the recommendations to the legislature on whether to maintain the market rules or let them expire.

      (4) The commissioner shall evaluate plans offered at each actuarial value defined in section 1302 of P.L. 111-148 of 2010, as amended, and determine whether variation in prescription drug benefit cost-sharing, both inside and outside the exchange in both the individual and small group markets results in adverse selection.  If so, the commissioner may adopt rules to assure substantial equivalence of prescription drug cost-sharing.

NEW SECTION.  Sec. 7.  A new section is added to chapter 48.43 RCW to read as follows:

      All health plans, other than catastrophic health plans, offered outside of the exchange must conform with the actuarial value tiers specified in section 1302 of P.L. 111-148 of 2010, as amended, as bronze, silver, gold, or platinum.

 

PART IV
QUALIFIED HEALTH PLANS

 

NEW SECTION.  Sec. 8.  A new section is added to chapter 43.71 RCW to read as follows:

      (1) The board shall certify a plan as a qualified health plan to be offered through the exchange if the plan is determined by the:

      (a) Insurance commissioner to meet the requirements of Title 48 RCW and rules adopted by the commissioner pursuant to chapter 34.05 RCW to implement the requirements of Title 48 RCW;

      (b) Board to meet the requirements of the affordable care act for certification as a qualified health plan; and

      (c) Board to include tribal clinics and urban Indian clinics as essential community providers in the plan's provider network consistent with federal law.  If consistent with federal law, integrated delivery systems shall be exempt from the requirement to include essential community providers in the provider network.

      (2) Consistent with section 1311 of P.L. 111-148 of 2010, as amended, the board shall allow stand-alone dental plans to offer coverage in the exchange beginning January 1, 2014.  Dental benefits offered in the exchange must be offered and priced separately to assure transparency for consumers.

      (3) The board may permit direct primary care medical home plans, consistent with section 1301 of P.L. 111-148 of 2010, as amended, to be offered in the exchange beginning January 1, 2014.

      (4) Upon request by the board, a state agency shall provide information to the board for its use in determining if the requirements under subsection (1)(b) or (c) of this section have been met.  Unless the agency and the board agree to a later date, the agency shall provide the information within sixty days of the request.  The exchange shall reimburse the agency for the cost of compiling and providing the requested information within one hundred eighty days of its receipt.

      (5) A decision by the board denying a request to certify or recertify a plan as a qualified health plan may be appealed according to procedures adopted by the board.

NEW SECTION.  Sec. 9.  A new section is added to chapter 43.71 RCW to read as follows:

      The board shall establish a rating system consistent with section 1311 of P.L. 111-148 of 2010, as amended, for qualified health plans to assist consumers in evaluating plan choices in the exchange.  Rating factors established by the board may include, but are not limited to:

      (1) Affordability with respect to premiums, deductibles, and point- of-service cost-sharing;

      (2) Enrollee satisfaction;

      (3) Provider reimbursement methods that incentivize health homes or chronic care management or care coordination for enrollees with complex, high-cost, or multiple chronic conditions;

      (4) Promotion of appropriate primary care and preventive services utilization;

      (5) High standards for provider network adequacy, including consumer choice of providers and service locations and robust provider participation intended to improve access to underserved populations through participation of essential community providers, family planning providers and pediatric providers;

      (6) High standards for covered services, including languages spoken or transportation assistance; and

      (7) Coverage of benefits for spiritual care services that are deductible under section 213(d) of the internal revenue code.

Sec. 10.  RCW 48.42.010 and 1985 c 264 s 15 are each amended to read as follows:

(1) Notwithstanding any other provision of law, and except as provided in this chapter, any person or other entity which provides coverage in this state for life insurance, annuities, loss of time, medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, the providing of services, or otherwise, shall be subject to the authority of the state insurance commissioner, unless the person or other entity shows that while providing the services it is subject to the jurisdiction and regulation of another agency of this state, any subdivisions thereof, or the federal government.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

Sec. 11.  RCW 48.42.020 and 1983 c 36 s 2 are each amended to read as follows:

(1) A person or entity may show that it is subject to the jurisdiction and regulation of another agency of this state, any subdivision thereof, or the federal government, by providing to the insurance commissioner the appropriate certificate, license, or other document issued by the other governmental agency which permits or qualifies it to provide the coverage as defined in RCW 48.42.010.

(2) "Another agency of this state, any subdivision thereof, or the federal government" does not include the Washington health benefit exchange under chapter 43.71 RCW or P.L. 111-148 of 2010, as amended.

NEW SECTION.  Sec. 12.  A new section is added to chapter 48.43 RCW to read as follows:

      Certification by the Washington health benefit exchange of a plan as a qualified health plan, or of a carrier as a qualified issuer, does not exempt the plan or carrier from any of the requirements of this title or rules adopted by the commissioner pursuant to chapter 34.05 RCW to implement this title.

 

PART V
ESSENTIAL HEALTH BENEFITS

 

NEW SECTION.  Sec. 13.  A new section is added to chapter 48.43 RCW to read as follows:

      (1) Consistent with federal law, the commissioner, in consultation with the board and the health care authority, shall, by rule, select the largest small group plan in the state by enrollment as the benchmark plan for the individual and small group market for purposes of establishing the essential health benefits in Washington state under P.L. 111-148 of 2010, as amended.

      (2) If the essential health benefits benchmark plan for the individual and small group market does not include all of the ten benefit categories specified by section 1302 of P.L. 111-148, as amended, the commissioner, in consultation with the board and the health care authority, shall, by rule, supplement the benchmark plan benefits as needed to meet the minimum requirements of section 1302.

      (3) A health plan required to offer the essential health benefits, other than a health plan offered through the federal basic health program or medicaid, under P.L. 111-148 of 2010, as amended, may not be offered in the state unless the commissioner finds that it is substantially equal to the benchmark plan.  When making this determination, the commissioner must:

      (a) Ensure that the plan covers the ten essential health benefits categories specified in section 1302 of P.L. 111-148 of 2010, as amended; and

      (b) May consider whether the health plan has a benefit design that would create a risk of biased selection based on health status and whether the health plan contains meaningful scope and level of benefits in each of the ten essential health benefit categories specified by section 1302 of P.L. 111-148 of 2010, as amended.

      (4) Beginning December 15, 2012, and every year thereafter, the commissioner shall submit to the legislature a list of state-mandated health benefits, the enforcement of which will result in federally imposed costs to the state related to the plans sold through the exchange because the benefits are not included in the essential health benefits designated under federal law.  The list must include the anticipated costs to the state of each state-mandated health benefit on the list and any statutory changes needed if funds are not appropriated to defray the state costs for the listed mandate.  The commissioner may enforce a mandate on the list for the entire market only if funds are appropriated in an omnibus appropriations act specifically to pay the state portion of the identified costs.

NEW SECTION.  Sec. 14.  Nothing in this act prohibits the offering of benefits for spiritual care services deductible under section 213(d) of the internal revenue code in health plans inside and outside of the exchange.

 

PART VI
THE BASIC HEALTH OPTION

 

NEW SECTION.  Sec. 15.  A new section is added to chapter 70.47 RCW to read as follows:

      (1) On or before December 1, 2012, the director of the health care authority shall submit a report to the legislature on whether to proceed with implementation of a federal basic health option, under section 1331 of P.L. 111-148 of 2010, as amended.  The report shall address whether:

      (a) Sufficient funding is available to support the design and development work necessary for the program to provide health coverage to enrollees beginning January 1, 2014;

      (b) Anticipated federal funding under section 1331 will be sufficient, absent any additional state funding, to cover the provision of essential health benefits and costs for administering the basic health plan.  Enrollee premium levels will be below the levels that would apply to persons with income between one hundred thirty-four and two hundred percent of the federal poverty level through the exchange; and

      (c) Health plan payment rates will be sufficient to ensure enrollee access to a robust provider network and health homes, as described under RCW 70.47.100.

      (2) If the legislature determines to proceed with implementation of a federal basic health option, the director shall provide the necessary certifications to the secretary of the federal department of health and human services under section 1331 of P.L. 111-148 of 2010, as amended, to proceed with adoption of the federal basic health program option.

      (3) Prior to making this finding, the director shall:

      (a) Actively consult with the board of the Washington health benefit exchange, the office of the insurance commissioner, consumer advocates, provider organizations, carriers, and other interested organizations;

      (b) Consider any available objective analysis specific to Washington state, by an independent nationally recognized consultant that has been actively engaged in analysis and economic modeling of the federal basic health program option for multiple states.

      (4) The director shall report any findings and supporting analysis made under this section to the governor and relevant policy and fiscal committees of the legislature.

      (5) To the extent funding is available specifically for this purpose in the operating budget, the health care authority shall assume the federal basic health plan option will be implemented in Washington state, and initiate the necessary design and development work.  If the legislature determines under subsection (1) of this section not to proceed with implementation, the authority may cease activities related to basic health program implementation.

      (6) If implemented, the federal basic health program must be guided by the following principles:

      (a) Meeting the minimum state certification standards in section 1331 of the federal patient protection and affordable care act;

      (b) To the extent allowed by the federal department of health and human services, twelve-month continuous eligibility for the basic health program, and corresponding twelve-month continuous enrollment in standard health plans by enrollees; or, in lieu of twelve-month continuous eligibility, financing mechanisms that enable enrollees to remain with a plan for the entire plan year;

      (c) Achieving an appropriate balance between:

      (i) Premiums and cost-sharing minimized to increase the affordability of insurance coverage;

      (ii) Standard health plan contracting requirements that minimize plan and provider administrative costs, while incentivizing improvements in quality and enrollee health outcomes; and

      (iii) Health plan payment rates and provider payment rates that  are sufficient to ensure enrollee access to a robust provider network and health homes, as described under RCW 70.47.100; and

      (d) Transparency in program administration, including active and ongoing consultation with basic health program enrollees and interested organizations, and ensuring adequate enrollee notice and appeal rights.

 

PART VII
RISK ADJUSTMENT AND REINSURANCE

 

NEW SECTION.  Sec. 16.  A new section is added to chapter 48.43 RCW to read as follows:

      (1)(a) The commissioner, in consultation with the board, shall adopt rules establishing the reinsurance and risk adjustment programs required by P.L. 111-148 of 2010, as amended.

      (b) The commissioner must include in deliberations related to reinsurance rule making an analysis of an invisible high risk pool option, in which the full premium and risk associated with certain high-risk or high-cost enrollees would be ceded to the transitional reinsurance program.  The analysis must include a determination as to whether that option is authorized under the federal reinsurance program regulations, whether the option would provide sufficiently comprehensive coverage for current nonmedicare high risk pool enrollees, and how an invisible high risk pool option could be designed to ensure that carriers ceding risk provide effective care management to high-risk or high-cost enrollees.

      (2) Consistent with federal law, the rules for the reinsurance program must, at a minimum, establish:

      (a) A mechanism to collect reinsurance contribution funds;

      (b) A reinsurance payment formula; and

      (c) A mechanism to disburse reinsurance payments.

      (3)(a) The commissioner may adjust the rules adopted under this section as needed to preserve a healthy market both inside and outside of the exchange.

      (b) The rules adopted under this section must identify and may require submission of the data needed to support operation of the reinsurance and risk adjustment programs established under this section.  The commissioner must identify by rule the sources of the data, and other requirements related to the collection, validation, correction, interpretation, transmission or exchange, and retention of the data.

      (4) The commissioner shall contract with one or more nonprofit entities to administer the risk adjustment and reinsurance programs.

      (5) Contribution amounts for the transitional reinsurance program under section 1341 of P.L. 111-148 of 2010, as amended, may be increased to include amounts sufficient to cover the costs of administration of the reinsurance program including reasonable costs incurred for preoperational and planning activities related to the reinsurance program.

 

PART VIII
THE WASHINGTON STATE HEALTH INSURANCE POOL

 

NEW SECTION.  Sec. 17.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The board shall review populations that may need ongoing access to coverage through the pool, with specific attention to those persons who may be excluded from or may receive inadequate coverage beginning January 1, 2014, such as persons with end-stage renal disease or HIV/AIDS, or persons not eligible for coverage in the exchange.

      (2) If the review under subsection (1) of this section indicates a continued need for coverage through the pool after December 31, 2013, the board shall submit recommendations regarding any modifications to pool eligibility requirements for new and ongoing enrollment after December 31, 2013.  The recommendations must address any needed modifications to the standard health questionnaire or other eligibility screening tool that could be used in a manner consistent with federal law to determine eligibility for enrollment in the pool.

      (3) The board shall complete an analysis of current pool assessment requirements in relation to assessments that will fund the reinsurance program and recommend changes to pool assessments or any credits against assessments that may be considered for the reinsurance program.  The analysis shall recommend whether the categories of members paying assessments should be adjusted to make the assessment fair and equitable among all payers.

      (4) The board shall report its recommendations to the governor and the legislature by December 1, 2012.

NEW SECTION.  Sec. 18.  A new section is added to chapter 48.41 RCW to read as follows:

      (1) The pool is authorized to contract with the commissioner to administer risk management functions if necessary, consistent with section 16 of this act, and consistent with P.L. 111-148 of 2010, as amended.  Prior to entering into a contract, the pool may conduct preoperational and planning activities related to these programs, including defining and implementing an appropriate legal structure or structures to administer and coordinate the reinsurance or risk adjustment programs.

      (2) The reasonable costs incurred by the pool for preoperational and planning activities related to the reinsurance program may be reimbursed from federal funds or from the additional contributions authorized under section 16 of this act to pay the administrative costs of the reinsurance program.

      (3) If the pool contracts to administer and coordinate the reinsurance or risk adjustment program, the board must submit recommendations to the legislature with suggestions for additional consumer representatives or other representative members to the board.

      (4) The pool shall report on these activities to the appropriate committees of the senate and house of representatives by December 15, 2012, and December 15, 2013.

 

PART IX
EXCHANGE EMPLOYEES

 

NEW SECTION.  Sec. 19.  A new section is added to chapter 41.04 RCW to read as follows:

      Except for chapters 41.05 and 41.40 RCW, this title does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

NEW SECTION.  Sec. 20.  A new section is added to chapter 43.01 RCW to read as follows:

      This chapter does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

NEW SECTION.  Sec. 21.  A new section is added to chapter 43.03 RCW to read as follows:

      This chapter does not apply to any position in or employee of the Washington health benefit exchange established in chapter 43.71 RCW.

Sec. 22.  RCW 41.05.011 and 2011 1st sp.s. c 15 s 54 are each reenacted and amended to read as follows:

      The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

      (1) "Authority" means the Washington state health care authority.

      (2) "Board" means the public employees' benefits board established under RCW 41.05.055.

      (3) "Dependent care assistance program" means a benefit plan whereby state and public employees may pay for certain employment related dependent care with pretax dollars as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 129 or other sections of the internal revenue code.

      (4) "Director" means the director of the authority.

      (5) "Emergency service personnel killed in the line of duty" means law enforcement officers and firefighters as defined in RCW 41.26.030, members of the Washington state patrol retirement fund as defined in RCW 43.43.120, and reserve officers and firefighters as defined in RCW 41.24.010 who die as a result of injuries sustained in the course of employment as determined consistent with Title 51 RCW by the department of labor and industries.

      (6) "Employee" includes all 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; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature.  Pursuant to contractual agreement with the authority, "employee" may also include:  (a) Employees of a county, municipality, or other political subdivision of the state and members of the legislative authority of any county, city, or town who are elected to office after February 20, 1970, if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205 and 41.05.021(1)(g); (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; (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; ((and)) (d) employees of a tribal government, if the governing body of the tribal government seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.05.021(1) (f) and (g); and (e) employees of the Washington health benefit exchange if the governing board of the exchange established in RCW 43.71.020 seeks and receives approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.05.021(1) (g) and (n).  "Employee" does not include:  Adult family homeowners; unpaid volunteers; patients of state hospitals; inmates; employees of the Washington state convention and trade center as provided in RCW 41.05.110; students of institutions of higher education as determined by their institution; and any others not expressly defined as employees under this chapter or by the authority under this chapter.

      (7) "Employer" means the state of Washington.

      (8) "Employing agency" means a division, department, or separate agency of state government, including an institution of higher education; a county, municipality, school district, educational service district, or other political subdivision; and a tribal government covered by this chapter.

      (9) "Faculty" means an academic employee of an institution of higher education whose workload is not defined by work hours but whose appointment, workload, and duties directly serve the institution's academic mission, as determined under the authority of its enabling statutes, its governing body, and any applicable collective bargaining agreement.

      (10) "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.

      (11) "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.

      (12) "Medical flexible spending arrangement" means a benefit plan whereby state and public employees may reduce their salary before taxes to pay for medical expenses not reimbursed by insurance as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (13) "Participant" means an individual who fulfills the eligibility and enrollment requirements under the salary reduction plan.

      (14) "Plan year" means the time period established by the authority.

      (15) "Premium payment plan" means a benefit plan whereby state and public employees may pay their share of group health plan premiums with pretax dollars as provided in the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (16) "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, 41.35, 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, 41.35, or 41.40 RCW.

      (17) "Salary" means a state employee's monthly salary or wages.

      (18) "Salary reduction plan" means a benefit plan whereby state and public employees may agree to a reduction of salary on a pretax basis to participate in the dependent care assistance program, medical flexible spending arrangement, or premium payment plan offered pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

      (19) "Seasonal employee" means an employee hired to work during a recurring, annual season with a duration of three months or more, and anticipated to return each season to perform similar work.

      (20) "Separated employees" means persons who separate from employment with an employer as defined in:

      (a) RCW 41.32.010(17) on or after July 1, 1996; or

      (b) RCW 41.35.010 on or after September 1, 2000; or

      (c) RCW 41.40.010 on or after March 1, 2002;

and who are at least age fifty-five and have at least ten years of service under the teachers' retirement system plan 3 as defined in RCW 41.32.010(33), the Washington school employees' retirement system plan 3 as defined in RCW 41.35.010, or the public employees' retirement system plan 3 as defined in RCW 41.40.010.

      (21) "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.

      (22) "Tribal government" means an Indian tribal government as defined in section 3(32) of the employee retirement income security act of 1974, as amended, or an agency or instrumentality of the tribal government, that has government offices principally located in this state.

Sec. 23.  RCW 41.05.021 and 2011 1st sp.s. c 15 s 56 are each amended to read as follows:

      (1) The Washington state health care authority is created within the executive branch.  The authority shall have a director appointed by the governor, with the consent of the senate.  The director shall serve at the pleasure of the governor.  The director may employ a deputy director, and such assistant directors and special assistants as may be needed to administer the authority, who shall be exempt from chapter 41.06 RCW, and any additional staff members as are necessary to administer this chapter.  The director may delegate any power or duty vested in him or her by law, including authority to make final decisions and enter final orders in hearings conducted under chapter 34.05 RCW.  The primary duties of the authority shall be to:  Administer state employees' insurance benefits and retired or disabled school employees' insurance benefits; administer the basic health plan pursuant to chapter 70.47 RCW; administer the children's health program pursuant to chapter 74.09 RCW; study state-purchased health care programs in order to maximize cost containment in these programs while ensuring access to quality health care; implement state initiatives, joint purchasing strategies, and techniques for efficient administration that have potential application to all state-purchased health services; and administer grants that further the mission and goals of the authority.  The authority's duties include, but are not limited to, the following:

      (a) To administer health care benefit programs for employees and retired or disabled school employees as specifically authorized in RCW 41.05.065 and in accordance with the methods described in RCW 41.05.075, 41.05.140, and other provisions of this chapter;

      (b) To analyze state-purchased health care programs and to explore options for cost containment and delivery alternatives for those programs that are consistent with the purposes of those programs, including, but not limited to:

      (i) Creation of economic incentives for the persons for whom the state purchases health care to appropriately utilize and purchase health care services, including the development of flexible benefit plans to offset increases in individual financial responsibility;

      (ii) Utilization of provider arrangements that encourage cost containment, including but not limited to prepaid delivery systems, utilization review, and prospective payment methods, and that ensure access to quality care, including assuring reasonable access to local providers, especially for employees residing in rural areas;

      (iii) Coordination of state agency efforts to purchase drugs effectively as provided in RCW 70.14.050;

      (iv) Development of recommendations and methods for purchasing medical equipment and supporting services on a volume discount basis;

      (v) Development of data systems to obtain utilization data from state-purchased health care programs in order to identify cost centers, utilization patterns, provider and hospital practice patterns, and procedure costs, utilizing the information obtained pursuant to RCW 41.05.031; and

      (vi) In collaboration with other state agencies that administer state purchased health care programs, private health care purchasers, health care facilities, providers, and carriers:

      (A) Use evidence-based medicine principles to develop common performance measures and implement financial incentives in contracts with insuring entities, health care facilities, and providers that:

      (I) Reward improvements in health outcomes for individuals with chronic diseases, increased utilization of appropriate preventive health services, and reductions in medical errors; and

      (II) Increase, through appropriate incentives to insuring entities, health care facilities, and providers, the adoption and use of information technology that contributes to improved health outcomes, better coordination of care, and decreased medical errors;

      (B) Through state health purchasing, reimbursement, or pilot strategies, promote and increase the adoption of health information technology systems, including electronic medical records, by hospitals as defined in RCW 70.41.020(4), integrated delivery systems, and providers that:

      (I) Facilitate diagnosis or treatment;

      (II) Reduce unnecessary duplication of medical tests;

      (III) Promote efficient electronic physician order entry;

      (IV) Increase access to health information for consumers and their providers; and

      (V) Improve health outcomes;

      (C) Coordinate a strategy for the adoption of health information technology systems using the final health information technology report and recommendations developed under chapter 261, Laws of 2005;

