NOTICE: Formatting and page numbering in this document may be different

from that in the original published version.

THIRTIETH DAY, FIRST SPECIAL SESSION

------------

MORNING SESSION

------------

Senate Chamber, Olympia, Tuesday, June 10, 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 Senators Deccio, McCaslin, Shin and West. On motion of Senator Hewitt, Senators Deccio, McCaslin and West were excused. On motion of Senator Eide, Senator Shin was excused.

The Sergeant at Arms Color Guard, consisting of staff members Joanne Conrad and Sandra Wibbels, presented the Colors. Senator James Hargrove 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.

MESSAGE FROM THE GOVERNOR

April 27, 2003

TO THE HONORABLE, THE SENATE

OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

In compliance with the provision of Section II of Article III of the Constitution of the state of Washington, the Governor hereby submits his report of each case of reprieve, commutation or pardon that he has granted since the adjournment of the 2002 Regular Session of the 57th Legislature, copies of which are attached.

Respectfully submitted,

JENNIFER JOLY, General Counsel

CONDITIONAL COMMUTATION

JASON PETER KRAJESKI

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, in September of 1998, Jason Peter Krajeski, then 22 years old, was caught with two stolen bicycles and a firearm in his possession. He was not linked to the initial theft of the bicycles. Due to a prior felony, he could not legally possess a firearm. All of Mr. Krajeski’s offenses were non-violent property crimes and were committed during a particularly difficult time in his life as a juvenile and young adult; and

WHEREAS, Mr. Krajeski was convicted in Pierce County Superior Court of Possession of Stolen Property in the First Degree, Possession of Stolen Property in the Second Degree, and Unlawful Possession of a Firearm in the Second Degree. Mr. Krajeski was sentenced to 38 months on June 1, 1999, but was freed on bond for approximately 2 ½ years pending an appeal, which ultimately was unsuccessful. He was finally admitted to prison on December 4, 2001, and has now served approximately nine months. Under normal circumstances, Mr. Krajeski’s earliest release date would be October 9, 2003; and

WHEREAS, during the 2 ½ years between the conviction and when he reported to prison, major changes took place in Mr. Krajeski’s life. He married on February 16, 2001 and has an infant son and stepdaughter. Before incarceration, he held steady employment for over a year at a local landscape and property management business. Mr. Krajeski worked weekdays and his wife worked weekends so that they could better provide for their children. Mr. Krajeski has risen well to the enormous commitment of both marriage and raising children. He has committed no further offenses, and has fully paid all financial obligations imposed as part of his sentence; and

WHEREAS, on remand after appeal, the sentencing judge was favorably impressed by the changes Mr. Krajeski had made in his life, and expressed a desire to reconsider the sentence, but acknowledged that she had no discretion to do so. Mr. Krajeski has tremendous support within his family. And, his own wife and child are in great need of his support. When Mr. Krajeski is released from prison, he will be able to provide them with needed income and a father figure. Employment is expected to be available to Mr. Krajeski upon his release from prison; and

WHEREAS, the Clemency and Pardons Board was also favorably impressed by the extent to which Mr. Krajeski has taken full responsibility for his past actions and turned his life around. The Board believes that he has been adequately punished, has been rehabilitated, and that further incarceration would serve no purpose; and

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the unanimous favorable recommendation of the Washington State Clemency and Pardons Board, and in light of the circumstances, I have determined that the best interests of justice will be served by this action;

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, grant to Jason Peter Krajeski this Conditional Commutation, commute his term of incarceration to time served, and direct the Department of Corrections to promptly release Mr. Krajeski from prison, SUBJECT TO THE FOLLOWING CONDITIONS:

1. Mr. Krajeski must comply with the post-release requirements of his sentence.

2. Mr. Krajeski shall not be convicted of any crimes against persons or property.

The conditions of this Conditional Commutation shall remain in force until October 18, 2004, the latest date of expiration of his original sentence; or until he has completed all post-release requirements of his sentence, whichever is later. Upon breach of any of the foregoing conditions, this Conditional Commutation shall automatically and immediately expire, and shall be null and void as if it had never been granted. This Conditional Commutation does not restore, and shall not under any circumstances be construed to restore, any civil rights related to firearms, and shall not remove any disability related to firearms under any state or federal law.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 10th

day of September, A.D., two thousand two.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

FULL AND UNCONDITIONAL PARDON

KARLO ALEXIS REYES

AMENDED AND RESTATED

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, on November 20, 1994, Karlo Alexis Reyes, then age 18, was returning from a party in Bremerton, Washington to Seattle with a group of other youths. The group stopped at a convenience store in or near Bremerton. At the store, an altercation and shouting match broke out between the group with which Mr. Reyes was traveling and another group of youths. Mr. Reyes fired gunshots from the car he was riding in, injuring one young man. The car sped away, but was later apprehended. Mr. Reyes was arrested and charged with second degree assault with a deadly weapon. He accepted full responsibility for the crime, and in May of 1995 pled guilty to the charge and served time at the Washington State Reformatory in Monroe from June 1995 through July 1996. He was then transferred to immigration custody until he was bonded out on August 2, 1996. The remainder of his state sentence was served in community placement. Mr. Reyes had no prior offenses, and has remained law-abiding since his release from prison. This is the sole criminal offense in his life.

WHEREAS, the United States Immigration and Naturalization Service has issued an order to deport Mr. Reyes to the Philippines for having committed a crime of moral turpitude and having committed an aggravated felony. The order is effective at 9:30 a.m. on September 14, 1999. Categorizing Mr. Reyes as an “aggravated felon” was made possible only due to the passage on September 30, 1996 of the federal Illegal Immigration Reform and Immigrant Responsibility Act of 1996. Under that act, the immigration laws were changed with retroactive effect to include Mr. Reyes’ crime and sentence of more than one year. Under the laws in place at the time that Mr. Reyes entered his guilty plea, the definition of “aggravated felon” did not apply to him. Moreover, the new federal act precludes Mr. Reyes from filing any waivers for relief and eliminates appeal to the federal courts. Pursuant to 8 U.S.C. Section 1251(a), a full and unconditional pardon is the only avenue of relief that will allow Mr. Reyes to continue his life in the United States.

WHEREAS, Mr. Reyes was a model prisoner while incarcerated and was commended by the prison counselor. At the request of the Assistant Superintendent, he spoke to young visitors to the prison. Mr. Reyes has accepted full responsibility for his actions. He has pre-paid all restitution and has had no prior or subsequent arrests or charges. He has severed all ties with acquaintances and friends prior to this offense. Convincing testimony that Mr. Reyes was never a gang member was presented to the Clemency and Pardons Board. Well-known Seattle School District youth counselor Mr. Tom Nakao spoke on Mr. Reyes’ behalf at the Clemency and Pardons Board Hearing, and approximately two years later made a personal plea to the Governor to be merciful to Mr. Reyes, as one of his final acts before his death of cancer. Mr. Reyes is now beginning his senior year at the University of Washington, is working several part-time jobs and has maintained a respectable grade point average.

WHEREAS, Mr. Reyes moved to the United States from the Philippines with his family when he was approximately five years old, and became a permanent resident on February 6, 1993. Today, his immediate and much of his extended family lives in Washington. Mr. Reyes does not speak any of the languages of the Philippines and has no allegiance to that country. The Clemency and Pardons Board was convinced that Mr. Reyes has fully paid for his actions, will be a worthy and productive member of society in the United States, and that deporting him to the Philippines would serve no purpose other than to destroy the hope and opportunity for this young man to complete his education and live a productive life in the United States with his family.

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the favorable recommendation of the Washington State Clemency and Pardons Board, and the purpose for Mr. Reyes’s request, and in light of the circumstances of the crime and all other factors, I have determined that the best interests of justice will be served by this action;

WHEREAS, the original Full and Unconditional Pardon granted to Mr. Reyes on September 13, 1999 contained a firearms restriction that has been deemed by an immigration judge as rendering the pardon insufficient to prevent the deportation of Mr. Reyes, despite the express purpose of the pardon.

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, hereby grant to Karlo Alexis Reyes this Full and Unconditional Pardon for the express purpose of allowing him to obtain a deportation waiver, lawfully remain in the United States, and pursue Unites States citizenship. This Full and Unconditional Pardon amends and restates the original Full and Unconditional Pardon granted on September 13, 1999, and is effective as of that date, as if it had been signed in this form on that date.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 21st

day of August, A.D., two thousand two.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

FULL AND UNCONDITIONAL PARDON

VANNY VATH

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, on May 21, 1998, Vanny Vath, then age 19, was arrested at a friend’s home in Longview, Washington. Police had been tipped that Ms. Vath was selling heroin at the home of Mary Guimont, a friend of Ms. Vath. The officers went to Ms. Guimont’s home and found Ms. Vath there. Upon a search of her purse, .5 grams of heroin, a pager and money were found. The officers arrested Ms. Vath, and she was charged with delivery of heroin. Ms. Vath accepted responsibility and pled guilty to the crime on July 21, 1998 in Cowlitz County and was sentenced to 34 months confinement. Ms. Vath has had no further offenses since her arrest in 1998,

WHEREAS, the United States Immigration and Naturalization Service has issued an order to deport Ms. Vath to Cambodia for having committed a crime of moral turpitude and having committed an aggravated felony. While Ms. Vath is a Cambodian national, she was born in a refugee camp in Thailand, and has no connections with Cambodia. Categorizing Ms. Vath as an “aggravated felon” was made possible only due to the passage on September 30, 1996 of the Immigration and Nationality Act, which provides that, at any time after admission, any alien who is convicted of an aggravated felony, shall be deported, without regard to the length of sentence or other individual circumstances. The only avenue of relief available is a full and unconditional pardon,

WHEREAS, Ms. Vath was a model prisoner, and took full advantage of vocational skills training programs while incarcerated. She was commended by her instructors who described her as gifted and always willing and able to help and teach others. She is motivated and possesses a positive attitude. While incarcerated, Ms. Vath completed her GED, courses in keyboarding, word processing, database management, spreadsheets, and a number of general vocational courses. She also completed anger management classes, victim awareness and chemical dependency courses,

WHEREAS, since her release, Ms. Vath has turned her life around. She has continued her education at Lower Columbia College in Longview, Washington and has maintained steady employment as a cable television installer. Ms. Vath has regained custody of her child. She has not had any subsequent violations of the law since her release, and has fulfilled all of the terms of her probation,

WHEREAS, Ms. Vath’s family is of Cambodian origin, and moved to the United States in 1979 when she was five months old. Her entire family, including her young U.S. citizen daughter, all reside in the United States. Ms. Vath, having been born in a Thailand refugee camp, has no connections with Cambodia. She is not fluent in the language of that country, and sending her there would be a terrible punishment for a person who has fully paid for her transgressions and is American in every way but formal citizenship. The Clemency and Pardons Board made a favorable recommendation for Ms. Vath as they believe that Ms. Vath has paid her debt to society for her crime, will be a worthy and productive member of society in the United States, and that deporting her to Cambodia would serve no purpose other than to destroy the hope and opportunity for this young woman to raise her daughter and live a productive life in the United States with her family,

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the favorable recommendation of the Washington State Clemency and Pardons Board, and the purpose for Ms. Vath’s request, I have determined that the best interests of justice will be served by this action,

NOW, Therefore, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, hereby grant to Vanny Vath this Full and Unconditional Pardon for the express purpose of allowing her to obtain a deportation waiver, lawfully remain in the United States, and eventually become a United States citizen.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 8th

day of August, A.D., two thousand two.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

FULL AND UNCONDITIONAL PARDON

OMER YASIN MOHAMMED

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, on December 4, 1993, Omer Yasin Mohammed, then age 30, was at a bar, drinking with friends. One friend asked Mr. Mohammed if he could borrow money. Mr. Mohammed refused to loan the friend money, yet the friend proceeded to take the money from Mr. Mohammed anyway. The two men exited the bar and a scuffle ensued. Mr. Mohammed hit the other man with a broken bottle, injuring the other man. Both men sustained minor injuries. They then re-entered the bar and resumed playing a game of darts together. Later that evening, the police arrived and Mr. Mohammed was arrested. His friend never pressed charges. Mr. Mohammed pled guilty to the charge of second degree assault and served ten months at the King County Jail. He was released on October 24, 1994. This was Mr. Mohammed’s only felony conviction. After serving his time, Mr. Mohammed was employed in home health care, then as a day laborer. He is now a partner in a landscaping business. He no longer uses alcohol.

WHEREAS, the United States Immigration and Naturalization Service has issued an order to deport Mr. Mohammed to Ethiopia for having committed an aggravated felony. Categorizing Mr. Mohammed as an “aggravated felon” was made possible only due to the passage of the Immigration and Nationality Act, as amended, in that, at any time after admission, any alien who is convicted of an aggravated felony, for which a term of imprisonment imposed was one year or more shall be deported. Under that act, the immigration laws were changed with a retroactive effect to include Mr. Mohammed’s crime and sentence of more than one year. Under the laws in place at the time that Mr. Mohammed entered his guilty plea, the definition of “aggravated felon” did not apply to him. Moreover, the new federal act precludes Mr. Mohammed from filing any waivers for relief and eliminates appeal to the federal courts. Pursuant to 8 U.S.C. Section 1251 (a), a full and unconditional pardon is the only avenue of relief that will allow Mr. Mohammed to continue his life in the United States.

WHEREAS, Mr. Mohammed was a model prisoner and was released after 10 months of a 15 month sentence. Mr. Mohammed has accepted full responsibility for his actions. He has paid his restitution in full and has had no subsequent convictions. Mr. Mohammed met his future wife in 1997 and married her in September, 2000. Their daughter was born in 2001. Mr. Mohammed’s family is dependent upon him for support. Mr. Mohammed has significant support in his community attesting to his devotion to his family and his rehabilitation. Mr. Mohammed is now working hard to support his family as a partner in a landscaping business.

WHEREAS, Mr. Mohammed is a political refugee from Ethiopia. His father was born in Eritrea and was killed by the Ethiopian government. When Mr. Mohammed was caught trying to flee Ethiopia, he was detained and beaten. He successfully fled the country in 1981, at age 18. Mr. Mohammed is considered Eritrean by the Ethiopian government because of his father’s birthplace. There is still considerable strife between Ethiopia and Eritrea. A number of Mr. Mohammed’s family members in Ethiopia are missing. Scholars have stated that if Mr. Mohammed returns, he will be persecuted and could even be killed. A majority of the Clemency and Pardons Board is convinced that Mr. Mohammed has fully paid for his actions, will be a worthy and productive member of society in this country, and that deporting him to Ethiopia would serve no purpose other than to destroy the hope and opportunity for this man to support his wife and child and live a meaningful life in the United States.

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the favorable recommendation of the Washington State Clemency and Pardons Board, and the purpose for Mr. Mohammed’s request, and in light of the circumstances of the crime and all other factors, I have determined that the best interests of justice will be served by this action;

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, hereby grant to Omer Yasin Mohammed this Full and Unconditional Pardon for the express purpose of allowing him to obtain a deportation waiver, lawfully remain in the United States, and eventually become a United States citizen.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 31st

day of July, A.D., two thousand two.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

CONDITIONAL PARDON

JOSEPH DUANE LINDBERG

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, on December 12, 1989, Joseph Duane Lindberg, a displaced timber worker, was involved in a domestic dispute, which resulted in law enforcement being called. A struggle ensued and an officer was slightly injured when he was shoved. Mr. Lindberg has since been divorced from his wife. Mr. Lindberg was convicted of third degree assault in Lewis County Court, and his sentence included: $70.00 court costs; $100.00 victim assessment; $55.00 restitution; $750.00 fine; 45 days of confinement to be served as 30 days work release; and 120 hours community service. Mr. Lindberg promptly completed all of the terms and conditions of his sentence. Thirteen years have elapsed since he committed the crime; and

WHEREAS, Mr. Lindberg is now a timber faller. Since his conviction in 1990, he gained custody of his daughter in 1995 and purchased a home. In 1999, his oldest daughter moved back home with him and in 2000, Mr. Lindberg enrolled in Centralia College’s Criminal Justice Program in hopes of gaining employment in law enforcement. Mr. Lindberg also had his firearms privileges reinstated in 1996. He no longer uses alcohol and has not used alcohol since the date of his arrest, some 13 years ago. Mr. Lindberg’s petition for clemency was supported by the officer who was injured, as well as other officers in the Morton police department and several instructors from Centralia College’s Criminal Justice Program. The full Clemency and Pardons Board voted unanimously to recommend a pardon; and

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the circumstances of the crime, and the unanimous favorable recommendation of the Washington State Clemency and Pardons Board, and in light of the foregoing, I have determined that the best interests of justice will be served by this action;

NOW, THEREFORE, I, Gary Locke, by the virtue of the power vested in me as Governor of the State of Washington, hereby grant to Joseph Duane Lindberg this Conditional Pardon, SUBJECT TO THE CONDITION that Mr. Lindberg shall not commit any more crimes.

