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EIGHTY-SEVENTH DAY

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MORNING SESSION

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Senate Chamber, Olympia, Wednesday, April 9, 2003

The Senate was called to order at 10:00 a.m. by President Owen. The Secretary called the roll and announced to the President that all Senators were present except Senator Brown. On motion of Senator Eide, Senator Brown was excused.

The Sergeant at Arms Color Guard, consisting of Pages Rebecca Bertram and Paul Greene, presented the Colors. Reverend Dr. Anna Joy Grace, pastor of the Unity Church in Olympia, offered the prayer.

MOTION

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

INTRODUCTION AND FIRST READING

SB 6070 by Senators Jacobsen, Prentice, Shin, Franklin, Fraser, Regala, Thibaudeau, Winsley, Rasmussen and Kohl-Welles

AN ACT Relating to exempting veterans from Initiative Measure No. 200; and amending RCW 49.60.400.

Referred to Committee on Government Operations and Elections.

SB 6071 by Senators Shin, Sheahan, Jacobsen, Rasmussen, B. Sheldon, Brandland, Doumit, Hewitt, Eide, Prentice, Kohl-Welles, Oke, Kline, Roach, Finkbeiner, Winsley, Reardon, Fairley, McCaslin, Thibaudeau, Benton, Fraser, Franklin, Regala and Mulliken.

AN ACT Relating to veterans of the Afghanistan conflict and the Persian Gulf War II; amending RCW 28B.15.628; and reenacting and amending RCW 41.04.005.

Referred to Committee on Ways and Means.

MESSAGE FROM THE GOVERNOR

GUBERNATORIAL APPOINTMENT

March 6, 2003

TO THE HONORABLE, THE SENATE OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

I have the honor to submit the following appointment, subject to your confirmation.

Michael G. Heuer, appointed March 6, 2003, for a term ending September 30, 2007, as a member of Board of Trustees for Lower Columbia Community College District No. 13.

Sincerely,

GARY LOCKE, Governor

Referred to the Committee on Higher Education.

MOTION

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

SENATE RESOLUTION 8651

By Senators Spanel, Haugen, Fraser, Stevens and Rasmussen

WHEREAS, Every April, the beautiful Skagit Valley debuts brilliant colors of spring; and

WHEREAS, The Skagit Valley is the second largest producer of tulips in the world; and

WHEREAS, Every year, the Skagit Valley Tulip Festival involves the communities of Sedro-Woolley, Burlington, Anacortes, La Conner, Mount Vernon, Concrete, Conway, and Upper Skagit Valley; and

WHEREAS, 2003 will mark the festival's Twentieth Anniversary, and beginning this year the Skagit Valley Tulip Festival will be held during the entire month of April instead of the usual three weekends; and

WHEREAS, This year's Tulip Festival Ambassadors, Lindsey Oosterhof and Michael Elhardt, will ably and personably perform their responsibilities as representatives of this festival; and

WHEREAS, Highlights of the festival include the Annual Kiwanis Salmon Barbeque, Downtown Mount Vernon Street Fair, Anacortes Quilt Walk, and much more, including last year's added attraction, the Country Market; and

WHEREAS, More than half a million people visited the Skagit Valley Tulip Festival last year, participating in the joy and excitement of this annual event and contributing to the economy of Skagit Valley; and

WHEREAS, This nationally acclaimed celebration creates a spirit of communal pride for residents of Skagit Valley;

NOW, THEREFORE, BE IT RESOLVED, That the Washington State Senate salute the communities of the Skagit Valley, their Chambers of Commerce, the Skagit Valley Tulip Festival Ambassadors, Tulip Festival Committee, community leaders, and corporate sponsors for the success of this important event; and

BE IT FURTHER RESOLVED, That the Senate encourage all Washington residents to take time to enjoy this spectacular display, which reflects the fullness of life in the valley and the valley's wonderful people; and

BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Secretary of the Senate to Skagit Valley Tulip Festival Executive Director Audrey Smith and the Tulip Festival Ambassadors.

Senators Spanel and Haugen spoke to Senate Resolution 8651.

INTRODUCTION OF SPECIAL GUESTS

The President welcomed and introduced Audrey Smith, the Tulip Festival Executive Director, and Lindsey Oosterhof and Michael Elhardt, the Tulip Ambassadors, who were seated on the rostrum.

PERSONAL PRIVILEGE

Senator Tim Sheldon: “A point of personal privilege, Mr. President. I know we have all watched the events unfold on the television this morning. I just wanted to say thanks to the constituents that we all have and that I have that are in the military--especially the young kids that are doing a job that is probably dangerous and sometimes with no great reward. I know that we all have constituents in Fort Lewis and McChord and Oak Harbor, Fairchild, Everett, just to name a few places that today have brought us a lot of pride. Sometimes, we just don’t say thanks to those young kids that are risking their lives for us. I think it is a point of personal privilege that I would like to just say and I know that everyone else shares with the tremendous day today and a tremendous event. Thank you.”

MOTION

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

SECOND READING

SUBSTITUTE HOUSE BILL NO. 2172, by House Committee on Technology, Telecommunications and Energy (originally sponsored by Representatives Sullivan, Morris, Benson, Rockefeller, Wood and Hudgins)

Promoting the purchase of fuel cells for the use of distributive generation at state-owned facilities.

The bill was read the second time.

MOTION

On motion of Senator Morton, the following Committee on Natural Resources, Energy and Water striking amendment was adopted:

Strike everything after the enacting clause and insert the following:

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

(a) As a consumer of energy resources and a committed steward of public health and environmental quality, Washington state government is well-positioned to be a leader in promoting and using clean energy technologies, including fuel cells;

(b) The use of batteries and internal combustion engines in state facilities for emergency and back-up power, and to power remote equipment for communications, security lighting, cameras and sensors, signaling, environmental monitoring, and similar applications can adversely impact the environment.

(2) The legislature declares that:

(a) Fuel cells operating directly on hydrogen emit only water and heat and can be used indoors and outdoors without harming the environment or people;

(b) Fuel cells provide reliable and high digital quality direct current power that meets uninterruptible and premium power supply requirements;

(d) On a life-cycle cost basis, small fuel cells can offer a better economic value to the state than batteries and internal combustion engines.

NEW SECTION. Sec. 2. A new section is added to chapter 43.19 RCW to read as follows:

(1) State agencies, when planning for the construction of a state facility, must consider the utilization of fuel cells as a primary source of energy for a facility that requires a source of uninterrupted electric power.

(2) When planning the procurement of back-up power systems and remote power sources, state agencies must consider the use of fuel cells as an alternative to purchasing and utilizing batteries or internal combustion engines.

(3) The director of the department of general administration shall assist state agencies in identifying, evaluating, and developing potential fuel cell applications at their facilities. The department shall notify state agencies of these potential applications and provide technical and analytical support. The department shall recover costs for this assistance through written agreements, including reimbursement from third parties participating in the projects, for any costs and expenses incurred in providing assistance.

(4) State agencies may use financing contracts under chapter 39.94 RCW to provide all or part of the funding for the procurement and installation of fuel cells for the purposes of this section. The department of general administration shall determine the eligibility of projects for financing contracts. The repayments of the financing contracts shall be sufficient to pay, when due, the principal and interest on the contracts.

(5) For the purposes of this section, (a) "fuel cell" means an electrochemical reaction that generates electric energy by combining atoms of hydrogen and oxygen in the presence of a catalyst; and (b) "state facilities" has the same meaning as provided in RCW 43.19.450.

(6) State agencies are also authorized to consider and use other renewable or alternative energy sources to the same extent as provided for fuel cells under subsections (1) through (4) of this section."

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

On page 1, line 2 of the title, after "facilities;" strike the remainder of the title and insert "adding a new section to chapter 43.19 RCW; and creating a new section."

MOTION

On motion of Senator Morton, the rules were suspended, Substitute House Bill No. 2172, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 2172, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 2172, 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 Benton, Brandland, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 48.

Excused: Senator Brown - 1.

SUBSTITUTE HOUSE BILL NO. 2172, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1348, by Representatives Flannigan and Moeller (by request of Office of the Code Reviser)

Making technical corrections.

The bill was read the second time.

MOTION

On motion of Senator Esser, the rules were suspended, House Bill No. 1348 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1348.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1348 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Excused: Senator Brown - 1.

HOUSE BILL NO. 1348, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

INTRODUCTION OF SPECIAL GUEST

The President welcomed and introduced Mika Mulliken, granddaughter of Senator Mulliken, who was seated on the rostrum.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1848, by House Committee on Commerce and Labor (originally sponsored by Representatives Conway and Chandler)

Exempting the installation, maintenance, and repair of certain medical devices from electrician licensing requirements.

The bill was read the second time.

MOTION

On motion of Senator Honeyford, the rules were suspended, Substitute House Bill No. 1848 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1848.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1848 and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 1; Excused, 1.

Voting yea: Senators Benton, Brandland, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 47.

Absent: Senator Honeyford - 1.

Excused: Senator Brown - 1.

SUBSTITUTE HOUSE BILL NO. 1848, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1045, by Representatives Miloscia, Chandler and Upthegrove

Modifying water-sewer district bidding provisions.

The bill was read the second time.

MOTION

On motion of Senator Roach, the rules were suspended, House Bill No. 1045 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1045.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1045 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Excused: Senator Brown - 1.

HOUSE BILL NO. 1045, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1086, by House Committee on Transportation (originally sponsored by Representatives Morris, Pearson, Sullivan, Miloscia and Kristiansen)

Moving mobile homes by mobile home park owners.

The bill was read the second time.

MOTION

On motion of Senator Horn, the rules were suspended, Substitute House Bill No. 1086 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1086.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1086 and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 1; Excused, 1.

Absent: Senator Zarelli - 1.

Excused: Senator Brown - 1.

SUBSTITUTE HOUSE BILL NO. 1086, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1242, by House Committee on Technology, Telecommunications and Energy (originally sponsored by Representatives Sullivan, Crouse, Wood, Morris, Grant, Schoesler, Quall, Ruderman and Mielke)

Encouraging the use of biodiesel by state agencies.

The bill was read the second time.

MOTION

On motion of Senator Morton, the rules were suspended, Engrossed Substitute House Bill No. 1242 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 1242.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 1242 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 0; Excused, 1.

Excused: Senator Brown - 1.

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1242, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

PERSONAL PRIVILEGE

Senator Benton: “I rise to a point of personal privilege, Mr. President. I want to join with Senator Sheldon’s remarks this morning. Many of you do not know, but my father is a retired naval officer, who served in the liberation of France and was involved in the invasion of Normandy. Some of you do know that. Both of my older brothers served in Vietnam, one a naval aviator who flew ninety-three combat missions, and the other who was decorated by the President of the United States for bravery for serving in the One-hundred and First Airborne Division. So, I come from an extremely patriotic and military background in my family. Quite often times, I wear my patriotism on my sleeve, as you know.

“You don’t have to come from that kind of background to be extremely proud of what we saw today and yesterday. When you see one-hundred fifty children ranging in age from eight to fourteen, many of whom have been in prison for five years, because they refused to join a political party--being released by the fifth Marine Division--and the joy of their parents and their families to have their children back--children in prison for not joining a political party. When you see the joy of the Iraq people being liberated this morning, it is awfully hard to contain your pride and your enthusiasm for what America has been able to accomplish in three very short weeks. Six weeks it took to liberate Kuwait–three weeks to liberate the country of Iraq. For that, I think every American should be extremely proud this morning on what we have been able to accomplish. Thank you Mr. President.”

Further remarks on the war in Iraq ensued.

SECOND READING

HOUSE BILL NO. 1631, by Representatives McCoy, Cooper, Conway, Romero, Lovick, Simpson and Kenney

Regulating fire protection sprinkler system contractors.

The bill was read the second time.

MOTION

On motion of Senator Honeyford, the rules were suspended, House Bill No. 1631 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1631.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1631 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 49.

HOUSE BILL NO. 1631, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Honeyford, Senator Zarelli was excused.

MOTION

On motion of Senator Sheahan, Senators Hewitt and Rossi were excused.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1219, by House Committee on Financial Institutions and Insurance (originally sponsored by Representatives Schual-Berke, Benson, Anderson, Upthegrove, Rockefeller and Simpson) (by request of Governor Locke)

Addressing violations connected with the offer, sale, or purchase of securities.

The bill was read the second time.

MOTION

On motion of Senator Benton, the following Committee on Financial Services, Insurance and Housing striking amendment was adopted:Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 43.320.110 and 2002 c 371 s 912 are each amended to read as follows:

There is created a local fund known as the "financial services regulation fund" which shall consist of all moneys received by the divisions of the department of financial institutions, except for the division of securities which shall deposit thirteen percent of all moneys received, except as provided in section 2 of this act, and which shall be used for the purchase of supplies and necessary equipment; the payment of salaries, wages, and utilities; the establishment of reserves; and other incidental costs required for the proper regulation of individuals and entities subject to regulation by the department. The state treasurer shall be the custodian of the fund. Disbursements from the fund shall be on authorization of the director of financial institutions or the director's designee. In order to maintain an effective expenditure and revenue control, the fund shall be subject in all respects to chapter 43.88 RCW, but no appropriation is required to permit expenditures and payment of obligations from the fund.

((Between July 1, 2001, and December 31, 2001, the legislature may transfer up to two million dollars from the financial services regulation fund to the digital government revolving account. During the 2001-2003 fiscal biennium, the legislature may transfer from the financial services regulation fund to the state general fund such amounts as reflect the excess fund balance of the fund and appropriations reductions made by the 2002 supplemental appropriations act for administrative efficiencies and savings.))

NEW SECTION. Sec. 2. A new section is added to chapter 43.320 RCW to read as follows:

(1) The securities prosecution fund is created in the custody of the state treasurer and shall consist of all fines received by the division of securities under RCW 21.20.400(2), 21.20.110, and 21.20.395 and all undistributed funds from orders of disgorgement and restitution under RCW 21.20.110(8) and 21.20.390(6). No appropriation is required to permit expenditures from this fund, but the account is subject to allotment procedures under chapter 43.88 RCW.

(2) Expenditures from this fund may be used solely for administering the fund and for payment of costs, expenses, and charges incurred in the preparation, initiation, and prosecution of criminal charges for violations of chapters 21.20, 21.30, 19.100, and 19.110 RCW. Only the director or the director's designee may authorize expenditures from the fund.

(3) Applications for fund expenditures must be submitted by the attorney general or the proper prosecuting attorney to the director. The application must clearly identify the alleged criminal violations identified in subsection (2) of this section and indicate the purpose for which the funds will be used. The application must also certify that any funds received will be expended only for the purpose requested. Funding requests must be approved by the director prior to any expenditure being incurred by the requesting attorney general or prosecuting attorney. At the conclusion of the prosecution, the attorney general or prosecuting attorney shall provide the director with an accounting of fund expenditures, a summary of the case, and certify his or her compliance with any rules adopted by the director relating to the administration of the fund.

(4) If the balance of the securities prosecution fund reaches three hundred fifty thousand dollars, all fines received by the division of securities under RCW 21.20.400(2), 21.20.110, and 21.20.395 and all undistributed funds from orders of disgorgement and restitution under RCW 21.20.110(8) and 21.20.390(6) shall be deposited in the financial services regulation fund until such time as the balance in the fund falls below three hundred fifty thousand dollars, at which time the fines received by the division of securities under RCW 21.20.400(2), 21.20.110, and 21.20.395 and all undistributed funds from orders of disgorgement and restitution under RCW 21.20.110(8) and 21.20.390(6) shall be deposited to the securities prosecution fund until balance in the fund once again reaches three hundred fifty thousand dollars.

Sec. 3. RCW 21.20.400 and 1979 ex.s. c 68 s 28 are each amended to read as follows:

(1) Any person who willfully violates any provision of this chapter except RCW 21.20.350, or who willfully violates any rule or order under this chapter, or who willfully violates RCW 21.20.350 knowing the statement made to be false or misleading in any material respect, ((shall upon conviction be fined not more than five thousand dollars or imprisoned not more than ten years, or both; but no)) is guilty of a class B felony punishable under RCW 9A.20.021(1)(b). However, a person may not be imprisoned for the violation of any rule or order if that person proves that he or she had no knowledge of the rule or order.

(2) Any person who knowingly alters, destroys, shreds, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object's integrity or availability for use in an official proceeding under this chapter, is guilty of a class B felony punishable under RCW 9A.20.021(1)(b) or punishable by a fine of not more than five hundred thousand dollars, or both. The fines paid under this subsection shall be deposited into the securities prosecution fund.

(3) No indictment or information may be returned under this chapter more than (a) five years after the ((alleged)) violation, or (b) three years after the actual discovery of the violation, whichever date of limitation is later.