      (c) To analyze areas of public and private health care interaction;

      (d) To provide information and technical and administrative assistance to the board;

      (e) To review and approve or deny applications from counties, municipalities, and other political subdivisions of the state to provide state-sponsored insurance or self-insurance programs to their employees in accordance with the provisions of RCW 41.04.205 and (g) of this subsection, setting the premium contribution for approved groups as outlined in RCW 41.05.050;

      (f) To review and approve or deny the application when the governing body of a tribal government applies to transfer their employees to an insurance or self‑insurance program administered under this chapter.  In the event of an employee transfer pursuant to this subsection (1)(f), members of the governing body are eligible to be included in such a transfer if the members are authorized by the tribal government to participate in the insurance program being transferred from and subject to payment by the members of all costs of insurance for the members.  The authority shall:  (i) Establish the conditions for participation; (ii) have the sole right to reject the application; and (iii) set the premium contribution for approved groups as outlined in RCW 41.05.050.  Approval of the application by the authority transfers the employees and dependents involved to the insurance, self‑insurance, or health care program approved by the authority;

      (g) To ensure the continued status of the employee insurance or self-insurance programs administered under this chapter as a governmental plan under section 3(32) of the employee retirement income security act of 1974, as amended, the authority shall limit the participation of employees of a county, municipal, school district, educational service district, or other political subdivision, the Washington health benefit exchange, or a tribal government, including providing for the participation of those employees whose services are substantially all in the performance of essential governmental functions, but not in the performance of commercial activities;

      (h) To establish billing procedures and collect funds from school districts in a way that minimizes the administrative burden on districts;

      (i) To publish and distribute to nonparticipating school districts and educational service districts by October 1st of each year a description of health care benefit plans available through the authority and the estimated cost if school districts and educational service district employees were enrolled;

      (j) To apply for, receive, and accept grants, gifts, and other payments, including property and service, from any governmental or other public or private entity or person, and make arrangements as to the use of these receipts to implement initiatives and strategies developed under this section;

      (k) To issue, distribute, and administer grants that further the mission and goals of the authority;

      (l) To adopt rules consistent with this chapter as described in RCW 41.05.160 including, but not limited to:

      (i) Setting forth the criteria established by the board under RCW 41.05.065 for determining whether an employee is eligible for benefits;

      (ii) Establishing an appeal process in accordance with chapter 34.05 RCW by which an employee may appeal an eligibility determination;

      (iii) Establishing a process to assure that the eligibility determinations of an employing agency comply with the criteria under this chapter, including the imposition of penalties as may be authorized by the board;

      (m)(i) To administer the medical services programs established under chapter 74.09 RCW as the designated single state agency for purposes of Title XIX of the federal social security act;

      (ii) To administer the state children's health insurance program under chapter 74.09 RCW for purposes of Title XXI of the federal social security act;

      (iii) To enter into agreements with the department of social and health services for administration of medical care services programs under Titles XIX and XXI of the social security act.  The agreements shall establish the division of responsibilities between the authority and the department with respect to mental health, chemical dependency, and long-term care services, including services for persons with developmental disabilities.  The agreements shall be revised as necessary, to comply with the final implementation plan adopted under section 116, chapter 15, Laws of 2011 1st sp. sess.;

      (iv) To adopt rules to carry out the purposes of chapter 74.09 RCW;

      (v) To appoint such advisory committees or councils as may be required by any federal statute or regulation as a condition to the receipt of federal funds by the authority.  The director may appoint statewide committees or councils in the following subject areas:  (A) Health facilities; (B) children and youth services; (C) blind services; (D) medical and health care; (E) drug abuse and alcoholism; (F) rehabilitative services; and (G) such other subject matters as are or come within the authority's responsibilities.  The statewide councils shall have representation from both major political parties and shall have substantial consumer representation.  Such committees or councils shall be constituted as required by federal law or as the director in his or her discretion may determine.  The members of the committees or councils shall hold office for three years except in the case of a vacancy, in which event appointment shall be only for the remainder of the unexpired term for which the vacancy occurs.  No member shall serve more than two consecutive terms.  Members of such state advisory committees or councils may be paid their travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended;
      (n) To review and approve or deny the application from the governing board of the Washington health benefit exchange to provide state-sponsored insurance or self-insurance programs to employees of the exchange.  The authority shall (i) establish the conditions for participation; (ii) have the sole right to reject an application; and (iii) set the premium contribution for approved groups as outlined in RCW 41.05.050.

      (2) On and after January 1, 1996, the public employees' benefits board may implement strategies to promote managed competition among employee health benefit plans.  Strategies may include but are not limited to:

      (a) Standardizing the benefit package;

      (b) Soliciting competitive bids for the benefit package;

      (c) Limiting the state's contribution to a percent of the lowest priced qualified plan within a geographical area;

      (d) Monitoring the impact of the approach under this subsection with regards to:  Efficiencies in health service delivery, cost shifts to subscribers, access to and choice of managed care plans statewide, and quality of health services.  The health care authority shall also advise on the value of administering a benchmark employer-managed plan to promote competition among managed care plans.

 

PART X
MISCELLANEOUS

 

NEW SECTION.  Sec. 24.  The health care authority shall pursue an application for the state to participate in the individual market wellness program demonstration as described in section 2705 of P.L. 111-148 of 2010, as amended.  The health care authority shall pursue activities that will prepare the state to apply for the demonstration project once announced by the United States department of health and human services.

NEW SECTION.  Sec. 25.  A new section is added to chapter 43.71 RCW to read as follows:

      A person or entity functioning as a navigator consistent with the requirements of section 1311(i) of P.L. 111-148 of 2010, as amended, shall not be considered soliciting or negotiating insurance as stated under chapter 48.17 RCW.

NEW SECTION.  Sec. 26.  A new section is added to chapter 43.71 RCW to read as follows:

      If at any time the exchange is no longer self-sustaining as defined in RCW 43.71.010, the operations of the exchange shall be suspended.

NEW SECTION.  Sec. 27.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 28.  Sections 4, 16, 18, and 19 through 23 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."

      Senator Hargrove spoke in favor of adoption of the striking amendment.

 

The President declared the question before the Senate to be the adoption of the striking amendment by Senators Hargrove, Kastama and Pflug to Engrossed Second Substitute House Bill No. 2319.

The motion by Senator Hargrove carried and the striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 2 of the title, after "act;" strike the remainder of the title and insert "amending RCW 43.71.010, 43.71.020, 43.71.030, 43.71.060, 48.42.010, 48.42.020, and 41.05.021; reenacting and amending RCW 48.43.005 and 41.05.011; adding new sections to chapter 48.43 RCW; adding new sections to chapter 43.71 RCW; adding a new section to chapter 70.47 RCW; adding new sections to chapter 48.41 RCW; adding a new section to chapter 41.04 RCW; adding a new section to chapter 43.01 RCW; adding a new section to chapter 43.03 RCW; creating new sections; providing an expiration date; and declaring an emergency."

MOTION

 

On motion of Senator Keiser, the rules were suspended, Engrossed Second Substitute House Bill No. 2319 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Keiser, Frockt, Kastama, Conway and Pflug spoke in favor of passage of the bill.

      Senators Becker and Ericksen spoke against passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed Second Substitute House Bill No. 2319 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed Second Substitute House Bill No. 2319 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 27; Nays, 22; Absent, 0; Excused, 0.

      Voting yea: Senators Brown, Chase, Conway, Eide, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hobbs, Kastama, Keiser, Kilmer, Kline, Kohl-Welles, McAuliffe, Murray, Nelson, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Shin and Tom

      Voting nay: Senators Baumgartner, Becker, Benton, Carrell, Delvin, Ericksen, Fain, Hewitt, Hill, Holmquist Newbry, Honeyford, King, Litzow, Morton, Padden, Parlette, Roach, Schoesler, Sheldon, Stevens, Swecker and Zarelli

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2319 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

On motion of Senator Eide, Engrossed Second Substitute House Bill No. 2319 was immediately transmitted to the House of Representatives.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 2771, by Representatives Pettigrew, Cody and Springer

 

Addressing employer and employee relationships under the state retirement systems.

 

The measure was read the second time.

 

MOTION

 

Senator Fraser moved that the following committee amendment by the Committee on Ways & Means be adopted:

0)On page 2, after line 29, insert the following:
      "(5) This act shall apply solely to eligibility for state-sponsored public employee pension plans under chapters 41.26, 41.32, 41.35, 41.37, and 41.40 RCW and shall not affect any other statute or rule regarding employee benefits, status, or workplace protections."

Renumber the remaining subsection consecutively and correct any internal references accordingly.

      Senator Fraser spoke in favor of adoption of the committee amendment.

 

The President declared the question before the Senate to be the adoption of the committee amendment by the Committee on Ways & Means to Engrossed House Bill No. 2771.

The motion by Senator Fraser carried and the committee amendment was adopted by voice vote.

 

MOTION

 

On motion of Senator Fraser, the rules were suspended, Engrossed House Bill No. 2771 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Fraser and Schoesler spoke in favor of passage of the bill.

      Senators Kline and Nelson spoke against passage of the bill.

 

MOTION

 

On motion of Senator Hill, Senator Ericksen was excused.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 2771 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 2771 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 38; Nays, 10; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Conway, Delvin, Eide, Fain, Fraser, Hargrove, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Kilmer, King, Litzow, Morton, Padden, Parlette, Pflug, Prentice, Pridemore, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senators Chase, Frockt, Harper, Keiser, Kline, Kohl-Welles, McAuliffe, Murray, Nelson and Ranker

      Excused: Senator Ericksen

ENGROSSED HOUSE BILL NO. 2771 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

On motion of Senator Eide, Engrossed House Bill No. 2771 was immediately transmitted to the House of Representatives.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 2328, by Representatives Dammeier, Haigh and Hunt

 

Addressing job order contracting.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Pridemore, the rules were suspended, Engrossed House Bill No. 2328 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Pridemore spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 2328.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 2328 and the bill passed the Senate by the following vote:  Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Excused: Senator Ericksen

ENGROSSED HOUSE BILL NO. 2328, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2361, by House Committee on Business & Financial Services (originally sponsored by Representatives Kirby, Bailey, Kelley, Parker, Rivers, Buys, Blake, Hurst, Condotta and Pollet)

 

Concerning usage-based automobile insurance.

 

The measure was read the second time.

 

MOTION

 

Senator Hobbs moved that the following committee striking amendment by the Committee on Financial Institutions, Housing & Insurance be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 48.19.040 and 1994 c 131 s 8 are each amended to read as follows:

      (1) Every insurer or rating organization shall, before using, file with the commissioner every classifications manual, manual of rules and rates, rating plan, rating schedule, minimum rate, class rate, and rating rule, and every modification of any of the foregoing which it proposes.  The insurer need not so file any rate on individually rated risks as described in subdivision (1) of RCW 48.19.030; except that any such specific rate made by a rating organization shall be filed.

      (2) Every such filing shall indicate the type and extent of the coverage contemplated and must be accompanied by sufficient information to permit the commissioner to determine whether it meets the requirements of this chapter.  An insurer or rating organization shall offer in support of any filing:

      (a) The experience or judgment of the insurer or rating organization making the filing;

      (b) An exhibit detailing the major elements of operating expense for the types of insurance affected by the filing;

      (c) An explanation of how investment income has been taken into account in the proposed rates; and

      (d) Any other information which the insurer or rating organization deems relevant.

      (3) If an insurer has insufficient loss experience to support its proposed rates, it may submit loss experience for similar exposures of other insurers or of a rating organization.

      (4) Every such filing shall state its proposed effective date.

      (5)(a) A filing made pursuant to this chapter shall be exempt from the provisions of RCW 48.02.120(3).  However, the filing and all supporting information accompanying it shall be open to public inspection only after the filing becomes effective, except as provided in (b) of this subsection.

(b) For the purpose of this section, "usage-based insurance" means private passenger automobile coverage that uses data gathered by an insurer through a recording device as defined in RCW 46.35.010 to determine rates or premiums.  Information in a filing of usage-based insurance about the usage-based component of the rate is confidential and must be withheld from public inspection.

      (6) Where a filing is required no insurer shall make or issue an insurance contract or policy except in accordance with its filing then in effect, except as is provided by RCW 48.19.090.

Sec. 2.  RCW 42.56.400 and 2011 c 188 s 21 are each amended to read as follows:

      The following information relating to insurance and financial institutions is exempt from disclosure under this chapter:

      (1) Records maintained by the board of industrial insurance appeals that are related to appeals of crime victims' compensation claims filed with the board under RCW 7.68.110;

      (2) Information obtained and exempted or withheld from public inspection by the health care authority under RCW 41.05.026, whether retained by the authority, transferred to another state purchased health care program by the authority, or transferred by the authority to a technical review committee created to facilitate the development, acquisition, or implementation of state purchased health care under chapter 41.05 RCW;

      (3) The names and individual identification data of either all owners or all insureds, or both, received by the insurance commissioner under chapter 48.102 RCW;

      (4) Information provided under RCW 48.30A.045 through 48.30A.060;

      (5) Information provided under RCW 48.05.510 through 48.05.535, 48.43.200 through 48.43.225, 48.44.530 through 48.44.555, and 48.46.600 through 48.46.625;

      (6) Examination reports and information obtained by the department of financial institutions from banks under RCW 30.04.075, from savings banks under RCW 32.04.220, from savings and loan associations under RCW 33.04.110, from credit unions under RCW 31.12.565, from check cashers and sellers under RCW 31.45.030(3), and from securities brokers and investment advisers under RCW 21.20.100, all of which is confidential and privileged information;

      (7) Information provided to the insurance commissioner under RCW 48.110.040(3);

      (8) Documents, materials, or information obtained by the insurance commissioner under RCW 48.02.065, all of which are confidential and privileged;

      (9) Confidential proprietary and trade secret information provided to the commissioner under RCW 48.31C.020 through 48.31C.050 and 48.31C.070;

      (10) Data filed under RCW 48.140.020, 48.140.030, 48.140.050, and 7.70.140 that, alone or in combination with any other data, may reveal the identity of a claimant, health care provider, health care facility, insuring entity, or self-insurer involved in a particular claim or a collection of claims.  For the purposes of this subsection:

      (a) "Claimant" has the same meaning as in RCW 48.140.010(2).

      (b) "Health care facility" has the same meaning as in RCW 48.140.010(6).

      (c) "Health care provider" has the same meaning as in RCW 48.140.010(7).

      (d) "Insuring entity" has the same meaning as in RCW 48.140.010(8).

      (e) "Self-insurer" has the same meaning as in RCW 48.140.010(11);

      (11) Documents, materials, or information obtained by the insurance commissioner under RCW 48.135.060;

      (12) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.060;

      (13) Confidential and privileged documents obtained or produced by the insurance commissioner and identified in RCW 48.37.080;

      (14) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.140;

      (15) Documents, materials, or information obtained by the insurance commissioner under RCW 48.17.595;

      (16) Documents, materials, or information obtained by the insurance commissioner under RCW 48.102.051(1) and 48.102.140 (3) and (7)(a)(ii);

      (17) Documents, materials, or information obtained by the insurance commissioner in the commissioner's capacity as receiver under RCW 48.31.025 and 48.99.017, which are records under the jurisdiction and control of the receivership court.  The commissioner is not required to search for, log, produce, or otherwise comply with the public records act for any records that the commissioner obtains under chapters 48.31 and 48.99 RCW in the commissioner's capacity as a receiver, except as directed by the receivership court;

      (18) Documents, materials, or information obtained by the insurance commissioner under RCW 48.13.151; ((and))

      (19) Data, information, and documents provided by a carrier pursuant to section 1, chapter 172, Laws of 2010; and
      (20) Information in a filing of usage-based insurance about the usage-based component of the rate pursuant to RCW 48.19.040(5)(b)."

 

MOTION

 

Senator Haugen moved that the following amendment by Senators Haugen and Prentice to the committee striking amendment be adopted:

0)On page 4, after line 11, insert the following:

NEW SECTION.  Sec. 3.  This act shall not be used, directly or indirectly, as a basis for a cause of action claiming damages for a violation of proprietary intellectual property subject to one or more United States patents.

Renumber the remaining sections consecutively and correct any internal references accordingly.

Senators Haugen and Prentice spoke in favor of adoption of the amendment to the committee striking amendment.

Senator Benton and Hobbs spoke against adoption of the amendment to the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the amendment by Senators Haugen and Prentice on page 4, after line 11 to the committee striking amendment to Engrossed Substitute House Bill No. 2361.

The motion by Senator Haugen failed and the amendment to the committee striking amendment was not adopted by voice vote.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Financial Institutions, Housing & Insurance to Engrossed Substitute House Bill No. 2361.

The motion by Senator Hobbs carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 2 of the title, after "inspection;" strike the remainder of the title and insert "and amending RCW 48.19.040 and 42.56.400."

MOTION

 

On motion of Senator Hobbs, the rules were suspended, Engrossed Substitute House Bill No. 2361 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Hobbs and Benton spoke in favor of passage of the bill.

      Senators Prentice and Haugen spoke against passage of the bill.

 

MOTION

 

On motion of Senator Harper, Senator Tom was excused.

 

The President declared the question before the Senate to be the final passage of Engrossed Substitute House Bill No. 2361 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2361 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 38; Nays, 10; Absent, 0; Excused, 1.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Conway, Delvin, Eide, Fain, Frockt, Harper, Hatfield, Hewitt, Hill, Hobbs, Honeyford, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Nelson, Parlette, Pflug, Pridemore, Ranker, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senators Chase, Fraser, Hargrove, Haugen, Holmquist Newbry, Kastama, Murray, Padden, Prentice and Regala

      Excused: Senator Ericksen

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2361 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2545, by House Committee on Technology, Energy & Communications (originally sponsored by Representatives Zeiger, Ladenburg, Dammeier, Seaquist, Angel, Dahlquist, Wilcox, Jinkins, McCune and Kelley)

 

Including compressed natural gas in fuel usage requirements for local governments. Revised for 1st Substitute: Including compressed natural gas in fuel usage requirements for local governments. (REVISED FOR ENGROSSED: Including compressed natural gas, liquefied natural gas, or propane in fuel usage requirements for local governments. )

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Ranker, the rules were suspended, Engrossed Substitute House Bill No. 2545 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Ranker and Morton spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed Substitute House Bill No. 2545.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 2545 and the bill passed the Senate by the following vote:  Yeas, 48; Nays, 1; Absent, 0; Excused, 0.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker, Tom and Zarelli

      Voting nay: Senator Ericksen

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2545, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

MOTION

 

At 5:26 p.m., on motion of Senator Eide, the Senate was declared to be at ease subject to the call of the President.

 

EVENING SESSION

 

The Senate was called to order at 6:38 p.m. by President Owen.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 2177, by House Committee on Public Safety & Emergency Preparedness (originally sponsored by Representatives Ladenburg, Dammeier, Jinkins, Zeiger, Darneille, Dahlquist, Seaquist, Angel, Kelley, Wilcox, Hurst, McCune, Kirby, Appleton, Green, Ryu, Warnick and Finn)

 

Protecting children from sexual exploitation.

 

The measure was read the second time.

 

MOTION

 

Senator Kline moved that the following committee striking amendment by the Committee on Judiciary be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 9.68A.001 and 2010 c 227 s 1 are each amended to read as follows:

      The legislature finds that the prevention of sexual exploitation and abuse of children constitutes a government objective of surpassing importance.  The care of children is a sacred trust and should not be abused by those who seek commercial gain or personal gratification based on the exploitation of children.

      The legislature further finds that the protection of children from sexual exploitation can be accomplished without infringing on a constitutionally protected activity.  The definition of "sexually explicit conduct" and other operative definitions demarcate a line between protected and prohibited conduct and should not inhibit legitimate scientific, medical, or educational activities.

      The legislature further finds that children engaged in sexual conduct for financial compensation are frequently the victims of sexual abuse.  Approximately eighty to ninety percent of children engaged in sexual activity for financial compensation have a history of sexual abuse victimization.  It is the intent of the legislature to encourage these children to engage in prevention and intervention services and to hold those who pay to engage in the sexual abuse of children accountable for the trauma they inflict on children.

      The legislature further finds that due to the changing nature of technology, offenders are now able to access child pornography in different ways and in increasing quantities.  By amending current statutes governing depictions of a minor engaged in sexually explicit conduct, it is the intent of the legislature to ensure that intentional viewing of and dealing in child pornography over the internet is subject to a criminal penalty without limiting the scope of existing prohibitions on the possession of or dealing in child pornography, including the possession of electronic depictions of a minor engaged in sexually explicit conduct.  It is also the intent of the legislature to clarify, in response to State v. Sutherby, 204 P.3d 916 (2009), the unit of prosecution for the statutes governing possession of and dealing in depictions of a minor engaged in sexually explicit conduct.  It is the intent of the legislature that the first degree offenses under RCW 9.68A.050, 9.68A.060, and 9.68A.070 have a per depiction or image unit of prosecution, while the second degree offenses under RCW 9.68A.050, 9.68A.060, and 9.68A.070 have a per incident unit of prosecution as established in State v. Sutherby, 204 P.3d 916 (2009).  Furthermore, it is the intent of the legislature to set a different unit of prosecution for the new offense of viewing of depictions of a minor engaged in sexually explicit conduct such that each separate session of intentionally viewing over the internet of visual depictions or images of a minor engaged in sexually explicit conduct constitutes a separate offense.