The foregoing condition shall remain in force indefinitely. Upon breach of the foregoing condition, this Conditional Pardon shall automatically and immediately expire, and shall be null and void as if it had never been granted.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 31st

day of July, A.D., two thousand two.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

FURTHER MESSAGE FROM THE GOVERNOR

June 10, 2003

TO THE HONORABLE, THE SENATE

OF THE STATE OF WASHINGTON

Ladies and Gentlemen:

Respectfully submitted,

JENNIFER JOLY, General Counsel

CONDITIONAL PARDON

JENNIFER DAVIS

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, on October 13, 1995, Jennifer Davis (previously, Underwood), then 23 years old, sold a sixteenth ounce of methamphetamine to a confidential informant and undercover narcotics agent. At the time of the incident Ms. Davis notes that she was in a troubled and abusive relationship. She pled guilty to delivery of a controlled substance. Ms. Davis began her sentence on February 10, 1997, participated in the Work Ethic Program, and was released on July 14, 1997. She was under community supervision until 2002, at which time she was discharged from the Department of Corrections’ supervision; and

WHEREAS, Ms. Davis began intensive efforts to rehabilitate herself upon her arrest. She received mental health counseling and drug dependency treatment. Reports indicate that Ms. Davis was cooperative and motivated. She graduated as a dental assistant in 1997. She worked as a dental assistant, and then began attending community college to prepare for a degree as a Licensed Practical Nurse (LPN). She is currently employed as a Certified Nursing Assistant at a nursing home. While she is able to participate in the necessary training to become a LPN and is eligible for licensure, the medical facilities offering internships for her program will not accept Ms. Davis due to her conviction. Thus, she has requested a pardon for the purposing of removing her conviction as an impediment to employment. Numerous members of Ms. Davis’ family and friends speak of a dramatic turn around in Ms. Davis after her arrest. Reports from social service agencies indicate that it took considerable effort to reverse the downward spiral her life had assumed. This is an extraordinary case due to Ms. Davis’ hard work and dedication to living a law-abiding and productive live in the community; and

NOW, THEREFORE, I, Gary Locke, by the virtue of the power vested in me as Governor of the State of Washington, hereby grant to Jennifer Davis this Conditional Pardon, SUBJECT TO THE CONDITION that Ms. Davis not commit any more crimes.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 12th

day of May, A.D., two thousand and three.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

CONDITIONAL PARDON

ADOLPHO G. HINOJOSA

To All to Whom These Presents Shall Come, Greetings:

WHEREAS, on January 11, 1979, Adolpho G. Hinojosa, was involved in a bar fight between a group of people. As the fight progressed outside the tavern, Mr. Hinojosa stabbed his victim, resulting in death. Mr. Hinojosa was convicted of manslaughter, served 18 months, and was on parole for three years. He has paid all costs including a judgment in favor of the deceased. Mr. Hinojosa has no other arrests and only two traffic tickets in his 62 years. Twenty-three years have elapsed since he committed the crime; and

WHEREAS, Mr. Hinojosa and his wife, Rita, have been together for 18 years. Between them, they have nine children, thirty-six grandchildren, and four great-grandchildren. Mr. Hinojosa’s life has revolved around his wife, children, grandchildren, and the extended family. He has supported them as a janitor, a truck driver on a farm, and a grounds keeper. One of the Hinojosa’s daughters has had problems with drugs. In the past the Hinojosas, as grandparents, provided care for the daughter’s three children when she was not capable of doing so. Christina, age 8, Alberto, age 6, and Nicholas, age 5, have been placed with Rita Hinojosa since February 2002 under the supervision of Child Welfare Services and the Yakima County Juvenile Court. Initially, the Department of Social and Health Services (DSHS) was aware of Mr. Hinojosa’s conviction and waived his technical ineligibility to act as a foster parent due to his felony conviction. Prior policy provisions allowed DSHS to issue a waiver when a disqualifying conviction was older than ten years. However, new federal regulations and greater public scrutiny now prohibit such waivers. Accordingly, DSHS ruled in March 2002 that Mr. Hinojosa was not eligible to act as a foster parent. Rather than remove the grandchildren from his home, Mr. Hinojosa left so that his wife could continue to care for the three grandchildren. When it appeared that the Hinojosa’s daughter might not be able to complete the juvenile court plan for reuniting the mother with the children, the Hinojosas dissolved their marriage. The dissolution was solely to enable Rita Hinojosa to become a permanent resource for the children should her daughter’s parental rights be terminated. Because of these federal regulations, Mr. Hinojosa cannot join the frequent family gatherings when the three foster grandchildren are present. Mr. and Mrs. Hinojosa would like to reunite, remarry, and live together. While their daughter’s prospects for reuniting with her children are much improved, it appears likely that the grandchildren will need support from their grandparents in the future; and

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the circumstances of the crime, and the favorable recommendation of the Washington State Clemency and Pardons Board, and in light of the foregoing, I have determined that the best interests of justice will be served by this action; and

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, hereby grant to Adolpho G. Hinojosa this Conditional Pardon, SUBJECT TO THE CONDITION that Mr. Hinojosa shall not commit any more crimes.

The condition of this Conditional Pardon shall remain in force indefinitely. Upon breach of the foregoing condition, this Conditional Pardon shall automatically and immediately expire, and shall be null and void as if it had never been granted.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 12th

day of May, A.D., two thousand and three.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

CONDITIONAL COMMUTATION

VIBOL OUK

To All To Whom These Presents Shall Come, Greetings:

WHEREAS, on March 15, 1997, Viboul Ouk had an argument with his ex-girlfriend, who is also the mother of Mr. Ouk’s three children. Mr. Ouk spent the previous two nights at his ex-girlfriend’s residence because his two older children wanted to spend time with him. As the ex-girlfriend attempted to leave with their mutual eighteen-month-old child, Mr. Ouk pushed her down, pulled a knife from his pocket, and threatened to stab her. After a short struggle, Mr. Ouk dropped the knife and his ex-girlfriend picked it up and poked him with it to keep him away. She then broke free and ran across the street to call 911. At this time, Mr. Ouk picked up his eighteen-month-old child, walked across the street to where his ex-girlfriend was waiting, and held a steak knife to the child’s throat. After the police department arrived, he held the child for approximately five minutes before releasing the child, dropping his knife, and allowing himself to be taken into custody. Mr. Ouk pled guilty to second degree assault of a child. The trial court noted that at the time of the incident, Mr. Ouk was suffering great emotional anguish over the welfare and supervision of his children, and that the incident was one of passion and not characteristic of Mr. Ouk and his concern for his children. Mr. Ouk had no prior offenses. This is the sole criminal offense of his life; and

WHEREAS, the United States Immigration and Naturalization Service (INS) has issued an order to deport Mr. Ouk to Cambodia for having committed an aggravated felony. Categorizing Mr. Ouk as an “aggravated felon” was made possible when his exceptional sentence of eight months was reserved on appeal. Mr. Ouk was subsequently resentenced to a minimum term of 31 months, the lowest standard range possible. He began serving his sentence on January 30, 2001, and was released to the INS on May 13, 2002 due to his Cambodian citizenship; and

WHEREAS, Mr. Ouk maintained an excellent record while incarcerated, and has completed all the terms of his sentence, including anger management. His ex-girlfriend does not fear Mr. Ouk and reports that his behavior on March 15, 1997 was uncharacteristic. Mr. Ouk has a strong, healthy bond with his children. They wrote letters on their father’s behalf about his help with their homework, playing games with him, and his parental guidance. Mr. Ouk pays child support. Nearly 60 letters of recommendation were submitted by Mr. Ouk’s family and other community members; and

WHEREAS, Mr. Ouk is a political refugee from Cambodia. His father was executed by the Khemer Rouge, along with other family members. The Clemency and Pardons Board was convinced that Mr. Ouk has fully paid for his actions, will be a worthy and productive member of society in the United States, and that deporting him to Cambodia would serve no purpose other than to destroy the hope and opportunity for this man to support his children and live a meaningful life in the United States.

WHEREAS, I have reviewed the pertinent facts and circumstances surrounding this matter, the unanimous favorable recommendation of the Washington State Clemency and Pardons Board, and the purpose for Mr. Ouk’s request, and in light of the circumstances of the crime and all other factors, I have determined that the best interests of justice will be served by this action; and

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, hereby grant Vibol Ouk this Conditional Commutation, commute his term of incarceration to eight months in order to remove his aggravated felon status for the express purpose of allowing him to obtain a deportation waiver, lawfully remain in the United States, and eventually become a United States citizen, SUBJECT TO THE FOLLOWING CONDITIONS:

Mr. Ouk shall:

1. Not consume controlled substances except pursuant to lawfully issued prescriptions;

2. Not consume any intoxicants;

3. Not unlawfully possess controlled substances while in community custody;

4. Not associate with known drug users or drug dealers; and

5. Not possess any firearms or ammunition.

Violation of any of the above conditions shall result in suspension of this commutation and imposition of community supervision as per the Department of Corrections. PROVIDED, that in the event Mr. Ouk commits any offense classified as a felony or gross misdemeanor in the State of Washington, this Conditional Commutation is revoked and the sentence imposed by the court reinstated without benefit of sentence reduction credit, whereupon Mr. Ouk shall be tried and sentenced accordingly.

The Superior Court of King County shall provide a written report to the Clemency and Pardons Board re regarding the violation of any condition of this Conditional Commutation.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 12th

day of May, A.D., two thousand and three.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

CONDITIONAL COMMUTATION

TERRENCE LAMONT GARDNER

To All To Whom These Presents Shall Come, Greetings:

WHEREAS, March 5, 1992, Terrence Lamont Gardner was involved in a drug-related robbery. Mr. Gardner admits that he knew a crime would be committed, but states that he had no knowledge of any plan for murder. Mr. Gardner claims that his accomplice, acting on his own, committed an uplanned murder during the robbery. The murder was a repetitive stabbing. The accomplice turned state’s evidence and claimed Mr. Gardner committed the murder. However, at trial, the jury found Mr. Gardner not guilty of being the perpetrator of the murder. Nonetheless, under the felony murder rule, they found Mr. Gardner guilty of first-degree murder. Mr. Gardner was sentenced to a term of 24 years, 3 months, and 15 days; he has an earned release date of November 2, 2012. Mr. Gardner’s accomplice received a far lesser sentence for his testimony and was released long ago; and

WHEREAS, Mr. Gardner has maintained an excellent record while incarcerated. His Department of Corrections Unit Supervisor and his employers at Correctional Industries filed letters evidencing Mr. Gardner’s integrity and rehabilitation. He has attended community college and has obtained a certified wielder’s card. He has reportedly become an excellent welder, to the point where the Washington State Reformatory requested his transfer to that facility for the purpose of utilizing his welding skills. The chaplain reports that Mr. Gardner seeks counseling and is a leader in the inmate church. At the time of Mr. Gardner’s conviction, the current Kitsap County Prosecutor, Russell Hauge, was the defense attorney representing Mr. Gardner’s accomplice. Mr. Hauge, speaking as a private citizen, has indicated that it is clear to him that Mr. Gardner would not have been involved in this crime had he not been addicted to drugs. Mr. Hauge also finds Mr. Gardner’s degree of rehabilitation to be exceptional; and

WHEREAS, the Clemency and Pardons Board was favorably impressed by the extent to which Mr. Gardner has taken responsibility for his past actions and turned his life around. The Board believes he has been adequately punished, has been rehabilitated, and that further incarceration would serve no purpose; and

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the state of Washington, grant to Terrance Lamont Gardner this Conditional Commutation, commute the remainder of the sentence imposed to a term of community custody not to exceed the normal term imposed by the sentencing court (twenty-four months), SUBJECT TO THE FOLLOWING CONDITIONS:

1. Report to and be available for contact with the assigned community corrections officer as directed;

2. Work at Department of Corrections-approved education, employment, and/or community service;

3. Not consume controlled substances except pursuant to lawfully issued prescriptions;

4. Not consume any intoxicants;

5. Not unlawfully possess controlled substances while in community custody;

6. Not associate with known drug users or drug dealers;

7. Not have any direct or indirect contact with the family of the victim;

8. Not have any direct or indirect contact with co-defendant Gerald Lee Belgard (a.k.a. “Sonny Belgard”);

9. Not possess any deadly or dangerous weapons;

10.Submit to random urinalysis and blood alcohol tests as determined by the Department of Corrections and at his own expense;

11.Participate in crime-related treatment or counseling services as determined by the Department of Corrections;

12.Submit to random searches of person, home, and car by the Department of Corrections;

13. Pay community placement fees as determined by the Department of Corrections;

14.Remain in residence at the residence and in the geographic area identified by the Department of Corrections;

15.Notify the Washington Department of Corrections regarding any change in his living situation; and

16.Comply with all standard conditions, requirements, and instructions of community placement as directed by his community corrections officer and with all other applicable conditions imposed by the sentencing court.

Violation of any of the above conditions shall result in sanctions conforming to the Department of Corrections Violations Sanction Grid for community custody. PROVIDED, that in the event Mr. Gardner commits any offense classified as a felony or gross misdemeanor in the state of Washington, this Conditional Commutation is revoked and the sentence imposed by the court reinstated without benefit of sentence reduction credit, whereupon Mr. Gardner shall be immediately returned to the Washington Corrections Center or such other facility as the Secretary of Corrections deems appropriate.

The Department of Corrections shall provide a written report to the Clemency and Pardons Board regarding the violation of any condition of this Conditional Commutation.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 15th

day of May, A.D., two thousand and three.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

CONDITIONAL PARDON

RICKY ROMERO RANGEL

To All to Whom There Presents Shall Come, Greetings:

WHEREAS, On September 9, 1983, Ricky Romero Rangel was sentenced to serve eleven months for drug possession and assault in the third degree, resulting from a bar brawl. Additionally, prior to 1995, Mr. Rangel committed numerous drug related crimes. He was paroled from the Department of Corrections on August 27, 1986, and was discharged from supervision in 1997; and

WHEREAS, as a result of his children being taken into Child Protective Services custody and being sentenced to mandatory addiction treatment, Mr. Rangel has been clean and sober since 1995. Mr. Rangel takes full responsibility and is remorseful for his crimes. He has taken significant steps toward improving his life and has the support of numerous community members. The Yakima County Prosecutor, Ron Zirkle, as well as the former Prosecutor, the Honorable Robert Hackett, Jr., Superior Court Judge, both support a pardon for Mr. Rangel. Mr. Rangel is involved in many volunteer programs in the Yakima Valley to assist the rehabilitation of others facing chemical dependency, including sponsoring a number of participants in Alcoholic Anonymous. He is currently employed as a case manager for the Yakima County Coalition for the Homeless. Mr. Rangel seeks a pardon from his felony convictions to be eligible to receive a Department of Social and Health Services, Child Protective Services, grant to provide financial aid for a Master’s Degree in Social Work. Mr. Rangel aspires to become a family therapist; and

WHEREAS, I have reviewed all pertinent facts and circumstances surrounding this matter, the unanimous favorable recommendation of the Washington State Clemency and Pardons Board, and in light of the circumstances of the crimes I have determined that the best interests of justice will be served by this action;

NOW, THEREFORE, I, Gary Locke, by virtue of the power vested in me as Governor of the State of Washington, grant to Ricky Romero Rangel this Conditional Pardon, SUBJECT TO THE CONDITION that Mr. Rangel shall not commit any more crimes.