Sec. 4. RCW 21.20.110 and 2002 c 65 s 4 are each amended to read as follows:

(1) The director may by order deny, suspend, revoke, restrict, condition, or limit any application or registration of any broker- dealer, salesperson, investment adviser representative, or investment adviser; or censure or fine the registrant or an officer, director, partner, or person ((occupying)) performing similar functions for a registrant; if the director finds that the order is in the public interest and that the applicant or registrant or, in the case of a broker-dealer or investment adviser, any partner, officer, director, or person ((occupying)) performing similar functions:

(a) Has filed an application for registration under this section which, as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in the light of the circumstances under which it was made, false, or misleading with respect to any material fact;

(b) Has willfully violated or willfully failed to comply with any provision of this chapter or a predecessor act or any rule or order under this chapter or a predecessor act, or any provision of chapter 21.30 RCW or any rule or order thereunder;

(c) Has been convicted, within the past ten years, of any misdemeanor involving a security, or a commodity contract or commodity option as defined in RCW 21.30.010, or any aspect of the securities, commodities, business investments, franchises, business opportunities, insurance, banking, or finance business, or any felony involving moral turpitude;

(d) Is permanently or temporarily enjoined or restrained by any court of competent jurisdiction in an action brought by the director, a state, or a federal government agency from engaging in or continuing any conduct or practice involving any aspect of the securities, commodities, business investments, franchises, business opportunities, insurance, banking, or finance business;

(e) Is the subject of an order entered after notice and opportunity for hearing:

(i) By the securities administrator of a state or by the Securities and Exchange Commission denying, revoking, barring, or suspending registration as a broker-dealer, salesperson, investment adviser, or investment adviser representative;

(ii) By the securities administrator of a state or by the Securities and Exchange Commission ((sanctioning)) against a broker- dealer ((or an)), salesperson, investment adviser, or an investment adviser representative;

(iii) By the Securities and Exchange Commission or self-regulatory organization suspending or expelling the registrant from membership in a self-regulatory organization; or

(iv) By a court adjudicating a United States Postal Service fraud;

The director may not commence a revocation or suspension proceeding more than one year after the date of the order relied on. The director may not enter an order on the basis of an order under another state securities act unless that order was based on facts that would constitute a ground for an order under this section;

(f) Is the subject of an order, adjudication, or determination, after notice and opportunity for hearing, by the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Federal Trade Commission, or a securities or insurance regulator of any state that the person has ((willfully)) violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Commodities Exchange Act, the securities, insurance, or commodities law of any state, or a federal or state law under which a business involving investments, franchises, business opportunities, insurance, banking, or finance is regulated;

(g) Has engaged in dishonest or unethical practices in the securities or commodities business;

(h) Is insolvent, either in the sense that his or her liabilities exceed his or her assets or in the sense that he or she cannot meet his or her obligations as they mature; but the director may not enter an order against an applicant or registrant under this subsection (1)(h) without a finding of insolvency as to the applicant or registrant;

(i) Has not complied with a condition imposed by the director under RCW 21.20.100, or is not qualified on the basis of such factors as training, experience, or knowledge of the securities business, except as otherwise provided in subsection (2) of this section;

(j) Has failed to supervise reasonably a salesperson or an investment adviser representative, or employee, if the salesperson, investment adviser representative, or employee was subject to the person's supervision and committed a violation of this chapter or a rule adopted or order issued under this chapter. For the purposes of this subsection, no person fails to supervise reasonably another person, if:

(i) There are established procedures, and a system for applying those procedures, that would reasonably be expected to prevent and detect, insofar as practicable, any violation by another person of this chapter, or a rule or order under this chapter; and

(ii) The supervising person has reasonably discharged the duties and obligations required by these procedures and system without reasonable cause to believe that another person was violating this chapter or rules or orders under this chapter;

(k) Has failed to pay the proper filing fee within thirty days after being notified by the director of a deficiency, but the director shall vacate an order under this subsection (1)(k) when the deficiency is corrected;

(l) Within the past ten years has been found, after notice and opportunity for a hearing to have:

(i) ((Willfully)) Violated the law of a foreign jurisdiction governing or regulating the business of securities, commodities, insurance, or banking;

(ii) Been the subject of an order of a securities regulator of a foreign jurisdiction denying, revoking, or suspending the right to engage in the business of securities as a broker-dealer, agent, investment adviser, or investment adviser representative; or

(iii) Been suspended or expelled from membership by a securities exchange or securities association operating under the authority of the securities regulator of a foreign jurisdiction;

(m) Is the subject of a cease and desist order issued by the Securities and Exchange Commission or issued under the securities or commodities laws of a state; or

(n) Refuses to allow or otherwise impedes the director from conducting an audit, examination, or inspection, or refuses access to any branch office or business location to conduct an audit, examination, or inspection.

(2) The director, by rule or order, may require that an examination, including an examination developed or approved by an organization of securities administrators, be taken by any class of or all applicants. The director, by rule or order, may waive the examination as to a person or class of persons if the administrator determines that the examination is not necessary or appropriate in the public interest or for the protection of investors.

(3) The director may issue a summary order pending final determination of a proceeding under this section upon a finding that it is in the public interest and necessary or appropriate for the protection of investors.

(4) The director may not impose a fine under this section except after notice and opportunity for hearing. The fine imposed under this section may not exceed ((five)) ten thousand dollars for each act or omission that constitutes the basis for issuing the order. If a petition for judicial review has not been timely filed under RCW 34.05.542(2), a certified copy of the director's order requiring payment of the fine may be filed in the office of the clerk of the superior court in any county of this state. The clerk shall treat the order of the director in the same manner as a judgment of the superior court. The director's order so filed has the same effect as a judgment of the superior court and may be recorded, enforced, or satisfied in like manner.

(5) Withdrawal from registration as a broker-dealer, salesperson, investment adviser, or investment adviser representative becomes effective thirty days after receipt of an application to withdraw or within such shorter period as the administrator determines, unless a revocation or suspension proceeding is pending when the application is filed. If a proceeding is pending, withdrawal becomes effective upon such conditions as the director, by order, determines. If no proceeding is pending or commenced and withdrawal automatically becomes effective, the administrator may nevertheless commence a revocation or suspension proceeding under subsection (1)(b) of this section within one year after withdrawal became effective and enter a revocation or suspension order as of the last date on which registration was effective.

(6) A person who, directly or indirectly, controls a person not in compliance with any part of this section may also be sanctioned to the same extent as the noncomplying person, unless the controlling person acted in good faith and did not directly or indirectly induce the conduct constituting the violation or cause of action.

(7) In any action under subsection (1) of this section, the director may charge the costs, fees, and other expenses incurred by the director in the conduct of any administrative investigation, hearing, or court proceeding against any person found to be in violation of any provision of this section or any rule or order adopted under this section.

(8) In any action under subsection (1) of this section, the director may enter an order requiring an accounting, restitution, and disgorgement, including interest at the legal rate under RCW 4.56.110(3). The director may by rule or order provide for payments to investors, rates of interest, periods of accrual, and other matters the director deems appropriate to implement this subsection.

(9) The director shall immediately suspend the license or certificate of a person who has been certified pursuant to RCW 74.20A.320 by the department of social and health services as a person who is not in compliance with a support order. If the person has continued to meet all other requirements for reinstatement during the suspension, reissuance of the license or certificate shall be automatic upon the director's receipt of a release issued by the department of social and health services stating that the licensee is in compliance with the order.

Sec. 5. RCW 21.20.390 and 1995 c 46 s 7 are each amended to read as follows:

Whenever it appears to the director that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the director may in his or her discretion:

(1) Issue an order directing the person to cease and desist from continuing the act or practice and to take appropriate affirmative action within a reasonable period of time, as prescribed by the director, to correct conditions resulting from the act or practice including, without limitation, a requirement to provide restitution((: PROVIDED, That)). Reasonable notice of and opportunity for a hearing shall be given((: PROVIDED, FURTHER, That)). The director may issue a ((temporary)) summary order pending the hearing which shall remain in effect until ten days after the hearing is held and which shall become final if the person to whom notice is addressed does not request a hearing within ((fifteen)) twenty days after the receipt of notice; or

(2) The director may without issuing a cease and desist order, bring an action in any court of competent jurisdiction to enjoin any such acts or practices and to enforce compliance with this chapter or any rule or order ((hereunder)) adopted under this chapter. The court may grant such ancillary relief, including a civil penalty, restitution, and disgorgement, as it deems appropriate. Upon a proper showing a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The director may not be required to post a bond. If the director prevails, the director shall be entitled to a reasonable attorney's fee to be fixed by the court.

(3) Whenever it appears to the director that any person who has received a permit to issue, sell, or otherwise dispose of securities under this chapter, whether current or otherwise, has become insolvent, the director may petition a court of competent jurisdiction to appoint a receiver or conservator for the defendant or the defendant's assets. The director may not be required to post a bond.

(4) The director may bring an action for restitution or damages on behalf of the persons injured by a violation of this chapter, if the court finds that private civil action would be so burdensome or expensive as to be impractical.

(5) In any action under this section, the director may charge the costs, fees, and other expenses incurred by the director in the conduct of any administrative investigation, hearing, or court proceeding against any person found to be in violation of any provision of this section or any rule or order adopted under this section.

(6) In any action under subsection (1) of this section, the director may enter an order requiring an accounting, restitution, and disgorgement, including interest at the legal rate under RCW 4.56.110(3). The director may by rule or order provide for payments to investors, interest rates, periods of accrual, and other matters the director deems appropriate to implement this subsection.

Sec. 6. RCW 21.20.395 and 1998 c 15 s 18 are each amended to read as follows:

(1) A person who, in an administrative action by the director, is found to have knowingly or recklessly violated any provision of this chapter, or any rule or order under this chapter, may be fined, after notice and opportunity for hearing, in an amount not to exceed ((five)) ten thousand dollars for each violation.

(2) A person who, in an administrative action by the director, is found to have knowingly or recklessly violated an administrative order issued under RCW 21.20.110 or 21.20.390 shall pay an administrative fine in an amount not to exceed twenty-five thousand dollars for each violation.

(3) The fines paid under subsections (1) and (2) of this section shall be deposited into the securities prosecution fund.

(4) If a petition for judicial review has not been timely filed under RCW 34.05.542(2), a certified copy of the director's order requiring payment of the fine may be filed in the office of the clerk of the superior court in any county of this state. The clerk shall treat the order of the director in the same manner as a judgment of the superior court. The director's order so filed has the same effect as a judgment of the superior court and may be recorded, enforced, or satisfied in like manner.

Sec. 7. RCW 9A.20.021 and 1982 c 192 s 10 are each amended to read as follows:

(1) Felony. Unless a different maximum sentence for a classified felony is specifically established by statute, no person convicted of a classified felony shall be punished by confinement or fine exceeding the following:

(a) For a class A felony, by confinement in a state correctional institution for a term of life imprisonment, or by a fine in an amount fixed by the court of fifty thousand dollars, or by both such confinement and fine;

(b) For a class B felony, by confinement in a state correctional institution for a term of ten years, or by a fine in an amount fixed by the court of twenty thousand dollars, or by both such confinement and fine;

(c) For a class C felony, by confinement in a state correctional institution for five years, or by a fine in an amount fixed by the court of ten thousand dollars, or by both such confinement and fine.

(2) Gross misdemeanor. Every person convicted of a gross misdemeanor defined in Title 9A RCW shall be punished by imprisonment in the county jail for a maximum term fixed by the court of not more than one year, or by a fine in an amount fixed by the court of not more than five thousand dollars, or by both such imprisonment and fine.

(3) Misdemeanor. Every person convicted of a misdemeanor defined in Title 9A RCW shall be punished by imprisonment in the county jail for a maximum term fixed by the court of not more than ninety days, or by a fine in an amount fixed by the court of not more than one thousand dollars, or by both such imprisonment and fine.

(4) This section applies to only those crimes committed on or after July 1, 1984."

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

On page 1, line 2 of the title, after "securities;" strike the remainder of the title and insert "amending RCW 43.320.110, 21.20.400, 21.20.110, 21.20.390, 21.20.395, and 9A.20.021; adding a new section to chapter 43.320 RCW; and prescribing penalties."

MOTION

On motion of Senator Benton, the rules were suspended, Substitute House Bill No. 1219, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1219, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1219, 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 Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West and Winsley - 46.

Excused: Senators Hewitt, Rossi and Zarelli - 3.

SUBSTITUTE HOUSE BILL NO. 1219, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1243, by House Committee on Technology, Telecommunications and Energy (originally sponsored by Representatives Sullivan, Wood, Crouse, Morris and Schoesler)

Establishing a biodiesel pilot project for school transportation.

The bill was read the second time.

MOTION

On motion of Senator Morton, the rules were suspended, Engrossed Substitute House Bill No. 1243 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute House Bill No. 1243.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 1243 and the bill passed the Senate by the following vote: Yeas, 46; Nays, 0; Absent, 0; Excused, 3.

Excused: Senators Hewitt, Rossi and Zarelli - 3.

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1243, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1356, by Representatives Dunshee, Sommers, DeBolt and Alexander (by request of Utilities and Transportation Commission)

Updating utilities and transportation commission regulatory fees.

The bill was read the second time.

MOTION

On motion of Senator Horn, the following Committee on Highways and Transportation striking amendment was adopted:

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 80.24.010 and 1994 c 83 s 1 are each amended to read as follows:

Every public service company subject to regulation by the commission shall, on or before the date specified by the commission for filing annual reports under RCW 80.04.080, file with the commission a statement on oath showing its gross operating revenue from intrastate operations for the preceding calendar year or portion thereof and pay to the commission a fee equal to one-tenth of one percent of the first fifty thousand dollars of gross operating revenue, plus two-tenths of one percent of any gross operating revenue in excess of fifty thousand dollars: PROVIDED, That the ((fee shall in no case be less than one dollar)) commission may, by rule, set minimum fees that do not exceed the cost of collecting the fees. The commission may by rule waive any or all of the minimum fee established pursuant to this section.

The percentage rates of gross operating revenue to be paid in any year may be decreased by the commission for any class of companies subject to the payment of such fees, by general order entered before March 1st of such year, and for such purpose such companies shall be classified as follows:

Electrical, gas, water, telecommunications, and irrigation companies shall constitute class one. Every other company subject to regulation by the commission, for which regulatory fees are not otherwise fixed by law shall pay fees as herein provided and shall constitute additional classes according to kinds of businesses engaged in.

Any payment of the fee imposed by this section made after its due date shall include a late fee of two percent of the amount due. Delinquent fees shall accrue interest at the rate of one percent per month.

Sec. 2. RCW 81.24.010 and 1996 c 196 s 1 are each amended to read as follows:

(1) Every company subject to regulation by the commission, except auto transportation companies, steamboat companies, ((wharfingers or warehousemen,)) and motor freight carriers((, and storage warehousemen)) shall, on or before the date specified by the commission for filing annual reports under RCW 81.04.080, file with the commission a statement on oath showing its gross operating revenue from intrastate operations for the preceding calendar year, or portion thereof, and pay to the commission a fee equal to one-tenth of one percent of the first fifty thousand dollars of gross operating revenue, plus two-tenths of one percent of any gross operating revenue in excess of fifty thousand dollars, except railroad companies which shall each pay to the commission a fee equal to one and one-half percent of its intrastate gross operating revenue. ((However, the fee shall in no case be less than one dollar)) The commission may, by rule, set minimum fees that do not exceed the cost of collecting the fees. The commission may by rule waive any or all of the minimum fee established pursuant to this section. Any railroad association that qualifies as a not-for-profit charitable organization under the federal internal revenue code section 501(c)(3) is exempt from the fee required under this subsection.

(2) The percentage rates of gross operating revenue to be paid in any one year may be decreased by the commission for any class of companies subject to the payment of such fees, by general order entered before March 1st of such year, and for such purpose such companies shall be classified as follows: Railroad, express, sleeping car, and toll bridge companies shall constitute class two. Every other company subject to regulation by the commission, for which regulatory fees are not otherwise fixed by law shall pay fees as herein provided and shall constitute additional classes according to kinds of businesses engaged in.

Sec. 3. RCW 81.24.020 and 1997 c 215 s 1 are each amended to read as follows:

((By May 1st of each year)) On or before the date specified by the commission for filing annual reports under RCW 81.04.080, every auto transportation company must file with the commission a statement showing its gross operating revenue from intrastate operations for the preceding year and pay to the commission a fee of two-fifths of one percent of the amount of gross operating revenue. ((However, the fee paid shall in no case be less than two dollars and fifty cents.)) The commission may, by rule, set minimum fees that do not exceed the cost of collecting the fees. The commission may by rule waive any or all of the minimum fee established pursuant to this section.

The percentage rate of gross operating revenue to be paid in any period may be decreased by the commission by general order entered before the fifteenth day of the month preceding the month in which the fee is due.

Sec. 4. RCW 81.24.030 and 1993 c 427 s 10 are each amended to read as follows:

Every commercial ferry shall, on or before ((the first day of April of each year)) the date specified by the commission for filing annual reports under RCW 81.04.080, file with the commission a statement on oath showing its gross operating revenue from intrastate operations for the preceding calendar year, or portion thereof, and pay to the commission a fee of two-fifths of one percent of the amount of gross operating revenue: PROVIDED, That the ((fee so paid shall in no case be less than five dollars)) commission may, by rule, set minimum fees that do not exceed the cost of collecting the fees. The commission may by rule waive any or all of the minimum fee established pursuant to this section. The percentage rate of gross operating revenue to be paid in any year may be decreased by the commission by general order entered before March 1st of such year.

Sec. 5. RCW 81.77.080 and 1989 c 431 s 24 are each amended to read as follows:

Every solid waste collection company shall, on or before ((the 1st day of April of each year)) the date specified by the commission for filing annual reports under RCW 81.04.080, file with the commission a statement on oath showing its gross operating revenue from intrastate operations for the preceding calendar year, or portion thereof, and pay to the commission a fee equal to one percent of the amount of gross operating revenue: PROVIDED, That the ((fee shall in no case be less than one dollar)) commission may, by rule, set minimum fees that do not exceed the cost of collecting the fees. The commission may by rule waive any or all of the minimum fee established pursuant to this section.

It is the intent of the legislature that the fees collected under the provisions of this chapter shall reasonably approximate the cost of supervising and regulating motor carriers subject thereto, and to that end the utilities and transportation commission is authorized to decrease the schedule of fees provided in this section by general order entered before March 1st of any year in which it determines that the moneys then in the solid waste collection companies account of the public service revolving fund and the fees currently to be paid will exceed the reasonable cost of supervising and regulating such carriers.

All fees collected under this section or under any other provision of this chapter shall be paid to the commission and shall be by it transmitted to the state treasurer within thirty days to be deposited to the credit of the public service revolving fund."

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

On line 2 of the title, after "fees;" strike the remainder of the title and insert "and amending RCW 80.24.010, 81.24.010, 81.24.020, 81.24.030, and 81.77.080."