The decisions of the Washington supreme court in State v. Boyd, 160 W.2d 424, 158 P.3d 54 (2007), and State v. Grenning, 169 Wn.2d 47, 234 P.3d 169 (2010), require prosecutors to duplicate and distribute depictions of a minor engaged in sexually explicit conduct ("child pornography") as part of the discovery process in a criminal prosecution.  The legislature finds that the importance of protecting children from repeat exploitation in child pornography is not being given sufficient weight under these decisions.  The importance of protecting children from repeat exploitation in child pornography is based upon the following findings:
      (1) Child pornography is not entitled to protection under the First Amendment and thus may be prohibited;
      (2) The state has a compelling interest in protecting children from those who sexually exploit them, and this interest extends to stamping out the vice of child pornography at all levels in the distribution chain;
      (3) Every instance of viewing images of child pornography represents a renewed violation of the privacy of the victims and a repetition of their abuse;
      (4) Child pornography constitutes prima facie contraband, and as such should not be distributed to, or copied by, child pornography defendants or their attorneys;
      (5) It is imperative to prohibit the reproduction of child pornography in criminal cases so as to avoid repeated violation and abuse of victims, so long as the government makes reasonable accommodations for the inspection, viewing, and examination of such material for the purposes of mounting a criminal defense.  The legislature is also aware that the Adam Walsh child protection and safety act, P.L. 109–248, 120 Stat. 587 (2006), codified at 18 U.S.C. Sec. 3509(m), prohibits the duplication and distribution of child pornography as part of the discovery process in federal prosecutions.  This federal law has been in effect since 2006, and upheld repeatedly as constitutional.  Courts interpreting the Walsh act have found that such limitations can be employed while still providing the defendant due process.  The legislature joins congress, and the legislatures of other states that have passed similar provisions, in protecting these child victims so that our justice system does not cause repeat exploitation, while still providing due process to criminal defendants.

NEW SECTION.  Sec. 2.  A new section is added to chapter 9.68A RCW to read as follows:

      (1) In any criminal proceeding, any property or material that constitutes a depiction of a minor engaged in sexually explicit conduct shall remain in the care, custody, and control of either a law enforcement agency or the court.

      (2) Despite any request by the defendant or prosecution, any property or material that constitutes a depiction of a minor engaged in sexually explicit conduct shall not be copied, photographed, duplicated, or otherwise reproduced, so long as the property or material is made reasonably available to the parties.  Such property or material shall be deemed to be reasonably available to the parties if the prosecution, defense counsel, or any individual sought to be qualified to furnish expert testimony at trial has ample opportunity for inspection, viewing, and examination of the property or material at a law enforcement facility or a neutral facility approved by the court upon petition by the defense.

      (3) The defendant may view and examine the property and materials only while in the presence of his or her attorney.  If the defendant is proceeding pro se, the court will appoint an individual to supervise the defendant while he or she examines the materials.

      (4) The court may direct that a mirror image of a computer hard drive containing such depictions be produced for use by an expert only upon a showing that an expert has been retained and is prepared to conduct a forensic examination while the mirror imaged hard drive remains in the care, custody, and control of a law enforcement agency or the court.  Upon a substantial showing that the expert's analysis cannot be accomplished while the mirror imaged hard drive is kept within the care, custody, and control of a law enforcement agency or the court, the court may order its release to the expert for analysis for a limited time.  If release is granted, the court shall issue a protective order setting forth such terms and conditions as are necessary to protect the rights of the victims, to document the chain of custody, and to protect physical evidence.

NEW SECTION.  Sec. 3.  A new section is added to chapter 9.68A RCW to read as follows:

      (1) Whenever a depiction of a minor engaged in sexually explicit conduct, regardless of its format, is marked as an exhibit in a criminal proceeding, the prosecutor shall seek an order sealing the exhibit at the close of the trial.  Any exhibits sealed under this section shall be sealed with evidence tape in a manner that prevents access to, or viewing of, the depiction of a minor engaged in sexually explicit conduct and shall be labeled so as to identify its contents.  Anyone seeking to view such an exhibit must obtain permission from the superior court after providing at least ten day’s notice to the prosecuting attorney.  Appellate attorneys for the defendant and the state shall be given access to the exhibit, which must remain in the care and custody of either a law enforcement agency or the court.  Any other person moving to view such an exhibit must demonstrate to the court that his or her reason for viewing the exhibit is of sufficient importance to justify another violation of the victim's privacy.

      (2) Whenever the clerk of the court receives an exhibit of a depiction of a minor engaged in sexually explicit conduct, he or she shall store the exhibit in a secure location, such as a safe.  The clerk may arrange for the transfer of such exhibits to a law enforcement agency evidence room for safekeeping provided the agency agrees not to destroy or dispose of the exhibits without an order of the court.

      (3) If the criminal proceeding ends in a conviction, the clerk of the court shall destroy any exhibit containing a depiction of a minor engaged in sexually explicit conduct five years after the judgment is final, as determined by the provisions of RCW 10.73.090(3).  Before any destruction, the clerk shall contact the prosecuting attorney and verify that there is no collateral attack on the judgment pending in any court.  If the criminal proceeding ends in a mistrial, the clerk shall either maintain the exhibit or return it to the law enforcement agency that investigated the criminal charges for safekeeping until the matter is set for retrial.  If the criminal proceeding ends in an acquittal, the clerk shall return the exhibit to the law enforcement agency that investigated the criminal charges for either safekeeping or destruction.

NEW SECTION.  Sec. 4.  A new section is added to chapter 9.68A RCW to read as follows:

      Any depiction of a minor engaged in sexually explicit conduct, in any format, distributed as discovery to defense counsel or an expert witness prior to the effective date of this section shall either be returned to the law enforcement agency that investigated the criminal charges or destroyed, if the case is no longer pending in superior court.  If the case is still pending, the depiction shall be returned to the superior court judge assigned to the case or the presiding judge.  The court shall order either the destruction of the depiction or the safekeeping of the depiction if it will be used at trial.  It is not a defense to violations of this chapter for crimes committed after December 31, 2012, that the initial receipt of the depictions was done under the color of law through the discovery process."

      Senator Kline spoke in favor of adoption of the committee striking amendment.

 

MOTION

 

On motion of Senator Ericksen, Senators Baumgartner, Benton, Fain, Hill, Litzow, Roach and Zarelli were excused.

 

MOTION

 

On motion of Senator Harper, Senator Haugen was excused.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Judiciary to Substitute House Bill No. 2177.

The motion by Senator Kline carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the title, after "exploitation;" strike the remainder of the title and insert "amending RCW 9.68A.001; and adding new sections to chapter 9.68A RCW."

 

MOTION

 

On motion of Senator Kline, the rules were suspended, Substitute House Bill No. 2177 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Kline and Padden spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2177 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 2177 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 46; Nays, 0; Absent, 0; Excused, 3.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker and Tom

      Excused: Senators Haugen, Roach and Zarelli

SUBSTITUTE HOUSE BILL NO. 2177 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 1552, by House Committee on Judiciary (originally sponsored by Representative Goodman)

 

Concerning garnishment.

 

The measure was read the second time.

 

MOTION

 

Senator Kline moved that the following committee striking amendment by the Committee on Judiciary be adopted:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1.  RCW 6.27.010 and 2003 c 222 s 16 are each amended to read as follows:

      (1) As used in this chapter, the term "earnings" means compensation paid or payable to an individual for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a governmental or nongovernmental pension or retirement program.

      (2) As used in this chapter, the term "disposable earnings" means that part of earnings remaining after the deduction from those earnings of any amounts required by law to be withheld.

Sec. 2.  RCW 6.27.090 and 2000 c 72 s 2 are each amended to read as follows:

      (1) The writ of garnishment shall set forth in the first paragraph the amount that garnishee is required to hold, which shall be an amount determined as follows:  (a)(i) If after judgment, the amount of the judgment remaining unsatisfied on the clerk of the court's execution docket, if any, plus interest to the date of garnishment, as provided in RCW 4.56.110, plus estimated interest that may accrue during the garnishment process on a per diem basis under subsection (3) of this section plus taxable costs and ((attorney's)) attorneys' fees, or (ii) if before judgment, the amount prayed for in the complaint plus estimated taxable costs of suit and attorneys' fees, together with, (b) whether before or after judgment, estimated costs of garnishment as provided in subsection (2) of this section.  The court may, by order, set a higher amount to be held upon a showing of good cause by plaintiff.

      (2) Costs recoverable in garnishment proceedings, to be estimated for purposes of subsection (1) of this section, include filing and ex parte fees, service and affidavit fees, postage and costs of certified mail, answer fee or fees, other fees legally chargeable to a plaintiff in the garnishment process, and a garnishment attorney fee in the amount of the greater of ((fifty)) one hundred dollars or ten percent of (a) the amount of the judgment remaining unsatisfied or (b) the amount prayed for in the complaint.  The garnishment attorney fee shall not exceed ((two)) three hundred ((fifty)) dollars.

(3) For purposes of subsection (1) of this section, the plaintiff must indicate in the writ a specific dollar amount of estimated interest that may accrue during the garnishment process per day.  The amount must be based on an interest rate of twelve percent or the interest rate set forth in the judgment, whichever rate is less.

Sec. 3.  RCW 6.27.100 and 2003 c 222 s 4 are each amended to read as follows:

      (1) ((The)) A writ issued for a continuing lien on earnings shall be substantially in the form provided in section 4 of this act.  All other writs of garnishment shall be substantially in the following form, but if the writ is issued under ((a court)) an order or judgment for child support, the following statement shall appear conspicuously in the caption:  "This garnishment is based on a judgment or ((court)) order for child support"; and ((if the garnishment is for a continuing lien, the form shall be modified as provided in RCW 6.27.340; and if the writ is not directed to an employer for the purpose of garnishing a defendant's earnings, the paragraph relating to the earnings exemption may be omitted and the paragraph relating to the deduction of processing fees may be omitted; and)) if the writ is issued by an attorney, the writ shall be revised as indicated in subsection (2) of this section:

 

"IN THE  . . . . . COURT

OF THE STATE OF WASHINGTON IN AND FOR

THE COUNTY OF  . . . . . .

 

............................................. ,

 

Plaintiff,

No.  . . . .

vs.

 

 

............................................. ,

WRIT OF

Defendant,

GARNISHMENT

............................................. ,

 

Garnishee

 

 

THE STATE OF WASHINGTON TO:  ......................................

 

Garnishee

 

AND TO:  ...................................................................................

Defendant

 

        The above-named plaintiff has applied for a writ of

garnishment against you, claiming that the above-named

defendant is indebted to plaintiff and that the amount to be

held to satisfy that indebtedness is $ . . . . . ., consisting of:

 

 

Balance on Judgment or Amount of Claim

$ . . . .

 

Interest under Judgment from  . . . . to  . . . .

$ . . . .

 

Per Day Rate of Estimated Interest

$ . . . .
per day

 

Taxable Costs and Attorneys' Fees

$ . . . .

 

Estimated Garnishment Costs:

 

Filing and Ex Parte Fees

$ . . . .

 

Service and Affidavit Fees

$ . . . .

 

Postage and Costs of Certified Mail

$ . . . .

 

Answer Fee or Fees (((If applicable)))

$ . . . .

 

Garnishment Attorney Fee

$ . . . .

 

Other

$ . . . .

 

 

      YOU ARE HEREBY COMMANDED, unless otherwise directed by the court, by the attorney of record for the plaintiff, or by this writ, not to pay any debt, whether earnings subject to this garnishment or any other debt, owed to the defendant at the time this writ was served and not to deliver, sell, or transfer, or recognize any sale or transfer of, any personal property or effects of the defendant in your possession or control at the time when this writ was served.  Any such payment, delivery, sale, or transfer is void to the extent necessary to satisfy the plaintiff's claim and costs for this writ with interest.

      YOU ARE FURTHER COMMANDED to answer this writ ((by filling in the attached form)) according to the instructions in this writ and in the answer forms and, within twenty days after the service of the writ upon you, to mail or deliver the original of such answer to the court, one copy to the plaintiff or the plaintiff's attorney, and one copy to the defendant, ((in the envelopes provided)) at the addresses listed at the bottom of this writ.

      ((If, at the time this writ was served, you owed the defendant any earnings (that is, wages, salary, commission, bonus, or other compensation for personal services or any periodic payments pursuant to a nongovernmental pension or retirement program), the defendant is entitled to receive amounts that are exempt from garnishment under federal and state law.  You must pay the exempt amounts to the defendant on the day you would customarily pay the compensation or other periodic payment.  As more fully explained in the answer, the basic exempt amount is the greater of seventy-five percent of disposable earnings or a minimum amount determined by reference to the employee's pay period, to be calculated as provided in the answer.  However, if this writ carries a statement in the heading that "This garnishment is based on a judgment or court order for child support," the basic exempt amount is forty percent of disposable earnings.
      IF THIS IS A WRIT FOR A CONTINUING LIEN ON EARNINGS, YOU MAY DEDUCT A PROCESSING FEE FROM THE REMAINDER OF THE EMPLOYEE'S EARNINGS AFTER WITHHOLDING UNDER THIS WRIT.  THE PROCESSING FEE MAY NOT EXCEED TWENTY DOLLARS FOR THE FIRST ANSWER AND TEN DOLLARS AT THE TIME YOU SUBMIT THE SECOND ANSWER.))

      If you owe the defendant a debt payable in money in excess of the amount set forth in the first paragraph of this writ, hold only the amount set forth in the first paragraph and any processing fee if one is charged and release all additional funds or property to defendant.

      IF YOU FAIL TO ANSWER THIS WRIT AS COMMANDED, A JUDGMENT MAY BE ENTERED AGAINST YOU FOR THE FULL AMOUNT OF THE PLAINTIFF'S CLAIM AGAINST THE DEFENDANT WITH ACCRUING INTEREST, ATTORNEY FEES, AND COSTS WHETHER OR NOT YOU OWE ANYTHING TO THE DEFENDANT.  IF YOU PROPERLY ANSWER THIS WRIT, ANY JUDGMENT AGAINST YOU WILL NOT EXCEED THE AMOUNT OF ANY NONEXEMPT DEBT OR THE VALUE OF ANY NONEXEMPT PROPERTY OR EFFECTS IN YOUR POSSESSION OR CONTROL.

      JUDGMENT MAY ALSO BE ENTERED AGAINST THE DEFENDANT FOR COSTS AND FEES INCURRED BY THE PLAINTIFF.

 

      Witness, the Honorable . . . . . . . ., Judge of the above-entitled Court, and the seal thereof, this . . . . day of . . . . . ., 20. . .

 

[Seal]

 

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

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

Attorney for

Plaintiff (or

Plaintiff, if no

attorney)

 

Clerk of

the Court

 

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

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

Address

By

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

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

Name of Defendant

Address"

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

 

Address of Defendant

 

 

      (2) If an attorney issues the writ of garnishment, the final paragraph of the writ, containing the date, and the subscripted attorney and clerk provisions, shall be replaced with text in substantially the following form:

      "This writ is issued by the undersigned attorney of record for plaintiff under the authority of chapter 6.27 of the Revised Code of Washington, and must be complied with in the same manner as a writ issued by the clerk of the court.

 

Dated this  . . . . . . . .day of . . . . . . . . . ., 20 . . . . . .

 

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

 

Attorney for Plaintiff

 

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

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

Address(("))

Address of the Clerk of the

Court"

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

 

Name of Defendant

 

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

 

Address of Defendant

 

NEW SECTION.  Sec. 4.  A new section is added to chapter 6.27 RCW to read as follows:

      (1) A writ that is issued for a continuing lien on earnings shall be substantially in the following form, but if the writ is issued under an order or judgment for child support, the following statement shall appear conspicuously in the caption:  "This garnishment is based on a judgment or order for child support;" and if the writ is issued by an attorney, the writ shall be revised as indicated in subsection (2) of this section:

 

"IN THE  . . . . . COURT

OF THE STATE OF WASHINGTON IN AND FOR

THE COUNTY OF  . . . . . .

 

.............................................. ,

 

Plaintiff,

No.  . . . .

vs.

 

 

.............................................. ,

WRIT OF

Defendant

GARNISHMENT FOR

 

CONTINUING LIEN ON

.............................................. ,

EARNINGS

Garnishee

 

 

THE STATE OF WASHINGTON TO:........................................

 

Garnishee

 

AND TO:......................................................................................

Defendant

 

        The above-named plaintiff has applied for a writ of

garnishment against you, claiming that the above-named

defendant is indebted to plaintiff and that the amount to be

held to satisfy that indebtedness is $ . . . . . ., consisting of:

 

 

Balance on Judgment or Amount of Claim

$ . . . .

 

Interest under Judgment from  . . . . to  . . . .

$ . . . .

 

Per Day Rate of Estimated Interest

$ . . . .

per day

 

Taxable Costs and Attorneys' Fees

$ . . . .

 

Estimated Garnishment Costs:

 

Filing and Ex Parte Fees

$ . . . .

 

Service and Affidavit Fees

$ . . . .

 

Postage and Costs of Certified Mail

$ . . . .

 

Answer Fee or Fees

$ . . . .

 

Garnishment Attorney Fee

$ . . . .

 

Other

$ . . . .

 

 

      THIS IS A WRIT FOR A CONTINUING LIEN.  THE GARNISHEE SHALL HOLD the nonexempt portion of the defendant's earnings due at the time of service of this writ and shall also hold the defendant's nonexempt earnings that accrue through the last payroll period ending on or before SIXTY days after the date of service of this writ.  HOWEVER, IF THE GARNISHEE IS PRESENTLY HOLDING THE NONEXEMPT PORTION OF THE DEFENDANT'S EARNINGS UNDER A PREVIOUSLY SERVED WRIT FOR A CONTINUING LIEN, THE GARNISHEE SHALL HOLD UNDER THIS WRIT only the defendant's nonexempt earnings that accrue from the date the previously served writ or writs terminate and through the last payroll period ending on or before sixty days after the date of termination of the previous writ or writs.  IN EITHER CASE, THE GARNISHEE SHALL STOP WITHHOLDING WHEN THE SUM WITHHELD EQUALS THE AMOUNT STATED IN THIS WRIT OF GARNISHMENT.

      YOU ARE HEREBY COMMANDED, unless otherwise directed by the court, by the attorney of record for the plaintiff, or by this writ, not to pay any debt, whether earnings subject to this garnishment or any other debt, owed to the defendant at the time this writ was served and not to deliver, sell, or transfer, or recognize any sale or transfer of, any personal property or effects of the defendant in your possession or control at the time when this writ was served.  Any such payment, delivery, sale, or transfer is void to the extent necessary to satisfy the plaintiff's claim and costs for this writ with interest.

      YOU ARE FURTHER COMMANDED to answer this writ according to the instructions in this writ and in the answer forms and, within twenty days after the service of the writ upon you, to mail or deliver the original of such answer to the court, one copy to the plaintiff or the plaintiff's attorney, and one copy to the defendant, at the addresses listed at the bottom of this writ.

      If, at the time this writ was served, you owed the defendant any earnings (that is, wages, salary, commission, bonus, tips, or other compensation for personal services or any periodic payments pursuant to a nongovernmental pension or retirement program), the defendant is entitled to receive amounts that are exempt from garnishment under federal and state law.  You must pay the exempt amounts to the defendant on the day you would customarily pay the compensation or other periodic payment.  As more fully explained in the answer, the basic exempt amount is the greater of seventy-five percent of disposable earnings or a minimum amount determined by reference to the employee's pay period, to be calculated as provided in the answer.  However, if this writ carries a statement in the heading that "This garnishment is based on a judgment or order for child support," the basic exempt amount is fifty percent of disposable earnings.

      YOU MAY DEDUCT A PROCESSING FEE FROM THE REMAINDER OF THE EMPLOYEE'S EARNINGS AFTER WITHHOLDING UNDER THIS WRIT.  THE PROCESSING FEE MAY NOT EXCEED TWENTY DOLLARS FOR THE FIRST ANSWER AND TEN DOLLARS AT THE TIME YOU SUBMIT THE SECOND ANSWER.

      If you owe the defendant a debt payable in money in excess of the amount set forth in the first paragraph of this writ, hold only the amount set forth in the first paragraph and any processing fee if one is charged and release all additional funds or property to defendant.

      IF YOU FAIL TO ANSWER THIS WRIT AS COMMANDED, A JUDGMENT MAY BE ENTERED AGAINST YOU FOR THE FULL AMOUNT OF THE PLAINTIFF'S CLAIM AGAINST THE DEFENDANT WITH ACCRUING INTEREST, ATTORNEY FEES, AND COSTS WHETHER OR NOT YOU OWE ANYTHING TO THE DEFENDANT.  IF YOU PROPERLY ANSWER THIS WRIT, ANY JUDGMENT AGAINST YOU WILL NOT EXCEED THE AMOUNT OF ANY NONEXEMPT DEBT OR THE VALUE OF ANY NONEXEMPT PROPERTY OR EFFECTS IN YOUR POSSESSION OR CONTROL.

      JUDGMENT MAY ALSO BE ENTERED AGAINST THE DEFENDANT FOR COSTS AND FEES INCURRED BY THE PLAINTIFF.

 

      Witness, the Honorable . . . . . . . ., Judge of the above-entitled Court, and the seal thereof, this . . . . day of . . . . . ., 20. . .

 

[Seal]

 

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

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

Attorney for

Plaintiff (or

Plaintiff, if no

attorney)

 

Clerk of

the Court

 

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

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

Address

By

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

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

Name of Defendant

Address"

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

 

Address of Defendant

 

 

      (2) If an attorney issues the writ of garnishment, the final paragraph of the writ, containing the date, and the subscripted attorney and clerk provisions, shall be replaced with text in substantially the following form:

      "This writ is issued by the undersigned attorney of record for plaintiff under the authority of chapter 6.27 of the Revised Code of Washington, and must be complied with in the same manner as a writ issued by the clerk of the court.