IN WITNESS WHEREOF, I have hereunto set

my hand and caused the seal of the state of

Washington to be affixed at Olympia on this 15th

day of May, A.D., two thousand and three.

GARY LOCKE

SEAL Governor of Washington

BY THE GOVERNOR:

SAM REED

Secretary of State

MESSAGE FROM THE HOUSE

June 6, 2003

MR. PRESIDENT:

The House has passed HOUSE BILL NO. 2252, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

INTRODUCTION AND FIRST READING OF HOUSE BILL

HB 2252 by Representatives Sommers, Fromhold and Moeller

Revising eligibility requirements for general assistance.

MOTION

On motion of Senator Sheahan, the rules were suspended and House Bill No. 2252 was advanced to second reading and placed on the second reading calendar.

MOTION

At 10:08 a.m., on motion of Senator Sheahan, the Senate was declared to be at ease.

The Senate was called to order at 2:17 p.m. by President Owen.

MOTION

Senators Sheahan, Hale and Schmidt demanded a Call of the Senate and the demand was sustained.

The President declared the question before the Senate to be a Call of the Senate.

The demand for the Call of the Senate carried and a Call of the Senate was ordered.

The Sergeant at Arms locked the doors of the Chamber.

The Secretary called the roll on the Call of the Senate and all Senators were present except Senators Deccio, McCaslin, Shin and West who were excused.

MOTION TO LIMIT DEBATE

Senator Sheahan: "Mr. President, pursuant to Rule 29, 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. This motion shall be in effect through the remainder of the day."

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

The motion by Senator Sheahan carried and debate was limited to three minutes through the end of the day.

MOTIONS

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

On motion of Senator Sheahan, the rules were suspended and Senate Bill No. 6097, which was held on the introduction and first reading calendar June 9, 2003, was advanced to second reading and placed on the second reading calendar.

MOTION

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

MOTION

On motion of Senator Sheahan, the Senate will immediately consider Senate Bill No. 6097.

PARLIAMENTARY INQUIRY

Senator Betti Sheldon: "A parliamentary inquiry, Mr. President. I understand that there are amendments to this bill and we have not seen those amendments."

REPLY BY THE PRESIDENT

President Owen: "What is your inquiry, Senator?"

Senator Betti Sheldon: "We would like to know where the amendments are to this bill and we would like to see those amendments. Also, Mr. President, I believe the report on the bill is also missing from our desks."

President Owen: "Senator Sheldon, is your inquiry as to where the location of the amendments and the bill are? Mr. Secretary? The amendments are being passed out, Senator Sheldon."

Senator Betti Sheldon: "Mr. President, would it be appropriate to ask that we delay further consideration of Senate Bill No. 6097 and that it hold it place on the calendar, so that we have a chance to look at the bill and the amendments?”

President Owen: "Senator, are you asking if that is appropriate--?"

Senator Betti Sheldon: "I move that."

The President declared the question before the Senate to be the motion by Senator Betti Sheldon that further consideration of Senate Bill No. 6097 be deferred.

Debate ensued.

The motion by Senator Betti Sheldon failed and the Senate resumed consideration of Senate Bill No. 6097.

SECOND READING

SENATE BILL NO. 6097, by Senators Honeyford and Mulliken

Revising the unemployment compensation system.

The bill was read the second time.

MOTION

Senator Honeyford moved that the following striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 50.01.010 and 1945 c 35 s 2 are each amended to read as follows:

Whereas, economic insecurity due to unemployment is a serious menace to the health, morals and welfare of the people of this state; involuntary unemployment is, therefore, a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and his family. Social security requires protection against this greatest hazard of our economic life. This can be provided only by application of the insurance principle of sharing the risks, and by the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment, thus maintaining purchasing powers and limiting the serious social consequences of relief assistance. The state of Washington, therefore, exercising herein its police and sovereign power endeavors by this title to remedy any widespread unemployment situation which may occur and to set up safeguards to prevent its recurrence in the years to come. The legislature, therefore, declares that in its considered judgment the public good, and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own((, and that this title shall be liberally construed for the purpose of reducing involuntary unemployment and the suffering caused thereby to the minimum)).

PART I - UNEMPLOYMENT ELIGIBILITY AND COMPENSATION

NEW SECTION. Sec. 2. A new section is added to chapter 50.04 RCW to read as follows:

After December 31, 2003, for the purpose of the payment of contributions, the term "wages" does not include an employee's income attributable to the transfer of shares of stock to the employee pursuant to his or her exercise of a stock option granted for any reason connected with his or her employment.

Sec. 3. RCW 50.20.010 and 1995 c 381 s 1 are each amended to read as follows:

(1) An unemployed individual shall be eligible to receive waiting period credits or benefits with respect to any week in his or her eligibility period only if the commissioner finds that:

(((1))) (a) He or she has registered for work at, and thereafter has continued to report at, an employment office in accordance with such regulation as the commissioner may prescribe, except that the commissioner may by regulation waive or alter either or both of the requirements of this subdivision as to individuals attached to regular jobs and as to such other types of cases or situations with respect to which the commissioner finds that the compliance with such requirements would be oppressive, or would be inconsistent with the purposes of this title;

(((2))) (b) He or she has filed an application for an initial determination and made a claim for waiting period credit or for benefits in accordance with the provisions of this title;

(((3))) (c) He or she is able to work, and is available for work in any trade, occupation, profession, or business for which he or she is reasonably fitted.

(i) With respect to claims that have an effective date before January 4, 2004, to be available for work an individual must be ready, able, and willing, immediately to accept any suitable work which may be offered to him or her and must be actively seeking work pursuant to customary trade practices and through other methods when so directed by the commissioner or the commissioner's agents.

(ii) With respect to claims that have an effective date on or after January 4, 2004, to be available for work an individual must be ready, able, and willing, immediately to accept any suitable work which may be offered to him or her and must be actively seeking work pursuant to customary trade practices and through other methods when so directed by the commissioner or the commissioner's agents. If a labor agreement or dispatch rules apply, customary trade practices must be in accordance with the applicable agreement or rules;

(((4))) (d) He or she has been unemployed for a waiting period of one week;

(((5))) (e) He or she participates in reemployment services if the individual has been referred to reemployment services pursuant to the profiling system established by the commissioner under RCW 50.20.011, unless the commissioner determines that:

(((a))) (i) The individual has completed such services; or

(((b))) (ii) There is justifiable cause for the claimant's failure to participate in such services; and

(((6))) (f) As to weeks beginning after March 31, 1981, which fall within an extended benefit period as defined in RCW 50.22.010, the individual meets the terms and conditions of RCW 50.22.020 with respect to benefits claimed in excess of twenty-six times the individual's weekly benefit amount.

(2) An individual's eligibility period for regular benefits shall be coincident to his or her established benefit year. An individual's eligibility period for additional or extended benefits shall be the periods prescribed elsewhere in this title for such benefits.

Sec. 4. RCW 50.20.050 and 2002 c 8 s 1 are each amended to read as follows:

(1) With respect to claims that have an effective date before January 4, 2004:

(a) An individual shall be disqualified from benefits beginning with the first day of the calendar week in which he or she has left work voluntarily without good cause and thereafter for seven calendar weeks and until he or she has obtained bona fide work in employment covered by this title and earned wages in that employment equal to seven times his or her weekly benefit amount.

The disqualification shall continue if the work obtained is a mere sham to qualify for benefits and is not bona fide work. In determining whether work is of a bona fide nature, the commissioner shall consider factors including but not limited to the following:

(((a))) (i) The duration of the work;

(((b))) (ii) The extent of direction and control by the employer over the work; and

(((c))) (iii) The level of skill required for the work in light of the individual's training and experience.

(((2))) (b) An individual shall not be considered to have left work voluntarily without good cause when:

(((a))) (i) He or she has left work to accept a bona fide offer of bona fide work as described in ((subsection (1))) (a) of this ((section)) subsection;

(((b))) (ii) The separation was because of the illness or disability of the claimant or the death, illness, or disability of a member of the claimant's immediate family if the claimant took all reasonable precautions, in accordance with any regulations that the commissioner may prescribe, to protect his or her employment status by having promptly notified the employer of the reason for the absence and by having promptly requested reemployment when again able to assume employment: PROVIDED, That these precautions need not have been taken when they would have been a futile act, including those instances when the futility of the act was a result of a recognized labor/management dispatch system;

(((c))) (iii) He or she has left work to relocate for the spouse's employment that is due to an employer-initiated mandatory transfer that is outside the existing labor market area if the claimant remained employed as long as was reasonable prior to the move; or

(((d))) (iv) The separation was necessary to protect the claimant or the claimant's immediate family members from domestic violence, as defined in RCW 26.50.010, or stalking, as defined in RCW 9A.46.110.

(((3))) (c) In determining under this ((section)) subsection whether an individual has left work voluntarily without good cause, the commissioner shall only consider work-connected factors such as the degree of risk involved to the individual's health, safety, and morals, the individual's physical fitness for the work, the individual's ability to perform the work, and such other work connected factors as the commissioner may deem pertinent, including state and national emergencies. Good cause shall not be established for voluntarily leaving work because of its distance from an individual's residence where the distance was known to the individual at the time he or she accepted the employment and where, in the judgment of the department, the distance is customarily traveled by workers in the individual's job classification and labor market, nor because of any other significant work factor which was generally known and present at the time he or she accepted employment, unless the related circumstances have so changed as to amount to a substantial involuntary deterioration of the work factor or unless the commissioner determines that other related circumstances would work an unreasonable hardship on the individual were he or she required to continue in the employment.

(((4))) (d) Subsection((s)) (1)(a) and (((3))) (c) of this section shall not apply to an individual whose marital status or domestic responsibilities cause him or her to leave employment. Such an individual shall not be eligible for unemployment insurance benefits beginning with the first day of the calendar week in which he or she left work and thereafter for seven calendar weeks and until he or she has requalified, either by obtaining bona fide work in employment covered by this title and earning wages in that employment equal to seven times his or her weekly benefit amount or by reporting in person to the department during ten different calendar weeks and certifying on each occasion that he or she is ready, able, and willing to immediately accept any suitable work which may be offered, is actively seeking work pursuant to customary trade practices, and is utilizing such employment counseling and placement services as are available through the department. This subsection does not apply to individuals covered by ((subsection (2)(b) or (c) of this section)) (b)(ii) or (iii) of this subsection.

(2) With respect to claims that have an effective date on or after January 4, 2004:

(i) The duration of the work;

(ii) The extent of direction and control by the employer over the work; and

(iii) The level of skill required for the work in light of the individual's training and experience.

(b) An individual is not disqualified from benefits under (a) of this subsection when:

(i) He or she has left work to accept a bona fide offer of bona fide work as described in (a) of this subsection;

(ii) The separation was necessary because of the illness or disability of the claimant or the death, illness, or disability of a member of the claimant's immediate family if:

(A) The claimant pursued all reasonable alternatives to preserve his or her employment status by requesting a leave of absence, by having promptly notified the employer of the reason for the absence, and by having promptly requested reemployment when again able to assume employment. These alternatives need not be pursued, however, when they would have been a futile act, including those instances when the futility of the act was a result of a recognized labor/management dispatch system; and

(B) The claimant terminated his or her employment status, and is not entitled to be reinstated to the same position or a comparable or similar position;

(iii) He or she: (A) Left work to relocate for the spouse's employment that, due to a mandatory military transfer: (I) Is outside the existing labor market area; and (II) is in Washington or another state that, pursuant to statute, does not consider such an individual to have left work voluntarily without good cause; and (B) remained employed as long as was reasonable prior to the move;

(iv) The separation was necessary to protect the claimant or the claimant's immediate family members from domestic violence, as defined in RCW 26.50.010, or stalking, as defined in RCW 9A.46.110;

(v) The individual's usual compensation was reduced by twenty-five percent or more;

(vi) The individual's usual hours were reduced by twenty-five percent or more;

(vii) The individual's worksite changed, such change caused a material increase in distance or difficulty of travel, and, after the change, the commute was greater than is customary for workers in the individual's job classification and labor market;

(viii) The individual's worksite safety deteriorated, the individual reported such safety deterioration to the employer, and the employer failed to correct the hazards within a reasonable period of time;

(ix) The individual left work because of illegal activities in the individual's worksite, the individual reported such activities to the employer, and the employer failed to end such activities within a reasonable period of time; or

(x) The individual's usual work was changed to work that violates the individual's religious convictions or sincere moral beliefs.

Sec. 5. RCW 50.04.293 and 1993 c 483 s 1 are each amended to read as follows:

With respect to claims that have an effective date before January 4, 2004, "misconduct" means an employee's act or failure to act in willful disregard of his or her employer's interest where the effect of the employee's act or failure to act is to harm the employer's business.

NEW SECTION. Sec. 6. A new section is added to chapter 50.04 RCW to read as follows:

With respect to claims that have an effective date on or after January 4, 2004:

(1) "Misconduct" includes, but is not limited to, the following conduct by a claimant:

(a) Willful or wanton disregard of the rights, title, and interests of the employer or a fellow employee;

(b) Deliberate violations or disregard of standards of behavior which the employer has the right to expect of an employee;

(c) Carelessness or negligence that causes or would likely cause serious bodily harm to the employer or a fellow employee; or

(d) Carelessness or negligence of such degree or recurrence to show an intentional or substantial disregard of the employer's interest.

(2) The following acts are considered misconduct because the acts signify a willful or wanton disregard of the rights, title, and interests of the employer or a fellow employee. These acts include, but are not limited to:

(a) Insubordination showing a deliberate, willful, or purposeful refusal to follow the reasonable directions or instructions of the employer;

(b) Repeated inexcusable tardiness following warnings by the employer;

(c) Dishonesty related to employment, including but not limited to deliberate falsification of company records, theft, deliberate deception, or lying;

(d) Repeated and inexcusable absences, including absences for which the employee was able to give advance notice and failed to do so;

(e) Deliberate acts that are illegal, provoke violence or violation of laws, or violate the collective bargaining agreement. However, an employee who engages in lawful union activity may not be disqualified due to misconduct;

(f) Violation of a company rule if the rule is reasonable and if the claimant knew or should have known of the existence of the rule; or

(g) Violations of law by the claimant while acting within the scope of employment that substantially affect the claimant's job performance or that substantially harm the employer's ability to do business.

(3) "Misconduct" does not include:

(a) Inefficiency, unsatisfactory conduct, or failure to perform well as the result of inability or incapacity;

(b) Inadvertence or ordinary negligence in isolated instances; or

(4) "Gross misconduct" means a criminal act in connection with an individual's work for which the individual has been convicted in a criminal court, or has admitted committing, or conduct connected with the individual's work that demonstrates a flagrant and wanton disregard of and for the rights, title, or interest of the employer or a fellow employee.

Sec. 7. RCW 50.20.060 and 2000 c 2 s 13 are each amended to read as follows:

With respect to claims that have an effective date before January 4, 2004, an individual shall be disqualified from benefits beginning with the first day of the calendar week in which he or she has been discharged or suspended for misconduct connected with his or her work and thereafter for seven calendar weeks and until he or she has obtained bona fide work in employment covered by this title and earned wages in that employment equal to seven times his or her weekly benefit amount. Alcoholism shall not constitute a defense to disqualification from benefits due to misconduct.

Sec. 8. RCW 50.20.065 and 1993 c 483 s 11 are each amended to read as follows:

With respect to claims that have an effective date before January 4, 2004:

(1) An individual who has been discharged from his or her work because of a felony or gross misdemeanor of which he or she has been convicted, or has admitted committing to a competent authority, and that is connected with his or her work shall have all hourly wage credits based on that employment canceled.

(2) The employer shall notify the department of such an admission or conviction, not later than six months following the admission or conviction.

(3) The claimant shall disclose any conviction of the claimant of a work-connected felony or gross misdemeanor occurring in the previous two years to the department at the time of application for benefits.

(4) All benefits that are paid in error based on wage/hour credits that should have been removed from the claimant's base year are recoverable, notwithstanding RCW 50.20.190 or 50.24.020 or any other provisions of this title.