MOTION

On motion of Senator Horn, the rules were suspended, House Bill No. 1356, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of House Bill No. 1356, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1356, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

HOUSE BILL NO. 1356, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

PERSONAL PRIVILEGE

Senator Kohl-Welles: “Mr. President, a point of personal privilege. I would like to respond to something that was said earlier about the media and Iraq. I understand that the comments that were made earlier were very heartfelt. I think we are all feeling very emotional right now with what is going on in Iraq and concern about our servicemen and women over there, but I think, with all due respect to the Senator who made the remarks--complete due respect that I have–I think it is very important to us to acknowledge that those in the media and the press, who have gone over to Iraq are also risking their lives to provide us with news. It is really quite incredible. We are getting real time information observing what is going on. There have been lives lost from the media, not just American representatives of the media--the press, but also those in other countries. Not only have those lives been lost, but there are hundreds and hundreds of people over there who are still risking their lives in a very unsafe situation. One of the things that has made our country so strong and so compelling is that we have our Bill of Rights and we have the freedom of the press, which is envied all over the world. Thank you.”

SECOND READING

SUBSTITUTE HOUSE BILL NO. 2039, by House Committee on Judiciary (originally sponsored by Representatives Fromhold, Carrell, Pettigrew, Cairnes, Lantz, Moeller, Newhouse, Armstrong, Grant, Quall, Woods, Roach, Hankins, Morris, Ericksen, Crouse, Condotta, Talcott, Holmquist, McMahan, Clements, Bailey, Clibborn, Kessler, Campbell, Hunter, Chandler, Gombosky, Schoesler, Ruderman, Miloscia, Kirby, Hinkle and Kenney)

Providing affirmative defenses for activities defined under RCW 4.16.300.

The bill was read the second time.

MOTION

Senator Kline moved that the following striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. A new section is added to chapter 4.16 RCW to read as follows:

(1) Persons engaged in any activity defined in RCW 4.16.300 may be excused, in whole or in part, from any obligation, damage, loss, or liability for those defined activities under the principles of comparative fault for the following affirmative defenses:

(a) To the extent it is caused by an unforeseen act of nature that caused, prevented, or precluded the activities defined in RCW 4.16.300 from meeting the applicable building codes, regulations, and ordinances in effect at the commencement of construction. For purposes of this section an "unforeseen act of nature" means any weather condition, earthquake, or manmade event such as war, terrorism, or vandalism, in excess of the design criteria expressed by the applicable building codes, regulations, and ordinances in effect at the time of the original construction;

(b) To the extent it is caused by a homeowner's unreasonable failure to minimize or prevent those damages in a timely manner, including the failure of the homeowner to give timely notice to the builder and to allow reasonable and timely access for inspections and repairs as required by chapter 64.50 RCW;

(c) To the extent it is caused by the homeowner or his or her agent, employee, subcontractor, independent contractor, or consultant by virtue of their failure to follow the builder's or manufacturer's maintenance recommendations, or commonly accepted homeowner maintenance obligations. In order to rely upon this defense as it relates to a builder's recommended maintenance schedule, the builder shall show that the homeowner had written notice of the schedule, the schedule was reasonable at the time it was issued, and the homeowner failed to substantially comply with the written schedule;

(d) To the extent it is caused by the homeowner or his or her agent's or an independent third party's alterations, ordinary wear and tear, misuse, abuse, or neglect, or by the structure's use for something other than its intended purpose;

(e) As to a particular violation for which the builder has obtained a valid release from the party making the claim;

(f) To the extent that the builder's repair corrected the alleged violation or defect;

(g) To the extent that a cause of action does not accrue within the statute of repose pursuant to RCW 4.16.310 or that an actionable cause as set forth in RCW 4.16.300 is not filed within the applicable statute of limitations. In contract actions the applicable contract statute of limitations expires, regardless of discovery, six years after substantial completion of construction, or during the period within six years after the termination of the services enumerated in RCW 4.16.300, whichever is later;

(h) As to any causes of action to which this section does not apply, all applicable affirmative defenses are preserved.

(2) This section does not apply to any civil action in tort alleging personal injury or wrongful death to a person or persons resulting from a construction defect."

Debate ensued.

The President declared the question before the senate to be the adoption of the striking amendment by Senator Kline to Substitute House Bill No. 2039.

The motion by Senator Kline failed and the striking amendment was not adopted.

MOTION

On motion of Senator Esser, the rules were suspended, Substitute House Bill No. 2039 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 2039.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 2039 and the bill passed the Senate by the following vote: Yeas, 45; Nays, 4; Absent, 0; Excused, 0.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Finkbeiner, Franklin, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, West, Winsley and Zarelli - 45.

Voting nay: Senators Fairley, Fraser, Kline and Thibaudeau - 4.

SUBSTITUTE HOUSE BILL NO. 2039, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

PERSONAL PRIVILEGE

Senator McCaslin: “A point of personal privilege, Mr. President--and this is a point of personal privilege. For years, I have tried to get the majority leader–I think I skipped Senator Brown for the last two years, but Senator McDonald twice while he was in control. I have talked to Senator West and I talked to Senator Snyder when he was at the head of the majority party. One of the complaints that I have and have had for years, is the amount of amendments offered on the floor. I suggested from time to time that we adopt, what I understand is the Oregon system, where no amendments are offered on the floor. They go back to the committee. Take for example, the last amendment by Senator Kline and I am not criticizing him in any way, but he is an attorney--and Senator Esser is an attorney--wherever he is--he is still an attorney. There he is–there are two attorneys disagreeing on an amendment. Now, we have a Senate Rule that prior to hearing a bill, we have a five day notice to the public--and I was thinking about saying that we were conning the public, but I didn’t want to use that term. I think we are misleading the public. We can suspend that rule. The chairman can ask for a vote to suspend the rule and occasionally we do. But, there is no five day rule on any amendment that we offer before this body. The public has never seen it and probably most members of this body have never seen it. So, it is all new to us. Sometimes we understand it and most of the time, we probably don’t. If you look at that last amendment and you understand it, well, bless your heart, because you are a lot smarter than I am. I accepted Esser’s word on it and I didn’t ask Kline, because I know he proposed the amendment. Congratulations to him on his intelligence and his perception of the law as he sees it.

“I think we would serve the public well--and your constituency--if we didn’t accept amendments on the floor. If we have amendments, we go back to the committee where they will be discussed by members of the committee, as are other bills, five day suspension or not. Then, that body can either accept the amendment or reject it. At least the public is involved in it. Most of the public we see are lobbyists--paid lobbyists, but non-the-less, if you are going to serve your constituency, you should understand what you are voting for. Now, this isn’t bad today, but you will get into some bills and your will have, I don’t know, fifty amendments on here. How in the world, can you keep up with those amendments? The fact is, you can’t. I don’t think anybody here can, because we are speeding this process along to get these bills out, for whatever reason you have to get these bills out. I would implore those of you, and if there is anybody that supports me on this issue, that you talk to leadership and you consider, if nothing else, a pilot project--that one session we don’t accept amendments on the floor. If there is an amendment, we send it back. If you want to have a sixty percent rule, that is fine with me, but to continually add amendments on the floor, I think is asinine and I don’t think we are treating the public fair. Put them back into committee and when you are in committee, vote them up or down, but take care of it there. Then, the public knows what we are doing. I don’t know if that will speed up the process or slow down the process--whichever way is good--depending on your philosophy with what we should do with all of these bills we get before the body.

“Anyway, I have cleansed my blood vessels for today. I feel much better in having stated this before the body. I don’t how long I have been carrying on. You are probably sick and tired of hearing about this, but I would appreciate each one of you thinking about this and giving it some consideration as to how nice it would be to come to the floor and vote a bill up or down, instead of looking and trying to keep up and going out and talking to lobbyists for or against these amendments. Anyway, I feel much better and I thank you.”

MOTION TO LIMIT DEBATE

Senator Sheahan: “Mr. President, I move that the members of the Senate be allowed to speak only once and be limited to three minutes on each motion or amendment, except that the mover of the motion shall be allowed to open and close debate, and also that members be prohibited from yielding their time for the remainder of the day.”

The President declared the question before the Senate to be the motion by Senator Sheahan to limit debate for the remainder of the day.

The motion by Senator Sheahan carried and debate was limited for the remainder of the day.

SECOND READING

ENGROSSED HOUSE BILL NO. 2030, by Representatives Kessler, Cairnes, Talcott, McDonald, Schindler, Shabro, Pearson and Holmquist (by request of Governor Locke)

Changing requirements regarding state and local tax to provide for municipal business and occupation tax uniformity and fairness.

The bill was read the second time.

MOTION

Senator Doumit moved that the following amendment be adopted:

On page 3, after line 21, strike all material down through "annually." on line 23 and insert the following:

"(b) Except for cities with populations of less than sixty thousand, a uniform, minimum small business tax threshold of at least the equivalent of twenty thousand dollars in gross income annually. Cities with populations of less than sixty thousand must have a uniform, minimum small business tax threshold of at least the equivalent of two thousand dollars in gross income annually. Minimum thresholds may be applied proportionally for taxpayers reporting on a quarterly or monthly basis."

Debate ensued.

Senator Betti Sheldon demanded a roll call and the demand was sustained.

Further debate ensued.

The President declared the question before the Senate to be the roll call on the adoption of the amendment by Senator Doumit on page 3, after line 21, to Engrossed House Bill No. 2030.

ROLL CALL

The Secretary called the roll on the adoption of the amendment by Senator Doumit on page 3, line 21, to Engrossed House Bill No. 2030 and the amendment was adopted by the following vote: Yeas, 27; Nays, 22; Absent, 0; Excused, 0.

Voting yea: Senators Brown, Deccio, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Poulsen, Prentice, Rasmussen, Reardon, Regala, Sheldon, B., Shin, Spanel, Thibaudeau and Winsley - 27.

Voting nay: Senators Benton, Brandland, Carlson, Esser, Finkbeiner, Hale, Hewitt, Honeyford, Horn, Johnson, Mulliken, Oke, Parlette, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West and Zarelli - 22.

MOTION

On motion of Senator Sheahan, further consideration of Engrossed House Bill No. 2030 was deferred.

SECOND READING

ENGROSSED HOUSE BILL NO. 2140, by Representatives Grant and Linville

Reaffirming the role of the state conservation commission.

The bill was read the second time.

MOTION

Senator Swecker moved that the following Committee on Agriculture striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Commission" means the Washington state conservation commission created in section 2 of this act.

(2) "District" or "conservation district" means a governmental subdivision of this state created according to chapter 89.08 RCW.

(3) "Board" and "supervisors" mean the board of supervisors of a conservation district.

(4) "Land occupier" or "occupier of land" has the same meaning as in RCW 89.08.020.

(5) "District elector" or "voter" has the same meaning as in RCW 89.08.020.

(6) "Renewable natural resources," "natural resources," or "resources" has the same meaning as in RCW 89.08.020.

(7) "Conservation" has the same meaning as in RCW 89.08.020.

(8) "Farm and agricultural land" has the same meaning as in RCW 89.08.020.

Sec. 2. RCW 89.08.030 and 1987 c 180 s 1 are each amended to read as follows:

(1) There is hereby established to serve as an agency of the state ((and)) the state conservation commission. The commission is authorized to perform the functions conferred upon it by law((,)). The ((state conservation)) commission((, which)) shall succeed to all powers, duties and property of the state soil and water conservation committee.

(2) The commission shall consist of ten members, five of whom are ex officio. Two members shall be appointed by the governor((, one of whom shall be a landowner or operator of a farm. At least two of the three elected members shall be landowners or operators of a farm and shall be elected as herein provided)). Three members shall be elected as provided in subsection (4) of this section.

(3) At least one of the appointed members shall be a landowner or operator of a farm. The appointed members shall serve for a term of four years.

(4) At least two of the three elected members shall be landowners or operators of a farm. The three elected members shall be elected for three-year terms, with one ((shall be)) elected each year by the district supervisors at their annual statewide meeting. One of the members shall reside in eastern Washington, one in central Washington and one in western Washington, with the specific boundaries to be determined by district supervisors. ((At the first such election, the term of the member from western Washington shall be one year, central Washington two years and eastern Washington three years, and successors shall be elected for three years.))

(5) Unexpired term vacancies in the office of appointed commission members shall be filled by appointment by the governor in the same manner as full-term appointments. Unexpired terms of elected commission members shall be filled by the regional vice president of the Washington association of conservation districts who is serving that part of the state where the vacancy occurs, ((such)) for a term to continue only until district supervisors can fill the unexpired term by electing the commission member.

(6) The director of the department of ecology, the director of the department of agriculture, the commissioner of public lands, the president of the Washington association of conservation districts, and the dean of the college of agriculture at Washington State University shall be ex officio members of the commission. An ex officio member of the commission shall hold office so long as he or she retains the office by virtue of which he or she is a member of the commission. Ex officio members may delegate their authority.

(7) The commission may invite appropriate officers of cooperating organizations((,)) and state and federal agencies to serve as advisers to the conservation commission.

Sec. 3. RCW 89.08.040 and 1984 c 287 s 112 are each amended to read as follows:

(1) Members of the commission shall be compensated in accordance with RCW 43.03.240 and shall be entitled to travel expenses in accordance with RCW 43.03.050 and 43.03.060 incurred in the discharge of their duties.

(2) The commission shall keep a record of its official actions, shall adopt a seal, which shall be judicially noticed, and may perform such acts, hold such public hearings, and promulgate such rules and regulations as may be necessary for the execution of its functions under this chapter ((184, Laws of 1973 1st ex. sess)) and chapter 89.08 RCW.

(3) The ((state department of ecology)) office of financial management is empowered to pay the travel expenses of the elected and appointed members of the ((state conservation)) commission, and the salaries, wages and other expenses of such administrative officers or other employees as may be required under the provisions of this chapter.

Sec. 4. RCW 89.08.050 and 1973 1st ex.s. c 184 s 6 are each amended to read as follows:

(1) The commission may employ an administrative officer((,)) and such temporary or permanent technical experts and ((such)) other agents and employees((, permanent and temporary)) as it may require((, and)). The commission shall determine ((their)) the qualifications, duties, and compensation of its administrative officer, technical experts, agents, and employees. The commission may call upon the attorney general for ((such)) legal services as it may require.

((It)) (2) The commission shall have authority to delegate to its chairman, to one or more of its members, to one or more agents or employees such duties and powers as it deems proper. ((It))

(3) The commission shall be supplied with suitable office accommodations at the central office of the department of ecology, and shall be furnished the necessary supplies and equipment.

(4) The commission shall organize annually and select a chairman from among its members, who shall serve for one year from the date of his or her selection.

(5) A majority of the commission shall constitute a quorum ((and)). All actions of the commission shall be by a majority vote of the members present and voting at a meeting at which a quorum is present.

Sec. 5. RCW 89.08.060 and 1973 1st ex.s. c 184 s 7 are each amended to read as follows:

Upon request of the commission, for the purpose of carrying out any of ((its)) the commission's functions, the supervising officer of any state agency or state institution of learning may, insofar as may be possible under available appropriations and having due regard to the needs of the agency to which the request is directed, assign or detail to the commission, members of the staff or personnel of such agency or institution of learning, and make such special reports, surveys, or studies as the commission may request.

Sec. 6. RCW 89.08.070 and 1973 1st ex.s. c 184 s 8 are each amended to read as follows:

((In addition to the duties and powers hereinafter conferred upon)) The commission((, it)) shall have the ((following duties and powers)) duty and power to:

(1) ((To)) Offer such assistance as may be appropriate to the supervisors of conservation districts ((organized under the provisions of chapter 184, Laws of 1973 1st ex. sess., in the carrying)) to carry out ((of)) any of their powers and programs((:));

(((a) to)) (2) Assist and guide districts in the preparation and carrying out of programs for resource conservation authorized under chapter ((184, Laws of 1973 1st ex. sess.)) 89.08 RCW;

(((b) to)) (3) Review district programs;

(((c) to)) (4) Coordinate the programs of the several districts and resolve any conflicts in such programs;

(((d) to)) (5) Facilitate, promote, assist, harmonize, coordinate, and guide the resource conservation programs and activities of districts as they relate to other special purpose districts, counties, and other public agencies((.));

(((2) To)) (6) Keep the supervisors of each of the several conservation districts ((organized under the provisions of chapter 184, Laws of 1973 1st ex. sess.)) informed of the activities and experience of all other districts ((organized hereunder)), and ((to)) facilitate an interchange of advice and experience ((between such)) among districts and cooperation ((between)) among them((.));

(((3) To)) (7) Review agreements, or forms of agreements, proposed to be entered into by districts with other districts or with any state, federal, interstate, or other public or private agency, organization, or individual, and advise the districts concerning such agreements or forms of agreements((.));

(((4) To)) (8) Secure the cooperation and assistance of the United States and any of its agencies, and of agencies of this state in the work of such districts((.));

(((5) To)) (9) Recommend the inclusion in annual and longer term budgets and appropriation legislation of the state of Washington of funds necessary for appropriation by the legislature to finance the activities of the commission and the conservation districts; ((to)) administer the provisions of any law ((hereinafter)) enacted by the legislature appropriating funds for expenditure in connection with the activities of conservation districts; ((to)) distribute to conservation districts funds, equipment, supplies and services received by the commission for that purpose from any source, subject to ((such)) any applicable conditions ((as shall be made applicable thereto)) in any state or federal statute or local ordinance making available such funds, property or services; ((to)) issue regulations establishing guidelines and suitable controls to govern the use by conservation districts of such funds, property and services; and ((to)) review all budgets, administrative procedures and operations of such districts and advise the districts concerning their conformance with applicable laws and regulations((.));

(((6) To)) (10) Encourage the cooperation and collaboration of state, federal, regional, interstate and local public and private agencies with the conservation districts((,)) and facilitate arrangements under which the conservation districts may serve county governing bodies and other agencies as their local operating agencies in the administration of any activity concerned with the conservation of renewable natural resources((.));

(((7) To)) (11) Disseminate information throughout the state concerning the activities and programs of the conservation districts ((organized hereunder, and to)); encourage the formation of such districts in areas ((where)) in which their organization is desirable; ((to)) and make available information concerning the needs and the work of the conservation districts and the commission to the governor, the legislature, executive agencies of the government of this state, political subdivisions of this state, cooperating federal agencies, and the general public((.));

(((8))) (12) Receive, pursuant to procedures developed mutually by the commission and other state and local agencies ((that are)) authorized to plan or administer activities significantly affecting the conservation of renewable natural resources, ((to receive)) from such agencies for review and comment suitable descriptions of their plans, programs and activities for purposes of coordination with district conservation programs; ((to)) and arrange for and participate in conferences necessary to avoid conflict among such plans and programs, to call attention to omissions, and to avoid duplication of effort((.));

(((9) To)) (13) Compile information and make studies, summaries and analysis of district programs in relation to each other and to other resource conservation programs on a statewide basis((.));

(((10) To)) (14) Assist conservation districts in obtaining legal services from state and local legal officers((.));

(((11) To)) (15) Require annual reports from conservation districts, the form and content of which shall be developed by the commission((.)); and

(((12) To)) (16) Establish by regulations, with the assistance and advice of the state auditor's office, adequate and reasonably uniform accounting and auditing procedures ((which shall)) that must be used by conservation districts.