 

Dated this  . . . . . . . .day of . . . . . . . . . ., 20 . . . . . .

 

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

 

Attorney for Plaintiff

 

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

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

Address

Address of the Clerk of the

Court"

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

 

Name of Defendant

 

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

 

Address of Defendant

 

Sec. 5.  RCW 6.27.340 and 2003 c 222 s 13 are each amended to read as follows:

      (1) Service of a writ for a continuing lien shall comply fully with RCW 6.27.110.

      (2) ((The caption of the writ shall be marked "CONTINUING LIEN ON EARNINGS" and the following additional paragraph shall be included in the writ form prescribed in RCW 6.27.100:
"THIS IS A WRIT FOR A CONTINUING LIEN.  THE GARNISHEE SHALL HOLD the nonexempt portion of the defendant's earnings due at the time of service of this writ and shall also hold the defendant's nonexempt earnings that accrue through the last payroll period ending on or before SIXTY days after the date of service of this writ.  HOWEVER, IF THE GARNISHEE IS PRESENTLY HOLDING THE NONEXEMPT PORTION OF THE DEFENDANT'S EARNINGS UNDER A PREVIOUSLY SERVED WRIT FOR A CONTINUING LIEN, THE GARNISHEE SHALL HOLD UNDER THIS WRIT only the defendant's nonexempt earnings that accrue from the date the previously served writ or writs terminate and through the last payroll period ending on or before sixty days after the date of termination of the previous writ or writs.  IN EITHER CASE, THE GARNISHEE SHALL STOP WITHHOLDING WHEN THE SUM WITHHELD EQUALS THE AMOUNT STATED IN THIS WRIT OF GARNISHMENT."
      (3) The answer forms served on an employer with the writ shall include in the caption, "ANSWER TO WRIT OF GARNISHMENT FOR CONTINUING LIEN ON EARNINGS," and the following paragraph shall be added to section I of the answer form prescribed in RCW 6.27.190:
"If you are withholding the defendant's nonexempt earnings under a previously served writ for a continuing lien, answer only sections I and II of this form and mail or deliver the forms as directed in the writ.  Withhold from the defendant's future nonexempt earnings as directed in the writ, and a second set of answer forms will be forwarded to you later.
ANSWER:  I am presently holding the defendant's nonexempt earnings under a previous writ served on . . . . . . that will terminate not later than . . . . . ., 20 . . .

 

 

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

 

If you are NOT withholding the defendant's earnings under a previously served writ for a continuing lien, answer this entire form and mail or deliver the forms as directed in the writ.  A second set of answer forms will be forwarded to you later for subsequently withheld earnings.")) If the writ is directed to an employer for the purpose of garnishing the defendant's wages, the first answer shall accurately state, as of the date the writ of garnishment was issued as indicated by the date appearing on the last page of the writ, whether the defendant was employed by the garnishee defendant (and if not the date employment terminated), whether the defendant's earnings were subject to a preexisting writ of garnishment for continuing liens on earnings (and if so the date such writ will terminate and the current writ will be enforced), whether the defendant maintained a financial account with garnishee, and whether the garnishee defendant had possession of or control over any funds, personal property, or effects of the defendant (and if so the garnishee defendant shall list all of defendant's personal property or effects in its possession or control).  The first answer shall further accurately state, as of the time of service of the writ of garnishment on the garnishee defendant, the amount due and owing from the garnishee defendant to the defendant, and the defendant's total earnings, allowable deductions, disposable earnings, exempt earnings, deductions for superior liens such as child support, and net earnings withheld under the writ.  The first answer may be substantially in the following form:

 

IN THE  . . . . . COURT
OF THE STATE OF WASHINGTON IN AND FOR
THE COUNTY OF  . . . . . .

 

............................................. ,

NO.  . . . . .

Plaintiff,

 

vs.

FIRST ANSWER

............................................. ,

TO WRIT OF

Defendant,

GARNISHMENT

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

FOR CONTINUING LIEN

Garnishee Defendant

 

ON EARNINGS

 

SECTION I. If you are withholding the defendant's nonexempt earnings under a previously served writ for a continuing lien, answer only sections I and III of this form and mail or deliver the forms as directed in the writ.  Withhold from the defendant's future nonexempt earnings as directed in the writ, and a second set of answer forms will be forwarded to you later.

 

If you are NOT withholding the defendant's earnings under a previously served writ for a continuing lien, answer this ENTIRE form and mail or deliver the forms as directed in the writ.  A second set of answer forms will be forwarded to you later for subsequently withheld earnings.

 

ANSWER:  I am presently holding the defendant's nonexempt earnings under a previous writ served on . . . . . . that will terminate not later than . . . . ., 20 . . .

 

On the date the writ of garnishment was issued as indicated by the date appearing on the last page of the writ:

 

(A) The defendant:  (check one) [ ] was, [ ] was not employed by garnishee.  If not employed and you have no possession or control of any funds of defendant, indicate the last day of employment: . . . . . . .; and complete section III of this answer and mail or deliver the forms as directed in the writ;

 

(B) The defendant:  (check one) [ ] did, [ ] did not maintain a financial account with garnishee; and

 

(C) The garnishee:  (check one) [ ] did, [ ] did not have possession of or control over any funds, personal property, or effects of the defendant.  (List all of defendant's personal property or effects in your possession or control on the last page of this answer form or attach a schedule if necessary.)

 

SECTION II.  At the time of service of the writ of garnishment on the garnishee there was due and owing from the garnishee to the above-named defendant $ . . . . .

 

This writ attaches a maximum of . . . . percent of the defendant's disposable earnings (that is, compensation payable for personal services, whether called wages, salary, commission, bonus, or otherwise, and including periodic payments pursuant to a nongovernmental pension or retirement program).

 

Calculate the attachable amount as follows:

 

Gross Earnings           $ . . . . . . . .(1)

 

Less deductions required by law (social security,

 

federal withholding tax, etc.  Do not include

 

deductions for child support orders or government

 

liens here.  Deduct child support orders and liens

 

on line 7):                   $ . . . . . . . .(2)

 

Disposable Earnings (subtract line 2 from

 

line 1):  $ . . . . . . . .(3)

 

Enter . . . . percent of line 3:        $ . . . . . . . .(4)

 

Enter one of the following exempt amounts*:             $ . . . . . . . .(5)

 

        If paid:

Weekly

$ . . . . .

Semi-monthly

$ . . . . .

 

Bi-weekly

$ . . . . .

Monthly

$ . . . . .

 

 

*These are minimum exempt amounts that the

 

defendant must be paid.  If your answer

 

covers more than one pay period, multiply

 

the preceding amount by the number of pay

 

periods and/or fraction thereof your answer

 

covers.  If you use a pay period not shown,

 

prorate the monthly exempt amount.

 

Subtract the larger of lines 4 and 5 from

 

line 3:   $ . . . . . . . .(6)

 

Enter amount (if any) withheld for ongoing

 

government liens such as child support:      $ . . . . . . . .(7)

 

Subtract line 7 from line 6.  This amount

 

must be held out for the plaintiff: $ . . . . . . . .(8)

 

This is the formula that you will use for withholding each pay period over the required sixty day garnishment period.  Deduct any allowable processing fee you may charge from the amount that is to be paid to the defendant.

 

If there is any uncertainty about your answer, give an explanation on the last page or on an attached page.

 

SECTION III.  An attorney may answer for the garnishee.

 

Under penalty of perjury, I affirm that I have examined this answer, including accompanying schedules, and to the best of my knowledge and belief it is true, correct, and complete.

 

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

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

Signature of

Date

Garnishee Defendant

 

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

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

Signature of Person

Connection with

Answering for

Garnishee

Garnishee

 

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

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

Print Name of Person
Signing

................................................
Address of Garnishee

 

 

(3) Prior to serving the answer forms for a writ for continuing lien on earnings, the plaintiff shall fill in the minimum exemption amounts for the different pay periods, and the maximum percentages of disposable earnings subject to lien and exempt from lien.

      (4) In the event plaintiff fails to comply with this section, employer may elect to treat the garnishment as one not creating a continuing lien.

Sec. 6.  RCW 6.27.110 and 1998 c 227 s 4 are each amended to read as follows:

      (1) Service of the writ of garnishment, including a writ for continuing lien on earnings, on the garnishee is invalid unless the writ is served together with:  (a) ((Four)) An answer form((s)) as prescribed in RCW 6.27.190; and (b) ((three stamped envelopes addressed respectively to the clerk of the court issuing the writ, the attorney for the plaintiff (or to the plaintiff if the plaintiff has no attorney), and the defendant; and (c))) a check or money order made payable to the garnishee in the amount of twenty dollars for the answer fee if the writ of garnishment is not a writ for a continuing lien on earnings.

      (2) Except as provided in RCW 6.27.080 for service on a bank, savings and loan association, or credit union, the writ of garnishment shall be mailed to the garnishee by certified mail, return receipt requested, addressed in the same manner as a summons in a civil action, and will be binding upon the garnishee on the day set forth on the return receipt.  In the alternative, the writ shall be served by the sheriff of the county in which the garnishee lives or has its place of business or by any person qualified to serve process in the same manner as a summons in a civil action is served.

      (3) If a writ of garnishment is served by a sheriff, the sheriff shall file with the clerk of the court that issued the writ a signed return showing the time, place, and manner of service and that the writ was accompanied by an answer form((s, addressed envelopes)), and check or money order if required by this section, and noting thereon fees for making the service.  If service is made by any person other than a sheriff, such person shall file an affidavit including the same information and showing qualifications to make such service.  If a writ of garnishment is served by mail, the person making the mailing shall file an affidavit showing the time, place, and manner of mailing and that the writ was accompanied by an answer form((s and addressed envelopes)), and check or money order if required by this section, and shall attach the return receipt or electronic return receipt delivery confirmation to the affidavit.

Sec. 7.  RCW 6.27.140 and 2011 c 162 s 5 are each amended to read as follows:

      (1) The notice required by RCW 6.27.130(1) to be mailed to or served on an individual judgment debtor shall be in the following form, printed or typed in ((type)) no smaller than ((elite type)) size twelve point font type:

 

NOTICE OF GARNISHMENT

 

AND OF YOUR RIGHTS

A Writ of Garnishment issued in a Washington court has been or will be served on the garnishee named in the attached copy of the writ.  After receipt of the writ, the garnishee is required to withhold payment of any money that was due to you and to withhold any other property of yours that the garnishee held or controlled.  This notice of your rights is required by law.

 

YOU HAVE THE FOLLOWING EXEMPTION RIGHTS:

 

WAGES.  If the garnishee is your employer who owes wages or other personal earnings to you, your employer is required to pay amounts to you that are exempt under state and federal laws, as explained in the writ of garnishment.  You should receive a copy of your employer's answer, which will show how the exempt amount was calculated.  If the garnishment is for child support, the exempt amount paid to you will be ((forty)) a percent of ((wages due you, but if you are supporting a spouse, state registered domestic partner, or dependent child, you are entitled to claim an additional ten percent as exempt)) your disposable earnings, which is fifty percent of that part of your earnings remaining after your employer deducts those amounts which are required by law to be withheld.

 

 

BANK ACCOUNTS.  If the garnishee is a bank or other institution with which you have an account in which you have deposited benefits such as Temporary Assistance for Needy Families, Supplemental Security Income (SSI), Social Security, veterans' benefits, unemployment compensation, or ((a United States pension)) any federally qualified pension, such as a state or federal pension, individual retirement account (IRA), or 401K plan, you may claim the account as fully exempt if you have deposited only such benefit funds in the account.  It may be partially exempt even though you have deposited money from other sources in the same account.  An exemption is also available under RCW 26.16.200, providing that funds in a community bank account that can be identified as the earnings of a stepparent are exempt from a garnishment on the child support obligation of the parent.

 

OTHER EXEMPTIONS.  If the garnishee holds other property of yours, some or all of it may be exempt under RCW 6.15.010, a Washington statute that exempts certain property of your choice (including money in a bank account up to $200.00 for debts owed to state agencies, or up to $500.00 for all other debts) and certain other property such as household furnishings, tools of trade, and a motor vehicle (all limited by differing dollar values).

 

HOW TO CLAIM EXEMPTIONS.  Fill out the enclosed claim form and mail or deliver it as described in instructions on the claim form.  If the plaintiff does not object to your claim, the funds or other property that you have claimed as exempt must be released not later than 10 days after the plaintiff receives your claim form.  If the plaintiff objects, the law requires a hearing not later than 14 days after the plaintiff receives your claim form, and notice of the objection and hearing date will be mailed to you at the address that you put on the claim form.

 

THE LAW ALSO PROVIDES OTHER EXEMPTION RIGHTS.  IF NECESSARY, AN ATTORNEY CAN ASSIST YOU TO ASSERT THESE AND OTHER RIGHTS, BUT YOU MUST ACT IMMEDIATELY TO AVOID LOSS OF RIGHTS BY DELAY.

 

      (2)(a) If the writ is to garnish funds or property held by a financial institution, the claim form required by RCW 6.27.130(1) to be mailed to or served on an individual judgment debtor shall be in the following form, printed or typed in ((type)) no smaller than ((elite type)) size twelve point font type:

 

[Caption to be filled in by judgment creditor

or plaintiff before mailing.]

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

 

Name of Court

 

 

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

No . . . . . .

Plaintiff,

 

 

vs.

 

 

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

EXEMPTION CLAIM

Defendant,

 

 

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

 

Garnishee Defendant

 

 

INSTRUCTIONS:

 

1.

Read this whole form after reading the enclosed

notice.  Then put an X in the box or boxes that

describe your exemption claim or claims and write in

the necessary information on the blank lines.  If

additional space is needed, use the bottom of the last

page or attach another sheet.

 

2.

Make two copies of the completed form.  Deliver the

original form by first-class mail or in person to the

clerk of the court, whose address is shown at the

bottom of the writ of garnishment.  Deliver one of

the copies by first-class mail or in person to the

plaintiff or plaintiff's attorney, whose name and

address are shown at the bottom of the writ.  Keep

the other copy.  YOU SHOULD DO THIS AS

QUICKLY AS POSSIBLE, BUT NO LATER

THAN 28 DAYS (4 WEEKS) AFTER THE DATE

ON THE WRIT.

 

I/We claim the following money or property as exempt:

 

IF BANK ACCOUNT IS GARNISHED:

 

[  ] The account contains payments from:

 

[  ]

Temporary assistance for needy families, SSI, or

other public assistance.  I receive $ . . . . . monthly.

[  ]

Social Security.  I receive $ . . . . . monthly.

[  ]

Veterans' Benefits.  I receive $ . . . . . monthly.

[  ]

Pensions and retirement accounts including, but not
limited to, U.S. Government Pension, federally
qualified pension, individual retirement account
(IRA), 401K, 403(b), and any state retirement
system listed in RCW 41.50.030.  I receive $ . . . . .

monthly.

[  ]

Unemployment Compensation.  I receive $ . . . . .

monthly.

[  ]

Child support.  I receive $ . . . . . monthly.

[  ]

Other.  Explain ............................................................

 

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

 

[  ]

$200 exemption if debt is to state agency.

[  ]

$500 exemption for all other debts.

IF EXEMPTION IN BANK ACCOUNT IS CLAIMED,

ANSWER ONE OR BOTH OF THE FOLLOWING:

 

[  ]

No money other than from above payments are in

the account.

[  ]

Moneys in addition to the above payments have

been deposited in the account.  Explain .......................

 

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

 

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

 

((IF EARNINGS ARE GARNISHED FOR CHILD
SUPPORT:

 

[  ]

I claim maximum exemption.

[  ]

I am supporting another child or other children.

[  ]

I am supporting a husband, wife, or state registered
domestic partner.

 

IF PENSION OR RETIREMENT BENEFITS ARE
GARNISHED:

 

[  ]

Name and address of employer who is paying the
benefits:  .........................................................................

 

....................................................................................... ))

 

OTHER PROPERTY:

 

[  ]

Describe property ............................................................

 

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

 

(If you claim other personal property as exempt, you

must attach a list of all other personal property that

you own.)

 

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

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

 

Print:  Your name

If married or in a state

registered domestic

partnership,

 

name of husband/wife/state

registered domestic partner

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

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

 

Your signature

Signature of husband,

 

wife, or state registered

domestic partner

 

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

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

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

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

 

Address

Address

 

(if different from yours)

 

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

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

 

Telephone number

Telephone number

 

(if different from yours)

 

      CAUTION:  If the plaintiff objects to your claim, you will have to go to court and give proof of your claim.  For example, if you claim that a bank account is exempt, you may have to show the judge your bank statements and papers that show the source of the money you deposited in the bank.  Your claim may be granted more quickly if you attach copies of such proof to your claim.

 

IF THE JUDGE DENIES YOUR EXEMPTION CLAIM, YOU WILL HAVE TO PAY THE PLAINTIFF'S COSTS.  IF THE JUDGE DECIDES THAT YOU DID NOT MAKE THE CLAIM IN GOOD FAITH, HE OR SHE MAY DECIDE THAT YOU MUST PAY THE PLAINTIFF'S ATTORNEY FEES.

(b) If the writ is directed to an employer to garnish earnings, the claim form required by RCW 6.27.130(1) to be mailed to or served on an individual judgment debtor shall be in the following form, subject to (c) of this subsection, printed or typed in no smaller than size twelve point font type:

 

[Caption to be filled in by judgment creditor
or plaintiff before mailing.]

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

 

Name of Court

 

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

No . . . . . .

Plaintiff,

 

vs.

 

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

EXEMPTION CLAIM

Defendant,

 

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

 

Garnishee Defendant

 

INSTRUCTIONS:

1.

Read this whole form after reading the enclosed
notice.  Then put an X in the box or boxes that
describe your exemption claim or claims and write in
the necessary information on the blank lines.  If
additional space is needed, use the bottom of the last
page or attach another sheet.

2.

Make two copies of the completed form.  Deliver the
original form by first-class mail or in person to the
clerk of the court, whose address is shown at the
bottom of the writ of garnishment.  Deliver one of
the copies by first-class mail or in person to the
plaintiff or plaintiff's attorney, whose name and
address are shown at the bottom of the writ.  Keep
the other copy.  YOU SHOULD DO THIS AS
QUICKLY AS POSSIBLE, BUT NO LATER
THAN 28 DAYS (4 WEEKS) AFTER THE DATE
ON THE WRIT.

I/We claim the following money or property as exempt:






IF PENSION OR RETIREMENT BENEFITS ARE
GARNISHED:

[  ]

Name and address of employer who is paying the
benefits:.............................................................................

 

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

IF EARNINGS ARE GARNISHED FOR CHILD
SUPPORT:

[  ]

I claim maximum exemption.

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

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

 

Print:  Your name

If married or in a state
registered domestic
partnership,

 

name of husband/wife/state
registered domestic partner

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

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

 

Your signature

Signature of husband,

 

wife, or state registered
domestic partner

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

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

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

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

 

Address

Address

 

(if different from yours)

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

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

 

Telephone number

Telephone number

 

(if different from yours)

 

 

CAUTION:  If the plaintiff objects to your claim, you will have to go to court and give proof of your claim.  For example, if you claim that a bank account is exempt, you may have to show the judge your bank statements and papers that show the source of the money you deposited in the bank.  Your claim may be granted more quickly if you attach copies of such proof to your claim.
IF THE JUDGE DENIES YOUR EXEMPTION CLAIM, YOU WILL HAVE TO PAY THE PLAINTIFF'S COSTS.  IF THE JUDGE DECIDES THAT YOU DID NOT MAKE THE CLAIM IN GOOD FAITH, HE OR SHE MAY DECIDE THAT YOU MUST PAY THE PLAINTIFF'S ATTORNEY FEES.
      (c) If the writ under (b) of this subsection is not a writ for the collection of child support, the exemption language pertaining to child support may be omitted.

Sec. 8.  RCW 6.27.140 and 2011 c 162 s 6 are each amended to read as follows:

      (1) The notice required by RCW 6.27.130(1) to be mailed to or served on an individual judgment debtor shall be in the following form, printed or typed in ((type)) no smaller than ((elite type)) size twelve point font:

 

                                                   NOTICE OF GARNISHMENT
                                                                   AND OF YOUR RIGHTS

 

A Writ of Garnishment issued in a Washington court has been or will be served on the garnishee named in the attached copy of the writ.  After receipt of the writ, the garnishee is required to withhold payment of any money that was due to you and to withhold any other property of yours that the garnishee held or controlled.  This notice of your rights is required by law.

 

YOU HAVE THE FOLLOWING EXEMPTION RIGHTS:

 

WAGES.  If the garnishee is your employer who owes wages or other personal earnings to you, your employer is required to pay amounts to you that are exempt under state and federal laws, as explained in the writ of garnishment.  You should receive a copy of your employer's answer, which will show how the exempt amount was calculated.  If the garnishment is for child support, the exempt amount paid to you will be ((forty)) a percent of ((wages due you, but if you are supporting a spouse, state registered domestic partner, or dependent child, you are entitled to claim an additional ten percent as exempt)) your disposable earnings, which is fifty percent of that part of your earnings remaining after your employer deducts those amounts which are required by law to be withheld.

 

BANK ACCOUNTS.  If the garnishee is a bank or other institution with which you have an account in which you have deposited benefits such as Temporary Assistance for Needy Families, Supplemental Security Income (SSI), Social Security, veterans' benefits, unemployment compensation, or ((a United States pension)) any federally qualified pension, such as a state or federal pension, individual retirement account (IRA), or 401K plan, you may claim the account as fully exempt if you have deposited only such benefit funds in the account.  It may be partially exempt even though you have deposited money from other sources in the same account.  An exemption is also available under RCW 26.16.200, providing that funds in a community bank account that can be identified as the earnings of a stepparent are exempt from a garnishment on the child support obligation of the parent.