NEW SECTION. Sec. 9. A new section is added to chapter 50.20 RCW to read as follows:

With respect to claims that have an effective date on or after January 4, 2004:

(1) An individual shall be disqualified from benefits beginning with the first day of the calendar week in which he or she has been discharged or suspended for misconduct connected with his or her work and thereafter for ten calendar weeks and until he or she has obtained bona fide work in employment covered by this title and earned wages in that employment equal to ten times his or her weekly benefit amount. Alcoholism shall not constitute a defense to disqualification from benefits due to misconduct.

(2) An individual who has been discharged from his or her work because of gross misconduct shall have all hourly wage credits based on that employment or six hundred eighty hours of wage credits, whichever is greater, canceled.

(3) The employer shall notify the department of a felony or gross misdemeanor of which an individual has been convicted, or has admitted committing to a competent authority, not later than six months following the admission or conviction.

(4) The claimant shall disclose any conviction of the claimant of a work-connected felony or gross misdemeanor occurring in the previous two years to the department at the time of application for benefits.

(5) All benefits that are paid in error based on this section are recoverable, notwithstanding RCW 50.20.190 or 50.24.020 or any other provisions of this title.

Sec. 10. RCW 50.20.240 and 2002 c 8 s 3 are each amended to read as follows:

(1)(a) To ensure that following the initial application for benefits, an individual is actively engaged in searching for work, ((effective July 1, 1999,)) the employment security department shall implement a job search monitoring program. Effective January 4, 2004, the department shall contract with employment security agencies in other states to ensure that individuals residing in those states and receiving benefits under this title are actively engaged in searching for work in accordance with the requirements of this section. The department may use interactive voice technology and other electronic means to ensure that individuals are subject to comparable job search monitoring, regardless of whether they reside in Washington or elsewhere.

(b) Except for those individuals with employer attachment or union referral, individuals who qualify for unemployment compensation under RCW 50.20.050(((2)(d))) (1)(b)(iii) or (2)(b)(v), as applicable, and individuals in commissioner-approved training, an individual who has received five or more weeks of benefits under this title, regardless of whether the individual resides in Washington or elsewhere, must provide evidence of seeking work, as directed by the commissioner or the commissioner's agents, for each week beyond five in which a claim is filed. With regard to claims with an effective date before January 4, 2004, the evidence must demonstrate contacts with at least three employers per week or documented in-person job search activity at the local reemployment center. With regard to claims with an effective date on or after January 4, 2004, the evidence must demonstrate contacts with at least three employers per week or documented in-person job search activities at the local reemployment center at least three times per week.

(c) In developing the requirements for the job search monitoring program, the commissioner or the commissioner's agents shall utilize an existing advisory committee having equal representation of employers and workers.

(2) Effective January 4, 2004, an individual who fails to comply fully with the requirements for actively seeking work under RCW 50.20.010 shall lose all benefits for all weeks during which the individual was not in compliance, and the individual shall be liable for repayment of all such benefits under RCW 50.20.190.

Sec. 11. RCW 50.20.120 and 2002 c 149 s 4 are each amended to read as follows:

(1)(a) Subject to the other provisions of this title, benefits shall be payable to any eligible individual during the individual's benefit year in a maximum amount equal to the lesser of thirty times the weekly benefit amount (((determined hereinafter))), as determined in subsection (2) of this section, or one-third of the individual's base year wages under this title: PROVIDED, That as to any week ((beginning on and after March 31, 1981,)) which falls in an extended benefit period as defined in RCW 50.22.010(1), ((as now or hereafter amended,)) an individual's eligibility for maximum benefits in excess of twenty-six times his or her weekly benefit amount will be subject to the terms and conditions set forth in RCW 50.22.020((, as now or hereafter amended)).

(b) With respect to claims that have an effective date on or after the first Sunday of the calendar month immediately following the month in which the commissioner finds that the state unemployment rate is six and eight-tenths percent or less, benefits shall be payable to any eligible individual during the individual's benefit year in a maximum amount equal to the lesser of twenty-six times the weekly benefit amount, as determined in subsection (2) of this section, or one-third of the individual's base year wages under this title.

(2)(a) For claims with an effective date before January 4, 2004, an individual's weekly benefit amount shall be an amount equal to one twenty-fifth of the average quarterly wages of the individual's total wages during the two quarters of the individual's base year in which such total wages were highest.

(b) With respect to claims with an effective date on or after January 4, 2004, and before January 2, 2005, an individual's weekly benefit amount shall be an amount equal to one twenty-fifth of the average quarterly wages of the individual's total wages during the three quarters of the individual's base year in which such total wages were highest.

(c) With respect to claims with an effective date on or after January 2, 2005, an individual's weekly benefit amount shall be an amount equal to one percent of the total wages paid in the individual's base year.

(3) The maximum and minimum amounts payable weekly shall be determined as of each June 30th to apply to benefit years beginning in the twelve-month period immediately following such June 30th. ((Except as provided in RCW 50.20.125,))

(a)(i) With respect to claims that have an effective date before January 4, 2004, the maximum amount payable weekly shall be seventy percent of the "average weekly wage" for the calendar year preceding such June 30th.

(ii) With respect to claims that have an effective date on or after January 4, 2004, the maximum amount payable weekly shall be either four hundred ninety-six dollars or sixty-three percent of the "average weekly wage" for the calendar year preceding such June 30th, whichever is greater.

(b) The minimum amount payable weekly shall be fifteen percent of the "average weekly wage" for the calendar year preceding such June 30th.

(4) If any weekly benefit, maximum benefit, or minimum benefit amount computed herein is not a multiple of one dollar, it shall be reduced to the next lower multiple of one dollar.

NEW SECTION. Sec. 12. A new section is added to chapter 50.20 RCW to read as follows:

(1) It is the intent of the legislature to establish eligibility requirements for workers who are part-time or seasonal workers.

(2) With respect to claims that have an effective date on or after January 2, 2005:

(a) An otherwise eligible individual may not be denied benefits for any week because the individual is a part-time worker and is available for, seeks, applies for, or accepts only work of twenty or fewer hours per week by reason of the application of RCW 50.20.010(1)(c), 50.20.080, or 50.22.020(1) relating to availability for work and active search for work, or failure to apply for or refusal to accept suitable work.

(b) If a claimant is a seasonal worker:

(i) Who earned wages in "employment" in fewer than one thousand four hundred forty hours in his or her base year, benefits are payable to the claimant during a calendar week of the claimant's benefit year only if the week corresponds to a calendar week within a seasonal work period of a base year employer who had been designated as a seasonal employer by the commissioner under this section.

(ii) Who earned wages in "employment" in one thousand four hundred forty hours or more in his or her base year, benefits are payable to the claimant during any calendar week of the claimant's benefit year as otherwise provided in this title.

(c)(i) Between January 1st and April 1st of any year, an employer may apply to the commissioner in writing for designation as a seasonal employer, effective on the date determined by the commissioner. By June 30th, the commissioner shall determine if the employer is a seasonal employer and, if the employer is designated a seasonal employer, identify one or more seasonal work periods of the employer. The commissioner's determination regarding an employer's status as a seasonal employer, or a decision of an administrative law judge or of the court regarding the employer's status as a seasonal employer, which has become final and is not subject to further appeal, together with the record thereof, may be introduced in any proceeding involving a claim for benefits, and the facts found and decision issued in the determination or decision shall be conclusive unless the claimant introduces substantial evidence to the contrary.

(ii) A determination of seasonal employer status shall remain in effect until the commissioner, on the commissioner's own motion for good cause or upon the written request of the employer, issues a determination terminating an employer's status as a seasonal employer. A termination determination under this subsection becomes effective as specified by the commissioner.

(d) At the time an employee is hired by a seasonal employer, the employer must notify the employee in writing that the employee may be a seasonal worker.

(3) For purposes of this section:

(a) "Part-time worker" means an individual that: (i) Earned wages in "employment" in at least forty weeks in the individual's base year; and (ii) did not earn wages in "employment" in more than twenty hours per week in more than three weeks in the individual's base year.

(b) "Seasonal employer" means an employer who:

(i) With respect to a period identified by the employer of twelve consecutive calendar months preceding the employer's application, has reduced his or her work force by at least sixty percent from the highest level of employment in a seasonal work period to the lowest level of employment at any point in the twelve calendar month period; and

(ii) Operates in an industry or with a process which, because of conditions related to climate, agriculture, food fish, shellfish, or natural resources, makes it impractical or impossible for the employer to operate without the reduction in employment specified in (b)(i) of this subsection.

(c) "Seasonal worker" means a worker who earned at least seventy-five percent of his or her base year wages in employment with one or more seasonal employers during one or more seasonal work periods.

(d) "Seasonal work period" means a regularly recurring period in any twelve consecutive calendar months that is determined by the commissioner to be a period during which the seasonal employer customarily operates and because of which the employer meets the definition of "seasonal employer."

Sec. 13. RCW 50.20.100 and 2002 c 8 s 2 are each amended to read as follows:

(1) Suitable work for an individual is employment in an occupation in keeping with the individual's prior work experience, education, or training and if the individual has no prior work experience, special education, or training for employment available in the general area, then employment which the individual would have the physical and mental ability to perform. In determining whether work is suitable for an individual, the commissioner shall also consider the degree of risk involved to the individual's health, safety, and morals, the individual's physical fitness, the individual's length of unemployment and prospects for securing local work in the individual's customary occupation, the distance of the available work from the individual's residence, and such other factors as the commissioner may deem pertinent, including state and national emergencies.

(2) For individuals with base year work experience in agricultural labor, any agricultural labor available from any employer shall be deemed suitable unless it meets conditions in RCW 50.20.110 or the commissioner finds elements of specific work opportunity unsuitable for a particular individual.

(3) With respect to claims that have an effective date on or after January 4, 2004, for seasonal workers, any work available from any seasonal employer shall be deemed suitable unless it meets conditions in RCW 50.20.110 or the commissioner finds elements of specific work opportunity unsuitable for a particular individual.

(4) For part-time workers as defined in section 12 of this act, suitable work includes suitable work under subsection (1) of this section that is for twenty or fewer hours per week.

(5) For individuals who have qualified for unemployment compensation benefits under RCW 50.20.050(((2)(d))) (1)(b)(iii) or (2)(b)(v), as applicable, an evaluation of the suitability of the work must consider the individual's need to address the physical, psychological, legal, and other effects of domestic violence or stalking.

NEW SECTION. Sec. 14. A new section is added to chapter 50.20 RCW to read as follows:

(1) It is the intent of the legislature that a transitional training benefits program be established to provide unemployment insurance benefits to unemployed individuals who would be or are impacted by the changes in benefits made in this act and who are participating in training programs approved by the commissioner. If section 12(2)(b) of this act does not take effect by July 1, 2003, this section is null and void. With respect to claims that have an effective date before January 7, 2007, the employment security department is authorized to pay transitional training benefits under this section, but may not obligate expenditures of more than the following:

(a) For the fiscal year ending June 30, 2004, ten million dollars;

(b) For the fiscal year ending June 30, 2005, ten million dollars;

(d) For the fiscal year ending June 30, 2007, ten million dollars.

(2) Any funds not obligated under subsecton (1)(a) through (c) of this section in any fiscal year may be carried forward to the next fiscal year to increase, by the amount carried forward, the amount available to obligate under RCW 50.22.140. The department shall develop a process to ensure that expenditures under subsection (1) of this section do not exceed available funds and to prioritize access to funds when again available.

(3) Subject to availability of funds, transitional training benefits are available for an individual who:

(a) Is eligible for or has exhausted entitlement to unemployment compensation benefits; and

(i) As a seasonal worker whose claim has an effective date before January 4, 2004, would not have received benefits under this title if section 12(2)(b) of this act had applied to the individual; or

(ii) Has a claim that has an effective date on or after July 6, 2004, or has exhausted benefits on or after July 6, 2004, and received benefits that were limited because of the section 11, chapter..., Laws of 2003 amendments to RCW 50.20.120 or section 12(2)(b) of this act, or would have had benefits limited if these provisions had been in effect at the time the individual's claim became effective;

(b) Develops an individual training program that is submitted to the commissioner for approval within sixty days after the individual is notified by the employment security department of the requirements of this section;

(c) Enters the approved training program by ninety days after the date of the notification, unless the employment security department determines that the training is not available during the ninety-day period, in which case the individual enters training as soon as it is available; and

(d) Is enrolled in training approved under this section on a full-time basis as determined by the educational institution, and is making satisfactory progress in the training as certified by the educational institution.

(4) Benefits under this section shall be paid to eligible exhaustees as follows:

(a) The total benefit amount shall be fifty-two times the individual's weekly benefit amount, reduced by the total amount of regular benefits and extended benefits paid, or deemed paid, with respect to the benefit year.

(b)(i) For exhaustees receiving financial aid in the form of scholarships, grants, tuition waivers, or any other financial aid that does not require repayment, the weekly benefit amount shall be the same as the regular weekly amount payable during the applicable benefit year and shall be paid under the same terms and conditions as regular benefits.

(ii) For other exhaustees, the weekly benefit amount shall be one and one-fourth times the regular weekly amount payable during the applicable benefit year and shall be paid under the same terms and conditions as regular benefits.

(c) Transitional training benefits are not payable for weeks more than two years beyond the end of the benefit year of the regular claim.

(5) The requirement under RCW 50.22.010(10) relating to exhausting regular benefits does not apply to an individual otherwise eligible for training benefits under this section when the individual's benefit year ends before his or her training benefits are exhausted and the individual is eligible for a new benefit year. These individuals will have the option of remaining on the original claim or filing a new claim.

(6) An individual who received benefits under any other additional benefits program for training within the five-year period immediately preceding application under this section is not eligible for training benefits under this section.

(7) An individual eligible to receive emergency unemployment compensation, so called, under any federal law, is not eligible to receive benefits under this section for each week the individual receives such compensation.

(8) All base year employers are interested parties to the approval of training and the granting of transitional training benefits.

(9) For purposes of this section:

(a) "Educational institution" and "training program" mean the same as the definitions in RCW 50.22.150.

(b) "Exhaustee," "extended benefits," and "regular benefits" mean the same as the definitions in RCW 50.22.010.

PART II - FINANCING UNEMPLOYMENT COMPENSATION

Sec. 15. RCW 50.29.025 and 2003 c 4 (SHB 1832) s 1 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, the contribution rate for each employer subject to contributions under RCW 50.24.010 shall be determined under this ((section)) subsection.

(((1))) (a) A fund balance ratio shall be determined by dividing the balance in the unemployment compensation fund as of the September 30th immediately preceding the rate year by the total remuneration paid by all employers subject to contributions during the second calendar year preceding the rate year and reported to the department by the following March 31st. The division shall be carried to the fourth decimal place with the remaining fraction, if any, disregarded. The fund balance ratio shall be expressed as a percentage.

(((2))) (b) The interval of the fund balance ratio, expressed as a percentage, shall determine which tax schedule in (e) of this subsection (((5) of this section)) shall be in effect for assigning tax rates for the rate year. The intervals for determining the effective tax schedule shall be:

Interval of the Fund Balance Ratio Expressed as a Percentage		Effective Tax Schedule
	2.90 and above	AA
	2.10 to 2.89	A
	1.70 to 2.09	B
	1.40 to 1.69	C
	1.00 to 1.39	D
	0.70 to 0.99	E
	Less than 0.70	F

(((3))) (c) An array shall be prepared, listing all qualified employers in ascending order of their benefit ratios. The array shall show for each qualified employer: (((a))) (i) Identification number; (((b))) (ii) benefit ratio; (((c))) (iii) taxable payrolls for the four calendar quarters immediately preceding the computation date and reported to the department by the cut-off date; (((d))) (iv) a cumulative total of taxable payrolls consisting of the employer's taxable payroll plus the taxable payrolls of all other employers preceding him or her in the array; and (((e))) (v) the percentage equivalent of the cumulative total of taxable payrolls.

(((4))) (d) Each employer in the array shall be assigned to one of twenty rate classes according to the percentage intervals of cumulative taxable payrolls set forth in (e) of this subsection (((5) of this section)): PROVIDED, That if an employer's taxable payroll falls within two or more rate classes, the employer and any other employer with the same benefit ratio shall be assigned to the lowest rate class which includes any portion of the employer's taxable payroll.