Sec. 7. RCW 89.08.450 and 1995 c 378 s 1 are each amended to read as follows:

The legislature declares that it is the goal of the state of Washington to preserve and restore the natural resources of the state and, in particular, fish and wildlife and their habitat. It is further the policy of the state insofar as possible to utilize the commission and conservation districts in these efforts and the volunteer organizations who have demonstrated their commitment to these goals.

To this end, it is the intent of the legislature to minimize the expense and delays caused by unnecessary bureaucratic process in securing permits for projects that preserve or restore native fish and wildlife habitat.

Sec. 8. RCW 89.08.460 and 1995 c 378 s 2 are each amended to read as follows:

The definitions in this section apply throughout RCW 89.08.460 through 89.08.510 (as recodified by this act) unless the context clearly requires otherwise((, the definitions in this section shall apply throughout RCW 89.08.450 through 89.08.510)).

(1) "Watershed restoration plan" means a plan, developed or sponsored by the department of fish and wildlife, the department of ecology, the department of natural resources, the department of transportation, a federally recognized Indian tribe acting within and pursuant to its authority, a city, a county, or a conservation district, that provides a general program and implementation measures or actions for the preservation, restoration, re-creation, or enhancement of the natural resources, character, and ecology of a stream, stream segment, drainage area, or watershed, and for which agency and public review has been conducted pursuant to chapter 43.21C RCW, the state environmental policy act. If the implementation measures or actions would have a probable significant, adverse environmental impact, a detailed statement under RCW 43.21C.031 must be prepared on the plan.

(2) "Watershed restoration project" means a public or private project authorized by the sponsor of a watershed restoration plan that implements the plan or a part of the plan and consists of one or more of the following activities:

(a) A project that involves ((less)) fewer than ten miles of streamreach, in which ((less)) fewer than twenty-five cubic yards of sand, gravel, or soil is removed, imported, disturbed, or discharged, and in which no existing vegetation is removed except as minimally necessary to facilitate additional plantings;

(b) A project for the restoration of an eroded or unstable stream bank that employs the principles of bioengineering, including limited use of rock as a stabilization only at the toe of the bank, and with primary emphasis on using native vegetation to control the erosive forces of flowing water; or

(c) A project primarily designed to improve fish and wildlife habitat, remove or reduce impediments to migration of fish, or enhance the fishery resource available for use by all of the citizens of the state, provided that any structure other than a bridge or culvert or instream habitat enhancement structure associated with the project is ((less)) fewer than two hundred square feet in floor area and is located above the ordinary high water mark of the stream.

Sec. 9. RCW 89.08.470 and 1998 c 249 s 13 are each amended to read as follows:

(1) ((By January 1, 1996,)) The ((Washington conservation)) commission shall develop, in consultation with other state agencies, tribes, and local governments, a consolidated application process for permits for a watershed restoration project developed by an agency or sponsored by an agency on behalf of a volunteer organization. The consolidated process shall include a single permit application form for use by all responsible state and local agencies. The commission shall encourage use of the consolidated permit application process by any federal agency responsible for issuance of related permits. The permit application forms to be consolidated shall include, at a minimum, applications for: (a) Approvals related to water quality standards under chapter 90.48 RCW; (b) hydraulic project approvals under chapter ((75.20)) 77.55 RCW; and (c) section 401 water quality certifications under 33 U.S.C. Sec. 1341 and chapter 90.48 RCW.

(2) If a watershed restoration project is also a fish habitat enhancement project that meets the criteria of RCW ((75.20.350)) 77.55.290(1), the project sponsor shall instead follow the permit review and approval process established in RCW ((75.20.350)) 77.55.290 with regard to state and local government permitting requirements. The sponsor shall ((so)) notify state and local permitting authorities.

Sec. 10. RCW 89.08.480 and 1995 c 378 s 4 are each amended to read as follows:

Each agency of the state and unit of local government that claims jurisdiction or the right to require permits, other approvals, or fees as a condition of allowing a watershed restoration project to proceed shall:

(1) Designate an office or official as a designated recipient of project applications; and ((shall))

(2) Inform the ((conservation)) commission of the designation.

Sec. 11. RCW 89.08.490 and 1995 c 378 s 5 are each amended to read as follows:

All agencies of the state and local governments shall accept the single application developed under RCW 89.08.470 (as recodified by this act). Unless the procedures under RCW 89.08.500 (as recodified by this act) are invoked, the application shall be processed without charge and permit decisions shall be issued within forty-five days of the receipt of a complete application.

Sec. 12. RCW 89.08.500 and 1995 c 378 s 6 are each amended to read as follows:

The applicant or any state agency, tribe, or local government with permit processing responsibility may request that the office of permit assistance ((center)) created ((by chapter 347, Laws of 1995)) in chapter 43.42 RCW appoint a project facilitator to develop in consultation with the applicant and permit agencies a coordinated process for permit decisions on the application. The process may incorporate procedures for coordinating state permits under ((chapter 347, Laws of 1995)) chapter 43.42 RCW. The ((center)) office shall adopt a target of completing permit decisions within forty-five days of receipt of a complete application.

((If House Bill No. 1724 is not enacted by June 30, 1995, this section shall be null and void.))

Sec. 13. RCW 89.08.510 and 1995 c 378 s 7 are each amended to read as follows:

State agencies, tribes, and local governments responsible for permits or other approvals of watershed restoration projects as defined in RCW 89.08.460 (as recodified by this act) may develop general permits or permits by rule to address some or all projects required by an approved watershed restoration plan, or for types of watershed restoration projects. Nothing in this chapter ((378, Laws of 1995)) precludes local governments, state agencies, and tribes from working out other cooperative permitting agreements outside the procedures of this chapter ((378, Laws of 1995)).

Sec. 14. RCW 89.08.520 and 2001 c 227 s 3 are each amended to read as follows:

(1) In administering grant programs to improve water quality and protect habitat, the commission shall require grant recipients to incorporate the environmental benefits of the project into their grant applications((, and)). The commission shall utilize the statement of environmental ((benefit[s])) benefits in its grant prioritization and selection process.

(2) The commission shall also develop appropriate outcome-focused performance measures to be used both for management and performance assessment of the grant program. The commission shall work with the districts to develop uniform performance measures across participating districts.

(3) To the extent possible, the commission should coordinate its performance measure system with other natural resource-related agencies as defined in RCW 43.41.270.

(4) The commission shall consult with affected interest groups in implementing this section.

Sec. 15. RCW 89.08.530 and 2002 c 280 s 2 are each amended to read as follows:

(1) The agricultural conservation easements program is created. The ((state conservation)) commission shall manage the program and adopt rules as necessary to implement the legislature's intent.

(2) The commission shall report to the legislature on an on-going basis regarding potential funding sources for the purchase of agricultural conservation easements under the program and recommend changes to existing funding authorized by the legislature.

(3) All funding for the program shall be deposited into the agricultural conservation easements account created in RCW 89.08.540 (as recodified by this act). Expenditures from the account shall be made to local governments and private nonprofits on a match or no match required basis at the discretion of the commission.

(4) Easements purchased with money from the agricultural conservation easements account run with the land.

Sec. 16. RCW 89.08.540 and 2002 c 280 s 3 are each amended to read as follows:

(1) The agricultural conservation easements account is created in the custody of the state treasurer. All receipts from legislative appropriations, other sources as directed by the legislature, and gifts, grants, or endowments from public or private sources must be deposited into the account. Expenditures from the account may be used only for the purchase of easements under the agricultural conservation easements program. Only the ((state conservation)) commission, or the executive director of the commission on the commission's behalf, 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) The commission is authorized to receive and expend gifts, grants, or endowments from public or private sources that are made available, in trust or otherwise, for the use and benefit of the agricultural conservation easements program.

Sec. 17. RCW 89.08.010 and 1973 1st ex.s. c 184 s 2 are each amended to read as follows:

((It is hereby declared, as a matter of legislative determination)) The legislature finds that:

(1) ((That)) The lands of the state of Washington are among the basic assets of the state, and ((that)) the preservation of these lands is necessary to protect and promote the health, safety, and general welfare of its people; ((that))

(2) Improper land-use practices have caused and have contributed to, and are now causing and contributing to, a progressively more serious erosion of the lands of this state by wind and water; ((that))

(3) The breaking of natural grass, plant, and forest cover have interfered with the natural factors of soil stabilization, causing loosening of soil and exhaustion of humus, and developing a soil condition that favors erosion; ((that))

(4) The topsoil is being blown and washed off of lands((; that)) and there has been an accelerated washing of sloping lands; ((that))

(5) These processes of erosion by wind and water speed up with removal of absorptive topsoil, causing exposure of less absorptive and less protective but more erosive subsoil; ((that))

(6) Failure by any land occupier to conserve the soil and control erosion upon his or her lands may cause a washing and blowing of soil from his or her lands onto other lands and makes the conservation of soil and control of erosion on such other lands difficult or impossible((, and that));

(7) Extensive denuding of land for development creates critical erosion areas that are difficult to effectively regenerate, and the resulting sediment causes extensive pollution of streams, ponds, lakes, and other waters((.));

(((2) That)) (8) The consequences of ((such)) soil erosion in the form of soil blowing and soil washing are the:

(a) Silting and sedimentation of stream channels, reservoirs, dams, ditches, and harbors, and loading of the air with soil particles; ((the))

(b) Loss of fertile soil material in dust storms; ((the))

(d) Reduction in productivity or outright ruin of rich bottom lands by overwash of poor subsoil material, sand, and gravel swept out of the hills;

(e) Deterioration of soil and its fertility, deterioration of crops grown thereon, and declining acre yields despite development of scientific processes for increasing such yields;

(f) Loss of soil and water which causes destruction of food and cover for wildlife; ((a))

(g) Blowing and washing of soil into streams, which silts over spawning beds((,)) and destroys water plants, diminishing the food supply of fish; ((a))

(h) Diminishing of the underground water reserve, which causes water shortages, intensifies periods of drought, and causes crop failures; ((an))

(i) Increase in the speed and volume of rainfall run-off, causing severe and increasing floods, which bring suffering, disease, and death; and

(j) Impoverishment of families attempting to farm eroding and eroded lands; damage to roads, highways, railways, buildings, and other property from floods and from dust storms; and losses in navigation, hydroelectric power, municipal water supply, irrigation developments, farming and grazing((.));

(((3) That)) (9) To conserve soil resources and control and prevent soil erosion and prevent flood water and sediment damages, and further agricultural and nonagricultural phases of the conservation, development, utilization, and disposal of water, it is necessary that land-use practices contributing to soil wastage and soil erosion be discouraged and discontinued((,)) and that appropriate soil-conserving land-use practices, and works of improvement for flood prevention of agricultural and nonagricultural phases of the conservation, development, utilization, and disposal of water be adopted and ((carried out)) implemented; ((that)) and

(10) Among the procedures necessary for widespread adoption((,)) are the:

(a) Carrying on of engineering operations ((such as)) including but not limited to the construction of terraces, terrace outlets, check- dams, desilting basins, flood water retarding structures, channel floodways, dikes, ponds, and ditches((, and the like)); ((the))

(b) Utilization of strip cropping, contour cultivating, and contour furrowing;

(d) Seeding and planting of waste, sloping, abandoned, or eroded lands to water-conserving and erosion-preventing plants, trees, and grasses;

(e) Forestation and reforestation;

(f) Rotation of crops;

(g) Soil stabilizations with trees, grasses, legumes, and other thick-growing, soil-holding crops, retardation of run-off by increasing absorption of rainfall; and

(h) Retirement from cultivation of steep, highly erosive areas and areas now badly gullied or otherwise eroded.

(((4) Whereas, there is a pressing need for the conservation of renewable resources in all areas of the state, whether urban, suburban, or rural, and that the benefits of resource practices, programs, and projects, as carried out by the state conservation commission and by the conservation districts, should be available to all such areas; therefore, it is hereby declared to be the policy of the legislature to provide for the conservation of the renewable resources of this state, and for the control and prevention of soil erosion, and for the prevention of flood water and sediment damages, and for furthering agricultural and nonagricultural phases of conservation, development, utilization, and disposal of water, and thereby to preserve natural resources, control floods, prevent impairment of dams and reservoirs, assist in maintaining the navigability of rivers and harbors, preserve wildlife, protect the tax base, protect public lands, and protect and promote the health, safety, and general welfare of the people of this state. To this end all incorporated cities and towns heretofore excluded from the boundaries of a conservation district established pursuant to the provisions of the state conservation district law, as amended, may be approved by the conservation commission as being included in and deemed a part of the district upon receiving a petition for annexation signed by the governing authority of the city or town and the conservation district within the exterior boundaries of which it lies in whole or in part or to which it lies closest.))

NEW SECTION. Sec. 18. A new section is added to chapter 89.08 RCW to read as follows:

(1) The legislature finds that there is a pressing need for the conservation of renewable resources in all areas of the state, whether urban, suburban, or rural. The legislature also finds that the benefits of resource practices, programs, and projects, as carried out by the commission and by the conservation districts, should be available to all such areas. Therefore, the legislature declares it is the policy of the state to provide for the:

(a) Conservation of the renewable resources of this state;

(b) Control and prevention of soil erosion;

(d) Furthering of agricultural and nonagricultural phases of conservation, development, utilization, and disposal of water.

(2) The legislature further declares that providing for the objectives identified in subsection (1) of this section will enhance the state's ability to:

(a) Preserve natural resources;

(b) Control floods;

(d) Assist in maintaining the navigability of rivers and harbors;

(e) Preserve wildlife;

(f) Protect the tax base and public lands; and

(g) Promote the health, safety, and general welfare of the people of this state.

NEW SECTION. Sec. 19. A new section is added to chapter 89.08 RCW to read as follows:

All incorporated cities and towns previously excluded from the boundaries of a conservation district may be approved by the commission as being included in and deemed a part of the district upon receiving a petition for annexation signed by the governing authority of the city or town and the conservation district within the exterior boundaries of which it lies in whole or in part or to which it lies closest.

Sec. 20. RCW 89.08.020 and 1999 c 305 s 1 are each amended to read as follows:

The definitions in this section apply throughout this chapter unless the context clearly ((indicates)) requires otherwise((, as used in this chapter:)).

(1) "Agricultural lands" includes the lands defined as "farm and agricultural lands" in subsection (7) of this section and any of the following lands:

(a) Farm woodlots fewer than twenty and more than five acres and the land on which appurtenances necessary to production, preparation, or sale of the agricultural products exist in conjunction with the lands producing such products; and

(b) Any parcel of land of one to five acres, which is not contiguous, but which otherwise constitutes an integral part of farming operations being conducted on land meeting the definition of either "agricultural lands" or "farm and agricultural lands" under this section.

(2) "Board" and "supervisors" mean the board of supervisors of a conservation district.

(3) "Commission" ((and "state conservation commission")) means the ((agency created hereunder. All former references to "state soil and water conservation committee", "state committee" or "committee" shall be deemed to be references to the "state conservation commission";)) Washington state conservation commission created in section 2 of this act.

(4) "Conservation" includes conservation, development, improvement, maintenance, preservation, protection and use, and alleviation of flood water and sediment damages, and the disposal of excess surface waters.

(5) "Conservation district" or "district"((, or "conservation district")) means a governmental subdivision of this state and a public body corporate and politic, organized in accordance with the provisions of this chapter ((184, Laws of 1973 1st ex. sess., for the purposes, with the powers, and subject to the restrictions set forth in this chapter. All districts created under chapter 184, Laws of 1973 1st ex. sess. shall be known as conservation districts and shall have all the powers and duties set out in chapter 184, Laws of 1973 1st ex. sess. All references in chapter 184, Laws of 1973 1st ex. sess. to "districts", or "soil and water conservation districts" shall be deemed to be reference to "conservation districts";

"Board" and "supervisors" mean the board of supervisors of a conservation district;)).

(6) "District elector" or "voter" means a registered voter in the county in which the district is located who resides within the district boundary or in the area affected by a petition.

(7) "Farm and agricultural land" includes the lands defined as "agricultural lands" in subsection (1) of this section and any of the following lands:

(a) Land in any contiguous ownership of twenty or more acres devoted primarily to agricultural uses;

(b) Any parcel of land five acres or more but fewer than twenty acres devoted primarily to agricultural uses, which has produced a gross income from agricultural uses equivalent to one hundred dollars or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter; or

(c) Any parcel of land fewer than five acres devoted primarily to agricultural uses that has produced a gross income of one thousand dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter.

(8) "Land occupier" or "occupier of land" includes any person, firm, political subdivision, government agency, municipality, public or private corporation, copartnership, association, or any other entity whatsoever ((which)) that holds title to, or is in possession of, any lands lying within a district organized under the provisions of this chapter ((184, Laws of 1973 1st ex. sess.)), whether as owner, lessee, renter, tenant, or otherwise((;)).