 

OTHER EXEMPTIONS.  If the garnishee holds other property of yours, some or all of it may be exempt under RCW 6.15.010, a Washington statute that exempts certain property of your choice (including up to $500.00 in a bank account) and certain other property such as household furnishings, tools of trade, and a motor vehicle (all limited by differing dollar values).

 

HOW TO CLAIM EXEMPTIONS.  Fill out the enclosed claim form and mail or deliver it as described in instructions on the claim form.  If the plaintiff does not object to your claim, the funds or other property that you have claimed as exempt must be released not later than 10 days after the plaintiff receives your claim form.  If the plaintiff objects, the law requires a hearing not later than 14 days after the plaintiff receives your claim form, and notice of the objection and hearing date will be mailed to you at the address that you put on the claim form.

 

THE LAW ALSO PROVIDES OTHER EXEMPTION RIGHTS.  IF NECESSARY, AN ATTORNEY CAN ASSIST YOU TO ASSERT THESE AND OTHER RIGHTS, BUT YOU MUST ACT IMMEDIATELY TO AVOID LOSS OF RIGHTS BY DELAY.

 

      (2)(a) If the writ is to garnish funds or property held by a financial institution, the claim form required by RCW 6.27.130(1) to be mailed to or served on an individual judgment debtor shall be in the following form, printed or typed in ((type)) no smaller than ((elite type)) size twelve point font:

 

[Caption to be filled in by judgment creditor

or plaintiff before mailing.]

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

 

Name of Court

 

 

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

No . . . . . .

Plaintiff,

 

 

vs.

 

 

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

EXEMPTION CLAIM

Defendant,

 

 

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

 

Garnishee Defendant

 

 

INSTRUCTIONS:

 

1.

Read this whole form after reading the enclosed

notice.  Then put an X in the box or boxes that

describe your exemption claim or claims and write in

the necessary information on the blank lines.  If

additional space is needed, use the bottom of the last

page or attach another sheet.

 

2.

Make two copies of the completed form.  Deliver the

original form by first-class mail or in person to the

clerk of the court, whose address is shown at the

bottom of the writ of garnishment.  Deliver one of

the copies by first-class mail or in person to the

plaintiff or plaintiff's attorney, whose name and

address are shown at the bottom of the writ.  Keep

the other copy.  YOU SHOULD DO THIS AS

QUICKLY AS POSSIBLE, BUT NO LATER

THAN 28 DAYS (4 WEEKS) AFTER THE DATE

ON THE WRIT.

 

I/We claim the following money or property as exempt:

 

IF BANK ACCOUNT IS GARNISHED:

 

[  ] The account contains payments from:

 

[  ]

Temporary assistance for needy families, SSI, or

other public assistance.  I receive $ . . . . . monthly.

[  ]

Social Security.  I receive $ . . . . . monthly.

[  ]

Veterans' Benefits.  I receive $ . . . . . monthly.

[  ]

((U.S. Government Pension.)) Federally qualified
pension, such as a state or federal pension,
individual retirement account (IRA), or 401K plan.

I receive $ . . . . . monthly.

[  ]

Unemployment Compensation.  I receive $ . . . . .

monthly.

[  ]

Child support.  I receive $ . . . . . monthly.

[  ]

Other.  Explain ............................................................

 

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

 

IF EXEMPTION IN BANK ACCOUNT IS CLAIMED,

ANSWER ONE OR BOTH OF THE FOLLOWING:

 

[  ]

No money other than from above payments are in

the account.

[  ]

Moneys in addition to the above payments have

been deposited in the account.  Explain .......................

 

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

 

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

 

((IF EARNINGS ARE GARNISHED FOR CHILD
SUPPORT:

 

[  ]

I claim maximum exemption.

[  ]

I am supporting another child or other children.

[  ]

I am supporting a husband, wife, or state registered
domestic partner.

 

IF PENSION OR RETIREMENT BENEFITS ARE
GARNISHED:

 

[  ]

Name and address of employer who is paying the
benefits:  .........................................................................

 

....................................................................................... ))

 

OTHER PROPERTY:

 

[  ]

Describe property ............................................................

 

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

 

(If you claim other personal property as exempt, you

must attach a list of all other personal property that

you own.)

 

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

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

 

Print:  Your name

If married or in a state

registered domestic

partnership,

 

name of husband/wife/state

registered domestic partner

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

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

 

Your signature

Signature of husband,

 

wife, or state registered

domestic partner

 

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

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

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

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

 

Address

Address

 

(if different from yours)

 

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

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

 

Telephone number

Telephone number

 

(if different from yours)

 

      CAUTION:  If the plaintiff objects to your claim, you will have to go to court and give proof of your claim.  For example, if you claim that a bank account is exempt, you may have to show the judge your bank statements and papers that show the source of the money you deposited in the bank.  Your claim may be granted more quickly if you attach copies of such proof to your claim.

 

IF THE JUDGE DENIES YOUR EXEMPTION CLAIM, YOU WILL HAVE TO PAY THE PLAINTIFF'S COSTS.  IF THE JUDGE DECIDES THAT YOU DID NOT MAKE THE CLAIM IN GOOD FAITH, HE OR SHE MAY DECIDE THAT YOU MUST PAY THE PLAINTIFF'S ATTORNEY FEES.

(b) If the writ is directed to an employer to garnish earnings, the claim form required by RCW 6.27.130(1) to be mailed to or served on an individual judgment debtor shall be in the following form, subject to (c) of this subsection, printed or typed in no smaller than size twelve point font type:

 

[Caption to be filled in by judgment creditor
or plaintiff before mailing.]

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

 

Name of Court

 

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

No . . . . . .

Plaintiff,

 

vs.

 

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

EXEMPTION CLAIM

Defendant,

 

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

 

Garnishee Defendant

 

INSTRUCTIONS:

1.

Read this whole form after reading the enclosed
notice.  Then put an X in the box or boxes that
describe your exemption claim or claims and write in
the necessary information on the blank lines.  If
additional space is needed, use the bottom of the last
page or attach another sheet.

2.

Make two copies of the completed form.  Deliver the
original form by first-class mail or in person to the
clerk of the court, whose address is shown at the
bottom of the writ of garnishment.  Deliver one of
the copies by first-class mail or in person to the
plaintiff or plaintiff's attorney, whose name and
address are shown at the bottom of the writ.  Keep
the other copy.  YOU SHOULD DO THIS AS
QUICKLY AS POSSIBLE, BUT NO LATER
THAN 28 DAYS (4 WEEKS) AFTER THE DATE
ON THE WRIT.

I/We claim the following money or property as exempt:






IF PENSION OR RETIREMENT BENEFITS ARE
GARNISHED:

[  ]

Name and address of employer who is paying the
benefits:.............................................................................

 

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

IF EARNINGS ARE GARNISHED FOR CHILD
SUPPORT:

[  ]

I claim maximum exemption.

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

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

 

Print:  Your name

If married or in a state
registered domestic
partnership,

 

name of husband/wife/state
registered domestic partner

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

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

 

Your signature

Signature of husband,

 

wife, or state registered
domestic partner

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

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

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

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

 

Address

Address

 

(if different from yours)

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

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

 

Telephone number

Telephone number

 

(if different from yours)

 

CAUTION:  If the plaintiff objects to your claim, you will have to go to court and give proof of your claim.  For example, if you claim that a bank account is exempt, you may have to show the judge your bank statements and papers that show the source of the money you deposited in the bank.  Your claim may be granted more quickly if you attach copies of such proof to your claim.
IF THE JUDGE DENIES YOUR EXEMPTION CLAIM, YOU WILL HAVE TO PAY THE PLAINTIFF'S COSTS.  IF THE JUDGE DECIDES THAT YOU DID NOT MAKE THE CLAIM IN GOOD FAITH, HE OR SHE MAY DECIDE THAT YOU MUST PAY THE PLAINTIFF'S ATTORNEY FEES.
      (c) If the writ under (b) of this subsection is not a writ for the collection of child support, the exemption language pertaining to child support may be omitted.

Sec. 9.  RCW 6.27.150 and 1991 c 365 s 26 are each amended to read as follows:

      (1) Except as provided in subsection (2) of this section, if the garnishee is an employer owing the defendant earnings, then for each week of such earnings, an amount shall be exempt from garnishment which is the greatest of the following:

      (a) Thirty-five times the federal minimum hourly wage ((prescribed by section 206(a)(1) of Title 29 of the United States Code)) in effect at the time the earnings are payable; or

      (b) Seventy-five percent of the disposable earnings of the defendant.

      (2) In the case of a garnishment based on a judgment or other ((court)) order for child support or court order for spousal maintenance, other than a mandatory wage assignment order pursuant to chapter 26.18 RCW, or a mandatory assignment of retirement benefits pursuant to chapter 41.50 RCW, the exemption shall be fifty percent of the disposable earnings of the defendant ((if the individual is supporting a spouse or dependent child (other than a spouse or child on whose behalf the garnishment is brought), or forty percent of the disposable earnings of the defendant if the individual is not supporting such a spouse or dependent child)).

      (3) The exemptions stated in this section shall apply whether such earnings are paid, or are to be paid, weekly, monthly, or at other intervals, and whether earnings are due the defendant for one week, a portion thereof, or for a longer period.

      (4) Unless directed otherwise by the court, the garnishee shall determine and deduct exempt amounts under this section as directed in the writ of garnishment and answer, and shall pay these amounts to the defendant.

      (5) No money due or earned as earnings as defined in RCW 6.27.010 shall be exempt from garnishment under the provisions of RCW 6.15.010, as now or hereafter amended.

Sec. 10.  RCW 6.27.190 and 2003 c 222 s 8 are each amended to read as follows:

(1) The answer of the garnishee shall be signed by the garnishee or attorney or if the garnishee is a corporation, by an officer, attorney or duly authorized agent of the garnishee, under penalty of perjury, and the original and copies delivered, either personally or by mail, ((to the clerk of the court, one copy to the plaintiff or the plaintiff's attorney, and one copy to the defendant.  The answer shall be made on a form substantially as appears in this section, served on the garnishee with the writ.  Prior to serving the answer forms for a writ for continuing lien on earnings, the plaintiff shall fill in the minimum exemption amounts for the different pay periods, and the maximum percentages of disposable earnings subject to lien and exempt from lien)) as instructed in the writ.

(2) If the writ of garnishment is for a continuing lien, the answer forms shall be as prescribed in RCW 6.27.340 and 6.27.350.

(3) If the writ is not directed to an employer for the purpose of garnishing the defendant's wages, the ((paragraphs in section II of the answer relating to earnings and calculations of withheld amounts may be omitted.)) answer shall be substantially in the following form:

 

IN THE  . . . . . COURT

OF THE STATE OF WASHINGTON IN AND FOR

THE COUNTY OF  . . . . . .

 

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

NO.  . . . . .

Plaintiff

 

vs.

ANSWER

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

TO WRIT OF

Defendant

GARNISHMENT

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

 

Garnishee Defendant

 

 

      SECTION I.  On the date the writ of garnishment was issued as indicated by the date appearing on the last page of the writ:

(A) The defendant:  (check one) . . . . was, . . . . was not employed by garnishee.  If not employed and you have no possession or control of any funds of defendant, indicate the last day of employment: . . . . . . .; and complete section III of this answer and mail or deliver the forms as directed in the writ;

(B) The defendant:  (check one) . . . . did, . . . . did not maintain a financial account with garnishee; and

(C) The garnishee:  (check one) . . . . did, . . . . did not have possession of or control over any funds, personal property, or effects of the defendant.  (List all of defendant's personal property or effects in your possession or control on the last page of this answer form or attach a schedule if necessary.)

 

      SECTION II.  At the time of service of the writ of garnishment on the garnishee there was due and owing from the garnishee to the above-named defendant $ . . . . .

      ((This writ attaches a maximum of . . . . percent of the defendant's disposable earnings (that is, compensation payable for personal services, whether called wages, salary, commission, bonus, or otherwise, and including periodic payments pursuant to a nongovernmental pension or retirement program).  Calculate the attachable amount as follows:
Gross Earnings           $ . . . . . . . .(1)
Less deductions required by law (social security,
federal withholding tax, etc.  Do not include
deductions for child support orders or government
liens here.  Deduct child support orders and liens
on line 7):                   $ . . . . . . . .(2)
Disposable Earnings (subtract line 2 from
line 1):  $ . . . . . . . .(3)
Enter . . . . percent of line 3:        $ . . . . . . . .(4)
Enter one of the following exempt amounts*:             $ . . . . . . . .(5)

 

If paid:

Weekly

$ . . . . .

Semi-monthly

$ . . . . .

 

Bi-weekly

$ . . . . .

Monthly

$ . . . . .

*These are minimum exempt amounts that the
defendant must be paid.  If your answer
covers more than one pay period, multiply
the preceding amount by the number of pay
periods and/or fraction thereof your answer
covers.  If you use a pay period not shown,
prorate the monthly exempt amount.
Subtract the larger of lines 4 and 5 from
line 3:   $ . . . . . . . .(6)
Enter amount (if any) withheld for ongoing
government liens such as child support:      $ . . . . . . . .(7)
Subtract line 7 from line 6.  This amount
must be held out for the plaintiff: $ . . . . . . . .(8)
This is the formula that you will use for withholding each pay period over the required sixty-day garnishment period.  Deduct any allowable processing fee you may charge from the amount that is to be paid to the defendant.))

 

      If there is any uncertainty about your answer, give an explanation on the last page or on an attached page.

 

      SECTION III.  An attorney may answer for the garnishee.

      Under penalty of perjury, I affirm that I have examined this answer, including accompanying schedules, and to the best of my knowledge and belief it is true, correct, and complete.

 

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

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

Signature of

Date

Garnishee Defendant

 

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

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

Signature of person

Connection with

answering for

garnishee

garnishee

 

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

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

Print name of person

signing

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

Address of garnishee

Sec. 11.  RCW 6.27.200 and 2003 c 222 s 9 are each amended to read as follows:

      If the garnishee fails to answer the writ within the time prescribed in the writ, after the time to answer the writ has expired and after required returns or affidavits have been filed, showing service on the garnishee and service on or mailing to the defendant, it shall be lawful for the court to render judgment by default against such garnishee, after providing a notice to the garnishee by personal service or first-class mail deposited in the mail at least ten calendar days prior to entry of the judgment, for the full amount claimed by the plaintiff against the defendant, or in case the plaintiff has a judgment against the defendant, for the full amount of the plaintiff's unpaid judgment against the defendant with all accruing interest and costs as prescribed in RCW 6.27.090:  PROVIDED, That upon motion by the garnishee at any time within seven days following service on, or mailing to, the garnishee of a copy of the first writ of execution or writ of garnishment under such judgment, the judgment against the garnishee shall be reduced to the amount of any nonexempt funds or property which was actually in the possession of the garnishee at the time the writ was served, plus the cumulative amount of the nonexempt earnings subject to the lien provided for in RCW 6.27.350, or the sum of one hundred dollars, whichever is more, but in no event to exceed the full amount claimed by the plaintiff or the amount of the unpaid judgment against the principal defendant ((plus)) with all accruing interest and costs and attorney's fees as prescribed in RCW 6.27.090, plus the accruing interest and costs and attorneys' fees as prescribed in RCW 6.27.090 for any garnishment on the judgment against the garnishee, and in addition the plaintiff shall be entitled to a reasonable attorney's fee for the plaintiff's response to the garnishee's motion to reduce said judgment against the garnishee under this proviso and the court may allow additional attorney's fees for other actions taken because of the garnishee's failure to answer.

Sec. 12.  RCW 6.27.250 and 2003 c 222 s 10 are each amended to read as follows:

      (1)(a) If it appears from the answer of the garnishee or if it is otherwise made to appear that the garnishee was indebted to the defendant in any amount, not exempt, when the writ of garnishment was served, and if the required return or affidavit showing service on or mailing to the defendant is on file, the court shall render judgment for the plaintiff against such garnishee for the amount so admitted or found to be due to the defendant from the garnishee, unless such amount exceeds the amount of the plaintiff's claim or judgment against the defendant with accruing interest and costs and attorney's fees as prescribed in RCW 6.27.090, in which case it shall be for the amount of such claim or judgment, with said interest, costs, and fees.  If there is no unresolved exemption claim and no controversion, the plaintiff may apply for the judgment and order to pay ex parte.  In the case of a superior court garnishment, the court shall order the garnishee to pay to the plaintiff or to the plaintiff's attorney through the registry of the court the amount of the judgment against the garnishee, the clerk of the court shall note receipt of any such payment, and the clerk of the court shall disburse the payment to the plaintiff.  In the case of a district court garnishment, the court shall order the garnishee to pay the judgment amount directly to the plaintiff or to the plaintiff's attorney.  In either case, the court shall inform the garnishee that failure to pay the amount may result in execution of the judgment, including garnishment.

      (b) If, prior to judgment, the garnishee tenders to the plaintiff or to the plaintiff's attorney or to the court any amounts due, such tender will support judgment against the garnishee in the amount so tendered, subject to any exemption claimed within the time required in RCW 6.27.160 after the amounts are tendered, and subject to any controversion filed within the time required in RCW 6.27.210 after the amounts are tendered.  Any amounts tendered to the court by or on behalf of the garnishee or the defendant prior to judgment shall be disbursed to the party entitled to same upon entry of judgment or order, and any amounts so tendered after entry of judgment or order shall be disbursed upon receipt to the party entitled to same.

      (2) If it shall appear from the answer of the garnishee and the same is not controverted, or if it shall appear from the hearing or trial on controversion or by stipulation of the parties that the garnishee is indebted to the principal defendant in any sum, but that such indebtedness is not matured and is not due and payable, and if the required return or affidavit showing service on or mailing to the defendant is on file, the court shall make an order requiring the garnishee to pay such sum into court when the same becomes due, the date when such payment is to be made to be specified in the order, and in default thereof that judgment shall be entered against the garnishee for the amount of such indebtedness so admitted or found due.  In case the garnishee pays the sum at the time specified in the order, the payment shall operate as a discharge, otherwise judgment shall be entered against the garnishee for the amount of such indebtedness, which judgment shall have the same force and effect, and be enforced in the same manner as other judgments entered against garnishees as provided in this chapter:  PROVIDED, That if judgment is rendered in favor of the principal defendant, or if any judgment rendered against the principal defendant is satisfied prior to the date of payment specified in an order of payment entered under this subsection, the garnishee shall not be required to make the payment, nor shall any judgment in such case be entered against the garnishee.

      (3) The court shall, upon request of the plaintiff at the time judgment is rendered against the garnishee or within one year thereafter, or within one year after service of the writ on the garnishee if no judgment is taken against the garnishee, render judgment against the defendant for recoverable garnishment costs and attorney fees.  However, if it appears from the answer of garnishee or otherwise that, at the time the writ was issued, the garnishee held no funds, personal property, or effects of the defendant and, in the case of a garnishment on earnings, the defendant was not employed by the garnishee, or, in the case of a writ directed to a financial institution, the defendant maintained no account therein, then the plaintiff may not be awarded judgment against the defendant for such costs or attorney fees.

Sec. 13.  RCW 6.27.330 and 1987 c 442 s 1032 are each amended to read as follows:

      A judgment creditor may obtain a continuing lien on earnings by a garnishment pursuant to ((RCW 6.27.340, 6.27.350, 6.27.360, and 7.33.390)) this chapter.

Sec. 14.  RCW 6.27.350 and 2003 c 222 s 14 are each amended to read as follows:

      (1) Where the garnishee's answer to a garnishment for a continuing lien reflects that the defendant is employed by the garnishee, the judgment or balance due thereon as reflected on the writ of garnishment shall become a lien on earnings due at the time of the effective date of the writ, as defined in this subsection, to the extent that they are not exempt from garnishment, and such lien shall continue as to subsequent nonexempt earnings until the total subject to the lien equals the amount stated on the writ of garnishment or until the expiration of the employer's payroll period ending on or before sixty days after the effective date of the writ, whichever occurs first, except that such lien on subsequent earnings shall terminate sooner if the employment relationship is terminated or if the underlying judgment is vacated, modified, or satisfied in full or if the writ is dismissed.  The "effective date" of a writ is the date of service of the writ if there is no previously served writ; otherwise, it is the date of termination of a previously served writ or writs.

      (2) At the time of the expected termination of the lien, the plaintiff shall mail to the garnishee ((three additional stamped envelopes addressed as provided in RCW 6.27.110, and four additional copies)) one copy of the answer form prescribed in RCW ((6.27.190)) 6.27.340.  The plaintiff shall replace the text of section I of the answer form with a statement in substantially the following form:  "ANSWER SECTION II OF THIS FORM WITH RESPECT TO THE TOTAL AMOUNT OF EARNINGS WITHHELD UNDER THIS GARNISHMENT, INCLUDING THE AMOUNT, IF ANY, STATED IN YOUR FIRST ANSWER, AND WITHIN TWENTY DAYS AFTER YOU RECEIVE THESE FORMS, MAIL OR DELIVER THEM AS DIRECTED IN THE WRIT."

 

Nonexempt amount due and owing stated in first

answer

$ . . .

Nonexempt amount accrued since first answer

$ . . .

TOTAL AMOUNT WITHHELD

$

 

      (3) Within twenty days of receipt of the second answer form the garnishee shall file a second answer, either in the form as provided in subsection (2) of this section, stating the total amount held subject to the garnishment, or otherwise containing the information required in subsection (2) of this section and a calculation indicating the total amount due and owing from the garnishee defendant to the defendant, the defendant's total earnings, allowable deductions, disposable earnings, exempt earnings, deductions for superior liens such as child support, and net earnings withheld under the writ.