(((5))) (e) Except as provided in RCW 50.29.026, the contribution rate for each employer in the array shall be the rate specified in the following tables for the rate class to which he or she has been assigned, as determined under (d) of this subsection (((4) of this section)), within the tax schedule which is to be in effect during the rate year:

Percent of Cumulative Taxable Payrolls			Schedules of Contributions Rates for Effective Tax Schedule
From	To	Rate Class	AA	A	B	C	D	E	F
0.00	5.00	1	0.47	0.47	0.57	0.97	1.47	1.87	2.47
5.01	10.00	2	0.47	0.47	0.77	1.17	1.67	2.07	2.67
10.01	15.00	3	0.57	0.57	0.97	1.37	1.77	2.27	2.87
15.01	20.00	4	0.57	0.73	1.11	1.51	1.90	2.40	2.98
20.01	25.00	5	0.72	0.92	1.30	1.70	2.09	2.59	3.08
25.01	30.00	6	0.91	1.11	1.49	1.89	2.29	2.69	3.18
30.01	35.00	7	1.00	1.29	1.69	2.08	2.48	2.88	3.27
35.01	40.00	8	1.19	1.48	1.88	2.27	2.67	3.07	3.47
40.01	45.00	9	1.37	1.67	2.07	2.47	2.87	3.27	3.66
45.01	50.00	10	1.56	1.86	2.26	2.66	3.06	3.46	3.86
50.01	55.00	11	1.84	2.14	2.45	2.85	3.25	3.66	3.95
55.01	60.00	12	2.03	2.33	2.64	3.04	3.44	3.85	4.15
60.01	65.00	13	2.22	2.52	2.83	3.23	3.64	4.04	4.34
65.01	70.00	14	2.40	2.71	3.02	3.43	3.83	4.24	4.54
70.01	75.00	15	2.68	2.90	3.21	3.62	4.02	4.43	4.63
75.01	80.00	16	2.87	3.09	3.42	3.81	4.22	4.53	4.73
80.01	85.00	17	3.27	3.47	3.77	4.17	4.57	4.87	4.97
85.01	90.00	18	3.67	3.87	4.17	4.57	4.87	4.97	5.17
90.01	95.00	19	4.07	4.27	4.57	4.97	5.07	5.17	5.37
95.01	100.00	20	5.40	5.40	5.40	5.40	5.40	5.40	5.40

(((6))) (f) The contribution rate for each employer not qualified to be in the array shall be as follows:

(((a))) (i) Employers who do not meet the definition of "qualified employer" by reason of failure to pay contributions when due shall be assigned a contribution rate two-tenths higher than that in rate class 20 for the applicable rate year, except employers who have an approved agency-deferred payment contract by September 30 of the previous rate year. If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to a contribution rate two-tenths higher than that in rate class 20 for the applicable rate year; and

(((b))) (ii) For all other employers not qualified to be in the array, the contribution rate shall be a rate equal to the average industry rate as determined by the commissioner; however, the rate may not be less than one percent. ((Assignment of employers by the commissioner to industrial classification, for purposes of this section, shall be in accordance with established classification practices found in the "Standard Industrial Classification Manual" issued by the federal office of management and budget to the third digit provided in the standard industrial classification code, or in the North American industry classification system code.))

(2) Beginning with contributions assessed for rate year 2005, the contribution rate for each employer subject to contributions under RCW 50.24.010 shall be the sum of the array calculation factor rate and the graduated social cost factor rate determined under this subsection, and the solvency surcharge determined under section 17 of this act, if any.

(a) The array calculation factor rate shall be determined as follows:

(i) An array shall be prepared, listing all qualified employers in ascending order of their benefit ratios. The array shall show for each qualified employer: (A) Identification number; (B) benefit ratio; and (C) taxable payrolls for the four consecutive calendar quarters immediately preceding the computation date and reported to the employment security department by the cut-off date.

(ii) Each employer in the array shall be assigned to one of forty rate classes according to his or her benefit ratio as follows, and, except as provided in RCW 50.29.026, the array calculation factor rate for each employer in the array shall be the rate specified in the rate class to which the employer has been assigned:

Benefit Ratio		Rate Class	Rate (percent)
At least	Less than	Rate Class	Rate (percent)
	0.000001	1	0.00
0.000001	0.001250	2	0.13
0.001250	0.002500	3	0.25
0.002500	0.003750	4	0.38
0.003750	0.005000	5	0.50
0.005000	0.006250	6	0.63
0.006250	0.007500	7	0.75
0.007500	0.008750	8	0.88
0.008750	0.010000	9	1.00
0.010000	0.011250	10	1.15
0.011250	0.012500	11	1.30
0.012500	0.013750	12	1.45
0.013750	0.015000	13	1.60
0.015000	0.016250	14	1.75
0.016250	0.017500	15	1.90
0.017500	0.018750	16	2.05
0.018750	0.020000	17	2.20
0.020000	0.021250	18	2.35
0.021250	0.022500	19	2.50
0.022500	0.023750	20	2.65
0.023750	0.025000	21	2.80
0.025000	0.026250	22	2.95
0.026250	0.027500	23	3.10
0.027500	0.028750	24	3.25
0.028750	0.030000	25	3.40
0.030000	0.031250	26	3.55
0.031250	0.032500	27	3.70
0.032500	0.033750	28	3.85
0.033750	0.035000	29	4.00
0.035000	0.036250	30	4.15
0.036250	0.037500	31	4.30
0.037500	0.040000	32	4.45
0.040000	0.042500	33	4.60
0.042500	0.045000	34	4.75
0.045000	0.047500	35	4.90
0.047500	0.050000	36	5.05
0.050000	0.052500	37	5.20
0.052500	0.055000	38	5.30
0.055000	0.057500	39	5.35
0.057500		40	5.40

(b) The graduated social cost factor rate shall be determined as follows:

(i)(A) Except as provided in (b)(i)(B) and (C) of this subsection, the commissioner shall calculate the flat social cost factor for a rate year by dividing the total social cost by the total taxable payroll. The division shall be carried to the second decimal place with the remaining fraction disregarded unless it amounts to five hundredths or more, in which case the second decimal place shall be rounded to the next higher digit. The flat social cost factor shall be expressed as a percentage.

(B) If, on the cut-off date, the balance in the unemployment compensation fund is determined by the commissioner to be an amount that will provide more than ten months of unemployment benefits, the commissioner shall calculate the flat social cost factor for the rate year immediately following the cut-off date by reducing the total social cost by the dollar amount that represents the number of months for which the balance in the unemployment compensation fund on the cut-off date will provide benefits above ten months and dividing the result by the total taxable payroll. However, the calculation under this subsection (2)(b)(i)(B) for a rate year may not result in a flat social cost factor that is more than two-tenths lower than the calculation under (b)(i)(A) of this subsection for that rate year. For the purposes of this subsection, the commissioner shall determine the number of months of unemployment benefits in the unemployment compensation fund using the benefit cost rate for the average of the three highest calendar benefit cost rates in the twenty consecutive completed calendar years immediately preceding the cut-off date or a period of consecutive calendar years immediately preceding the cut-off date that includes three recessions, if longer.

(ii) The graduated social cost factor rate for each employer in the array is the flat social cost factor multiplied by the percentage specified as follows for the rate class to which the employer has been assigned in (a)(ii) of this subsection, except that the sum of an employer's array calculation factor rate and the graduated social cost factor rate may not exceed six and five-tenths percent:

(A) Rate class 1 - 78 percent;

(B) Rate class 2 - 82 percent;

(D) Rate class 4 - 90 percent;

(E) Rate class 5 - 94 percent;

(F) Rate class 6 - 98 percent;

(G) Rate class 7 - 102 percent;

(H) Rate class 8 - 106 percent;

(I) Rate class 9 - 110 percent;

(J) Rate class 10 - 114 percent;

(K) Rate class 11 - 118 percent; and

(L) Rate classes 12 through 40 - 120 percent.

(iii) For the purposes of this section:

(A) "Total social cost" means the amount calculated by subtracting the array calculation factor contributions paid by all employers with respect to the four consecutive calendar quarters immediately preceding the computation date and paid to the employment security department by the cut-off date from the total unemployment benefits paid to claimants in the same four consecutive calendar quarters. To calculate the flat social cost factor for rate year 2005, the commissioner shall calculate the total social cost using the array calculation factor contributions that would have been required to be paid by all employers in the calculation period if (a) of this subsection had been in effect for the relevant period.

(B) "Total taxable payroll" means the total amount of wages subject to tax, as determined under RCW 50.24.010, for all employers in the four consecutive calendar quarters immediately preceding the computation date and reported to the employment security department by the cut-off date.

(i) Employers who do not meet the definition of "qualified employer" by reason of failure to pay contributions when due shall be assigned an array calculation factor rate two-tenths higher than that in rate class 40, except employers who have an approved agency-deferred payment contract by September 30th of the previous rate year. If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to an array calculation factor rate two-tenths higher than that in rate class 40; and

(ii) For all other employers not qualified to be in the array, the array calculation factor rate shall be a rate equal to the average industry array calculation factor rate as determined by the commissioner, plus fifteen percent of that amount; however, the rate may not be less than one percent or more than the array calculation factor rate in rate class 40.

(d) The graduated social cost factor rate for each employer not qualified to be in the array shall be as follows:

(i) For employers whose array calculation factor rate is determined under (c)(i) of this subsection, the social cost factor rate shall be the social cost factor rate assigned to rate class 40 under (b)(ii) of this subsection.

(ii) For employers whose array calculation factor rate is determined under (c)(ii) of this subsection, the social cost factor rate shall be a rate equal to the average industry social cost factor rate as determined by the commissioner, plus fifteen percent of that amount, but not more than the social cost factor rate assigned to rate class 40 under (b)(ii) of this subsection.

(3) Assignment of employers by the commissioner to industrial classification, for purposes of this section, shall be in accordance with established classification practices found in the "Standard Industrial Classification Manual" issued by the federal office of management and budget to the third digit provided in the standard industrial classification code, or in the North American industry classification system code.

Sec. 16. RCW 50.04.355 and 2000 c 2 s 1 are each amended to read as follows:

(1) For computations made before January 1, 2007, the employment security department shall compute, on or before the fifteenth day of June of each year, an "average annual wage", an "average weekly wage", and an "average annual wage for contributions purposes" ((shall be computed)) from information for the specified preceding calendar years including corrections thereof reported within three months after the close of the final year of the specified years by all employers as defined in RCW 50.04.080.

(((1))) (a) The "average annual wage" is the quotient derived by dividing the total remuneration reported by all employers for the preceding calendar year by the average number of workers reported for all months of the preceding calendar year and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.

(((2))) (b) The "average weekly wage" is the quotient derived by dividing the "average annual wage" obtained under (((1))) (a) of this subsection by fifty-two and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.

(((3))) (c) The "average annual wage for ((contribution[s])) contributions purposes" is the quotient derived by dividing by three the total remuneration reported by all employers subject to contributions for the preceding three consecutive calendar years and dividing this amount by the average number of workers reported for all months of these three years by these same employers and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.

(2) For computations made on or after January 1, 2007, the employment security department shall compute, on or before the fifteenth day of June of each year, an "average annual wage," an "average weekly wage," and an "average annual wage for contributions purposes" from information for the preceding calendar year including corrections thereof reported within three months after the close of that year by all employers as defined in RCW 50.04.080.

(a) The "average annual wage" is the quotient derived by dividing the total remuneration reported by all employers by the average number of workers reported for all months and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.

(b) The "average weekly wage" is the quotient derived by dividing the "average annual wage" obtained under (a) of this subsection by fifty-two and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.

(c) The "average annual wage for contributions purposes" is the quotient derived by dividing the total remuneration reported by all employers subject to contributions by the average number of workers reported for all months by these same employers and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.

NEW SECTION. Sec. 17. A new section is added to chapter 50.29 RCW to read as follows:

Beginning with contributions assessed for rate year 2005, the contribution rate of each employer subject to contributions under RCW 50.24.010 shall include a solvency surcharge determined as follows:

(1) This section shall apply to employers' contributions for a rate year immediately following a cut-off date only if, on the cut-off date, the balance in the unemployment compensation fund is determined by the commissioner to be an amount that will provide fewer than six months of unemployment benefits.

(2) The solvency surcharge shall be the lowest rate necessary, as determined by the commissioner, but not more than two-tenths of one percent, to provide revenue during the applicable rate year that will fund unemployment benefits for the number of months that is the difference between eight months and the number of months for which the balance in the unemployment compensation fund on the cut-off date will provide benefits.

(3) The basis for determining the number of months of unemployment benefits shall be the same basis used in RCW 50.29.025(2)(b)(i)(B).

Sec. 18. RCW 50.29.026 and 2000 c 2 s 5 are each amended to read as follows:

(1) Beginning with contributions assessed for rate year 1996, a qualified employer's contribution rate applicable for rate years beginning before January 1, 2005, or array calculation factor rate applicable for rate years beginning on or after January 1, 2005, determined under RCW 50.29.025 may be modified as follows:

(a) Subject to the limitations of this subsection, an employer may make a voluntary contribution of an amount equal to part or all of the benefits charged to the employer's account during the two years most recently ended on June 30th that were used for the purpose of computing the employer's contribution rate applicable for rate years beginning before January 1, 2005, or array calculation factor rate applicable for rate years beginning on or after January 1, 2005. On receiving timely payment of a voluntary contribution, plus a surcharge of ten percent of the amount of the voluntary contribution, the commissioner shall cancel the benefits equal to the amount of the voluntary contribution, excluding the surcharge, and compute a new benefit ratio for the employer. The employer shall then be assigned the contribution rate applicable for rate years beginning before January 1, 2005, or array calculation factor rate applicable for rate years beginning on or after January 1, 2005, applicable to the rate class within which the recomputed benefit ratio is included. The minimum amount of a voluntary contribution, excluding the surcharge, must be an amount that will result in a recomputed benefit ratio that is in a rate class at least ((two)) four rate classes lower than the rate class that included the employer's original benefit ratio.

(b) Payment of a voluntary contribution is considered timely if received by the department during the period beginning on the date of mailing to the employer the notice of contribution rate applicable for rate years beginning before January 1, 2005, or notice of array calculation factor rate applicable for rate years beginning on or after January 1, 2005, required under this title for the rate year for which the employer is seeking a modification of his or her ((contribution)) rate and ending on February 15th of that rate year or, for voluntary contributions for rate year 2000, ending on March 31, 2000.

(c) A benefit ratio may not be recomputed nor a ((contribution)) rate be reduced under this section as a result of a voluntary contribution received after the payment period prescribed in (b) of this subsection.

(2) This section does not apply to any employer who has not had an increase of at least ((six)) twelve rate classes from the previous tax rate year.

Sec. 19. RCW 50.29.062 and 1996 c 238 s 1 are each amended to read as follows:

Predecessor and successor employer contribution rates shall be computed in the following manner:

(1) If the successor is an employer, as defined in RCW 50.04.080, at the time of the transfer, its contribution rate shall remain unchanged for the remainder of the rate year in which the transfer occurs. From and after January 1 following the transfer, the successor's contribution rate for each rate year shall be based on its experience with payrolls and benefits including the experience of the acquired business or portion of a business from the date of transfer, as of the regular computation date for that rate year.

(2) For transfers before January 1, 2005, the following applies if the successor is not an employer at the time of the transfer((, it)). The successor shall pay contributions at the lowest rate determined under either of the following:

(a)(i) For transfers before January 1, 1997, the contribution rate of the rate class assigned to the predecessor employer at the time of the transfer for the remainder of that rate year and continuing until the successor qualifies for a different rate in its own right;

(ii) For transfers on or after January 1, 1997, the contribution rate of the rate class assigned to the predecessor employer at the time of the transfer for the remainder of that rate year. Any experience relating to the assignment of that rate class attributable to the predecessor is transferred to the successor. Beginning with the January 1 following the transfer, the successor's contribution rate shall be based on the transferred experience of the acquired business and the successor's experience after the transfer; or

(b) The contribution rate equal to the average industry rate as determined by the commissioner, but not less than one percent, and continuing until the successor qualifies for a different rate in its own right. Assignment of employers by the commissioner to industrial classification, for purposes of this subsection, must be in accordance with established classification practices found in the "Standard Industrial Classification Manual" issued by the federal office of management and budget to the third digit provided in the standard industrial classification code, or in the North American industry classification code system.