(("District elector" or "voter" means a registered voter in the county where the district is located who resides within the district boundary or in the area affected by a petition;

"Due)) (9) "Notice" means a notice published at least twice, with at least six days between publications, in a publication of general circulation within the affected area, or if there is no such publication, by posting at a reasonable number of public places within the area, where it is customary to post notices concerning county and municipal affairs. ((Any hearing held pursuant to due notice may be postponed from time to time without a new notice;))

(10) "Renewable natural resources", "natural resources" or "resources" includes land, air, water, vegetation, fish, wildlife, wild rivers, wilderness, natural beauty, scenery and open space((;

"Conservation" includes conservation, development, improvement, maintenance, preservation, protection and use, and alleviation of floodwater and sediment damages, and the disposal of excess surface waters.

"Farm and agricultural land" means either (a) land in any contiguous ownership of twenty or more acres devoted primarily to agricultural uses; (b) any parcel of land five acres or more but less than twenty acres devoted primarily to agricultural uses, which has produced a gross income from agricultural uses equivalent to one hundred dollars or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter; or (c) any parcel of land of less than five acres devoted primarily to agricultural uses which has produced a gross income of one thousand dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter. Agricultural lands shall also include farm woodlots of less than twenty and more than five acres and the land on which appurtenances necessary to production, preparation or sale of the agricultural products exist in conjunction with the lands producing such products. Agricultural lands shall also include any parcel of land of one to five acres, which is not contiguous, but which otherwise constitutes an integral part of farming operations being conducted on land qualifying under this section as "farm and agricultural lands")).

NEW SECTION. Sec. 21. A new section is added to chapter 89.08 RCW to read as follows:

All districts created under this chapter shall be known as conservation districts and shall have all the powers and duties set out in this chapter. All references in this chapter to "districts" or "soil and water conservation districts" shall be deemed to be references to "conservation districts" or "districts" as defined in this chapter.

Sec. 22. RCW 89.08.080 and 1999 c 305 s 2 are each amended to read as follows:

((To form a conservation district,)) (1) Twenty percent of the voters within the area to be affected may file a petition with the commission ((asking)) requesting that the area be organized into a district.

(2) The petition shall:

(a) Give the name of the proposed district((,));

(b) State that ((it)) the district is needed in the interest of the public health, safety, and welfare((,));

(d) Request that the commission determine that ((it)) the district be created((,)) and that ((it)) the commission define the district boundaries ((thereof)) and call an election on the question of creating the district.

(3) If more than one petition is filed covering parts of the same area, the commission may consolidate all or any of them.

Sec. 23. RCW 89.08.090 and 1973 1st ex.s. c 184 s 10 are each amended to read as follows:

(1) Within thirty days after a petition is filed, the commission shall ((give due)) issue notice of the time and place of a public hearing thereon. At the hearing all interested persons shall be heard.

(2) If it appears to the commission that additional land should be included in the district, the hearing shall be adjourned ((and)). The commission shall issue a new notice ((given)) covering the entire area and set a new date ((fixed)) for further hearing, unless waiver of notice by the owners of the additional land is filed with the commission.

((No district shall include any portion of a railroad right of way, or another similar district. The lands included in a district need not be contiguous.)) (3) Any hearing held by a district pursuant to notice as defined in RCW 89.08.020 may be postponed from time to time without a new notice.

NEW SECTION. Sec. 24. A new section is added to chapter 89.08 RCW to read as follows:

No district shall include any portion of a railroad right of way, or another similar district. The lands included in a district need not be contiguous.

Sec. 25. RCW 89.08.100 and 1973 1st ex.s. c 184 s 11 are each amended to read as follows:

(1) After the hearing held according to RCW 89.08.090, ((if)) the commission ((finds that)) shall determine whether the public health, safety, and welfare warrant the creation of the district((, it)). If it determines that creation of the district is warranted, the commission shall enter an order to that effect and define the boundaries ((thereof)) of the district by metes and bounds or by legal subdivisions.

(2) If the commission finds there is no need for the district, it shall enter an order denying the petition. No petition covering the same or substantially the same area may be filed within six months of the date the commission denies a petition under this section.

(3) In making its findings under this section, the commission shall consider the:

(a) Topography of the particular area and of the state generally; ((the))

(b) Composition of the soil; ((the))

(d) Prevailing land use practices; ((the))

(e) Effects upon and benefits to the land proposed to be included; ((the))

(f) Relation of the area to existing watersheds and agricultural regions and to other similar districts organized or proposed; and ((consider such))

(g) Other relevant physical, geographical, and economic factors ((as are relevant.

If the commission finds there is no need for the district, it shall enter an order denying the petition, and no petition covering the same or substantially the same area may be filed within six months thereafter)).

Sec. 26. RCW 89.08.110 and 1999 c 305 s 3 are each amended to read as follows:

(1) If the commission finds that the district is ((needed)) warranted pursuant to RCW 89.08.100, it shall then determine whether it is practicable. To assist the commission in determining this question, it shall, within a reasonable time, submit the proposition to a vote of the district electors in the proposed district.

(2) The commission shall fix the date of the election, designate the polling places, fix the hours for opening and closing the polls, and appoint the election officials. The commission shall conduct the election ((shall be conducted)), count the vote ((counted and)), canvas the returns ((canvassed)), and publish the results ((published by the commission)) of the election.

Sec. 27. RCW 89.08.120 and 1973 1st ex.s. c 184 s 13 are each amended to read as follows:

(1) The commission shall provide the ballots for the election ((which)). The ballots shall contain the words:

"□ For creation of a conservation district of the lands below described and lying in the county or counties of ......, ...... and ......," and

"□ Against creation of a conservation district of the lands below described and lying in the county or counties of ...., ...... and ......" (2) The ballot shall set forth the boundaries of the proposed district((,)) and contain a direction to insert an X in the square of the voter's choice.

Sec. 28. RCW 89.08.130 and 1999 c 305 s 4 are each amended to read as follows:

(1) The commission shall give ((due)) notice of the election((, which)) as defined in RCW 89.08.020. The notice shall state generally the purpose and date of the election((, the date thereof,)) and the place and hours of voting((, and)). The notice shall also set forth the boundaries of the proposed district.

(2) Only qualified district electors within the proposed district ((as determined by the commission)) may vote at the election. The commission shall determine the qualified district electors within the proposed district.

(3) Each voter shall vote in the polling place nearest the voter's residence.

Sec. 29. RCW 89.08.140 and 1973 1st ex.s. c 184 s 15 are each amended to read as follows:

(1) The commission shall bear all expense of giving the notices and conducting the hearings and election((, and)).

(2) The commission shall issue regulations governing all hearings and elections and establish procedures for determining whether districts are warranted and practicable as required by RCW 89.08.100 and 89.08.110.

(3) The commission shall supervise the conduct ((thereof)) of elections. ((It))

(4) The commission shall provide for registration of eligible voters or prescribe the procedure to determine ((the)) eligible voters.

(5) No informality in connection with the election shall invalidate the results((,)) if the notice ((thereof)) of the election was substantially given((,)) and the election fairly conducted.

Sec. 30. RCW 89.08.150 and 1999 c 305 s 5 are each amended to read as follows:

(1) The commission shall deny the petition to create a district if a majority of the votes cast at the election are against the creation of the district((, the commission shall deny the petition)).

(2) If a majority favor the district, the commission shall determine the practicability of creating the ((project)) district.

(3) In making such determination, the commission shall consider:

(a) The attitude of the voters of the district;

(b) The number of eligible voters who voted at the election;

(d) The wealth and income of the land occupiers;

(e) The probable expense of carrying out the project; and

(f) Any other economic factors relevant ((thereto)) to the creation of the district.

(4) If the commission finds that the ((project)) creation of the district is impracticable ((it)), the commission shall enter an order to that effect and deny the petition.

(5) When ((the)) a petition to create a district has been denied under this section, no new petition covering the same or substantially the same area may be filed within six months ((therefrom)) of the date of denial.

Sec. 31. RCW 89.08.160 and 1973 1st ex.s. c 184 s 17 are each amended to read as follows:

(1) If the commission finds ((the project)) creation of the district practicable, ((it)) the commission shall appoint two supervisors, one of whom shall be a landowner or operator of a farm, who shall be qualified by training and experience to perform the specialized skilled services required of them. They, with the three ((elected)) supervisors, two of whom shall be landowners or operators of a farm elected according to RCW 89.08.190, shall constitute the governing board of the district.

(2) The two appointed supervisors shall file with the secretary of state a sworn application, reciting that:

(a) A petition was filed with the commission for the creation of the district; ((that))

(b) All required proceedings ((were had thereon; that they)) for creation of the district required by this chapter were conducted;

(d) The application is being filed to complete the organization of the district and the requirements of this section. ((It))

(3) The application of the appointed supervisors shall contain the names and residences of the applicants, a certified copy of their appointments, the name of the district, the location of the office of the supervisors and the term of office of each applicant.

(4) The application of the appointed supervisors shall be accompanied by a statement of the commission((,)) reciting that:

(a) A petition was filed, notice issued, and hearing held ((thereon)) as required by this chapter; ((that it))

(b) The commission determined the need for the district and defined the boundaries ((thereof)) of the district; ((that))

(d) A majority vote favored the district((, and that));

(e) The commission had determined the district practicable; and

(f) The commission shall set forth the boundaries of the district.

Sec. 32. RCW 89.08.170 and 1973 1st ex.s. c 184 s 18 are each amended to read as follows:

(1) If the secretary of state finds that the name of the proposed district is such as will not be confused with that of any other district, ((he)) the secretary shall enter the application and statement in ((his)) the secretary's records.

(2) If ((he)) the secretary finds the name of the proposed district may be confusing, ((he)) the secretary shall certify that fact to the commission((, which)). The commission shall submit a new name free from such objections, and ((he)) the secretary shall enter the application and statement, as modified, in ((his)) the secretary's records. ((Thereupon)) The district shall then be considered organized into a body corporate.

(3) After the application and statement are entered into the secretary's records according to subsection (1) or (2) of this section, the secretary of state shall ((then)) issue to the supervisors a certificate of organization of the district under the seal of the state, and shall record the certificate in ((his)) the secretary's office.

(4) Proof of the issuance of the certificate shall be evidence of the establishment of the district, and a certified copy of the certificate shall be admissible as evidence and shall be proof of the filing and contents ((thereof. The name of a conservation district may be changed upon recommendation by the supervisors of a district and approval by the state conservation commission and the secretary of state. The new name shall be recorded by the secretary of state following the same general procedure as for the previous name)).

NEW SECTION. Sec. 33. A new section is added to chapter 89.08 RCW to read as follows:

The name of a conservation district may be changed upon recommendation by the supervisors of a district and approval by the commission and the secretary of state. The new name shall be recorded by the secretary of state following the same general procedure in RCW 89.08.170 for the previous name.

Sec. 34. RCW 89.08.180 and 1999 c 305 s 6 are each amended to read as follows:

(1) Territory may be added to an existing district upon filing a petition as in the case of formation with the commission by twenty percent of the voters of the affected area to be included. The ((same)) procedure ((shall be followed as)) for adding territory to a district shall be the same as the procedure specified in this chapter for the creation of the district.

(2) As an alternate ((procedure)) to the provisions of subsection (1) of this section, the commission may upon the petition of a majority of the voters in any one or more districts or in unorganized territory adjoining a conservation district change the boundaries of a district((,)) or districts((,)). The commission may change boundaries according to this subsection if such action will promote the practical and feasible administration of ((such)) the district or districts.

(3) Upon petition of the boards of supervisors of two or more districts, the commission may approve the combining of all or parts of such districts and name the district, or districts, with the approval of the name by the secretary of state. ((A public hearing and/or a referendum may be held if deemed)) The commission may hold a public hearing and/or a referendum on a petition filed according to this subsection if the commission determines such action necessary or desirable ((by the commission in order)) to determine the wishes of the voters.

((When districts are combined, the joint boards of supervisors will first select a chairman, secretary and other necessary officers and select a regular date for meetings. All elected supervisors will continue to serve as members of the board until the expiration of their current term of office, and/or until the election date nearest their expiration date. All appointed supervisors will continue to serve until the expiration of their current term of office, at which time the commission will make the necessary appointments. In the event that more than two districts are combined, a similar procedure will be set up and administered by the commission.

When districts are combined or territory is moved from one district to another, the property, records and accounts of the districts involved shall be distributed to the remaining district or districts as approved by the commission. A new certificate of organization, naming and describing the new district or districts, shall be issued by the secretary of state.))

NEW SECTION. Sec. 35. A new section is added to chapter 89.08 RCW to read as follows:

(1) When districts are combined according to RCW 89.08.180, the joint boards of supervisors shall select a chair, secretary, and other necessary officers and select a regular date for meetings. All elected supervisors shall continue to serve as members of the board until the expiration of their current term of office, and/or until the election date nearest their expiration date. All appointed supervisors shall continue to serve until the expiration of their current term of office, at which time the commission will make the necessary appointments.

(2) In the event that more than two districts are combined, the commission shall establish and administer a procedure similar to the procedure specified in subsection (1) of this section.

NEW SECTION. Sec. 36. A new section is added to chapter 89.08 RCW to read as follows:

(1) When districts are combined or territory is moved from one district to another according to RCW 89.08.180, the property, records, and accounts of the districts involved shall be distributed to the remaining district or districts. The commission shall approve the distribution of property, records, and accounts.

(2) A new certificate of organization, naming and describing the new district or districts, shall be issued by the secretary of state.

Sec. 37. RCW 89.08.185 and 1999 c 305 s 7 are each amended to read as follows:

(1) The local governing body of any city or incorporated town within an existing district may approve by majority vote a petition to withdraw from the district. The petition shall be submitted to the district for its approval.

(2) If the petition to withdraw is approved by the district, the petition shall be sent to the commission. The commission shall approve the petition and forward it to the secretary of state and the boundary of the district shall be adjusted accordingly.

(3)(a) If the petition is not approved by the district, the district shall adopt a resolution specifying the reasons why the petition is not approved. The petition and the district's resolution shall be sent to the commission for its review.

(b) The commission shall approve or reject the petition based upon criteria ((it has)) adopted according to subsection (4) of this section for the evaluation of petitions in dispute. If the commission approves the petition, it shall forward the petition to the secretary of state, and the boundaries of the district shall be adjusted accordingly.

(4) The ((criteria used by the commission to evaluate petitions which are in dispute)) commission shall adopt criteria for the evaluation of petitions in dispute submitted to the commission according to subsection (3) of this section. The criteria shall be adopted as rules by the commission under chapter 34.05 RCW, the administrative procedure act.

Sec. 38. RCW 89.08.190 and 2002 c 43 s 3 are each amended to read as follows:

(1) Petitions to nominate candidates for the three elected supervisors shall be filed with the commission within thirty days after the issuance of the certificate of organization pursuant to RCW 89.08.170, unless the time is extended by the commission((, petitions shall be filed with the commission to nominate candidates for the three elected supervisors)).

(2) The petition filed under this section shall be signed by not ((less)) fewer than twenty-five district electors((, and)). A district elector may sign petitions nominating more than one person.

(3) In the case of a new district, the commission shall give ((due)) notice to elect the three supervisors. ((All)) Provisions pertaining to elections on the creation of a district specified in this chapter shall govern this election so far as applicable.

(4) The names of all nominees shall appear on the ballot in alphabetical order, together with instructions to vote for three. The three candidates receiving the most votes shall be declared elected supervisors((, the one)). The candidate receiving the most ((being)) votes shall be elected for a three-year term, the ((next for two and the last for one year. An alternate method of dividing the district into three zones may be used when requested by the board of supervisors and approved by the commission. In such case,)) candidate with the second highest number of votes shall be elected for a two-year term, and the candidate with the third highest number of votes shall be elected for a one-year term.

(5) The commission may approve an alternate election method of dividing the district into three zones when requested by the board of supervisors. When this alternate method is used instructions will be to vote for one candidate in each zone. The candidate receiving the most votes in a zone shall be declared elected. The commission shall designate the term for which each supervisor shall be elected when the commission establishes the three zones.

(6) Each year after the creation of the first board of supervisors, the board shall by resolution and by giving ((due)) notice, set a date during the first quarter of each calendar year at which time it shall conduct an election((, except that for elections in 2002 only, the board shall set the date during the second quarter of the calendar year at which time it shall conduct an election)). Names of candidates nominated by petition shall appear in alphabetical order on the ballots, together with an extra line ((wherein)) on which may be written in the name of any other candidate.

(7) The commission shall establish procedures for elections, canvass the returns and announce the official results ((thereof)) of elections. Election results may be announced by polling officials at the close of the election subject to official canvass of ballots by the commission.

(8) Supervisors elected shall take office at the first board meeting following the election.

Sec. 39. RCW 89.08.200 and 1973 1st ex.s. c 184 s 21 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, the term of office of each appointed or elected supervisor shall be three years and until his or her successor is appointed or elected and qualified((, except that)).

(2) The supervisors first appointed shall serve for one and two years respectively from the date of their appointments((, as designated in their appointments.

In the case of elected supervisors, the term of office of each supervisor shall be three years and until his successor is elected and qualified, except that for the first election, the one receiving the largest number of votes shall be elected for three years; the next largest two years; and the third largest one year. Successors shall be elected for three-year terms)) with the terms designated by the commission in their appointments. The terms of the first elected supervisors shall be determined as provided in RCW 89.08.190.

(3) Vacancies in the office of appointed supervisors shall be filled by the ((state conservation)) commission. Vacancies in the office of elected supervisors shall be filled by appointment ((made by)) of the remaining supervisors for the unexpired term.

(4) A majority of the supervisors shall constitute a quorum and the concurrence of a majority is required for any official action or determination.

(5) Supervisors shall serve without compensation((,)) but ((they)) shall be entitled to expenses, including traveling expenses, necessarily incurred in discharge of their duties.

(6) A supervisor may be removed by the ((state conservation)) commission upon notice and hearing((,)) only for neglect of duty or malfeasance in office((, but)) and for no other reason.

(7) The governing board shall designate a chairman from time to time.