Sec. 15.  RCW 6.27.360 and 1997 c 296 s 8 are each amended to read as follows:

      (1) Except as provided in subsection (((2))) (3) of this section, a lien obtained under RCW 6.27.350 shall have priority over any subsequent garnishment lien or wage assignment except that service of a writ shall not be effective to create a continuing lien with such priority if a writ in the same case is pending at the time of the service of the new writ.

      (2) A lien obtained under RCW 6.27.350 shall have priority over any prior wage assignment, except an assignment for child support as provided in subsection (3) of this section and an assignment for legal financial obligations as provided under RCW 9.94A.760, 9.94A.7702, and 72.09.111.
      (3) A lien obtained under RCW 6.27.350 shall not have priority over a notice of payroll deduction issued under RCW 26.23.060 or a wage assignment or other garnishment for child support issued under chapters 26.18 and 74.20A RCW.  Should nonexempt wages remain after deduction of all amounts owing under a notice of payroll deduction, wage assignment, or garnishment for child support, the garnishee shall withhold the remaining nonexempt wages under the lien obtained under RCW 6.27.350.

Sec. 16.  RCW 6.27.370 and 1997 c 296 s 9 are each amended to read as follows:

      (1) Whenever the federal government is named as a garnishee defendant, the attorney for the plaintiff, or the clerk of the court shall, upon submitting a notice in the appropriate form by the plaintiff, issue a notice which directs the garnishee defendant to disburse any nonexempt earnings to the court in accordance with the garnishee defendant's normal pay and disbursement cycle.

      (2) Funds received by the clerk from a garnishee defendant may be deposited into the registry of the court or, in the case of negotiable instruments, may be retained in the court file.  Upon presentation of an order directing the clerk to disburse the funds received, the clerk shall pay or endorse the funds over to the party entitled to receive the funds.  Except for good cause shown, the funds shall not be paid or endorsed to the plaintiff prior to the expiration of any minimum statutory period allowed to the defendant for filing an exemption claim.

      (3) The plaintiff shall, in the same manner permitted for service of the writ of garnishment, provide to the garnishee defendant a copy of the notice issued ((by the clerk and an envelope addressed to the court)) under subsection (1) of this section, and shall supply to the garnished party a copy of the notice.

      (4) Any answer or processing fees charged by the garnishee defendant to the plaintiff under federal law shall be a recoverable cost under RCW 6.27.090.

      (5) The notice to the federal government garnishee shall be in substantially the following form:

 

IN THE  . . . . . . COURT OF THE STATE OF

WASHINGTON

 

IN AND FOR  . . . . . . COUNTY

 

....................................... ,

NO . . . . . .

Plaintiff,

NOTICE TO FEDERAL

vs.

GOVERNMENT GARNISHEE

 

DEFENDANT

 

....................................... ,

 

Defendant,

 

 

....................................... ,

 

Garnishee Defendant.

 

 

TO:  THE GOVERNMENT OF THE UNITED STATES

AND ANY DEPARTMENT, AGENCY, OR DIVISION

THEREOF

 

You have been named as the garnishee defendant in the

above-entitled cause.  A Writ of Garnishment accompanies

this Notice.  The Writ of Garnishment directs you to hold

the nonexempt earnings of the named defendant, but does

not instruct you to disburse the funds you hold.

 

BY THIS NOTICE THE COURT DIRECTS YOU TO

WITHHOLD ALL NONEXEMPT EARNINGS AND

DISBURSE THEM IN ACCORDANCE WITH YOUR

NORMAL PAY AND DISBURSEMENT CYCLE, TO

THE FOLLOWING:

 

 

 . . . . . . County  . . . . . . Court Clerk

 

Cause No . . . . . . .

 

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

 

 

(Address)

 

 

PLEASE REFERENCE THE DEFENDANT

EMPLOYEE'S NAME AND THE ABOVE CAUSE

NUMBER ON ALL DISBURSEMENTS.

 

The enclosed Writ also directs you to respond to the Writ

within twenty (20) days, but you are allowed thirty (30)

days to respond under federal law.

 

DATED this  . . . . day of  . . . . . ., ((19)) 20 . . .

 

 

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

 

Clerk of the Court

 

(6) If the writ of garnishment is issued by the attorney of record for the judgment creditor, the following paragraph shall replace the clerk's signature and date:
This notice is issued by the undersigned attorney of record for plaintiff under the authority of RCW 6.27.370, and must be complied with in the same manner as a notice issued by the court.

 

Dated this  . . . . . . . .day of . . . . . . . . . ., 20 . . . . . .

 

 

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

 

Attorney for Plaintiff

Sec. 17.  RCW 2.10.180 and 1991 c 365 s 18 are each amended to read as follows:

      (1) Except as provided in subsections (2), (3), and (4) of this section, the right of a person to a retirement allowance, disability allowance, or death benefit, the retirement, disability or death allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter, are hereby exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, or any other process of law whatsoever whether the same be in actual possession of the person or be deposited or loaned.

      (2) Subsection (1) of 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.

      (3) Deductions made in the past from retirement benefits are hereby expressly recognized, ratified, and affirmed.  Future deductions may only be made in accordance with this section.

      (4) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) a notice of payroll deduction issued under chapter 26.23 RCW, (c) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (d) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, (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.

Sec. 18.  RCW 2.12.090 and 1991 c 365 s 19 are each amended to read as follows:

      (1) Except as provided in subsections (2), (3), and (4) of this section, the right of any person to a retirement allowance or optional retirement allowance under the provisions of this chapter and all moneys and investments and income thereof are exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other processes of law whatsoever whether the same be in actual possession of the person or be deposited or loaned and shall be unassignable except as herein specifically provided.

      (2) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) a notice of payroll deduction issued under chapter 26.23 RCW, (c) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (d) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, (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.

      (3) Subsection (1) of 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.

      (4) Deductions made in the past from retirement benefits are hereby expressly recognized, ratified, and affirmed.  Future deductions may only be made in accordance with this section.

Sec. 19.  RCW 41.20.180 and 1979 ex.s. c 205 s 2 are each amended to read as follows:

      The right of a person to a pension, an annuity, or retirement allowance, or disability allowance, or death benefits, or any optional benefit, or any other right accrued or accruing to any person under the provisions of this chapter, and any fund created hereby, and all moneys and investments and income thereof, are 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, whether the same be in actual possession of the person or be deposited or loaned and shall be unassignable:  PROVIDED, That benefits under this chapter shall be payable to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation or in any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation.

Sec. 20.  RCW 41.32.052 and 1991 c 365 s 21 and 1991 c 35 s 63 are each reenacted and 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, or disability allowance, to the return of contributions, any optional benefit or death benefit, any other right accrued or accruing to any person under the provisions of this chapter and the moneys in the various funds created by this chapter shall be unassignable, and 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 whether the same be in actual possession of the person or be deposited or loaned.

      (2) This section shall not be deemed to prohibit a beneficiary of a retirement allowance who is eligible:

      (a) Under RCW 41.05.080 from authorizing monthly 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;

      (b) Under a group health care benefit plan approved pursuant to RCW 28A.400.350 or 41.05.065 from authorizing monthly deductions therefrom, of the amount or amounts of subscription payments, premiums, or contributions to any person, firm, or corporation furnishing or providing medical, surgical, and hospital care or other health care insurance; or

      (c) Under this system from authorizing monthly deductions therefrom for payment of dues and other membership fees to any retirement association composed of retired teachers and/or public employees pursuant to a written agreement between the director and the retirement association.

      Deductions under (a) and (b) of this subsection shall be made in accordance with rules that may be adopted by the director.

      (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 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.

Sec. 21.  RCW 41.26.053 and 1991 c 365 s 20 and 1991 c 35 s 25 are each reenacted and amended to read as follows:

      (1) Subject to subsections (2) and (3) of this section, the right of a person to a retirement allowance, disability allowance, or death benefit, to the return of accumulated contributions, the retirement, disability or death allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter, 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 any other process of law whatsoever, whether the same be in actual possession of the person or be deposited or loaned and shall be unassignable.

      (2) On the written request of any person eligible to receive benefits under this section, the department may deduct from such payments the premiums for life, health, or other insurance.  The request on behalf of any child or children shall be made by the legal guardian of such child or children.  The department may provide for such persons one or more plans of group insurance, through contracts with regularly constituted insurance carriers or health care service contractors.

      (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 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.

Sec. 22.  RCW 41.28.200 and 1939 c 207 s 21 are each amended to read as follows:

      The right of a person to a pension, an annuity or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter shall not be subject to execution, garnishment, attachment, or any other process whatsoever, whether the same be in actual possession of the person or be deposited or loaned and shall be unassignable except as in this chapter specifically provided.

Sec. 23.  RCW 41.34.080 and 2000 c 247 s 405 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; chapter 341, Laws of 1998; and chapter 247, Laws of 2000 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, whether the same be in actual possession of the person or be deposited or loaned 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. 24.  RCW 41.35.100 and 1998 c 341 s 11 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, 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, whether the same be in actual possession of the person or be deposited or loaned 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.

Sec. 25.  RCW 41.37.090 and 2004 c 242 s 12 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, or retirement allowance, any optional benefit, any other right accrued or accruing to any person under 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, whether the same be in actual possession of the person or be deposited or loaned 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 retired employees have authorized the 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 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. 26.  RCW 41.40.052 and 1999 c 83 s 1 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, 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, whether the same be in actual possession of the person or be deposited or loaned and shall be unassignable.

      (2)(a) 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 which has been approved for deduction in accordance with rules that may be adopted by the state health care authority and/or the department, and 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.

      (b) This section does not prohibit a beneficiary of a retirement allowance from authorizing deductions from that allowance for charitable purposes on the same terms as employees and public officers under RCW 41.04.035 and 41.04.036.

      (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 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.

Sec. 27.  RCW 41.44.240 and 1989 c 360 s 28 are each amended to read as follows:

      The right of a person to a pension, annuity or a retirement allowance, to the return of contribution, the pension, annuity or retirement allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter shall not be subject to execution, garnishment, or any other process whatsoever whether the same be in actual possession of the person or be deposited or loaned.  This section shall not apply to child support collection actions taken under chapter 26.18, 26.23, or 74.20A RCW against benefits payable under any such plan or arrangement.  Benefits under this chapter shall be payable to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation or in any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation.

Sec. 28.  RCW 43.43.310 and 1991 c 365 s 23 are each amended to read as follows:

      (1) Except as provided in subsections (2) and (3) of this section, the right of any person to a retirement allowance or optional retirement allowance under the provisions hereof and all moneys and investments and income thereof are exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other processes of law whatsoever, whether the same be in actual possession of the person or be deposited or loaned and shall be unassignable except as herein specifically provided.

      (2) Subsection (1) of this section shall not prohibit the department of retirement systems 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 pursuant to chapter 41.50 RCW, (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.

      (3) Subsection (1) of 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 members of the Washington state patrol or other public employees of the state of Washington, or for contributions to the Washington state patrol memorial foundation.

NEW SECTION.  Sec. 29.  Section 7 of this act expires January 1, 2018.

NEW SECTION.  Sec. 30.  Section 8 of this act takes effect January 1, 2018."

      Senator Kline spoke in favor of adoption of the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Judiciary to Substitute House Bill No. 1552.

The motion by Senator Kline carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 1 of the amendment, after "garnishment;" strike the remainder of the title and insert "amending RCW 6.27.010, 6.27.090, 6.27.100, 6.27.340, 6.27.110, 6.27.140, 6.27.140, 6.27.150, 6.27.190, 6.27.200, 6.27.250, 6.27.330, 6.27.350, 6.27.360, 6.27.370, 2.10.180, 2.12.090, 41.20.180, 41.28.200, 41.34.080, 41.35.100, 41.37.090, 41.40.052, 41.44.240, and 43.43.310; reenacting and amending RCW 41.32.052 and 41.26.053; adding a new section to chapter 6.27 RCW; providing an effective date; and providing an expiration date."

 

MOTION

 

On motion of Senator Kline, the rules were suspended, Substitute House Bill No. 1552 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Kline spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 1552 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 1552 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 46; Nays, 0; Absent, 0; Excused, 3.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker and Tom

      Excused: Senators Haugen, Roach and Zarelli

SUBSTITUTE HOUSE BILL NO. 1552 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

HOUSE BILL NO. 2210, by Representatives Billig, Carlyle, Lytton, Dahlquist, Asay, Fitzgibbon, Appleton, Warnick, Klippert, Hurst, Stanford, Kelley, Goodman, Ryu, Hudgins, Ormsby, Nealey, Hunt, Haigh, Hargrove, Finn, Tharinger, Santos, Moeller, Takko, Armstrong, McCoy, Jinkins, Probst, Van De Wege, Maxwell, Green, Sells, Reykdal, Ladenburg, Hasegawa, Pollet, Kenney and Kagi

 

Extending contribution limits to school board candidates.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Pridemore, the rules were suspended, House Bill No. 2210 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Pridemore and Benton spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of House Bill No. 2210.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of House Bill No. 2210 and the bill passed the Senate by the following vote:  Yeas, 43; Nays, 4; Absent, 0; Excused, 2.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Hewitt, Hill, Hobbs, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Pflug, Prentice, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Swecker and Tom

      Voting nay: Senators Holmquist Newbry, Padden, Parlette and Stevens

      Excused: Senators Haugen and Zarelli

HOUSE BILL NO. 2210, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

SECOND SUBSTITUTE HOUSE BILL NO. 2216, by House Committee on Ways & Means (originally sponsored by Representatives Hurst, Pearson, Van De Wege, Dahlquist, Tharinger, Goodman, Johnson, Dammeier, Sells, Kelley, McCune and Kristiansen)

 

Increasing penalties for vehicular homicide and vehicular assault.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Kline, the rules were suspended, Second Substitute House Bill No. 2216 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Kline and Padden spoke in favor of passage of the bill.

 

MOTION

 

On motion of Senator Harper, Senator Prentice was excused.

 

The President declared the question before the Senate to be the final passage of Second Substitute House Bill No. 2216.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Second Substitute House Bill No. 2216 and the bill passed the Senate by the following vote:  Yeas, 46; Nays, 0; Absent, 0; Excused, 3.

      Voting yea: Senators Baumgartner, Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Padden, Parlette, Pflug, Pridemore, Ranker, Regala, Roach, Rolfes, Schoesler, Sheldon, Shin, Stevens, Swecker and Tom

      Excused: Senators Haugen, Prentice and Zarelli

SECOND SUBSTITUTE HOUSE BILL NO. 2216, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED HOUSE BILL NO. 2671, by Representatives Takko and Fitzgibbon

 

Clarifying procedures for appealing department of ecology final action on a local shoreline master program by ensuring consistency with existing procedural provisions of the growth management act, chapter 36.70A RCW, the administrative procedure act, chapter 34.05 RCW, and the state environmental policy act, chapter 43.21C RCW.

 

The measure was read the second time.

 

MOTION

 

On motion of Senator Ranker, the rules were suspended, Engrossed House Bill No. 2671 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Ranker and Morton spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Engrossed House Bill No. 2671.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Engrossed House Bill No. 2671 and the bill passed the Senate by the following vote:  Yeas, 42; Nays, 6; Absent, 0; Excused, 1.

      Voting yea: Senators Becker, Brown, Carrell, Chase, Conway, Delvin, Eide, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Honeyford, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Morton, Murray, Nelson, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Schoesler, Sheldon, Shin, Swecker and Tom

      Voting nay: Senators Baumgartner, Benton, Ericksen, Padden, Roach and Stevens

      Excused: Senator Zarelli

ENGROSSED HOUSE BILL NO. 2671, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

SUBSTITUTE HOUSE BILL NO. 2263, by House Committee on Ways & Means (originally sponsored by Representatives Kagi, Walsh, Carlyle, Ladenburg, Darneille, Goodman, Fitzgibbon, Jinkins, Roberts, Ryu and Kenney)

 

Reinvesting savings resulting from changes in the child welfare system.

 

The measure was read the second time.

 

MOTION

 

Senator Hargrove moved that the following committee striking amendment by the Committee on Human Services & Corrections be adopted:

0)Strike everything after the enacting clause and insert the following:

"NEW SECTION.  Sec. 1.  (1) The legislature finds that the federal child and family services improvement and innovation act provides an important new opportunity for Washington state to flexibly use federal funding, traditionally limited to foster care, to achieve the following outcomes:  Increase permanency for all infants, children, and youth by reducing the time spent in foster care placements when possible and promoting a successful transition to adulthood for older youth; increase the positive outcomes for infants, children, youth, and families in their homes and communities, including tribal communities; improve the safety and well-being of infants, children, and youth; and prevent child abuse and neglect and the reentry of infants, children, and youth into foster care.

      (2) The legislature finds that the licensed out-of-home foster care caseload has declined by eighteen percent from fiscal year 2008 to fiscal year 2011.  The legislature further finds that under the current system, as caseloads decline, fewer state and federal funds are available in the child welfare budget for prevention and reunification services to continue improving outcomes.

      (3) The legislature recognizes the need to reinvest savings related to foster care caseload reductions into effective efforts that improve outcomes.  The legislature intends to maximize limited resources by continuing to focus on efforts to improve child safety, child permanency, and child well-being in Washington state.

NEW SECTION.  Sec. 2.  A new section is added to chapter 74.13 RCW to read as follows:

      (1) The child and family reinvestment account is created in the state treasury.  Moneys in the account may be spent only after appropriation.  Moneys in the account may be expended solely for improving outcomes related to:  (a) Safely reducing entry into the foster care system and preventing reentry; (b) safely increasing reunifications; (c) achieving permanency for children unable to be reunified; and (d) improving outcomes for youth who will age out of the foster care system.  Moneys may be expended for shared savings under performance-based contracts.

      (2) Revenues to the child and family reinvestment account consist of:  (a) Savings to the state general fund resulting from reductions in foster care caseloads and per capita costs, as calculated and transferred into the account under this section; and (b) any other public or private funds appropriated to or deposited in the account.

      (3)(a) The department of social and health services, in collaboration with the office of financial management and the caseload forecast council, shall develop a methodology for calculating the savings under this section.  The methodology must be used for the 2013-2015 fiscal biennium, and for each biennium thereafter.  The methodology must establish a baseline for calculating savings.  In developing the methodology, the department of social and health services shall incorporate the relevant requirements of any demonstration waiver granted to the state under P.L. 112-34.  The savings must be based on actual caseload and per capita expenditures.  By December 1, 2012, the department of social and health services shall submit the proposed methodology to the governor and the appropriate committees of the legislature.  The methodology is deemed approved unless the legislature enacts legislation to modify or reject the methodology.

      (b) The department of social and health services shall use the methodology established in (a) of this subsection to calculate savings to the state general fund for transfer into the child and family reinvestment account in fiscal year 2014 and each fiscal year thereafter.  Savings calculated by the department under this section are not subject to RCW 43.79.460.  The department shall report the amount of the state general fund savings achieved to the office of financial management and the fiscal committees of the legislature at the end of each fiscal year.  The office of financial management shall provide notice to the state treasurer of the amount of state general fund savings, as calculated by the department of social and health services, for transfer into the child and family reinvestment account.

      (c) Nothing in this section prohibits (i) the caseload forecast council from forecasting the foster care caseload under RCW 43.88C.010 or (ii) the department from including maintenance funding in its budget submittal for caseload costs that exceed the baseline established in (a) of this subsection.

NEW SECTION.  Sec. 3.  A new section is added to chapter 43.135 RCW to read as follows:

      RCW 43.135.034(4) does not apply to the transfer established under section 2 of this act.

NEW SECTION.  Sec. 4.  A new section is added to chapter 43.131 RCW to read as follows:

      The child and family reinvestment account and methodology for calculating savings as established under this act shall be terminated on June 30, 2018, as provided in section 5 of this act.

NEW SECTION.  Sec. 5.  A new section is added to chapter 43.131 RCW to read as follows:

      The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2019:

      (1) Section 1 of this act;

      (2) Section 2 of this act; and

      (3) Section 3 of this act."

      Senator Hargrove spoke in favor of adoption of the committee striking amendment.

 

The President declared the question before the Senate to be the adoption of the committee striking amendment by the Committee on Human Services & Corrections to Substitute House Bill No. 2263.

The motion by Senator Hargrove carried and the committee striking amendment was adopted by voice vote.

 

MOTION

 

There being no objection, the following title amendment was adopted:

On page 1, line 2 of the title, after "system;" strike the remainder of the title and insert "adding a new section to chapter 74.13 RCW; adding a new section to chapter 43.135 RCW; adding new sections to chapter 43.131 RCW; creating a new section; and providing an effective date."

 

MOTION

 

On motion of Senator Hargrove, the rules were suspended, Substitute House Bill No. 2263 as amended by the Senate was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senator Hargrove spoke in favor of passage of the bill.

 

The President declared the question before the Senate to be the final passage of Substitute House Bill No. 2263 as amended by the Senate.

 

ROLL CALL

 

      The Secretary called the roll on the final passage of Substitute House Bill No. 2263 as amended by the Senate and the bill passed the Senate by the following vote:  Yeas, 42; Nays, 6; Absent, 0; Excused, 1.