(3) For transfers before January 1, 2005, if the successor is not an employer at the time of the transfer and simultaneously acquires the business or a portion of the business of two or more employers in different rate classes, its rate from the date the transfer occurred until the end of that rate year and until it qualifies in its own right for a new rate, shall be the highest rate class applicable at the time of the acquisition to any predecessor employer who is a party to the acquisition, but not less than one percent.

(4) For transfers on or after January 1, 2005, the following applies if the successor is not an employer at the time of the transfer:

(a) Except as provided in (b) of this subsection, the successor shall pay contributions:

(i) At the contribution rate determined for the predecessor employer at the time of the transfer for the remainder of the rate year. Any experience attributable to the predecessor relating to the assignment of the predecessor's rate class is transferred to the successor. On and after January 1st following the transfer, the successor's array calculation factor rate shall be based on the transferred experience of the acquired business and the successor's experience after the transfer; or

(ii) At the contribution rate equal to the sum of the rates determined by the commissioner under RCW 50.29.025(2) (c)(ii) and (d)(ii), and section 17 of this act, if applicable, and continuing until the successor qualifies for a different rate in its own right.

(b) If there is a substantial continuity of ownership or management by the successor of the business of the predecessor, the successor shall pay contributions at the contribution rate determined for the predecessor employer at the time of the transfer for the remainder of that rate year. Any experience attributable to the predecessor relating to the assignment of the predecessor's rate class is transferred to the successor. On and after January 1st following the transfer, the successor's array calculation factor rate shall be based on the transferred experience of the acquired business and the successor's experience after the transfer.

(c) If the successor simultaneously acquires the business or a portion of the business of two or more employers with different contribution rates, the successor's rate from the date the transfer occurred until the end of that rate year and until it qualifies in its own right for a new rate, shall be the sum of the rates determined by the commissioner under RCW 50.29.025(2) (a) and (b), and section 17 of this act, applicable at the time of the acquisition to the predecessor employer who, among the parties to the acquisition, had the largest taxable payroll in the completed calendar quarter immediately preceding the date of transfer, but not less than the sum of the rates determined by the commissioner under RCW 50.29.025(2) (c)(ii) and (d)(ii), and section 17 of this act, if applicable.

(5) The contribution rate on any payroll retained by a predecessor employer shall remain unchanged for the remainder of the rate year in which the transfer occurs.

(((5))) (6) In all cases, from and after January 1 following the transfer, the predecessor's contribution rate or, beginning January 1, 2005, the predecessor's array calculation factor for each rate year shall be based on its experience with payrolls and benefits as of the regular computation date for that rate year including the experience of the acquired business or portion of business up to the date of transfer: PROVIDED, That if all of the predecessor's business is transferred to a successor or successors, the predecessor shall not be a qualified employer until it satisfies the requirements of a "qualified employer" as set forth in RCW 50.29.010.

Sec. 20. RCW 50.29.070 and 1990 c 245 s 8 are each amended to read as follows:

(1) Within a reasonable time after the computation date each employer shall be notified of the employer's rate of contribution as determined for the succeeding rate year and factors used in the calculation. Beginning with rate year 2005, the notice must include the amount of the contribution rate that is attributable to each component of the rate under RCW 50.29.025(2).

(2) Any employer dissatisfied with the benefit charges made to the employer's account for the twelve-month period immediately preceding the computation date or with his or her determined rate may file a request for review and redetermination with the commissioner within thirty days of the mailing of the notice to the employer, showing the reason for such request. Should such request for review and redetermination be denied, the employer may, within thirty days of the mailing of such notice of denial, file with the appeal tribunal a petition for hearing which shall be heard in the same manner as a petition for denial of refund. The appellate procedure prescribed by this title for further appeal shall apply to all denials of review and redetermination under this section.

Sec. 21. RCW 50.29.020 and 2002 c 149 s 6 and 2002 c 8 s 4 are each reenacted and amended to read as follows:

(1) This section applies to benefits charged to the experience rating accounts of employers for claims that have an effective date before January 4, 2004.

(2) An experience rating account shall be established and maintained for each employer, except employers as described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers as described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, based on existing records of the employment security department. Benefits paid to any eligible individuals shall be charged to the experience rating accounts of each of such individual's employers during the individual's base year in the same ratio that the wages paid by each employer to the individual during the base year bear to the wages paid by all employers to that individual during that base year, except as otherwise provided in this section.

(((2))) (3) The legislature finds that certain benefit payments, in whole or in part, should not be charged to the experience rating accounts of employers except those employers described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, as follows:

(a) Benefits paid to any individuals later determined to be ineligible shall not be charged to the experience rating account of any contribution paying employer.

(b) Benefits paid to an individual filing under the provisions of chapter 50.06 RCW shall not be charged to the experience rating account of any contribution paying employer only if:

(i) The individual files under RCW 50.06.020(1) after receiving crime victims' compensation for a disability resulting from a nonwork-related occurrence; or

(ii) The individual files under RCW 50.06.020(2).

(c) Benefits paid which represent the state's share of benefits payable as extended benefits defined under RCW 50.22.010(6) shall not be charged to the experience rating account of any contribution paying employer.

(d) In the case of individuals who requalify for benefits under RCW 50.20.050 or 50.20.060, benefits based on wage credits earned prior to the disqualifying separation shall not be charged to the experience rating account of the contribution paying employer from whom that separation took place.

(e) Individuals who qualify for benefits under RCW 50.20.050(((2)(d))) (1)(b)(iii) shall not have their benefits charged to the experience rating account of any contribution paying employer.

(f) In the case of individuals identified under RCW 50.20.015, benefits paid with respect to a calendar quarter, which exceed the total amount of wages earned in the state of Washington in the higher of two corresponding calendar quarters included within the individual's determination period, as defined in RCW 50.20.015, shall not be charged to the experience rating account of any contribution paying employer.

(((3)(a))) (4)(a) A contribution-paying base year employer, not otherwise eligible for relief of charges for benefits under this section, may receive such relief if the benefit charges result from payment to an individual who:

(i) Last left the employ of such employer voluntarily for reasons not attributable to the employer;

(ii) Was discharged for misconduct connected with his or her work not a result of inability to meet the minimum job requirements;

(iii) Is unemployed as a result of closure or severe curtailment of operation at the employer's plant, building, worksite, or other facility. This closure must be for reasons directly attributable to a catastrophic occurrence such as fire, flood, or other natural disaster; or

(iv) Continues to be employed on a regularly scheduled permanent part-time basis by a base year employer and who at some time during the base year was concurrently employed and subsequently separated from at least one other base year employer. Benefit charge relief ceases when the employment relationship between the employer requesting relief and the claimant is terminated. This subsection does not apply to shared work employers under chapter 50.60 RCW.

(b) The employer requesting relief of charges under this subsection must request relief in writing within thirty days following mailing to the last known address of the notification of the valid initial determination of such claim, stating the date and reason for the separation or the circumstances of continued employment. The commissioner, upon investigation of the request, shall determine whether relief should be granted.

NEW SECTION. Sec. 22. A new section is added to chapter 50.29 RCW to read as follows:

(1) This section applies to benefits charged to the experience rating accounts of employers for claims that have an effective date on or after January 4, 2004.

(2)(a) An experience rating account shall be established and maintained for each employer, except employers as described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers as described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, based on existing records of the employment security department.

(b) Benefits paid to an eligible individual shall be charged to the experience rating accounts of each of such individual's employers during the individual's base year in the same ratio that the wages paid by each employer to the individual during the base year bear to the wages paid by all employers to that individual during that base year, except as otherwise provided in this section.

(c) When the eligible individual's separating employer is a covered contribution paying base year employer, benefits paid to the eligible individual shall be charged to the experience rating account of only the individual's separating employer if the individual qualifies for benefits under:

(i) RCW 50.20.050(2)(b)(i), as applicable, and became unemployed after having worked and earned wages in the bona fide work; or

(ii) RCW 50.20.050(2)(b)(v) through (x).

(d) Benefits paid to an individual with respect to weeks of the benefit year that correspond to calendar weeks within a seasonal work period of a base year employer who had been designated as a seasonal employer by the commissioner under section 12(2)(c) of this act shall be charged to the experience rating account of that contribution paying seasonal employer.

(3) The legislature finds that certain benefit payments, in whole or in part, should not be charged to the experience rating accounts of employers except those employers described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, as follows:

(a) Benefits paid to any individual later determined to be ineligible shall not be charged to the experience rating account of any contribution paying employer.

(b) Benefits paid to an individual filing under the provisions of chapter 50.06 RCW shall not be charged to the experience rating account of any contribution paying employer only if:

(i) The individual files under RCW 50.06.020(1) after receiving crime victims' compensation for a disability resulting from a nonwork-related occurrence; or

(ii) The individual files under RCW 50.06.020(2).

(e) Individuals who qualify for benefits under RCW 50.20.050(2)(b)(iv), as applicable, shall not have their benefits charged to the experience rating account of any contribution paying employer.

(f) Benefits paid to an individual under section 12(2)(b)(ii) of this act that are paid for weeks that do not fall within a period designated by the commissioner as a seasonal work period of any of the individual's base year employers shall not be charged to the experience rating account of any contribution paying seasonal employer.

(4)(a) A contribution paying base year employer, not otherwise eligible for relief of charges for benefits under this section, may receive such relief if the benefit charges result from payment to an individual who:

(i) Last left the employ of such employer voluntarily for reasons not attributable to the employer;

(ii) Was discharged for misconduct or gross misconduct connected with his or her work not a result of inability to meet the minimum job requirements;

Sec. 23. RCW 50.12.220 and 1987 c 111 s 2 are each amended to read as follows:

(1)(a) If an employer fails to file in a timely and complete manner a report required by RCW 50.12.070 ((as now or hereafter amended)), or the rules adopted pursuant thereto, the employer shall be subject to a ((minimum)) penalty ((of ten dollars per violation)) to be determined by the commissioner, but not to exceed two hundred fifty dollars or ten percent of the quarterly contributions for each such offense, whichever is less.

(b) If an employer knowingly misrepresents to the employment security department the amount of his or her payroll upon which contributions under this title are based, the employer shall be liable to the state for up to ten times the amount of the difference in contributions paid, if any, and the amount the employer should have paid and for the reasonable expenses of auditing his or her books and collecting such sums. Such liability may be enforced in the name of the department.

(c) If any part of a delinquency for which an assessment is made under this title is due to an intent to evade the successorship provisions of RCW 50.29.062, the commissioner shall assign to the employer, and to any business found to be promoting the evasion of such provisions, the tax rate determined under RCW 50.29.025 for rate class 20 or rate class 40, as applicable, for five consecutive calendar quarters, beginning with the calendar quarter in which the intent to evade such provision is found.

(2) If contributions are not paid on the date on which they are due and payable as prescribed by the commissioner, there shall be assessed a penalty of five percent of the amount of the contributions for the first month or part thereof of delinquency; there shall be assessed a total penalty of ten percent of the amount of the contributions for the second month or part thereof of delinquency; and there shall be assessed a total penalty of twenty percent of the amount of the contributions for the third month or part thereof of delinquency. No penalty so added shall be less than ten dollars. These penalties are in addition to the interest charges assessed under RCW 50.24.040.

(3) Penalties shall not accrue on contributions from an estate in the hands of a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer subsequent to the date when such receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer qualifies as such, but contributions accruing with respect to employment of persons by a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer shall become due and shall be subject to penalties in the same manner as contributions due from other employers.

(4) Where adequate information has been furnished to the department and the department has failed to act or has advised the employer of no liability or inability to decide the issue, penalties shall be waived by the commissioner. Penalties may also be waived for good cause if the commissioner determines that the failure to timely file reports or pay contributions was not due to the employer's fault.

(5) Any decision to assess a penalty as provided by this section shall be made by the chief administrative officer of the tax branch or his or her designee.

(6) Nothing in this section shall be construed to deny an employer the right to appeal the assessment of any penalty. Such appeal shall be made in the manner provided in RCW 50.32.030.

Sec. 24. RCW 50.16.010 and 2002 c 371 s 914 are each amended to read as follows:

(1) There shall be maintained as special funds, separate and apart from all public moneys or funds of this state an unemployment compensation fund, an administrative contingency fund, and a federal interest payment fund, which shall be administered by the commissioner exclusively for the purposes of this title, and to which RCW 43.01.050 shall not be applicable.

(2)(a) The unemployment compensation fund shall consist of:

(((1))) (i) All contributions collected under RCW 50.24.010 and payments in lieu of contributions collected pursuant to the provisions of this title((,));

(((2))) (ii) Any property or securities acquired through the use of moneys belonging to the fund((,));

(((3))) (iii) All earnings of such property or securities((,));

(((4))) (iv) Any moneys received from the federal unemployment account in the unemployment trust fund in accordance with Title XII of the social security act, as amended((,));

(((5))) (v) All money recovered on official bonds for losses sustained by the fund((,));

(((6))) (vi) All money credited to this state's account in the unemployment trust fund pursuant to section 903 of the social security act, as amended((,));

(((7))) (vii) All money received from the federal government as reimbursement pursuant to section 204 of the federal-state extended compensation act of 1970 (84 Stat. 708-712; 26 U.S.C. Sec. 3304)((,)); and

(((8))) (viii) All moneys received for the fund from any other source.

(b) All moneys in the unemployment compensation fund shall be commingled and undivided.

(3)(a) Except as provided in (b) of this subsection, the administrative contingency fund shall consist of:

(i) All interest on delinquent contributions collected pursuant to this title((,));

(ii) All fines and penalties collected pursuant to the provisions of this title((,));

(iii) All sums recovered on official bonds for losses sustained by the fund((,)); and

(iv) Revenue received under RCW 50.24.014((: PROVIDED, That)).

(b) All fees, fines, forfeitures, and penalties collected or assessed by a district court because of the violation of ((a state law)) this title or rules adopted under this title shall be remitted as provided in chapter 3.62 RCW ((as now exists or is later amended)).

(c) Moneys available in the administrative contingency fund, other than money in the special account created under RCW 50.24.014(1)(a), shall be expended upon the direction of the commissioner, with the approval of the governor, whenever it appears to him or her that such expenditure is necessary solely for:

(((a))) (i) The proper administration of this title and no federal funds are available for the specific purpose to which such expenditure is to be made, provided, the moneys are not substituted for appropriations from federal funds which, in the absence of such moneys, would be made available.

(((b))) (ii) The proper administration of this title for which purpose appropriations from federal funds have been requested but not yet received, provided, the administrative contingency fund will be reimbursed upon receipt of the requested federal appropriation.

(((c))) (iii) The proper administration of this title for which compliance and audit issues have been identified that establish federal claims requiring the expenditure of state resources in resolution. Claims must be resolved in the following priority: First priority is to provide services to eligible participants within the state; second priority is to provide substitute services or program support; and last priority is the direct payment of funds to the federal government.

(d) ((During the 2001-2003 fiscal biennium, the cost of worker retraining programs at community and technical colleges as appropriated by the legislature.))

Money in the special account created under RCW 50.24.014(1)(a) may only be expended, after appropriation, for the purposes specified in this section and RCW 50.62.010, 50.62.020, 50.62.030, ((50.04.070, 50.04.072, 50.16.010, 50.29.025,)) 50.24.014, 50.44.053, and 50.22.010.

Sec. 25. RCW 50.16.015 and 1983 1st ex.s. c 13 s 6 are each amended to read as follows:

A separate and identifiable fund to provide for the payment of interest on advances received from this state's account in the federal unemployment trust fund shall be established and administered under the direction of the commissioner. This fund shall be known as the federal interest payment fund and shall consist of contributions paid under RCW 50.16.070. All money in this fund shall be expended solely for the payment of interest on advances received from this state's account in the federal unemployment trust fund and for no other purposes whatsoever.