Sec. 40. RCW 89.08.210 and 2000 c 45 s 1 are each amended to read as follows:

(1) The supervisors may:

(a) Employ a secretary, treasurer, technical experts, and such other officers, agents, and employees, permanent and temporary, as ((they)) it may require((,)) and determine their qualifications, duties, and compensation((. It may));

(b) Call upon the attorney general for legal services((,)) or ((may)) employ its own counsel and legal staff((. The supervisors may)); and

(c) Delegate to ((their chairman, to)) its chair one or more supervisors, or ((to)) one or more agents or employees such powers and duties as it deems proper.

(2) The board of supervisors shall:

(a) Furnish to the commission, upon request, copies of ((such)) internal rules, regulations, orders, contracts, forms, and other documents as ((they)) it shall adopt or employ, and such other information concerning ((their)) its activities ((as)) that the commission may require in the performance of its duties under this chapter ((184, Laws of 1973 1st ex. sess. The supervisors shall));

(b) Provide for the execution of surety bonds for officers and all employees who shall be entrusted with funds or property((.

The supervisors shall));

(c) Provide for the ((keeping)) maintenance of a full and accurate record of all proceedings, resolutions, regulations, and orders issued or adopted((. The supervisors shall)); and

(d) Provide for an annual audit of the accounts of receipts and disbursements ((in accordance with)) according to procedures prescribed by ((regulations of)) the commission.

((The board may invite the legislative body of any municipality or county near or within the district, to designate a representative to advise and consult with it on all questions of program and policy which may affect the property, water supply, or other interests of such municipality or county. The governing body of a district shall appoint such advisory committees as may be needed to assure the availability of appropriate channels of communication to the board of supervisors, to persons affected by district operations, and to local, regional, state and interstate special-purpose districts and agencies responsible for community planning, zoning, or other resource development activities. The district shall keep such committees informed of its work, and such advisory committees shall submit recommendations from time to time to the board of supervisors.))

NEW SECTION. Sec. 41. A new section is added to chapter 89.08 RCW to read as follows:

The board may invite the legislative body of any municipality or county near or within the district to designate a representative to advise and consult with it on all questions of program and policy that may affect the property, water supply, or other interests of such municipality or county.

NEW SECTION. Sec. 42. A new section is added to chapter 89.08 RCW to read as follows:

(1) The governing body of a district shall appoint advisory committees as needed to assure the availability of appropriate channels of communication to the board of supervisors, persons affected by district operations, and local, regional, state, and interstate special purpose districts and agencies responsible for community planning, zoning, or other resource development activities.

(2) The district shall keep any advisory committees informed of its work and require advisory committees to submit recommendations from time to time to the board of supervisors.

Sec. 43. RCW 89.08.215 and 2000 c 45 s 2 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, the treasurer of the county in which a conservation district is located ((is)) shall serve as ex officio treasurer of the district. ((However,))

(2) The board of supervisors by resolution may designate some other person having experience in financial or fiscal matters as treasurer of the conservation district. The board of supervisors shall require a bond, with a surety company authorized to do business in the state of Washington, in an amount and under the terms and conditions ((which)) that the board of supervisors by resolution from time to time finds will protect the district against loss. The premium on this bond shall be paid by the district. The district shall submit to the commission the name of the person selected to serve as treasurer according to this subsection.

(3) All district funds shall be paid to the treasurer and disbursed only on warrants issued by an auditor appointed by the board of supervisors, upon orders or vouchers approved by it. The treasurer shall establish a conservation district fund into which shall be paid all district funds. The treasurer shall maintain any special funds created by the board of supervisors for the placement of all money as the board of supervisors may, by resolution, direct.

(4) If the treasurer of the district is the treasurer of the county all district funds shall be deposited with the county depositaries under the same restrictions, contracts, and security as provided for county depositaries. If the treasurer of the district is some other person, all funds shall be deposited in a bank or banks authorized to do business in this state as the board of supervisors, by resolution, designates.

(5) A district may provide and require a reasonable bond of any other person handling moneys or securities of the district((,)) if the district pays the premium.

Sec. 44. RCW 89.08.220 and 1999 c 305 s 8 are each amended to read as follows:

(1) A conservation district organized under ((the provisions of)) this chapter ((184, Laws of 1973 1st ex. sess.)) shall constitute a governmental subdivision of this state, and a public body corporate and politic exercising public powers((, but)). A conservation district shall not levy taxes or issue bonds ((and such district, and the supervisors thereof,)).

(2) In addition to other powers specified in this chapter, a conservation district shall have the ((following powers, in addition to others granted in other sections of chapter 184, Laws of 1973 1st ex. sess.)) power to:

(((1) To)) (a) Conduct surveys, investigations, and research relating to the conservation of renewable natural resources and the preventive and control measures and works of improvement needed, ((to)) publish the results of such surveys, investigations, or research, and ((to)) disseminate information concerning such preventive and control measures and works of improvement((: PROVIDED, That in order)). To avoid duplication of research activities, no district shall initiate any research program except in cooperation with the government of this state or any of its agencies, or with the United States or any of its agencies;

(((2) To)) (b) Conduct educational and demonstrational projects on any lands within the district upon obtaining the consent of the occupier of such lands and such necessary rights or interests in such lands as may be required in order to demonstrate by example the means, methods, measures, and works of improvement by which the conservation of renewable natural resources may be carried out;

(((3) To)) (c) Carry out preventative and control measures and works of improvement for the conservation of renewable natural resources, within the district including, but not limited to, engineering operations, methods of cultivation, the growing of vegetation, changes in use of lands, and the measures listed in RCW 89.08.010, on any lands within the district upon obtaining the consent of the occupier of such lands and such necessary rights or interests in such lands as may be required;

(((4) To)) (d) Cooperate or enter into agreements with, and within the limits of appropriations duly made available to it by law, to furnish financial or other aid to any agency, governmental or otherwise, or any occupier of lands within the district in the carrying on of preventive and control measures and works of improvement for the conservation of renewable natural resources within the district, subject to such conditions as the supervisors may deem necessary to advance the purposes of this chapter ((184, Laws of 1973 1st ex. sess)). For purposes of this subsection (2)(d) only, land occupiers who are also district supervisors are not subject to the provisions of RCW 42.23.030;

(((5) To)) (e) Obtain options upon and ((to)) acquire in any manner((, except by)) other than condemnation, by purchase, exchange, lease, gift, bequest, devise, or otherwise, any property, real or personal, or rights or interests ((therein)) to property; ((to)) maintain, administer, and improve any properties acquired((, to)); receive income from such properties ((and to)); expend ((such)) income received from such properties in carrying out the purposes and provisions of this chapter ((184, Laws of 1973 1st ex. sess.)); and ((to)) sell, lease, or otherwise dispose of any of its property or interests therein in furtherance of the purposes and the provisions of this chapter ((184, Laws of 1973 1st ex. sess.));

(((6) To)) (f) Make available, on such terms, as it shall prescribe, to land occupiers within the district, agricultural and engineering machinery and equipment, fertilizer, seeds, seedlings, and such other equipment and material as will assist them to carry on operations upon their lands for the conservation of renewable natural resources;

(((7) To)) (g) Prepare and keep current a comprehensive long-range program recommending the conservation of all the renewable natural resources of the district((. Such programs shall be directed toward the best use of renewable natural resources and in a manner that will best meet the needs of the district and the state, taking into consideration, where appropriate, such uses as farming, grazing, timber supply, forest, parks, outdoor recreation, potable water supplies for urban and rural areas, water for agriculture, minimal flow, and industrial uses, watershed stabilization, control of soil erosion, retardation of water run-off, flood prevention and control, reservoirs and other water storage, restriction of developments of flood plains, protection of open space and scenery, preservation of natural beauty, protection of fish and wildlife, preservation of wilderness areas and wild rivers, the prevention or reduction of sedimentation and other pollution in rivers and other waters, and such location of highways, schools, housing developments, industries, airports and other facilities and structures as will fit the needs of the state and be consistent with the best uses of the renewable natural resources of the state. The program shall include an inventory of all renewable natural resources in the district, a compilation of current resource needs, projections of future resource requirements, priorities for various resource activities, projected timetables, descriptions of available alternatives, and provisions for coordination with other resource programs.

The district shall also prepare an annual work plan, which shall describe the action programs, services, facilities, materials, working arrangements and estimated funds needed to carry out the parts of the long-range programs that are of the highest priorities.

The districts shall hold public hearings at appropriate times in connection with the preparation of programs and plans, shall give careful consideration to the views expressed and problems revealed in hearings, and shall keep the public informed concerning their programs, plans, and activities. Occupiers of land shall be invited to submit proposals for consideration to such hearings. The districts may supplement such hearings with meetings, referenda and other suitable means to determine the wishes of interested parties and the general public in regard to current and proposed plans and programs of a district. They shall confer with public and private agencies, individually and in groups, to give and obtain information and understanding of the impact of district operations upon agriculture, forestry, water supply and quality, flood control, particular industries, commercial concerns and other public and private interests, both rural and urban.

Each district shall submit to the commission its proposed long- range program and annual work plans for review and comment.

The long-range renewable natural resource program, together with the supplemental annual work plans, developed by each district under the foregoing procedures shall have official status as the authorized program of the district, and it shall be published by the districts as its "renewable resources program". Copies shall be made available by the districts to the appropriate counties, municipalities, special purpose districts and state agencies, and shall be made available in convenient places for examination by public land occupier or private interest concerned. Summaries of the program and selected material therefrom shall be distributed as widely as feasible for public information)) according to section 35 of this act;

(((8) To)) (h) Administer any project or program concerned with the conservation of renewable natural resources located within its boundaries that is undertaken by any federal, state, or other public agency by entering into a contract or other appropriate administrative arrangement with any agency administering such project or program;

(((9))) (i) Cooperate with other districts organized under this chapter ((184, Laws of 1973 1st ex. sess.)) in the exercise of any of its powers;

(((10) To)) (j) Accept donations, gifts, and contributions in money, services, materials, or otherwise, from the United States or any of its agencies, from this state or any of its agencies, or from any other source, and ((to)) use or expend such moneys, services, materials, or any contributions in carrying out the purposes of this chapter ((184, Laws 1973 1st ex. sess.)); and

(((11) To)) (k) Sue and be sued in the name of the district; ((to)) have a seal which shall be judicially noticed; have perpetual succession unless terminated as ((hereinafter)) provided in this chapter; ((to)) make and execute contracts and other instruments, necessary or convenient to the exercise of its powers; ((to)) borrow money and ((to)) pledge, mortgage, and assign the income of the district and its real or personal property ((therefor)); and ((to)) make((,)) and amend rules and regulations not inconsistent with this chapter ((184, Laws of 1973 1st ex. sess.)) and ((to)) carry into effect its purposes((;

(12) Any two or more districts may engage in joint activities by agreement between or among them in planning, financing, constructing, operating, maintaining, and administering any program or project concerned with the conservation of renewable natural resources. The districts concerned may make available for purposes of the agreement any funds, property, personnel, equipment, or services available to them under chapter 184, Laws of 1973 1st ex. sess.;

Any district may enter into such agreements with a district or districts in adjoining states to carry out such purposes if the law in such other states permits the districts in such states to enter into such agreements.

The commission shall have authority to propose, guide, and facilitate the establishment and carrying out of any such agreement;

(13) Every district shall, through public hearings, annual meetings, publications, or other means, keep the general public, agencies and occupiers of land within the district, informed of the works and activities planned and administered by the district, of the purposes these will serve, of the income and expenditures of the district, of the funds borrowed by the district and the purposes for which such funds are expended, and of the results achieved annually by the district; and

(14) The supervisors of conservation districts may designate an area, state, and national association of conservation districts as a coordinating agency in the execution of the duties imposed by this chapter, and to make gifts in the form of dues, quotas, or otherwise to such associations for costs of services rendered, and may support and attend such meetings as may be required to promote and perfect the organization and to effect its purposes)).

NEW SECTION. Sec. 45. A new section is added to chapter 89.08 RCW to read as follows:

A comprehensive long-range program recommending the conservation of all the renewable natural resources of the district that is adopted as authorized by RCW 89.08.220(2)(g) shall be directed toward the best use of renewable natural resources and in a manner that will best meet the needs of the district and the state, taking into consideration, where appropriate, such uses as farming, grazing, timber supply, forests, parks, outdoor recreation, potable water supplies for urban and rural areas, water for agriculture, minimal flow, and industrial uses, watershed stabilization, control of soil erosion, retardation of water run-off, flood prevention and control, reservoirs and other water storage, restriction of developments of flood plains, protection of open space and scenery, preservation of natural beauty, protection of fish and wildlife, preservation of wilderness areas and wild rivers, the prevention or reduction of sedimentation and other pollution in rivers and other waters, and such location of highways, schools, housing developments, industries, airports, and other facilities and structures as will fit the needs of the state and be consistent with the best uses of the renewable natural resources of the state. The program shall include an inventory of all renewable natural resources in the district, a compilation of current resource needs, projections of future resource requirements, priorities for various resource activities, projected timetables, descriptions of available alternatives, and provisions for coordination with other resource programs.

The district shall also prepare an annual work plan, which shall describe the action programs, services, facilities, materials, working arrangements, and estimated funds needed to carry out the parts of the long-range programs that are of the highest priorities.

The districts shall hold public hearings at appropriate times in connection with the preparation of programs and plans, shall give careful consideration to the views expressed and problems revealed in hearings, and shall keep the public informed concerning their programs, plans, and activities. Occupiers of land shall be invited to submit proposals for consideration to such hearings. The districts may supplement such hearings with meetings, referenda, and other suitable means to determine the wishes of interested parties and the general public in regard to current and proposed plans and programs of a district. They shall confer with public and private agencies, individually and in groups, to give and obtain information and understanding of the impact of district operations upon agriculture, forestry, water supply and quality, flood control, particular industries, commercial concerns, and other public and private interests, both rural and urban.

Each district shall submit to the commission its proposed long- range program and annual work plans for review and comment.

The long-range renewable natural resource program, together with the supplemental annual work plans, developed by each district under the foregoing procedures shall have official status as the authorized program of the district, and it shall be published by the districts as its renewable resources program. Copies shall be made available by the districts to the appropriate counties, municipalities, special purpose districts, and state agencies, and shall be made available in convenient places for examination by public land occupier or private interest concerned. Summaries of the program and selected material therefrom shall be distributed as widely as feasible for public information.

NEW SECTION. Sec. 46. A new section is added to chapter 89.08 RCW to read as follows:

(1) Any two or more districts may engage in joint activities by agreement between or among them in planning, financing, constructing, operating, maintaining, and administering any program or project concerned with the conservation of renewable natural resources. The districts concerned may make available for purposes of the agreement any funds, property, personnel, equipment, or services available to them under this chapter.

(2) Any district may enter into such agreements with a district or districts in adjoining states to carry out such purposes if the law in such other states permits the districts in such states to enter into such agreements.

(3) The commission shall have authority to propose, guide, and facilitate the establishment and carrying out of any agreement made according to this section.

NEW SECTION. Sec. 47. A new section is added to chapter 89.08 RCW to read as follows:

(1) Every district shall, through public hearings, annual meetings, publications, or other means, keep the general public, agencies, and occupiers of land within the district, informed of the works and activities planned and administered by the district, of the purposes these will serve, of the income and expenditures of the district, of the funds borrowed by the district and the purposes for which such funds are expended, and of the results achieved annually by the district.

(2) Every district also shall provide to the commission the information disseminated according to subsection (1) of this section.

NEW SECTION. Sec. 48. A new section is added to chapter 89.08 RCW to read as follows:

The supervisors of conservation districts may designate an area, state, and national association of conservation districts as a coordinating agency in the execution of the duties imposed by this chapter. The supervisors shall inform the commission of any such designation. The supervisors of conservation districts may make gifts in the form of dues, quotas, or otherwise to such associations for costs of services rendered and may support and attend such meetings as may be required to promote and perfect the organization and to effect its purposes.

Sec. 49. RCW 89.08.341 and 1973 1st ex.s. c 184 s 24 are each amended to read as follows:

(1) Any agency of the government of this state and any local political subdivision of this state is hereby authorized to make such arrangements with any district, through contract, regulation or other appropriate means, wherever it believes that such arrangements will promote administrative efficiency or economy.

(2) In connection with any ((such)) arrangements authorized under subsection (1) of this section, any state or local agency or political subdivision of this state is authorized, within the limits of funds available to it, to contribute funds, equipment, property or services to any district; and to collaborate with a district in jointly planning, constructing, financing or operating any work or activity provided for in such arrangements and in the joint acquisition, maintenance and operation of equipment or facilities in connection therewith.

(3) The commission and other state agencies, the districts, and ((other)) local agencies are authorized to make available to each other maps, reports and data in their possession that are useful in the preparation of their respective programs and plans for resource conservation. The districts shall keep the commission, other state agencies, and local agencies fully informed ((concerning)) of the status and progress of the preparation of their resource conservation programs and plans.

(4) The state conservation commission and the counties of the state may provide respective conservation districts such administrative funds as will be necessary to carry out the purpose of this chapter ((184, Laws of 1973 1st ex. sess)).

Sec. 50. RCW 89.08.350 and 1999 c 305 s 9 are each amended to read as follows:

(1) At any time after five years from the date of organization of a district, twenty percent of the voters in the district may file with the commission a petition((,)) praying that the district be dissolved.

(2) The commission may hold public hearings ((thereon, and)) on a petition filed according to this section. Within sixty days from receipt of the petition, the commission shall give ((due)) notice of an election on the question of dissolution. ((It)) The commission shall provide appropriate ballots, conduct the election, canvass the returns, and declare the results in the ((same)) manner ((as)) specified in this chapter for elections to create a district.

(3) All district electors may vote at the election conducted according to this section. No informality relating to the election shall invalidate it if notice is substantially given and the election is fairly conducted.

Sec. 51. RCW 89.08.360 and 1999 c 305 s 10 are each amended to read as follows:

If a majority of the votes cast at the election are for dissolution, the district shall be dissolved. Under such circumstances, the commission shall enter an order dissolving the district.