      Voting yea: Senators Becker, Benton, Brown, Carrell, Chase, Conway, Delvin, Eide, Ericksen, Fain, Fraser, Frockt, Hargrove, Harper, Hatfield, Haugen, Hewitt, Hill, Hobbs, Holmquist Newbry, Kastama, Keiser, Kilmer, King, Kline, Kohl-Welles, Litzow, McAuliffe, Murray, Nelson, Parlette, Pflug, Prentice, Pridemore, Ranker, Regala, Rolfes, Sheldon, Shin, Stevens, Swecker and Tom

      Voting nay: Senators Baumgartner, Honeyford, Morton, Padden, Roach and Schoesler

      Excused: Senator Zarelli

SUBSTITUTE HOUSE BILL NO. 2263 as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.

 

SECOND READING

 

ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 2264, by House Committee on Ways & Means (originally sponsored by Representatives Kagi, Walsh, Hinkle, Carlyle, Darneille, Jinkins, Roberts, Dickerson and Ryu)

 

Concerning performance-based contracting related to child welfare services.

 

The measure was read the second time.

 

MOTION

 

Senator Hargrove moved that the following committee striking amendment by the Committee on Human Services & Corrections be not adopted:

0)Strike everything after the enacting clause and insert the following:

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

      (a) The state of Washington and several Indian tribes in the state of Washington assume legal responsibility for abused or neglected children when their parents or caregivers are unable or unwilling to adequately provide for their safety, health, and welfare;

      (b) Washington state has a strong history of partnership between the department of social and health services and contracted service providers who currently serve children and families in the child welfare system.  The department and its contracted service providers have responsibility for providing services to address parenting deficiencies resulting in child maltreatment, and the needs of children impacted by maltreatment;

      (c) Department caseworkers and contracted service providers each play a critical and complementary role in the child welfare system.  A 2007 Washington state children's administration workload study found significant gaps in the number of case-carrying social workers relative to the demands of their workload;

      (d) The current system of contracting for services needed by children and families in the child welfare system is fragmented, inflexible, and lacks incentives for improving outcomes for children and families.

      (2) The legislature intends:

      (a) To reform the delivery of certain services to children and families in the child welfare system by creating a flexible, accountable community-based system of care that utilizes performance-based contracting,  maximizes the use of evidence-based, research-based, and promising practices, and expands the capacity of community-based agencies to leverage local funding and other resources to benefit children and families served by the department;

      (b) To phase in implementation of performance-based contracting in order to develop the contracting experience and other capacity necessary for statewide implementation;

      (c) To achieve improved child safety, child permanency, including reunification, and child well-being outcomes through the collaborative efforts of the department and contracted service providers and the prioritization of these goals in performance-based contracting; and

      (d) To implement performance-based contracting under this act in a manner that supports and complies with the federal and Washington state Indian child welfare act.

NEW SECTION.  Sec. 2.  For purposes of this chapter:

      (1) "Case management" means convening family meetings, developing, revising, and monitoring implementation of any case plan or individual service and safety plan, coordinating and monitoring services needed by the child and family, caseworker-child visits, family visits, and the assumption of court-related duties, excluding legal representation, including preparing court reports, attending judicial hearings and permanency hearings, and ensuring that the child is progressing toward permanency within state and federal mandates, including the Indian child welfare act.

      (2) "Child" means:

      (a) A person less than eighteen years of age; or

      (b) A person age eighteen to twenty-one years who is eligible to receive the extended foster care services authorized under RCW 74.13.031.

      (3) "Child-placing agency" has the same meaning as in RCW 74.15.020.

      (4) "Child welfare services" means social services including voluntary and in-home services, out-of-home care, case management, and adoption services which strengthen, supplement, or substitute for, parental care and supervision for the purpose of:

      (a) Preventing or remedying, or assisting in the solution of problems which may result in families in conflict, or the neglect, abuse, exploitation, or criminal behavior of children;

      (b) Protecting and caring for dependent, abused, or neglected children;

      (c) Assisting children who are in conflict with their parents, and assisting parents who are in conflict with their children, with services designed to resolve such conflicts;

      (d) Protecting and promoting the welfare of children, including the strengthening of their own homes where possible, or, where needed;

      (e) Providing adequate care of children away from their homes in foster family homes or day care or other child care agencies or facilities.

      (5) "Department" means the department of social and health services.

      (6) "Evidence-based"  means a program or practice that is cost-effective and includes at least two randomized or statistically controlled evaluations that have demonstrated improved outcomes for its intended population.

      (7) "Network administrator" means an entity that contracts with the department  to provide defined services to children and families in the child welfare system  through its provider network, as provided in section 3 of this act.

      (8) "Performance-based contracting" means structuring all aspects of the procurement of services around the purpose of the work to be performed and the desired results with the contract requirements set forth in clear, specific, and objective terms with measurable outcomes and linking payment for services to contractor performance.

      (9) "Promising practice" means a practice that presents, based upon preliminary information, potential for becoming a research-based or consensus-based practice.

      (10) "Provider network" means those service providers who contract with a network administrator to provide  services to children and families in the geographic area served by the network administrator.

      (11) "Research-based" means a program or practice that has some research demonstrating effectiveness, but that does not yet meet the standard of evidence-based practices.

NEW SECTION.  Sec. 3.  (1) No later than December 1, 2013, the department shall enter into performance-based contracts for the provision of family support and related services.  The department may enter into performance-based contracts for additional services, other than case management, in future procurements.

      (2) Beginning December 1, 2013, the department may not renew its current contracts with individuals or entities for the provision of the child welfare services included in performance-based contracts under this section for services in geographic areas served by network administrators under such contracts, except as mutually agreed upon between the department and the network administrator to allow for the successful transition of services that meet the needs of children and families.    

      (3) The department shall conduct a procurement process to enter into performance-based contracts with one or more network administrators for family support and related services.  As part of the procurement process, the department shall consult with department caseworkers, the exclusive bargaining representative for employees of the department, tribal representatives, parents who were formerly involved in the child welfare system, youth currently or previously in foster care, child welfare services researchers, and the Washington state institute for public policy to assist in identifying the array of family support and related services that will be included in the procurement.  In identifying services, the department must review current data and research related to the effectiveness of family support and related services, and prioritize those services that are most critical to the mitigation of child safety concerns and are evidence-based or research-based.  Expenditures for family support and related services purchased under this section must remain within the levels appropriated in the operating budget.

      (4)(a) Network administrators shall, directly or through subcontracts with service providers:

      (i) Assist caseworkers in meeting their responsibility for implementation of case plans and individual service and safety plans; and

      (ii) Provide the family support and related services included in a child or family's case plan or individual service and safety plan within funds available under contract.

      (b) While the department caseworker retains responsibility for case management, nothing in this act limits the ability of the department to continue to contract for the provision of case management services by child-placing agencies, behavioral rehabilitation services agencies, or other entities that provided case management under contract with the department prior to July 1, 2005.

      (5) In conducting the procurement, the department shall actively consult with other state agencies with relevant expertise, such as the health care authority, and with philanthropic entities with expertise in performance-based contracting for child welfare services.  The director of the office of financial management must approve the request for proposal prior to its issuance.

      (6) The procurement process must be developed and implemented in a manner that complies with applicable provisions of intergovernmental agreements between the state of Washington and tribal governments and must provide an opportunity for tribal governments to contract for service delivery through network administrators.

      (7) The procurement and resulting contracts must include, but are not limited to, the following standards and requirements:

      (a) The use of family engagement approaches to successfully motivate families to engage in services and training of the network's contracted providers to apply such approaches;

      (b) The use of parents and youth who are successful veterans of the child welfare system to act as mentors through activities that include, but are not limited to, helping families navigate the system, facilitating parent engagement, and minimizing distrust of the child welfare system;

      (c) The establishment of qualifications for service providers participating in provider networks, such as appropriate licensure or certification, education, and accreditation by professional accrediting entities;

      (d) Adequate provider capacity to meet the anticipated service needs in the network administrator's contracted service area.  The network administrator must be able to demonstrate that its provider network is culturally competent and has adequate capacity to address disproportionality, including utilization of tribal and other ethnic providers capable of serving children and families of color or who need language-appropriate services;

      (e) Fiscal solvency of network administrators and providers participating in the network;

      (f) The use of evidence-based, research-based, and promising practices, where appropriate, including fidelity and quality assurance provisions;

      (g) Network administrator quality assurance activities, including monitoring of the performance of providers in their provider network, with respect to meeting measurable service outcomes;

      (h) Network administrator data reporting, including data on contracted provider performance and service outcomes; and

      (i) Network administrator compliance with applicable provisions of intergovernmental agreements between the state of Washington and tribal governments and the federal and Washington state Indian child welfare act.

      (8) Performance-based payment methodologies must be used in network administrator contracting.  Performance measures should relate to successful engagement by a child or parent in services included in their case plan, and resulting improvement in identified problem behaviors and interactions.  For the initial three-year period of implementation of performance-based contracting, the department may transfer financial risk for the provision of services to network administrators only to the limited extent necessary to implement a performance-based payment methodology, such as phased payment for services.  However, the department may develop a shared savings methodology through which the network administrator will receive a defined share of any savings that result from improved performance.  If the department receives a Title IV-E waiver, the shared savings methodology must be consistent with the terms of the waiver.  If a shared savings methodology is adopted, the network administrator shall reinvest the savings in enhanced services to better meet the needs of the families and children they serve.

      (9) The department must actively monitor network administrator compliance with the terms of contracts executed under this section.

      (10) The use of performance-based contracts under this section must be done in a manner that does not adversely affect the state's ability to continue to obtain federal funding for child welfare-related functions currently performed by the state and with consideration of options to further maximize federal funding opportunities and increase flexibility in the use of such funds, including use for preventive and in-home child welfare services.

NEW SECTION.  Sec. 4.  (1) For those services included in contracts under section 3 of this act, the service providers must be chosen by the department caseworker from among those in the network administrator's provider network.  The criteria for provider selection must include the geographic proximity of the provider to the child or family, and the performance of the provider based upon data collected and provided by the network administrator.  If a reasonably qualified provider is not available through the network administrator's provider network, at the request of a department caseworker, a provider who is not currently under contract with the network administrator may be offered a provisional contract by the network administrator, pending that provider demonstrating that he or she meets applicable provider qualifications to participate in the administrator's provider network.

      (2) The department shall develop a dispute resolution process to be used when the network administrator disagrees with the department caseworker's choice of a service provider due to factors such as the service provider's performance history or ability to serve culturally diverse families.  The mediator or decision maker must be a neutral employee of the department who has not been previously involved in the case.  The dispute resolution process must not result in a delay of more than two business days in the receipt of needed services by the child or family.

      (3) The department and network administrator shall collaborate to identify and respond to patterns or trends in service utilization that may indicate overutilization or underutilization of family support and related services, or may indicate a need to enhance service capacity.

NEW SECTION.  Sec. 5.  (1) On an annual basis, beginning in the 2015-2017 biennium, the department and contracted network administrators shall:

      (a) Review and update the services offered through performance-based contracts in response to service outcome data for currently contracted services and any research that has identified new evidence-based or research-based services not included in a previous procurement; and

      (b) Review service utilization and outcome data to determine whether changes are needed in procurement policies or performance-based contracts to better meet the goals established in section 1 of this act.

      (2) In conducting the review under subsection (1) of this section, the department must consult with department caseworkers, the exclusive bargaining representative for employees of the department, tribal representatives, parents who were formerly involved in the child welfare system, youth currently or previously in foster care, child welfare services researchers, representatives of child welfare service providers, and the Washington state institute for public policy.

NEW SECTION.  Sec. 6.  (1) To achieve the service delivery improvements and efficiencies intended in sections 1, 3, 4, and 7 of this act and in RCW 74.13.370, and pursuant to RCW 41.06.142(3), contracting with network administrators to provide services needed by children and families in the child welfare system, pursuant to  sections 3 and 4 of this act, and execution and monitoring of individual provider contracts, pursuant to section 3 of this act, are expressly mandated by the legislature and are not subject to the processes set forth in RCW 41.06.142 (1), (4), and (5).

      (2) The express mandate in subsection (1) of this section is limited to those services and activities provided in sections 3 and 4 of this act.  If the department includes services customarily and historically performed by department employees in the classified service in a procurement for network administrators that exceeds the scope of services or activities provided in sections 3 and 4 of this act, such contracting is not specifically mandated and will be subject to all applicable contractual and legal obligations.

NEW SECTION.  Sec. 7.  For the purposes of the provision of child welfare services by provider networks, when all other elements of the responses to any procurement under section 3 of this act are equal, private nonprofit entities, federally recognized Indian tribes located in this state, and state employees must receive primary preference over private for-profit entities.

Sec. 8.  RCW 74.13.360 and 2010 c 291 s 4 are each amended to read as follows:

      (1) ((No later than July 1, 2011, the department shall convert its current contracts with providers of child welfare services into performance-based contracts.  In accomplishing this conversion, the department shall decrease the total number of contracts it uses to purchase child welfare services from providers.  The conversion of contracts for the provision of child welfare services to performance-based contracts must be done in a manner that does not adversely affect the state's ability to continue to obtain federal funding for child welfare related functions currently performed by the state and with consideration of options to further maximize federal funding opportunities and increase flexibility in the use of such funds, including use for preventive and in-home child welfare services.
      (2))) No later than December 30, ((2012)) 2015:

      (a) In the demonstration sites selected under RCW 74.13.368(4)(a), child welfare services shall be provided by supervising agencies with whom the department has entered into performance-based contracts.  Supervising agencies may enter into subcontracts with other licensed agencies; and

      (b) Except as provided in subsection (((4))) (3) of this section, and notwithstanding any law to the contrary, the department may not directly provide child welfare services to families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a).

      (((3))) (2) No later than December 30, ((2012)) 2015, for families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a), the department is responsible for only the following:

      (a) Monitoring the quality of services for which the department contracts under this chapter;

      (b) Ensuring that the services are provided in accordance with federal law and the laws of this state, including the Indian child welfare act;

      (c) Providing child protection functions and services, including intake and investigation of allegations of child abuse or neglect, emergency shelter care functions under RCW 13.34.050, and referrals to appropriate providers; and

      (d) Issuing licenses pursuant to chapter 74.15 RCW.

      (((4))) (3) No later than December 30, ((2012)) 2015, for families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a), the department may provide child welfare services only:

      (a) For the limited purpose of establishing a control or comparison group as deemed necessary by the child welfare transformation design committee, with input from the Washington state institute for public policy, to implement the demonstration sites selected and defined pursuant to RCW 74.13.368(4)(a) in which the performance in achieving measurable outcomes will be compared and evaluated pursuant to RCW 74.13.370; or

      (b) In an emergency or as a provider of last resort.  The department shall adopt rules describing the circumstances under which the department may provide those services.  For purposes of this section, "provider of last resort" means the department is unable to contract with a private agency to provide child welfare services in a particular geographic area or, after entering into a contract with a private agency, either the contractor or the department terminates the contract.

      (((5))) (4) For purposes of this chapter, on and after September 1, 2010, performance-based contracts shall be structured to hold the supervising agencies accountable for achieving the following goals in order of importance:  Child safety; child permanency, including reunification; and child well-being.

      (((6))) (5) A federally recognized tribe located in this state may enter into a performance-based contract with the department to provide child welfare services to Indian children whether or not they reside on a reservation.  Nothing in this section prohibits a federally recognized Indian tribe located in this state from providing child welfare services to its members or other Indian children pursuant to existing tribal law, regulation, or custom, or from directly entering into agreements for the provision of such services with the department, if the department continues to otherwise provide such services, or with federal agencies.

Sec. 9.  RCW 74.13.370 and 2009 c 520 s 9 are each amended to read as follows:

      (1) ((Based upon the recommendations of the child welfare transformation design committee, including the two sets of outcomes developed by the committee under RCW 74.13.368(4)(b), the Washington state institute for public policy is to conduct a review of measurable effects achieved by the supervising agencies and compare those measurable effects with the existing services offered by the state.  The report on the measurable effects shall be provided to the governor and the legislature no later than April 1, 2015.
      (2))) No later than ((June 30, 2011)) December 1, 2014, the Washington state institute for public policy shall provide the legislature and the governor an initial report on the department's conversion to the use of performance-based contracts as provided in ((RCW 74.13.360(1))) sections 3 and 4 of this act.  No later than June 30, ((2012)) 2016, the Washington state institute for public policy shall provide the governor and the legislature with a second report on the ((department's conversion of its contracts to performance-based contracts)) extent to which the use of performance-based contracting has resulted in:
      (a) Increased use of evidence-based, research-based, and promising practices; and
      (b) Improvements in outcomes for children, including child safety, child permanency, including reunification, and child well-being.

      (((3))) (2) The department and network administrators shall respond to the Washington institute for public policy's request for data and other information with which to complete these reports in a timely manner.

(3) The Washington state institute for public policy must consult with a university-based child welfare research entity to evaluate performance-based contracting.

NEW SECTION.  Sec. 10.  RCW 74.13.362 (Performance-based contracts‑-Legislative mandate) and 2009 c 520 s 4 are each repealed.

NEW SECTION.  Sec. 11.  Sections 1 through 7 of this act constitute a new chapter in Title 74 RCW."

On page 1, line 2 of the title, after "system;" strike the remainder of the title and insert "amending RCW 74.13.360 and 74.13.370; adding a new chapter to Title 74 RCW; and repealing RCW 74.13.362."

 

The President declared the question before the Senate to be the motion by Senator Hargrove to not adopt the committee striking amendment by the Committee on Human Services & Corrections to Engrossed Second Substitute House Bill No. 2264.

The motion by Senator Hargrove carried and the committee striking amendment was not adopted by voice vote.

 

MOTION

 

Senator Hargrove moved that the following striking amendment by Senators Hargrove and Stevens be adopted:

0)Strike everything after the enacting clause and insert the following:

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

      (a) The state of Washington and several Indian tribes in the state of Washington assume legal responsibility for abused or neglected children when their parents or caregivers are unable or unwilling to adequately provide for their safety, health, and welfare;

      (b) Washington state has a strong history of partnership between the department of social and health services and contracted service providers who currently serve children and families in the child welfare system.  The department and its contracted service providers have responsibility for providing services to address parenting deficiencies resulting in child maltreatment, and the needs of children impacted by maltreatment;

      (c) Department caseworkers and contracted service providers each play a critical and complementary role in the child welfare system.  A 2007 Washington state children's administration workload study found significant gaps in the number of case-carrying social workers relative to the demands of their workload;

      (d) The current system of contracting for services needed by children and families in the child welfare system is fragmented, inflexible, and lacks incentives for improving outcomes for children and families.

      (2) The legislature intends:

      (a) To reform the delivery of certain services to children and families in the child welfare system by creating a flexible, accountable community-based system of care that utilizes performance-based contracting,  maximizes the use of evidence-based, research-based, and promising practices, and expands the capacity of community-based agencies to leverage local funding and other resources to benefit children and families served by the department;

      (b) To achieve improved child safety, child permanency, including reunification, and child well-being outcomes through the collaborative efforts of the department and contracted service providers and the prioritization of these goals in performance-based contracting; and

      (c) To implement performance-based contracting under this act in a manner that supports and complies with the federal and Washington state Indian child welfare act.

NEW SECTION.  Sec. 2.  For purposes of this chapter:

      (1) "Case management" means convening family meetings, developing, revising, and monitoring implementation of any case plan or individual service and safety plan, coordinating and monitoring services needed by the child and family, caseworker-child visits, family visits, and the assumption of court-related duties, excluding legal representation, including preparing court reports, attending judicial hearings and permanency hearings, and ensuring that the child is progressing toward permanency within state and federal mandates, including the Indian child welfare act.

      (2) "Child" means:

      (a) A person less than eighteen years of age; or

      (b) A person age eighteen to twenty-one years who is eligible to receive the extended foster care services authorized under RCW 74.13.031.

      (3) "Child-placing agency" has the same meaning as in RCW 74.15.020.

      (4) "Child welfare services" means social services including voluntary and in-home services, out-of-home care, case management, and adoption services which strengthen, supplement, or substitute for, parental care and supervision for the purpose of:

      (a) Preventing or remedying, or assisting in the solution of problems which may result in families in conflict, or the neglect, abuse, exploitation, or criminal behavior of children;

      (b) Protecting and caring for dependent, abused, or neglected children;

      (c) Assisting children who are in conflict with their parents, and assisting parents who are in conflict with their children, with services designed to resolve such conflicts;

      (d) Protecting and promoting the welfare of children, including the strengthening of their own homes where possible, or, where needed;

      (e) Providing adequate care of children away from their homes in foster family homes or day care or other child care agencies or facilities.

      (5) "Department" means the department of social and health services.

      (6) "Evidence-based"  means a program or practice that is cost-effective and includes at least two randomized or statistically controlled evaluations that have demonstrated improved outcomes for its intended population.

      (7) "Network administrator" means an entity that contracts with the department  to provide defined services to children and families in the child welfare system  through its provider network, as provided in section 3 of this act.

      (8) "Performance-based contracting" means structuring all aspects of the procurement of services around the purpose of the work to be performed and the desired results with the contract requirements set forth in clear, specific, and objective terms with measurable outcomes and linking payment for services to contractor performance.

      (9) "Promising practice" means a practice that presents, based upon preliminary information, potential for becoming a research-based or consensus-based practice.

      (10) "Provider network" means those service providers who contract with a network administrator to provide  services to children and families in the geographic area served by the network administrator.

      (11) "Research-based" means a program or practice that has some research demonstrating effectiveness, but that does not yet meet the standard of evidence-based practices.

NEW SECTION.  Sec. 3.  (1) No later than December 1, 2013, the department shall enter into performance-based contracts for the provision of family support and related services.  The department may enter into performance-based contracts for additional services, other than case management, in future procurements.