Sec. 26. RCW 50.24.014 and 2000 c 2 s 15 are each amended to read as follows:

(1)(a) A separate and identifiable account to provide for the financing of special programs to assist the unemployed is established in the administrative contingency fund. All money in this account shall be expended solely for the purposes of this title and for no other purposes whatsoever. Contributions to this account shall accrue and become payable by each employer, except employers as described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers as described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, at a basic rate of two one-hundredths of one percent. The amount of wages subject to tax shall be determined under RCW 50.24.010.

(b) A separate and identifiable account is established in the administrative contingency fund for financing the employment security department's administrative cost under RCW 50.22.150 and the costs under RCW 50.22.150(9). All money in this account shall be expended solely for the purposes of this title and for no other purposes whatsoever. Contributions to this account shall accrue and become payable by each employer, except employers as described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers as described in RCW 50.44.035, those employers who are required to make payments in lieu of contributions, those employers described under RCW 50.29.025(((6)(b))) (1)(f)(ii), and those qualified employers assigned rate class 20 or rate class 40, as applicable, under RCW 50.29.025, at a basic rate of one one-hundredth of one percent. The amount of wages subject to tax shall be determined under RCW 50.24.010. Any amount of contributions payable under this subsection (1)(b) that exceeds the amount that would have been collected at a rate of four one-thousandths of one percent must be deposited in the unemployment compensation trust fund.

(c) For the first calendar quarter of 1994 only, the basic two one-hundredths of one percent contribution payable under (a) of this subsection shall be increased by one-hundredth of one percent to a total rate of three one-hundredths of one percent. The proceeds of this incremental one-hundredth of one percent shall be used solely for the purposes described in section 22, chapter 483, Laws of 1993, and for the purposes of conducting an evaluation of the call center approach to unemployment insurance under section 5, chapter 161, Laws of 1998. During the 1997-1999 fiscal biennium, any surplus from contributions payable under this subsection (c) may be deposited in the unemployment compensation trust fund, used to support tax and wage automated systems projects that simplify and streamline employer reporting, or both.

(2)(a) Contributions under this section shall become due and be paid by each employer under rules as the commissioner may prescribe, and shall not be deducted, in whole or in part, from the remuneration of individuals in the employ of the employer. Any deduction in violation of this section is unlawful.

(b) In the payment of any contributions under this section, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.

(3) If the commissioner determines that federal funding has been increased to provide financing for the services specified in chapter 50.62 RCW, the commissioner shall direct that collection of contributions under this section be terminated on the following January 1st.

Sec. 27. RCW 50.20.190 and 2002 c 371 s 915 are each amended to read as follows:

(1) An individual who is paid any amount as benefits under this title to which he or she is not entitled shall, unless otherwise relieved pursuant to this section, be liable for repayment of the amount overpaid. The department shall issue an overpayment assessment setting forth the reasons for and the amount of the overpayment. The amount assessed, to the extent not collected, may be deducted from any future benefits payable to the individual: PROVIDED, That in the absence of a back pay award, a settlement affecting the allowance of benefits, fraud, misrepresentation, or willful nondisclosure, every determination of liability shall be mailed or personally served not later than two years after the close of or final payment made on the individual's applicable benefit year for which the purported overpayment was made, whichever is later, unless the merits of the claim are subjected to administrative or judicial review in which event the period for serving the determination of liability shall be extended to allow service of the determination of liability during the six-month period following the final decision affecting the claim.

(2) The commissioner may waive an overpayment if the commissioner finds that the overpayment was not the result of fraud, misrepresentation, willful nondisclosure, or fault attributable to the individual and that the recovery thereof would be against equity and good conscience: PROVIDED, HOWEVER, That the overpayment so waived shall be charged against the individual's applicable entitlement for the eligibility period containing the weeks to which the overpayment was attributed as though such benefits had been properly paid.

(3) Any assessment herein provided shall constitute a determination of liability from which an appeal may be had in the same manner and to the same extent as provided for appeals relating to determinations in respect to claims for benefits: PROVIDED, That an appeal from any determination covering overpayment only shall be deemed to be an appeal from the determination which was the basis for establishing the overpayment unless the merits involved in the issue set forth in such determination have already been heard and passed upon by the appeal tribunal. If no such appeal is taken to the appeal tribunal by the individual within thirty days of the delivery of the notice of determination of liability, or within thirty days of the mailing of the notice of determination, whichever is the earlier, the determination of liability shall be deemed conclusive and final. Whenever any such notice of determination of liability becomes conclusive and final, the commissioner, upon giving at least twenty days notice by certified mail return receipt requested to the individual's last known address of the intended action, may file with the superior court clerk of any county within the state a warrant in the amount of the notice of determination of liability plus a filing fee under RCW 36.18.012(10). The clerk of the county where the warrant is filed shall immediately designate a superior court cause number for the warrant, and the clerk shall cause to be entered in the judgment docket under the superior court cause number assigned to the warrant, the name of the person(s) mentioned in the warrant, the amount of the notice of determination of liability, and the date when the warrant was filed. The amount of the warrant as docketed shall become a lien upon the title to, and any interest in, all real and personal property of the person(s) against whom the warrant is issued, the same as a judgment in a civil case duly docketed in the office of such clerk. A warrant so docketed shall be sufficient to support the issuance of writs of execution and writs of garnishment in favor of the state in the manner provided by law for a civil judgment. A copy of the warrant shall be mailed to the person(s) mentioned in the warrant by certified mail to the person's last known address within five days of its filing with the clerk.

(4) On request of any agency which administers an employment security law of another state, the United States, or a foreign government and which has found in accordance with the provisions of such law that a claimant is liable to repay benefits received under such law, the commissioner may collect the amount of such benefits from the claimant to be refunded to the agency. In any case in which under this section a claimant is liable to repay any amount to the agency of another state, the United States, or a foreign government, such amounts may be collected without interest by civil action in the name of the commissioner acting as agent for such agency if the other state, the United States, or the foreign government extends such collection rights to the employment security department of the state of Washington, and provided that the court costs be paid by the governmental agency benefiting from such collection.

(5) Any employer who is a party to a back pay award or settlement due to loss of wages shall, within thirty days of the award or settlement, report to the department the amount of the award or settlement, the name and social security number of the recipient of the award or settlement, and the period for which it is awarded. When an individual has been awarded or receives back pay, for benefit purposes the amount of the back pay shall constitute wages paid in the period for which it was awarded. For contribution purposes, the back pay award or settlement shall constitute wages paid in the period in which it was actually paid. The following requirements shall also apply:

(a) The employer shall reduce the amount of the back pay award or settlement by an amount determined by the department based upon the amount of unemployment benefits received by the recipient of the award or settlement during the period for which the back pay award or settlement was awarded;

(b) The employer shall pay to the unemployment compensation fund, in a manner specified by the commissioner, an amount equal to the amount of such reduction;

(c) The employer shall also pay to the department any taxes due for unemployment insurance purposes on the entire amount of the back pay award or settlement notwithstanding any reduction made pursuant to (a) of this subsection;

(d) If the employer fails to reduce the amount of the back pay award or settlement as required in (a) of this subsection, the department shall issue an overpayment assessment against the recipient of the award or settlement in the amount that the back pay award or settlement should have been reduced; and

(e) If the employer fails to pay to the department an amount equal to the reduction as required in (b) of this subsection, the department shall issue an assessment of liability against the employer which shall be collected pursuant to the procedures for collection of assessments provided herein and in RCW 50.24.110.

(6) When an individual fails to repay an overpayment assessment that is due and fails to arrange for satisfactory repayment terms, the commissioner shall impose an interest penalty of one percent per month of the outstanding balance. Interest shall accrue immediately on overpayments assessed pursuant to RCW 50.20.070 and shall be imposed when the assessment becomes final. For any other overpayment, interest shall accrue when the individual has missed two or more of ((their)) the individual's monthly payments either partially or in full. The interest penalty shall be used, first, to fully fund either social security number cross-match audits or other more effective activities that ensure that individuals are entitled to all amounts of benefits that they are paid and, second, to fund other detection and recovery of overpayment and collection activities ((and, during the 2001-2003 fiscal biennium, the cost of worker retraining programs at community and technical colleges as appropriated by the legislature)).

Sec. 28. RCW 50.04.206 and 1990 c 245 s 3 are each amended to read as follows:

The term "employment" shall not include service that is performed by a nonresident alien for the period he or she is temporarily present in the United States as a nonimmigrant under subparagraph (F), (H)(ii), (H)(iii), or (J) of section 101(a)(15) of the federal immigration and naturalization act, as amended, and that is performed to carry out the purpose specified in the applicable subparagraph of the federal immigration and naturalization act.

PART III - ADMINISTRATION

Sec. 29. RCW 50.20.140 and 1998 c 161 s 2 are each amended to read as follows:

(1) An application for initial determination, a claim for waiting period, or a claim for benefits shall be filed in accordance with such rules as the commissioner may prescribe. An application for an initial determination may be made by any individual whether unemployed or not. Each employer shall post and maintain printed statements of such rules in places readily accessible to individuals in his or her employment and shall make available to each such individual at the time he or she becomes unemployed, a printed statement of such rules and such notices, instructions, and other material as the commissioner may by rule prescribe. Such printed material shall be supplied by the commissioner to each employer without cost to the employer.

(2) The term "application for initial determination" shall mean a request in writing, or by other means as determined by the commissioner, for an initial determination. The term "claim for waiting period" shall mean a certification, after the close of a given week, that the requirements stated herein for eligibility for waiting period have been met. The term "claim for benefits" shall mean a certification, after the close of a given week, that the requirements stated herein for eligibility for receipt of benefits have been met.

(3) A representative designated by the commissioner shall take the application for initial determination and for the claim for waiting period credits or for benefits. When an application for initial determination has been made, the employment security department shall promptly make an initial determination which shall be a statement of the applicant's base year wages, his or her weekly benefit amount, his or her maximum amount of benefits potentially payable, and his or her benefit year. Such determination shall fix the general conditions under which waiting period credit shall be granted and under which benefits shall be paid during any period of unemployment occurring within the benefit year fixed by such determination.

(4) The legislature finds that the shift by the employment security department from in-person written applications for unemployment insurance benefits to call centers and internet applications has increased the potential for fraud. Therefore, the employment security department must require claimants filing initial and weekly claims telephonically or electronically to provide additional proof of identity, such as a valid driver's license, a valid identification card, or other similar proof specified in rule by the department.

NEW SECTION. Sec. 30. The employment security department shall:

(1) In consultation with an advisory committee equally representing business and labor, identify the programs funded by special administrative contributions under Title 50 RCW and report to the advisory committee the expenditures for these programs annually and cumulatively since enactment. Following its report to the advisory committee, the department shall report its findings and any recommendations to the appropriate committees of the legislature by December 1, 2003.

(2) Conduct a review of the type, rate, and causes of employer turnover in the unemployment compensation system, using unified business identifier information or other relevant data bases and methods. The department shall report its findings and any recommendations to the appropriate committees of the legislature by December 1, 2003.

(3) Conduct a study of the potential for year to year volatility, if any, in the rate classes to which employers in the array are assigned under RCW 50.29.025(2)(a)(ii). The department shall report its findings and any recommendations for minimizing the potential for year to year volatility to the appropriate committees of the legislature by December 1, 2003.

PART IV - MISCELLANEOUS

Sec. 31. RCW 50.20.043 and 1985 c 40 s 1 are each amended to read as follows:

No otherwise eligible individual shall be denied benefits for any week because the individual is in training with the approval of the commissioner, nor shall such individual be denied benefits with respect to any week in which the individual is satisfactorily progressing in a training program with the approval of the commissioner by reason of the application of RCW 50.20.010(((3))) (1)(c), ((50.20.015,)) 50.20.080, or 50.22.020(1) relating to availability for work and active search for work, or failure to apply for or refusal to accept suitable work.

An individual who the commissioner determines to be a dislocated worker as defined by RCW 50.04.075 and who is satisfactorily progressing in a training program approved by the commissioner shall be considered to be in training with the approval of the commissioner.

Sec. 32. RCW 50.20.160 and 1990 c 245 s 4 are each amended to read as follows:

(1) A determination of amount of benefits potentially payable issued pursuant to the provisions of RCW 50.20.120 and 50.20.140 shall not serve as a basis for appeal but shall be subject to request by the claimant for reconsideration and/or for redetermination by the commissioner at any time within one year from the date of delivery or mailing of such determination, or any redetermination thereof: PROVIDED, That in the absence of fraud or misrepresentation on the part of the claimant, any benefits paid prior to the date of any redetermination which reduces the amount of benefits payable shall not be subject to recovery under the provisions of RCW 50.20.190. A denial of a request to reconsider or a redetermination shall be furnished the claimant in writing and provide the basis for appeal under the provisions of RCW 50.32.020.

(2) A determination of denial of benefits issued under the provisions of RCW 50.20.180 shall become final, in absence of timely appeal therefrom: PROVIDED, That the commissioner may reconsider and redetermine such determinations at any time within one year from delivery or mailing to correct an error in identity, omission of fact, or misapplication of law with respect to the facts.

(3) A determination of allowance of benefits shall become final, in absence of a timely appeal therefrom: PROVIDED, That the commissioner may redetermine such allowance at any time within two years following the benefit year in which such allowance was made in order to recover any benefits improperly paid and for which recovery is provided under the provisions of RCW 50.20.190: AND PROVIDED FURTHER, That in the absence of fraud, misrepresentation, or nondisclosure, this provision or the provisions of RCW 50.20.190 shall not be construed so as to permit redetermination or recovery of an allowance of benefits which having been made after consideration of the provisions of RCW 50.20.010(((3))) (1)(c), or the provisions of RCW 50.20.050, 50.20.060, 50.20.080, or 50.20.090 has become final.

(4) A redetermination may be made at any time: (a) To conform to a final court decision applicable to either an initial determination or a determination of denial or allowance of benefits; (b) in the event of a back pay award or settlement affecting the allowance of benefits; or (c) in the case of fraud, misrepresentation, or willful nondisclosure. Written notice of any such redetermination shall be promptly given by mail or delivered to such interested parties as were notified of the initial determination or determination of denial or allowance of benefits and any new interested party or parties who, pursuant to such regulation as the commissioner may prescribe, would be an interested party.

Sec. 33. RCW 50.32.040 and 1989 c 175 s 117 are each amended to read as follows:

In any proceeding before an appeal tribunal involving a dispute of an individual's initial determination, all matters covered by such initial determination shall be deemed to be in issue irrespective of the particular ground or grounds set forth in the notice of appeal.

In any proceeding before an appeal tribunal involving a dispute of an individual's claim for waiting period credit or claim for benefits, all matters and provisions of this title relating to the individual's right to receive such credit or benefits for the period in question, including but not limited to the question and nature of the claimant's availability for work within the meaning of RCW 50.20.010(((3))) (1)(c) and 50.20.080, shall be deemed to be in issue irrespective of the particular ground or grounds set forth in the notice of appeal in single claimant cases. The claimant's availability for work shall be determined apart from all other matters.

In any proceeding before an appeal tribunal involving an individual's right to benefits, all parties shall be afforded an opportunity for hearing after not less than seven days' notice in accordance with RCW 34.05.434.

In any proceeding involving an appeal relating to benefit determinations or benefit claims, the appeal tribunal, after affording the parties reasonable opportunity for fair hearing, shall render its decision affirming, modifying, or setting aside the determination or decisions of the unemployment compensation division. The parties shall be duly notified of such appeal tribunal's decision together with its reasons therefor, which shall be deemed to be the final decision on the initial determination or the claim for waiting period credit or the claim for benefits unless, within thirty days after the date of notification or mailing, whichever is the earlier, of such decision, further appeal is perfected pursuant to the provisions of this title relating to review by the commissioner.

Sec. 34. RCW 28B.50.030 and 1997 c 367 s 13 are each amended to read as follows:

As used in this chapter, unless the context requires otherwise, the term:

(1) "System" shall mean the state system of community and technical colleges, which shall be a system of higher education.

(2) "Board" shall mean the work force training and education coordinating board.

(3) "College board" shall mean the state board for community and technical colleges created by this chapter.

(4) "Director" shall mean the administrative director for the state system of community and technical colleges.