Sec. 52. RCW 89.08.370 and 1999 c 305 s 11 are each amended to read as follows:

(1) If the district is ordered dissolved, the supervisors shall ((forthwith)) promptly terminate the affairs of the district ((and)), dispose of all district property at public auction, and ((pay)) use the proceeds ((therefrom)) from the auction to pay any debts of the district ((and)). Any remaining balance shall be paid to the state treasurer.

((They)) (2) After satisfying the requirements of subsection (1) of this section, the supervisors shall then file a verified application with the secretary of state for the dissolution of the district((,)) accompanied by a certificate of the commission reciting the determination that further operation of the district is impracticable. The application shall recite that:

(a) The property of the district has been disposed of((, that));

(b) The proceeds ((therefrom)) from the property have been used to pay any debts of the district; and

(c) Any remaining balance has been paid to the state treasurer, ((and contain)) accompanied by a full accounting of the property and proceeds. ((Thereupon))

(3) Upon receiving the verified application and the certificate required by subsection (2) of this section, the secretary shall issue to the supervisors a certificate of dissolution and file a copy thereof in his or her records.

(4) The supervisors also shall file the application required by subsection (2) of this section with the commission.

Sec. 53. RCW 89.08.390 and 1939 c 187 s 17 are each amended to read as follows:

Insofar as any of the provisions of this chapter are inconsistent with the provisions of any other law, the provisions of this chapter shall be controlling((: PROVIDED, HOWEVER, That)). None of the provisions of this chapter shall be construed so as to impair water rights appurtenant to lands within or without the boundaries of any district or districts organized ((hereunder)) according to this chapter.

Sec. 54. RCW 89.08.391 and 1973 1st ex.s. c 184 s 30 are each amended to read as follows:

Sec. 55. RCW 89.08.400 and 1992 c 70 s 1 are each amended to read as follows:

(1) Special assessments are authorized to be imposed for conservation districts as provided in this section. Activities and programs to conserve natural resources, including soil and water, are declared to be of special benefit to lands and may be used as the basis upon which special assessments are imposed.

(2)(a) Special assessments to finance the activities of a conservation district may be imposed by the county legislative authority of the county in which the conservation district is located for a period or periods each not to exceed ten years in duration.

(b) The supervisors of a conservation district shall hold a public hearing on a proposed system of assessments prior to the first day of August in the year prior to which it is proposed that the initial special assessments be collected. At that public hearing, the supervisors shall gather information and shall alter the proposed system of assessments when appropriate, including the number of years during which it is proposed that the special assessments be imposed.

(c) On or before the first day of August in that year, the supervisors of a conservation district shall file the proposed system of assessments, indicating the years during which it is proposed that the special assessments shall be imposed, and a proposed budget for the succeeding year with the county legislative authority of the county within which the conservation district is located and with the commission. The county legislative authority shall hold a public hearing on the proposed system of assessments. After the hearing, the county legislative authority may accept, or modify and accept, the proposed system of assessments, including the number of years during which the special assessments shall be imposed, if it finds that both the public interest will be served by the imposition of the special assessments and that the special assessments to be imposed on any land will not exceed the special benefit that the land receives or will receive from the activities of the conservation district.

(d) The findings of the county legislative authority shall be final and conclusive.

(e) Special assessments may be altered during this period on individual parcels in accordance with the system of assessments if land is divided or land uses or other factors change.

(f) Notice of the public hearings held by the supervisors and the county legislative authority shall be posted conspicuously in at least five places throughout the conservation district((,)) and published once a week for two consecutive weeks in a newspaper in general circulation throughout the conservation district, with the date of the last publication at least five days prior to the public hearing.

(3) A system of assessments shall classify lands in the conservation district into suitable classifications according to benefits conferred or to be conferred by the activities of the conservation district, determine an annual per acre rate of assessment for each classification of land, and indicate the total amount of special assessments proposed to be obtained from each classification of lands. Lands deemed not to receive benefit from the activities of the conservation district shall be placed into a separate classification and shall not be subject to the special assessments. An annual assessment rate shall be stated as either uniform annual per acre amount, or an annual flat rate per parcel plus a uniform annual rate per acre amount, for each classification of land. The maximum annual per acre special assessment rate shall not exceed ten cents per acre. The maximum annual per parcel rate shall not exceed five dollars.

(4) Public land, including lands owned or held by the state, shall be subject to special assessments to the same extent as privately owned lands. The procedures provided in chapter 79.44 RCW shall be followed if lands owned or held by the state are subject to the special assessments of a conservation district.

(5) Forest lands used solely for the planting, growing, or harvesting of trees may be subject to special assessments if such lands benefit from the activities of the conservation district, but the per acre rate of special assessment on benefited forest lands shall not exceed one-tenth of the weighted average per acre assessment on all other lands within the conservation district that are subject to its special assessments. The calculation of the weighted average per acre special assessment shall be a ratio calculated as follows: (a) The numerator shall be the total amount of money estimated to be derived from the imposition of per acre special assessments on the nonforest lands in the conservation district; and (b) the denominator shall be the total number of nonforest land acres in the conservation district that receive benefit from the activities of the conservation district and which are subject to the special assessments of the conservation district. No more than ten thousand acres of such forest lands that is both owned by the same person or entity and is located in the same conservation district may be subject to the special assessments that are imposed for that conservation district in any year. Per parcel charges shall not be imposed on forest land parcels. However, in lieu of a per parcel charge, a charge of up to three dollars per forest landowner may be imposed on each owner of forest lands whose forest lands are subject to a per acre rate of assessment.

(((4))) (6) A conservation district shall prepare an assessment roll that implements the system of assessments approved by the county legislative authority. The special assessments from the assessment roll shall be spread by the county assessor as a separate item on the tax rolls and shall be collected and accounted for with property taxes by the county treasurer. The amount of a special assessment shall constitute a lien against the land that shall be subject to the same conditions as a tax lien, collected by the treasurer in the same manner as delinquent real property taxes, and subject to the same interest rate and penalty as for delinquent property taxes. The county treasurer shall deduct an amount from the collected special assessments, as established by the county legislative authority, to cover the costs incurred by the county assessor and county treasurer in spreading and collecting the special assessments, but not to exceed the actual costs of such work.

(((5))) (7) The special assessments for a conservation district shall not be spread on the tax rolls and shall not be collected with property tax collections in the following year if, after the system of assessments has been approved by the county legislative authority but prior to the fifteenth day of December in that year, a petition has been filed with the county legislative authority objecting to the imposition of such special assessments, which petition has been signed by at least twenty percent of the owners of land that would be subject to the special assessments to be imposed for a conservation district.

Sec. 56. RCW 89.08.410 and 1989 c 18 s 2 are each amended to read as follows:

(1) The ((state conservation)) commission may authorize grants to conservation districts from moneys appropriated to the commission for such purposes as provided in this section. ((Such)) The grants shall be made annually on or before the last day of June of each year and shall be made only to those conservation districts that apply for the grants. After all the grant requests have been submitted, the initial grants in any year shall be made so that a conservation district shall not receive a grant in excess of the lesser of: (((1))) (a) An amount equal to the total moneys obtained by the conservation district from all other sources, other than any grants obtained from the state, during the preceding calendar year; or (((2))) (b) twenty-two thousand five hundred dollars. If the appropriated moneys are insufficient to make the maximum level of the initial grants, each grant amount shall be reduced by an equal dollar amount until the total amount of the grants is equal to the amount of the appropriation.

However, further grants shall be made to those conservation districts that were limited to grants of twenty-two thousand five hundred dollars if the appropriated moneys are in excess of the amount of the initial distribution of grants, but the total of both grants to any conservation district in any year shall not exceed an amount equal to the total moneys obtained by that conservation district from all other sources, other than any grants obtained from the state, during the preceding calendar year. If the appropriated moneys are insufficient to make the second distribution of grants, each grant under the second distribution shall be reduced by an equal dollar amount until the total amount of all the grants is equal to the amount of the appropriation.

(2) At the request of the legislature, the commission shall provide a report to the appropriate committees of the legislature describing the grants made according to this section.

Sec. 57. RCW 89.08.440 and 1997 c 295 s 3 are each amended to read as follows:

(1) For the purpose of identifying property that may qualify for the exemption provided under RCW 84.36.255, each conservation district shall develop and maintain a list of best management practices that qualify for the exemption. The districts shall submit these lists of best management practices to the commission.

(2) Each conservation district shall ensure that the appropriate forms approved by the department of revenue are made available to property owners who may qualify for the exemption under RCW 84.36.255 and shall certify claims for exemption as provided in RCW 84.36.255(3).

Sec. 58. RCW 35.63.230 and 1998 c 249 s 5 are each amended to read as follows:

A permit required under this chapter for a watershed restoration project as defined in RCW 89.08.460 (as recodified by this act) shall be processed in compliance with RCW 89.08.450 through 89.08.510 (as recodified by this act). A fish habitat enhancement project meeting the criteria of RCW ((75.20.350)) 77.55.290(1) shall be reviewed and approved according to the provisions of RCW ((75.20.350)) 77.55.290.

Sec. 59. RCW 35A.63.250 and 1998 c 249 s 6 are each amended to read as follows:

Sec. 60. RCW 36.70.992 and 1998 c 249 s 7 are each amended to read as follows:

Sec. 61. RCW 36.70A.460 and 1998 c 249 s 11 are each amended to read as follows:

Sec. 62. RCW 43.21C.0382 and 1998 c 249 s 12 are each amended to read as follows:

Decisions pertaining to watershed restoration projects as defined in RCW 89.08.460 (as recodified by this act) are not subject to the requirements of RCW 43.21C.030(2)(c). Decisions pertaining to fish habitat enhancement projects meeting the criteria of RCW ((75.20.350)) 77.55.290(1) and being reviewed and approved according to the provisions of RCW ((75.20.350)) 77.55.290 are not subject to the requirements of RCW 43.21C.030(2)(c).

Sec. 63. RCW 43.30.410 and 1995 c 378 s 13 are each amended to read as follows:

A permit required by the department for a watershed restoration project as defined in RCW 89.08.460 (as recodified by this act) shall be processed in compliance with RCW 89.08.450 through 89.08.510 (as recodified by this act).

Sec. 64. RCW 77.55.210 and 1995 c 378 s 14 are each amended to read as follows:

A hydraulic project approval required by the department for a watershed restoration project as defined in RCW 89.08.460 (as recodified by this act) shall be processed in compliance with RCW 89.08.450 through 89.08.510 (as recodified by this act).

Sec. 65. RCW 90.48.430 and 1995 c 378 s 15 are each amended to read as follows:

A permit, certification, or other approval required by the department for a watershed restoration project as defined in RCW 89.08.460 (as recodified by this act) shall be processed in compliance with RCW 89.08.450 through 89.08.510 (as recodified by this act). Public review of proposed watershed restoration projects may be shortened or waived by the department.

Sec. 66. RCW 90.58.515 and 1995 c 378 s 16 are each amended to read as follows:

Watershed restoration projects as defined in RCW 89.08.460 (as recodified by this act) are exempt from the requirement to obtain a substantial development permit. Local government shall review the projects for consistency with the locally adopted shoreline master program in an expeditious manner and shall issue its decision along with any conditions within forty-five days of receiving a complete consolidated application form from the applicant. No fee may be charged for accepting and processing applications for watershed restoration projects as used in this section.

Sec. 67. RCW 90.71.020 and 1998 c 246 s 14 are each amended to read as follows:

(1) The Puget Sound action team is created. The action team shall consist of: The directors of the departments of ecology; agriculture; natural resources; fish and wildlife; and community, trade, and economic development; the secretaries of the departments of health and transportation; the director of the parks and recreation commission; the director of the interagency committee for outdoor recreation; the administrative officer of the conservation commission designated in RCW 89.08.050 (as recodified by this act); one person representing cities, appointed by the governor; one person representing counties, appointed by the governor; one person representing federally recognized tribes, appointed by the governor; and the chair of the action team. The action team shall also include the following ex officio nonvoting members: The regional director of the United States environmental protection agency; the regional administrator of the national marine fisheries service; and the regional supervisor of the United States fish and wildlife service. The members representing cities and counties shall each be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

(2) The action team shall:

(a) Prepare a Puget Sound work plan and budget for inclusion in the governor's biennial budget;

(b) Coordinate monitoring and research programs as provided in RCW 90.71.060;

(d) Coordinate permitting requirements as necessary to expedite permit issuance for any local watershed plan developed pursuant to rules adopted under this chapter;

(e) Identify and resolve any policy or rule conflicts that may exist between one or more agencies represented on the action team;

(f) Periodically amend the Puget Sound management plan;

(g) Enter into, amend, and terminate contracts with individuals, corporations, or research institutions for the purposes of this chapter;

(h) Receive such gifts, grants, and endowments, in trust or otherwise, for the use and benefit of the purposes of the action team. The action team may expend the same or any income therefrom according to the terms of the gifts, grants, or endowments;

(i) Promote extensive public participation, and otherwise seek to broadly disseminate information concerning Puget Sound;

(j) Receive and expend funding from other public agencies;

(k) To reduce costs and improve efficiency, review by December 1, 1996, all requirements for reports and documentation from state agencies and local governments specified in the plan for the purpose of eliminating and consolidating reporting requirements; and

(l) Beginning in December 1998, and every two years thereafter, submit a report to the appropriate policy and fiscal committees of the legislature that describes and evaluates the successes and shortcomings of the current work plan relative to the priority problems identified for each geographic area of Puget Sound.

(3) By July 1, 1996, the action team shall begin developing its initial work plan, which shall include the coordination of necessary support staff.

(4) The action team shall incorporate, to the maximum extent possible, the recommendations of the council regarding amendments to the Puget Sound management plan and the work plan.

(5) All proceedings of the action team are subject to the open public meetings act under chapter 42.30 RCW.

NEW SECTION. Sec. 68. 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. 69. This act does not affect any existing right acquired or liability or obligation incurred under the sections amended in this act or under any rule or order adopted under those sections, nor does it affect any proceeding instituted under those sections.

NEW SECTION. Sec. 70. The following sections are each recodified as sections in the new chapter created in section 71 of this act: RCW89.08.030, 89.08.040, 89.08.050, 89.08.060, 89.08.070, 89.08.450, 89.08.460, 89.08.470, 89.08.480, 89.08.490, 89.08.500, 89.08.510, 89.08.520, 89.08.530, and 89.08.540.

NEW SECTION. Sec. 71. Section 1 of this act constitutes a new chapter in Title 43 RCW."

MOTION

On motion of Senator Swecker, the following amendment to the striking amendment was adopted:

Beginning on page 1, line 20 of the amendment, strike all of section 2 and insert the following:

"Sec. 2. RCW 89.08.030 and 1987 c 180 s 1 are each amended to read as follows:

(1) There is hereby established to serve as an agency of the state ((and)) the state conservation commission. The commission is authorized to perform the functions conferred upon it by law((,)). The ((state conservation)) commission((, which)) shall succeed to all powers, duties, and property of the state soil and water conservation committee.

(2) The commission shall consist of ((ten)) twelve members((,)):

(a) Five of ((whom)) the members are the ex officio members specified in subsection (5) of this section.

(b) Two members shall be appointed by the governor((,)). At least one of ((whom)) the appointed members shall be a landowner or operator of a farm. The appointed members shall serve for a term of four years.

(c) Three members shall be elected as provided in subsection (3) of this section. At least two of the three elected members shall be landowners or operators of a farm ((and shall be elected as herein provided. The appointed members shall serve for a term of four years)).

(d) One member shall be appointed by a statewide livestock trade organization, such as cattle, dairy, or poultry, and confirmed by the conservation district supervisors at their annual statewide meeting. This member shall serve for a term of four years.

(e) One member shall be a crop producer appointed by a statewide organization representing the interests of a wide range of farming operations and confirmed by the conservation district supervisors at their annual statewide meeting. This member shall serve for a term of four years.

(3) The three elected members identified in subsection (2)(c) of this section shall be elected for three-year terms, with one ((shall be)) elected each year by the district supervisors at their annual statewide meeting. One of the members shall reside in eastern Washington, one in central Washington and one in western Washington, with the specific boundaries to be determined by district supervisors. ((At the first such election, the term of the member from western Washington shall be one year, central Washington two years and eastern Washington three years, and successors shall be elected for three years.))

(4) Unexpired term vacancies in the office of appointed commission members shall be filled by appointment by the governor in the same manner as full-term appointments. Unexpired terms of elected commission members shall be filled by the regional vice president of the Washington association of conservation districts who is serving that part of the state where the vacancy occurs, ((such)) for a term to continue only until district supervisors can fill the unexpired term by electing the commission member.

(5) The director of the department of ecology, the director of the department of agriculture, the commissioner of public lands, the president of the Washington association of conservation districts, and the dean of the college of agriculture at Washington State University shall be ex officio members of the commission. An ex officio member of the commission shall hold office so long as he or she retains the office by virtue of which he or she is a member of the commission. Ex officio members may delegate their authority.

(6) The commission may invite appropriate officers of cooperating organizations((,)) and state and federal agencies to serve as advisers to the conservation commission."

The President declared the question before the Senate to be the adoption of the Committee on Agriculture striking amendment, as amended, to Engrossed House bill No. 2140.

The motion by Senator Swecker carried and the committee striking amendment, as amended, was adopted.

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

On page 1, line 2 of the title, after "commission;" strike the remainder of the title and insert "amending RCW 89.08.030, 89.08.040, 89.08.050, 89.08.060, 89.08.070, 89.08.450, 89.08.460, 89.08.470, 89.08.480, 89.08.490, 89.08.500, 89.08.510, 89.08.520, 89.08.530, 89.08.540, 89.08.010, 89.08.020, 89.08.080, 89.08.090, 89.08.100, 89.08.110, 89.08.120, 89.08.130, 89.08.140, 89.08.150, 89.08.160, 89.08.170, 89.08.180, 89.08.185, 89.08.190, 89.08.200, 89.08.210, 89.08.215, 89.08.220, 89.08.341, 89.08.350, 89.08.360, 89.08.370, 89.08.390, 89.08.391, 89.08.400, 89.08.410, 89.08.440, 35.63.230, 35A.63.250, 36.70.992, 36.70A.460, 43.21C.0382, 43.30.410, 77.55.210, 90.48.430, 90.58.515, and 90.71.020; adding new sections to chapter 89.08 RCW; adding a new chapter to Title 43 RCW; creating a new section; and recodifying 89.08.030, 89.08.040, 89.08.050, 89.08.060, 89.08.070, 89.08.450, 89.08.460, 89.08.470, 89.08.480, 89.08.490, 89.08.500, 89.08.510, 89.08.520, 89.08.530, and 89.08.540."