      (2) Beginning December 1, 2013, the department may not renew its current contracts with individuals or entities for the provision of the child welfare services included in performance-based contracts under this section for services in geographic areas served by network administrators under such contracts, except as mutually agreed upon between the department and the network administrator to allow for the successful transition of services that meet the needs of children and families.    

      (3) The department shall conduct a procurement process to enter into performance-based contracts with one or more network administrators for family support and related services designed to improve family functioning, prevent children from entering out-of-home care, or to support reunification efforts when placement is unavoidable.

      (4) As part of the procurement process, following the selection of the network administrators, the department, in collaboration with the network administrators, shall consult with, but not be limited to, department caseworkers, the exclusive bargaining representative for employees of the department, tribal representatives, parents who were formerly involved in the child welfare system, youth currently or previously in foster care, child welfare services researchers, and the Washington state institute for public policy to assist in identifying the array of family support and related services that will be included in the provider network.  In identifying services, the department, in collaboration with the network administrators, must review current data and research related to the effectiveness of family support and related services, and prioritize those services that are most critical to the mitigation of child safety concerns and are evidence-based or research-based, while remaining cognizant of the need for diverse and culturally appropriate services.  Expenditures for family support and related services purchased under this section must remain within the levels appropriated in the operating budget.

      (5)(a) Network administrators shall, through subcontracts with service providers:

      (i) Assist caseworkers in meeting their responsibility for implementation of case plans and individual service and safety plans; and

      (ii) Provide the family support and related services included in a child or family's case plan or individual service and safety plan within funds available under contract.

      (b) While the department caseworker retains responsibility for case management, nothing in this act limits the ability of the department to continue to contract for the provision of case management services by child-placing agencies, behavioral rehabilitation services agencies, or other entities that provided case management under contract with the department prior to July 1, 2005.

      (6) In conducting the procurement, the department shall actively consult with other state agencies with relevant expertise, such as the health care authority, and with philanthropic entities with expertise in performance-based contracting for child welfare services.  The director of the office of financial management must approve the request for proposal prior to its issuance.

      (7) The procurement process must be developed and implemented in a manner that complies with applicable provisions of intergovernmental agreements between the state of Washington and tribal governments and must provide an opportunity for tribal governments to contract for service delivery through network administrators.

      (8) The procurement and resulting contracts must include, but are not limited to, the following standards and requirements:

      (a) The use of family engagement approaches to successfully motivate families to engage in services and training of the network's contracted providers to apply such approaches;

      (b) The use of parents and youth who are successful veterans of the child welfare system to act as mentors through activities that include, but are not limited to, helping families navigate the system, facilitating parent engagement, and minimizing distrust of the child welfare system;

      (c) The establishment of qualifications for service providers participating in provider networks, such as appropriate licensure or certification, education, and accreditation by professional accrediting entities;

      (d) Adequate provider capacity to meet the anticipated service needs in the network administrator's contracted service area.  The network administrator must be able to demonstrate that its provider network is culturally competent and has adequate capacity to address disproportionality, including utilization of tribal and other ethnic providers capable of serving children and families of color or who need language-appropriate services;

      (e) Fiscal solvency of network administrators and providers participating in the network;

      (f) The use of evidence-based, research-based, and promising practices, where appropriate, including fidelity and quality assurance provisions;

      (g) Network administrator quality assurance activities, including monitoring of the performance of providers in their provider network, with respect to meeting measurable service outcomes;

      (h) Network administrator data reporting, including data on contracted provider performance and service outcomes; and

      (i) Network administrator compliance with applicable provisions of intergovernmental agreements between the state of Washington and tribal governments and the federal and Washington state Indian child welfare act.

      (9) Performance-based payment methodologies must be used in network administrator contracting.  Performance measures should relate to successful engagement by a child or parent in services included in their case plan, and resulting improvement in identified problem behaviors and interactions.  For the initial three-year period of implementation of performance-based contracting, the department may transfer financial risk for the provision of services to network administrators only to the limited extent necessary to implement a performance-based payment methodology, such as phased payment for services.  However, the department may develop a shared savings methodology through which the network administrator will receive a defined share of any savings that result from improved performance.  If the department receives a Title IV-E waiver, the shared savings methodology must be consistent with the terms of the waiver.  If a shared savings methodology is adopted, the network administrator shall reinvest the savings in enhanced services to better meet the needs of the families and children they serve.

      (10) The department must actively monitor network administrator compliance with the terms of contracts executed under this section.

      (11) The use of performance-based contracts under this section must be done in a manner that does not adversely affect the state's ability to continue to obtain federal funding for child welfare-related functions currently performed by the state and with consideration of options to further maximize federal funding opportunities and increase flexibility in the use of such funds, including use for preventive and in-home child welfare services.

NEW SECTION.  Sec. 4.  (1) For those services included in contracts under section 3 of this act, the service providers must be chosen by the department caseworker from among those in the network administrator's provider network.  The criteria for provider selection must include the geographic proximity of the provider to the child or family, and the performance of the provider based upon data collected and provided by the network administrator.  If a reasonably qualified provider is not available through the network administrator's provider network, at the request of a department caseworker, a provider who is not currently under contract with the network administrator may be offered a provisional contract by the network administrator, pending that provider demonstrating that he or she meets applicable provider qualifications to participate in the administrator's provider network.

      (2) The department shall develop a dispute resolution process to be used when the network administrator disagrees with the department caseworker's choice of a service provider due to factors such as the service provider's performance history or ability to serve culturally diverse families.  The mediator or decision maker must be a neutral employee of the department who has not been previously involved in the case.  The dispute resolution process must not result in a delay of more than two business days in the receipt of needed services by the child or family.

      (3) The department and network administrator shall collaborate to identify and respond to patterns or trends in service utilization that may indicate overutilization or underutilization of family support and related services, or may indicate a need to enhance service capacity.

NEW SECTION.  Sec. 5.  (1) On an annual basis, beginning in the 2015-2017 biennium, the department and contracted network administrators shall:

      (a) Review and update the services offered through performance-based contracts in response to service outcome data for currently contracted services and any research that has identified new evidence-based or research-based services not included in a previous procurement; and

      (b) Review, and make public, service utilization and outcome data to determine whether changes are needed in procurement policies or performance-based contracts to better meet the goals established in section 1 of this act.

      (2) In conducting the review under subsection (1) of this section, the department must consult with department caseworkers, the exclusive bargaining representative for employees of the department, tribal representatives, parents who were formerly involved in the child welfare system, youth currently or previously in foster care, child welfare services researchers, representatives of child welfare service providers, and the Washington state institute for public policy.

NEW SECTION.  Sec. 6.  (1) To achieve the service delivery improvements and efficiencies intended in sections 1, 3, 4, and 7 of this act and in RCW 74.13.370, and pursuant to RCW 41.06.142(3), contracting with network administrators to provide services needed by children and families in the child welfare system, pursuant to  sections 3 and 4 of this act, and execution and monitoring of individual provider contracts, pursuant to section 3 of this act, are expressly mandated by the legislature and are not subject to the processes set forth in RCW 41.06.142 (1), (4), and (5).

      (2) The express mandate in subsection (1) of this section is limited to those services and activities provided in sections 3 and 4 of this act.  If the department includes services customarily and historically performed by department employees in the classified service in a procurement for network administrators that exceeds the scope of services or activities provided in sections 3 and 4 of this act, such contracting is not specifically mandated and will be subject to all applicable contractual and legal obligations.

NEW SECTION.  Sec. 7.  For the purposes of the provision of child welfare services by provider networks, when all other elements of the responses to any procurement under section 3 of this act are equal, private nonprofit entities, federally recognized Indian tribes located in this state, and state employees must receive primary preference over private for-profit entities.

Sec. 8.  RCW 74.13.360 and 2010 c 291 s 4 are each amended to read as follows:

      (1) ((No later than July 1, 2011, the department shall convert its current contracts with providers of child welfare services into performance-based contracts.  In accomplishing this conversion, the department shall decrease the total number of contracts it uses to purchase child welfare services from providers.  The conversion of contracts for the provision of child welfare services to performance-based contracts must be done in a manner that does not adversely affect the state's ability to continue to obtain federal funding for child welfare related functions currently performed by the state and with consideration of options to further maximize federal funding opportunities and increase flexibility in the use of such funds, including use for preventive and in-home child welfare services.
      (2))) No later than December 30, ((2012)) 2015:

      (a) In the demonstration sites selected under RCW 74.13.368(4)(a), child welfare services shall be provided by supervising agencies with whom the department has entered into performance-based contracts.  Supervising agencies may enter into subcontracts with other licensed agencies; and

      (b) Except as provided in subsection (((4))) (3) of this section, and notwithstanding any law to the contrary, the department may not directly provide child welfare services to families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a).

      (((3))) (2) No later than December 30, ((2012)) 2015, for families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a), the department is responsible for only the following:

      (a) Monitoring the quality of services for which the department contracts under this chapter;

      (b) Ensuring that the services are provided in accordance with federal law and the laws of this state, including the Indian child welfare act;

      (c) Providing child protection functions and services, including intake and investigation of allegations of child abuse or neglect, emergency shelter care functions under RCW 13.34.050, and referrals to appropriate providers; and

      (d) Issuing licenses pursuant to chapter 74.15 RCW.

      (((4))) (3) No later than December 30, ((2012)) 2015, for families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a), the department may provide child welfare services only:

      (a) For the limited purpose of establishing a control or comparison group as deemed necessary by the child welfare transformation design committee, with input from the Washington state institute for public policy, to implement the demonstration sites selected and defined pursuant to RCW 74.13.368(4)(a) in which the performance in achieving measurable outcomes will be compared and evaluated pursuant to RCW 74.13.370; or

      (b) In an emergency or as a provider of last resort.  The department shall adopt rules describing the circumstances under which the department may provide those services.  For purposes of this section, "provider of last resort" means the department is unable to contract with a private agency to provide child welfare services in a particular geographic area or, after entering into a contract with a private agency, either the contractor or the department terminates the contract.

      (((5))) (4) For purposes of this chapter, on and after September 1, 2010, performance-based contracts shall be structured to hold the supervising agencies accountable for achieving the following goals in order of importance:  Child safety; child permanency, including reunification; and child well-being.

      (((6))) (5) A federally recognized tribe located in this state may enter into a performance-based contract with the department to provide child welfare services to Indian children whether or not they reside on a reservation.  Nothing in this section prohibits a federally recognized Indian tribe located in this state from providing child welfare services to its members or other Indian children pursuant to existing tribal law, regulation, or custom, or from directly entering into agreements for the provision of such services with the department, if the department continues to otherwise provide such services, or with federal agencies.

Sec. 9.  RCW 74.13.370 and 2009 c 520 s 9 are each amended to read as follows:

      (1) Based upon the recommendations of the child welfare transformation design committee, including the two sets of outcomes developed by the committee under RCW 74.13.368(4)(b), the Washington state institute for public policy is to conduct a review of measurable effects achieved by the supervising agencies and compare those measurable effects with the existing services offered by the state.  The report on the measurable effects shall be provided to the governor and the legislature no later than April 1, ((2015)) 2018.

      (2) No later than ((June 30, 2011)) December 1, 2014, the Washington state institute for public policy shall provide the legislature and the governor an initial report on the department's conversion to the use of performance-based contracts as provided in ((RCW 74.13.360(1))) sections 3 and 4 of this act.  No later than June 30, ((2012)) 2016, the Washington state institute for public policy shall provide the governor and the legislature with a second report on the ((department's conversion of its contracts to performance-based contracts)) extent to which the use of performance-based contracting has resulted in:
      (a) Increased use of evidence-based, research-based, and promising practices; and
      (b) Improvements in outcomes for children, including child safety, child permanency, including reunification, and child well-being.

      (3) The department and network administrators shall respond to the Washington institute for public policy's request for data and other information with which to complete these reports in a timely manner.

(4) The Washington state institute for public policy must consult with a university-based child welfare research entity to evaluate performance-based contracting.

Sec. 10.  RCW 74.13.368 and 2010 c 291 s 2 are each amended to read as follows:

      (1)(a) The child welfare transformation design committee is established, with members as provided in this subsection.

      (i) The governor or the governor's designee;

      (ii) Four private agencies that, as of May 18, 2009, provide child welfare services to children and families referred to them by the department.  Two agencies must be headquartered in western Washington and two must be headquartered in eastern Washington.  Two agencies must have an annual budget of at least one million state-contracted dollars and two must have an annual budget of less than one million state-contracted dollars;

      (iii) The assistant secretary of the children's administration in the department;

      (iv) Two regional administrators in the children's administration selected by the assistant secretary, one from one of the department's administrative regions one or two, and one from one of the department's administrative regions three, four, five, or six;

      (v) The administrator for the division of licensed resources in the children's administration;

      (vi) Two nationally recognized experts in performance-based contracts;

      (vii) The attorney general or the attorney general's designee;

      (viii) A representative of the collective bargaining unit that represents the largest number of employees in the children's administration;

      (ix) A representative from the office of the family and children's ombudsman;

      (x) Four representatives from the Indian policy advisory committee convened by the department's office of Indian policy and support services;

      (xi) Two currently elected or former superior court judges with significant experience in dependency matters, selected by the superior court judges' association;

      (xii) One representative from partners for our children affiliated with the University of Washington school of social work;

      (xiii) A member of the Washington state racial disproportionality advisory committee;

      (xiv) A foster parent;

      (xv) A youth currently in or a recent alumnus of the Washington state foster care system, to be designated by the cochairs of the committee; and

      (xvi) A parent representative who has had personal experience with the dependency system.

      (b) The president of the senate and the speaker of the house of representatives shall jointly appoint the members under (a)(ii), (xiv), and (xvi) of this subsection.

      (c) The representative from partners for our children shall convene the initial meeting of the committee no later than June 15, 2009.

      (d) The cochairs of the committee shall be the assistant secretary for the children's administration and another member selected by a majority vote of those members present at the initial meeting.

      (2) The committee shall establish a transition plan containing recommendations to the legislature and the governor consistent with this section for the provision of child welfare services by supervising agencies pursuant to RCW 74.13.360.

      (3) The plan shall include the following:

      (a) A model or framework for performance-based contracts to be used by the department that clearly defines:

      (i) The target population;

      (ii) The referral and exit criteria for the services;

      (iii) The child welfare services including the use of evidence-based services and practices to be provided by contractors;

      (iv) The roles and responsibilities of public and private agency workers in key case decisions;

      (v) Contract performance and outcomes, including those related to eliminating racial disparities in child outcomes;

      (vi) That supervising agencies will provide culturally competent service;

      (vii) How to measure whether each contractor has met the goals listed in RCW 74.13.360(((5))) (4); and

      (viii) Incentives to meet performance outcomes;

      (b) A method by which the department will substantially reduce its current number of contracts for child welfare services;

      (c) A method or methods by which clients will access community-based services, how private supervising agencies will engage other services or form local service networks, develop subcontracts, and share information and supervision of children;

      (d) Methods to address the effects of racial disproportionality, as identified in the 2008 Racial Disproportionality Advisory Committee Report published by the Washington state institute for public policy in June 2008;

      (e) Methods for inclusion of the principles and requirements of the centennial accord executed in November 2001, executed between the state of Washington and federally recognized tribes in Washington state;

      (f) Methods for assuring performance‑based contracts adhere to the letter and intent of the federal Indian child welfare act;

      (g) Contract monitoring and evaluation procedures that will ensure that children and families are receiving timely and quality services and that contract terms are being implemented;

      (h) A method or methods by which to ensure that the children's administration has sufficiently trained and experienced staff to monitor and manage performance-based contracts;

      (i) A process by which to expand the capacity of supervising and other private agencies to meet the service needs of children and families in a performance-based contractual arrangement;

      (j) A method or methods by which supervising and other private agencies can expand services in underserved areas of the state;

      (k) The appropriate amounts and procedures for the reimbursement of supervising agencies given the proposed services restructuring;

      (l) A method by which to access and enhance existing data systems to include contract performance information;

      (m) A financing arrangement for the contracts that examines:

      (i) The use of case rates or performance-based fee-for-service contracts that include incentive payments or payment schedules that link reimbursement to outcomes; and

      (ii) Ways to reduce a contractor's financial risk that could jeopardize the solvency of the contractor, including consideration of the use of a risk-reward corridor that limits risk of loss and potential profits or the establishment of a statewide risk pool;

      (n) A description of how the transition will impact the state's ability to obtain federal funding and examine options to further maximize federal funding opportunities and increased flexibility;

      (o) A review of whether current administrative staffing levels in the regions should be continued when the majority of child welfare services are being provided by supervising agencies;

      (p) A description of the costs of the transition, the initial start-up costs and the mechanisms to periodically assess the overall adequacy of funds and the fiscal impact of the changes, and the feasibility of the plan and the impact of the plan on department employees during the transition; and

      (q) Identification of any statutory and regulatory revisions necessary to accomplish the transition.

      (4)(a) The committee, with the assistance of the department, shall select two demonstration sites within which to implement chapter 520, Laws of 2009.  One site must be located on the eastern side of the state.  The other site must be located on the western side of the state.  Neither site must be wholly located in any of the department's administrative regions.

      (b) The committee shall develop two sets of performance outcomes to be included in the performance-based contracts the department enters into with supervising agencies.  The first set of outcomes shall be used for those cases transferred to a supervising agency over time.  The second set of outcomes shall be used for new entrants to the child welfare system.

      (c) The committee shall also identify methods for ensuring that comparison of performance between supervising agencies and the existing service delivery system takes into account the variation in the characteristics of the populations being served as well as historical trends in outcomes for those populations.

      (5) The committee shall determine the appropriate size of the child and family populations to be provided services under performance-based contracts with supervising agencies.  The committee shall also identify the time frame within which cases will be transferred to supervising agencies.  The performance-based contracts entered into with supervising agencies shall encompass the provision of child welfare services to enough children and families in each demonstration site to allow for the assessment of whether there are meaningful differences, to be defined by the committee, between the outcomes achieved in the demonstration sites and the comparison sites or populations.  To ensure adequate statistical power to assess these differences, the populations served shall be large enough to provide a probability greater than seventy percent that meaningful difference will be detected and a ninety-five percent probability that observed differences are not due to chance alone.

      (6) The committee shall also prepare as part of the plan a recommendation as to how to implement chapter 520, Laws of 2009 so that full implementation of chapter 520, Laws of 2009 is achieved no later than December 30, ((2012)) 2015.

      (7) The committee shall prepare the plan to manage the delivery of child welfare services in a manner that achieves coordination of the services and programs that deliver primary prevention services.

      (8) Beginning June 30, 2009, the committee shall report quarterly to the governor and the legislative children's oversight committee established in RCW 44.04.220.  From June 30, 2012, until ((January 1)) December 30, 2015, the committee need only report twice a year.  The committee shall report on its progress in meeting its duties under subsections (2) and (3) of this section and on any other matters the committee or the legislative children's oversight committee or the governor deems appropriate.  The portion of the plan required in subsection (6) of this section shall be due to the legislative children's oversight committee on or before June 1, 2010.  The reports shall be in written form.

      (9) The committee, by majority vote, may establish advisory committees as it deems necessary.

      (10) All state executive branch agencies and the agencies with whom the department contracts for child welfare services shall cooperate with the committee and provide timely information as the chair or cochairs may request.  Cooperation by the children's administration must include developing and scheduling training for supervising agencies to access data and information necessary to implement and monitor the contracts.

      (11) It is expected that the administrative costs for the committee will be supported through private funds.

      (12) Staff support for the committee shall be provided jointly by partners for our children and legislative staff.

      (13) The committee is subject to chapters 42.30 (open public meetings act) and 42.52 (ethics in public service) RCW.

      (14) This section expires July 1, ((2015)) 2016.

Sec. 11.  RCW 74.13.372 and 2009 c 520 s 10 are each amended to read as follows:

      Not later than June 1, ((2015)) 2018, the governor shall, based on the report by the Washington state institute for public policy, determine whether to expand chapter 520, Laws of 2009 to the remainder of the state or terminate chapter 520, Laws of 2009.  The governor shall inform the legislature of his or her decision within seven days of the decision.  The department shall, regardless of the decision of the governor regarding the delivery of child welfare services, continue to purchase services through the use of performance-based contracts.

Sec. 12.  RCW 74.13.020 and 2011 c 330 s 4 are each reenacted and amended to read as follows:

      For purposes of this chapter:

      (1) "Case management" means the management of services delivered to children and families in the child welfare system, including permanency services, caseworker-child visits, family visits, the convening of family group conferences, the development and revision of the case plan, the coordination and monitoring of services needed by the child and family, and the assumption of court-related duties, excluding legal representation, including preparing court reports, attending judicial hearings and permanency hearings, and ensuring that the child is progressing toward permanency within state and federal mandates, including the Indian child welfare act.

      (2) "Child" means:

      (a) A person less than eighteen years of age; or

      (b) A person age eighteen to twenty-one years who is eligible to receive the extended foster care services authorized under RCW 74.13.031.

      (3) "Child protective services" has the same meaning as in RCW 26.44.020.

      (4) "Child welfare services" means social services including voluntary and in-home services, out-of-home care, case management, and adoption services which strengthen, supplement, or substitute for, parental care and supervision for the purpose of:

      (a) Preventing or remedying, or assisting in the solution of problems which may result in families in conflict, or the neglect, abuse, exploitation, or criminal behavior of children;

      (b) Protecting and caring for dependent, abused, or neglected children;

      (c) Assisting children who are in conflict with their parents, and assisting parents who are in conflict with their children, with services designed to resolve such conflicts;

      (d) Protecting and promoting the welfare of children, including the strengthening of their own homes where possible, or, where needed;

      (e) Providing adequate care of children away from their homes in foster family homes or day care or other child care agencies or facilities.

      "Child welfare service