MOTION

On motion of Senator Swecker, the rules were suspended, Engrossed House Bill No. 2140, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed House Bill No. 2140, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed House Bill No. 2140, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 1; Excused, 1.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 47.

Absent: Senator McCaslin - 1.

Excused: Senator Honeyford - 1.

ENGROSSED HOUSE BILL NO. 2140, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1318, by Representatives Darneille, Cody, Clements, Campbell, Bush, Anderson and Pflug (by request of Department of Health)

Allowing the state board of health to reference the United States food and drug administration's food code for the purpose of adopting food service rules.

MOTION

Senator Kohl-Welles moved that the following amendment by Senators Kohl-Welles, Schmidt and Rasmussen be adopted:

On page 2, line 2, after "service." insert "For those food services located in public schools, the state board shall also consult with the office of the superintendent of public instruction, the Washington state school directors' association, parents, representatives of food service employee groups, principals, and other interested parties to develop and make available to school districts a model policy for protecting children in preschool through sixth grade who assist in elementary school kitchens. The model policy shall be available by January 12, 2004."

POINT OF ORDER

Senator Zarelli: “A point of order, Mr. President. I raise the question whether this amendment falls within the scope and object of the bill. Just briefly, I know the title has probably less relevance than the body of the measure. I would just point out that the measure is very simple in its effect and that is relating to addressing the most current version of the United States Food and Drug Administration Food Code, for the purpose of adopting rules for food service.

Senator Kohl-Welles: “Well, I understand the Senator’s concern. I also believe that this amendment does fall within the scope and object of the underlying bill, as the FDA does provide guidance to state and local agencies regarding state food service practices and a school district is a local agency. It does provide food services and we are talking about safety and well being and how our children, who are working or volunteering, so to speak, in the food service. So, I think it certainly does fall within the scope and object of the underlying bill.”

MOTION

On motion of Senator Sheahan, further consideration of House Bill No. 1318 was deferred.

MOTION

At 11:56 p.m., on motion of Senator Sheahan, the Senate recessed until 2:30 p.m.

The Senate was called to order at 2:30 p.m. by President Owen.

MOTION

At 2:30 p.m., on motion of Senator Sheahan, the Senate was declared the Senate to be at ease.

The Senate was called to order at 2:45 p.m. by President Pro Tempore Winsley.

SECOND READING

HOUSE BILL NO. 1110, by Representatives Newhouse, Clibborn, Lovick, Benson, Cooper and Haigh

Increasing the monthly pensions for volunteer fire fighters and reserve officers.

The bill was read the second time.

MOTION

On motion of Senator Sheahan, the rules were suspended, House Bill No. 1110 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of House Bill No. 1110.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1110 and the bill passed the Senate by the following vote: Yeas, 48; Nays, 0; Absent, 1; Excused, 0.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 48.

Absent: Senator Kline - 1.

HOUSE BILL NO. 1110, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1085, by House Committee on Financial Institutions and Insurance (originally sponsored by Representatives Schual-Berke, Benson and Simpson) (by request of Insurance Commissioner Kreidler)

Providing confidentiality to certain insurance commissioner examinations.

The bill was read the second time.

MOTION

On motion of Senator Benton, the following Committee on Financial Services, Insurance and Housing striking amendment was adopted:

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 48.02.065 and 2001 c 57 s 1 are each amended to read as follows:

(1) Documents, materials, or other information as described in subsection (5) of this section are confidential by law and privileged, are not subject to public disclosure under chapter 42.17 RCW, and are not subject to subpoena directed to the commissioner or any person who received documents, materials, or other information while acting under the authority of the commissioner. The commissioner is authorized to use such documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The confidentiality and privilege created by this section and RCW 42.17.31916 applies only to the commissioner, any person acting under the authority of the commissioner, the national association of insurance commissioners and its affiliates and subsidiaries, regulatory and law enforcement officials of other states and nations, the federal government, and international authorities.

(2) Neither the commissioner nor any person who received documents, materials, or other information while acting under the authority of the commissioner is permitted or required to testify in any private civil action concerning any confidential and privileged documents, materials, or information subject to subsection (1) of this section.

(3) The commissioner:

(a) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (1) of this section, with (i) the national association of insurance commissioners and its affiliates and subsidiaries, and (ii) regulatory and law enforcement officials of other states and nations, the federal government, and international authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information;

(b) May receive documents, materials, or information, including otherwise either confidential or privileged, or both, documents, materials, or information, from (i) the national association of insurance commissioners and its affiliates and subsidiaries, and (ii) regulatory and law enforcement officials of other states and nations, the federal government, and international authorities and shall maintain as confidential and privileged any document, material, or information received that is either confidential or privileged, or both, under the laws of the jurisdiction that is the source of the document, material, or information; and

(4) No waiver of an existing privilege or claim of confidentiality in the documents, materials, or information may occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (3) of this section.

(5)(a) Documents, materials, or information, which is either confidential or privileged, or both, which has been provided to the commissioner by (((a))) (i) the national association of insurance commissioners and its affiliates and subsidiaries, (((b))) (ii) regulatory or law enforcement officials of other states and nations, the federal government, or international authorities, or (((c))) (iii) agencies of this state, is confidential and privileged only if the documents, materials, or information is protected from disclosure by the applicable laws of the jurisdiction that is the source of the document, material, or information.

(b) Working papers, documents, materials, or information produced by, obtained by, or disclosed to the commissioner or any other person in the course of a financial or market conduct examination are not required to be disclosed by the commissioner unless cited by the commissioner in connection with an agency action. The commissioner shall notify a party that produced documents, materials, or information twenty days before disclosure in connection to an agency action. The notified party may seek injunctive relief to prevent disclosure of any documents, materials, or information it believes is confidential or privileged in a court of competent jurisdiction. A waiver of existing privilege or claim of confidentiality may not occur as a result of a disclosure to the commissioner under this section."

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

On page 1, line 2 of the title, after "examinations;" strike the remainder of the title and insert "and amending RCW 48.02.065."

MOTION

On motion of Senator Benton, the rules were suspended, Substitute House Bill No. 1085, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1085, as amended by the Senate.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1085, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

SUBSTITUTE HOUSE BILL NO. 1085, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

SUBSTITUTE HOUSE BILL NO. 1722, by House Committee on Finance (originally sponsored by Representatives Gombosky and Cairnes)

Limiting the taxability of certain internet transactions.

The bill was read the second time.

MOTION

On motion of Senator Esser, the rules were suspended, Substitute House Bill No. 1722 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1722.

ROLL CALL

The Secretary called the roll on the final passage of Substitute House Bill No. 1722 and the bill passed the Senate by the following vote: Yeas, 45; Nays, 4; Absent, 0; Excused, 0.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, McAuliffe, McCaslin, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, West, Winsley and Zarelli - 45.

Voting nay: Senators Fraser, Kline, Kohl-Welles and Thibaudeau - 4.

SUBSTITUTE HOUSE BILL NO. 1722, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

HOUSE BILL NO. 1460, by Representatives Pettigrew, Santos, Sullivan, Chase, Linville, Schual-Berke, Veloria, Rockefeller, Conway, Darneille, Wallace, Upthegrove, Kenney and McDermott

Creating a Washington state day of civil liberties remembrance.

The bill was read the second time.

MOTION

On motion of Senator Roach, the rules were suspended, House Bill No. 1460 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

The President Pro Tempore declared the question before the Senate to be the roll call on the final passage of House Bill No. 1460.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 1460 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

HOUSE BILL NO. 1460, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

President Owen assumed the chair.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1509, by House Committee on Trade and Economic Development (originally sponsored by Representatives Skinner, Veloria, Sehlin, Pettigrew, McDonald, Schual-Berke, McCoy, McDermott, Linville, Upthegrove and Conway)

Establishing the economic development commission.

The bill was read the second time.

MOTION

On motion of Senator Tim Sheldon, the following Committee on Economic Development striking amendment was not adopted:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that Washington's innovation and trade-driven economy has provided tremendous opportunities for citizens of the state, but that there is no guarantee that globally competitive firms will continue to grow and locate in the state. The legislature also finds that developing an effective economic development strategy for the state and operating effective economic development programs, including work force training, small business assistance, technology transfer, and export assistance, are vital to the state's efforts to encourage employment growth, increase state revenues, and generate economic well-being. In addition, the legislature finds that there is a need for responsive and consistent involvement of the private sector in the state's economic development efforts. It is the intent of the legislature to create an economic development commission that will develop and update the state's economic development strategy and performance measures and provide advice to and oversight of the department of community, trade, and economic development.

NEW SECTION. Sec. 2. (1) The Washington state economic development commission is established to oversee the economic development strategies and policies of the department of community, trade, and economic development.

(2) The Washington state economic development commission shall consist of at least seven and no more than nine members appointed by the governor. There must also be four ex officio members appointed pursuant to subsection (3) of this section.

(a) In making the appointments, the governor shall consult with organizations that have an interest in economic development, including, but not limited to, industry associations, labor organizations, minority business associations, economic development councils, chambers of commerce, port associations, tribes, and the chairs of the legislative committees with jurisdiction over economic development.

(b) The members shall be representative of the geographic regions of the state, including eastern and central Washington, as well as represent the ethnic diversity of the state, embody the importance of businesswomen, reflect the state's various business sectors, including small businesses and private businesses, and reflect the labor sectors. Members of the commission shall serve statewide interests while preserving their diverse perspectives, and shall be recognized leaders in their fields with demonstrated experience in disciplines related to economic development.

(3) The four ex officio members must include two senators and two representatives from the legislature. The president of the senate shall appoint the senate members of the commission, and the speaker of the house of representatives shall appoint the house of representatives members of the commission. There should be representation from each of the two largest political parties in the senate and the house of representatives. Vacancies will be filled from the same political party and the same house as the member whose seat was vacated. The appointment process for the vacancy will be accomplished in the same manner as the initial appointment.

(4) Members, except for the ex officio members, shall serve at the pleasure of the governor for three-year terms, except that through June 30, 2004, members currently serving on the economic development commission created by executive order may continue to serve at the pleasure of the governor. Of the initial members appointed to serve after June 30, 2004, two members shall serve one-year terms, three members shall serve two-year terms, and the remainder of the commission members shall serve three-year terms.

(5) The commission chair shall be selected from among the appointed members by the majority vote of the members.

(6) The commission may establish committees as it desires, including a committee to identify policies and programs to assist small businesses. Nonmembers can be invited by the commission to serve as committee members.

(7) The commission may adopt rules for their own governance.

NEW SECTION. Sec. 3. The Washington state economic development commission shall perform the following duties:

(1) Review and periodically update the state's economic development strategy and performance measures, and perform an annual evaluation of the strategy;

(2) Provide policy, strategic, and programmatic direction to the department of community, trade, and economic development, with specific emphasis on the following:

(a) Development of strategies that promote business retention, expansion, and creation within the state;

(b) Development of strategies that promote the growth and success of Washington's small businesses;

(d) Development of strategies to enhance relationships and cooperation between local governments, economic development councils, federal agencies, state agencies, and the legislature.

(e) Development of strategies that integrate economic development programs, including work force training, technology transfer, and export assistance; and

(f) Development of strategies to make the funds available for economic development purposes more flexible to meet emergent needs and maximize opportunities;

(3) Identify policies and programs to assist Washington's small businesses;

(4) Assist the department of community, trade, and economic development with procurement and deployment of private funds for business development, retention, expansion, and recruitment as well as other economic development efforts;

(5) Meet with the chairs and ranking minority members of the legislative committees from both the house of representatives and the senate overseeing economic development policies; and

(6) Make a biennial report to the appropriate committees of the legislature regarding the commission's review of the state's economic development policy and the commission's recommendations. The first report is due by December 31, 2004.

NEW SECTION. Sec. 4. (1) The Washington state economic development commission shall receive the necessary staff support from the staff resources of the governor, the department of community, trade, and economic development, and other state agencies as appropriate, and within existing resources and operations.

(2) Creation of the Washington state economic development commission shall not be construed to modify any authority or budgetary responsibility of the governor or the department of community, trade, and economic development.

Sec. 5. RCW 43.330.040 and 1993 c 280 s 6 are each amended to read as follows:

(1) The director shall supervise and administer the activities of the department and shall advise the governor and the legislature with respect to community and economic development matters affecting the state.

(2) In addition to other powers and duties granted to the director, the director shall have the following powers and duties:

(a) Work with the Washington state economic development commission established in section 2 of this act to develop and implement economic development policies consistent with the advice of the commission;

(b) Enter into contracts on behalf of the state to carry out the purposes of this chapter;

(((b))) (c) Act for the state in the initiation of or participation in any multigovernmental program relative to the purpose of this chapter;

(((c))) (d) Accept and expend gifts and grants, whether such grants be of federal or other funds;

(((d))) (e) Appoint such deputy directors, assistant directors, and up to seven special assistants as may be needed to administer the department. These employees are exempt from the provisions of chapter 41.06 RCW;

(((e))) (f) Prepare and submit budgets for the department for executive and legislative action;

(((f))) (g) Submit recommendations for legislative actions as are deemed necessary to further the purposes of this chapter;

(((g))) (h) Adopt rules in accordance with chapter 34.05 RCW and perform all other functions necessary and proper to carry out the purposes of this chapter;

(((h))) (i) Delegate powers, duties, and functions as the director deems necessary for efficient administration, but the director shall be responsible for the official acts of the officers and employees of the department; and

(((i))) (j) Perform other duties as are necessary and consistent with law.

(3) When federal or other funds are received by the department, they shall be promptly transferred to the state treasurer and thereafter expended only upon the approval of the director.

(4) The director may request information and assistance from all other agencies, departments, and officials of the state, and may reimburse such agencies, departments, or officials if such a request imposes any additional expenses upon any such agency, department, or official.

(5) The director shall, in carrying out the responsibilities of office, consult with governmental officials, private groups, and individuals and with officials of other states. All state agencies and their officials and the officials of any political subdivision of the state shall cooperate with and give such assistance to the department, including the submission of requested information, to allow the department to carry out its purposes under this chapter.

(6) The director may establish additional advisory or coordinating groups with the legislature, within state government, with state and other governmental units, with the private sector and nonprofit entities or in specialized subject areas as may be necessary to carry out the purposes of this chapter.

(7) The internal affairs of the department shall be under the control of the director in order that the director may manage the department in a flexible and intelligent manner as dictated by changing contemporary circumstances. Unless specifically limited by law, the director shall have complete charge and supervisory powers over the department. The director may create such administrative structures as the director deems appropriate, except as otherwise specified by law, and the director may employ such personnel as may be necessary in accordance with chapter 41.06 RCW, except as otherwise provided by law.

NEW SECTION. Sec. 6. Sections 1 through 4 of this act constitute a new chapter in Title 43 RCW."

MOTION

Senator Tim Sheldon moved that the following striking amendment by Senators Tim Sheldon, West and Brown be adopted:

Strike everything after the enacting clause and insert the following:

(2)(a) The Washington state economic development commission shall consist of at least seven and no more than nine members appointed by the governor.

(b) In making the appointments, the governor shall consult with organizations that have an interest in economic development, including, but not limited to, industry associations, labor organizations, minority business associations, economic development councils, chambers of commerce, port associations, tribes, and the chairs of the legislative committees with jurisdiction over economic development.

(c) The members shall be representative of the geographic regions of the state, including eastern and central Washington, as well as represent the ethnic diversity of the state. Representation shall derive primarily from the private sector, including, but not limited to, existing and emerging industries, small businesses, women-owned businesses, and minority-owned businesses, but other sectors of the economy that have experience in economic development, including labor organizations and nonprofit organizations, shall be represented as well. A minimum of seventy-five percent of the members shall represent the private sector. Members of the commission shall serve statewide interests while preserving their diverse perspectives, and shall be recognized leaders in their fields with demonstrated experience in disciplines related to economic development.

(3) Members appointed by the governor shall serve at the pleasure of the governor for three-year terms, except that through June 30, 2004, members currently serving on the economic development commission created by executive order may continue to serve at the pleasure of the governor. Of the initial members appointed to serve after June 30, 2004, two members shall serve one-year terms, three members shall serve two-year terms, and the remainder of the commission members shall serve three-year terms.

(4) The commission chair shall be selected from among the appointed members by the majority vote of the members.

(5) The commission may establish committees as it desires, and may invite nonmembers of the commission to serve as committee members.

(6) The commission may adopt rules for its own governance.

NEW SECTION. Sec. 3. The Washington state economic development commission shall perform the following duties:

(1) Review and periodically update the state's economic development strategy, including implementation steps, and performance measures, and perform an annual evaluation of the strategy and the effectiveness of the state's laws, policies, and programs which target economic development;

(2) Provide policy, strategic, and programmatic direction to the department of community, trade, and economic development regarding strategies to:

(a) Promote business retention, expansion, and creation within the state;

(b) Promote the business climate of the state and stimulate increased national and international investment in the state;

(d) Enhance relationships and cooperation between local governments, economic development councils, federal agencies, state agencies, and the legislature;

(e) Integrate economic development programs, including work force training, technology transfer, and export assistance; and

(f) Make the funds available for economic development purposes more flexible to meet emergent needs and maximize opportunities;

(3) Identify policies and programs to assist Washington's small businesses;

(5) Meet with the chairs and ranking minority members of the legislative committees from both the house of representatives and the senate overseeing economic development policies; and

(6) Make a biennial report to the appropriate committees of the legislature regarding the commission's review of the state's economic development policy, the commission's recommendations, and steps taken by the department of community, trade, and economic development to implement the recommendations. The first report is due by December 31, 2004.