(5) "District" shall mean any one of the community and technical college districts created by this chapter.

(6) "Board of trustees" shall mean the local community and technical college board of trustees established for each college district within the state.

(7) "Occupational education" shall mean that education or training that will prepare a student for employment that does not require a baccalaureate degree.

(8) "K-12 system" shall mean the public school program including kindergarten through the twelfth grade.

(9) "Common school board" shall mean a public school district board of directors.

(10) "Community college" shall include those higher education institutions that conduct education programs under RCW 28B.50.020.

(11) "Technical college" shall include those higher education institutions with the sole industry needs. The programs of technical colleges shall include, but not be limited to, continuous enrollment, competency-based instruction, industry-experienced faculty, curriculum integrating vocational and basic skills education, and curriculum approved by representatives of employers and labor. For purposes of this chapter, technical colleges shall include Lake Washington Vocational-Technical Institute, Renton Vocational-Technical Institute, Bates Vocational-Technical Institute, Clover Park Vocational Institute, and Bellingham Vocational-Technical Institute.

(12) "Adult education" shall mean all education or instruction, including academic, vocational education or training, basic skills and literacy training, and "occupational education" provided by public educational institutions, including common school districts for persons who are eighteen years of age and over or who hold a high school diploma or certificate. However, "adult education" shall not include academic education or instruction for persons under twenty-one years of age who do not hold a high school degree or diploma and who are attending a public high school for the sole purpose of obtaining a high school diploma or certificate, nor shall "adult education" include education or instruction provided by any four year public institution of higher education.

(13) "Dislocated forest product worker" shall mean a forest products worker who: (a)(I) Has been terminated or received notice of termination from employment and is unlikely to return to employment in the individual's principal occupation or previous industry because of a diminishing demand for his or her skills in that occupation or industry; or (ii) is self-employed and has been displaced from his or her business because of the diminishing demand for the ((business's)) business' services or goods; and (b) at the time of last separation from employment, resided in or was employed in a rural natural resources impact area.

(14) "Forest products worker" shall mean a worker in the forest products industries affected by the reduction of forest fiber enhancement, transportation, or production. The workers included within this definition shall be determined by the employment security department, but shall include workers employed in the industries assigned the major group standard industrial classification codes "24" and "26" and the industries involved in the harvesting and management of logs, transportation of logs and wood products, processing of wood products, and the manufacturing and distribution of wood processing and logging equipment. The commissioner may adopt rules further interpreting these definitions. For the purposes of this subsection, "standard industrial classification code" means the code identified in RCW 50.29.025(((6)(c))) (3).

(15) "Dislocated salmon fishing worker" means a finfish products worker who: (a)(I) Has been terminated or received notice of termination from employment and is unlikely to return to employment in the individual's principal occupation or previous industry because of a diminishing demand for his or her skills in that occupation or industry; or (ii) is self-employed and has been displaced from his or her business because of the diminishing demand for the business's services or goods; and (b) at the time of last separation from employment, resided in or was employed in a rural natural resources impact area.

(16) "Salmon fishing worker" means a worker in the finfish industry affected by 1994 or future salmon disasters. The workers included within this definition shall be determined by the employment security department, but shall include workers employed in the industries involved in the commercial and recreational harvesting of finfish including buying and processing finfish. The commissioner may adopt rules further interpreting these definitions.

(17) "Rural natural resources impact area" means:

(a) A nonmetropolitan county, as defined by the 1990 decennial census, that meets three of the five criteria set forth in subsection (18) of this section;

(b) A nonmetropolitan county with a population of less than forty thousand in the 1990 decennial census, that meets two of the five criteria as set forth in subsection (18) of this section; or

(c) A nonurbanized area, as defined by the 1990 decennial census, that is located in a metropolitan county that meets three of the five criteria set forth in subsection (18) of this section.

(18) For the purposes of designating rural natural resources impact areas, the following criteria shall be considered:

(a) A lumber and wood products employment location quotient at or above the state average;

(b) A commercial salmon fishing employment location quotient at or above the state average;

(d) Projected or actual direct commercial salmon fishing job losses of one hundred positions or more; and

(e) An unemployment rate twenty percent or more above the state average. The counties that meet these criteria shall be determined by the employment security department for the most recent year for which data is available. For the purposes of administration of programs under this chapter, the United States post office five-digit zip code delivery areas will be used to determine residence status for eligibility purposes. For the purpose of this definition, a zip code delivery area of which any part is ten miles or more from an urbanized area is considered nonurbanized. A zip code totally surrounded by zip codes qualifying as nonurbanized under this definition is also considered nonurbanized. The office of financial management shall make available a zip code listing of the areas to all agencies and organizations providing services under this chapter.

NEW SECTION. Sec. 35. The commissioner of the employment security department may adopt such rules as are necessary to implement this act.

NEW SECTION. Sec. 36. The following acts or parts of acts are each repealed:

(1) RCW 50.20.015 (Person with marginal labor force attachment) and 1986 c 106 s 1, 1985 c 285 s 3, & 1984 c 205 s 9;

(2) RCW 50.20.045 (Employee separated from employment due to wage garnishment not disqualified) and 1969 ex.s. c 264 s 35;

(3) RCW 50.20.125 (Maximum amount payable weekly) and 2002 c 149 s 3; and

(4) RCW 50.29.045 (Contribution rate--Insolvency surcharge) and 2002 c 149 s 9.

NEW SECTION. Sec. 37. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state or the eligibility of employers in this state for federal unemployment tax credits, the conflicting part of this act is inoperative solely to the extent of the conflict, and the finding or determination does not affect the operation of the remainder of this act. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state or the granting of federal unemployment tax credits to employers in this state.

NEW SECTION. Sec. 38. 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. 39. Section 30 of this act expires January 1, 2004.

NEW SECTION. Sec. 40. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately."

PARLIAMENTARY INQUIRY

Senator Keiser: "A parliamentary inquiry, Mr. President. I see before me two striking amendments, one from Senator Honeyford and one from me and I have a question. If we take further action on the striking amendment by Senator Honeyford, does that preclude action on my striking amendment?"

REPLY BY THE PRESIDENT

President Owen: "Once, the action is completed on the striking amendment by Senator Honeyford and the amendments are completed and the vote is taken and if it passes, then the other striking amendment would be out of order. You can only adopt one striking amendment."

Senator Keiser: "Thank you."

MOTION

Senator Brown moved that the following amendment by Senators Brown, Franklin, Spanel, Kohl-Welles, Keiser, Eide and McAuliffe to the striking amendment by Senator Honeyford be adopted:

On page 6, line 28, beginning with "(A)" strike everything through "move" on line 33 and insert the following: "has left work to relocate for the spouse's employment that is due to an employer-initiated mandatory transfer that is outside the existing labor market area if the claimant remained employed as long as was reasonable prior to the move"

Renumber the sections consecutively and correct any internal references accordingly.

Debate ensued.

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

The President declared the question before the Senate to be the roll call on the adoption of the amendment by Senators Brown, Franklin, Spanel, Kohl-Welles, Keiser, Eide and McAuliffe to the striking amendment by Senator Honeyford to the striking amendment to Senate Bill No. 6097.

ROLL CALL

The Secretary called the roll and the amendment to the striking amendment was not adopted by the following vote: Yeas, 19; Nays, 26; Absent, 0; Excused, 4.

Voting yea: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Jacobsen, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Reardon, Regala, Sheldon, B., Spanel and Thibaudeau - 19.

Voting nay: Senators Benton, Brandland, Carlson, Esser, Finkbeiner, Hale, Haugen, Hewitt, Honeyford, Horn, Johnson, Kastama, Morton, Mulliken, Oke, Parlette, Rasmussen, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, Winsley and Zarelli- 26.

Excused: Senators Deccio, McCaslin, Shin and West - 4.

MOTION

Senator Brown moved that the following amendments to the striking amendment by Senator Honeyford be considered simultaneously and be adopted:

On page 11, line 29, strike all of section 11 and insert the following: "Sec. 11. RCW 50.20.120 and 2002 c 149 s 4 are each amended to read as follows:

(1) (a) For claims with an effective date before January 4, 2004, subject to the other provisions of this title, benefits shall be payable to any eligible individual during the individual's benefit year in a maximum amount equal to the lesser of thirty times the weekly benefit amount (((determined hereinafter))), as determined in subsection (2) of this section, or one-third of the individual's base year wages under this title: PROVIDED, That as to any week ((beginning on and after March 31, 1981,)) which falls in an extended benefit period as defined in RCW 50.22.010(1), ((as now or hereafter amended,)) an individual's eligibility for maximum benefits in excess of twenty-six times his or her weekly benefit amount will be subject to the terms and conditions set forth in RCW 50.22.020((, as now or hereafter amended)).

(b) With respect to claims that have an effective date on or after January 4, 2004, benefits shall be payable to any eligible individual during the individual's benefit year in a maximum amount equal to the lesser of twenty-six times the weekly benefit amount, as determined in subsection (2) of this section, or one-third of the individual's base year wages under this title.

(b) With respect to claims that have an effective date on or after January 4, 2004, an individual's weekly benefit amount shall be an amount equal to three and nine-tenths percent of the average quarterly wages of the individual's total wages during the two quarters of the individual's base year in which such total wages were highest.

(a)(I) With respect to claims that have an effective date on or after January 4, 2004, and before January 4, 2009, the maximum amount payable weekly shall be ((seventy percent of the "average weekly wage" for the calendar year preceding such June 30th))four hundred ninety-six dollars.

(ii) With respect to claims that have an effective date on or after January 4, 2009, the maximum amount payable weekly shall be four hundred ninety-six dollars or sixty-three percent of the "average weekly wage" for the calendar year preceding such June 30th, whichever is greater.

(b) The minimum amount payable weekly shall be fifteen percent of the "average weekly wage" for the calendar year preceding such June 30th.

(4) If any weekly benefit, maximum benefit, or minimum benefit amount computed herein is not a multiple of one dollar, it shall be reduced to the next lower multiple of one dollar."

On page 13, line 12, strike all of sections 12, 13, and 14 and insert the following: "NEW SECTION. Sec. 12. A new section is added to chapter 50.20 RCW to read as follows:

With respect to claims with an effective date on or after January 2, 2005 an otherwise eligible individual may not be denied benefits for any week because the individual is a part-time worker and is available for, seeks, applies for, or accepts only work of twenty or fewer hours per week by reason of the application of RCW 50.20.010(1)(c), 50.20.080, or 50.22.020(1) relating to availability for work and active search for work, or failure to apply for or refusal to accept suitable work commensurate with the worker's employment history."

On page 35, line 18, strike all of subsection d.

Renumber the sections consecutively and correct any internal references accordingly.

Debate ensued.

The President declared the question before the Senate to be the roll call on the adoption of the amendments by Senator Brown on page 11, line 29; page 13, line 12; and page 35, line 18; to the striking amendment by Senator Honeyford to the striking amendment to Senate Bill No. 6097.

The motion by Senator Brown failed and the amendments were not adopted.

ROLL CALL

The Secretary called the roll and the amendments to the striking amendment was not adopted by the following vote: Yeas, 19; Nays, 26; Absent, 0; Excused, 4.

Excused: Senators Deccio, McCaslin, Shin and West - 4.

MOTION

Senator Honeyford moved that the following amendments to the striking amendment by Senator Honeyford be considered simultaneously and be adopted:

On page 13, line 16, after "(2)" strike "With" and insert "Except as provided in subsection (3) and subsection (2)(a) of this section, with"

On page 13, line 18, after "(a)", strike "An" and insert "With respect to claims that have an effective date on or after January 4, 2009, an"

On page 14, line 24, after "(3)" insert:

"With respect to claims that have an effective date on or after January 2, 2005, but before January 4, 2009, for a claimant who is a seasonal worker under subsection (2)(b)(I) of this section, the denial of benefits under subsection (2)(b)(I) of this section for weeks that do not correspond to calendar weeks within a seasonal work period designated by the commissioner does not apply to that seasonal worker if he or she earned less than the state average wage in his or her base year and if he or she receives his or her benefits within this state. Benefits paid pursuant to this subsection shall be charged to money credited to the account of this state in the unemployment trust fund pursuant to section 903 of the social security act, as amended. If there is no money credited pursuant to section 903 of the social security act, as amended, remaining in this state's account in the unemployment trust fund, other money in this state's account may be used for the payment of such benefits.

(4)"

Renumber the sections consecutively and correct any internal references accordingly.

Debate ensued.

The President declared the question before the Senate to be the adoption of the amendments by Senator Honeyford on page 13, lines 16 and 18, and page14, line 24, to the striking amendment by Senator Honeyford to Senate Bill No. 6097.

The motion by Senator Honeyford carried and the amendments to the striking amendment were adopted.

MOTION

Senator Keiser moved that the following amendment to the striking amendment by Senator Honeyford be adopted:

On page 1, after line 28, Strike the remainder of the bill and insert the following:

"PART I - UNEMPLOYMENT COMPENSATION BENEFITS

Sec. 1. RCW 50.04.030 and 1991 c 117 s 1 are each amended to read as follows:

(1) "Benefit year" with respect to each individual, means the fifty-two consecutive week period beginning with the first day of the calendar week in which the individual files an application for an initial determination and thereafter the fifty-two consecutive week period beginning with the first day of the calendar week in which the individual next files an application for an initial determination after the expiration of the individual's last preceding benefit year: PROVIDED, HOWEVER, That the foregoing limitation shall not be deemed to preclude the establishment of a new benefit year under the laws of another state pursuant to any agreement providing for the interstate combining of employment and wages and the interstate payment of benefits nor shall this limitation be deemed to preclude the commissioner from backdating an initial application at the request of the claimant either for the convenience of the department of employment security or for any other reason deemed by the commissioner to be good cause.

(2) An individual's benefit year shall be extended to be fifty-three weeks when at the expiration of fifty-two weeks the establishment of a new benefit year would result in the use of a quarter of wages in the new base year that had been included in the individual's prior base year.

(3)(a) No benefit year will be established unless it is determined that:

(I) The individual earned wages in "employment" in not less than six hundred eighty hours of the individual's base year((: PROVIDED, HOWEVER, That)); or

(ii) Beginning with claims that have an effective date on or after January 4, 2004, the individual earned wages in "employment" in not less than six hundred eighty hours of the individual's base year and also earned wages in "employment" in at least two quarters of the individual's base year. If sections 9 and 10 of this act are not enacted by July 1, 2003, this subsection (3)(a)(ii) is null and void.

(b) A benefit year ((cannot)) may not be established if the base year wages include wages earned prior to the establishment of a prior benefit year unless the individual worked and earned wages since the last separation from employment immediately before the application for initial determination in the previous benefit year if the applicant was an unemployed individual at the time of application, or since the initial separation in the previous benefit year if the applicant was not an unemployed individual at the time of filing an application for initial determination for the previous benefit year, of not less than six times the weekly benefit amount computed for the individual's new benefit year.

(c) If an individual's prior benefit year was based on the last four completed calendar quarters, a new benefit year shall not be established until the new base year does not include any hours used in the establishment of the prior benefit year.

(4) If the wages of an individual are not based upon a fixed duration of time or if the individual's wages are paid at irregular intervals or in such manner as not to extend regularly over the period of employment, the wages for any week shall be determined in such manner as the commissioner may by regulation prescribe. Such regulation shall, so far as possible, secure results reasonably similar to those which would prevail if the individual were paid his or her wages at regular intervals.

Sec. 2. RCW 50.20.120 and 2002 c 149 s 4 are each amended to read as follows:

(2)(a) An individual's weekly benefit amount shall be an amount equal to one twenty-fifth of the average quarterly wages of the individual's total wages during the two quarters of the individual's base year in which such total wages were highest. The maximum and minimum amounts payable weekly shall be determined as of each June 30th to apply to benefit years beginning in the twelve-month period immediately following such June 30th. ((Except as provided in RCW 50.20.125,))

(b) The maximum amount payable weekly shall be:

(I) Except as provided in (b)(ii) of this subsection, seventy percent of the "average weekly wage" for the calendar year preceding such June 30th.

(ii) Beginning with claims that have an effective date on or after January 4, 2004, the maximum amount payable weekly shall be sixty-six and two-thirds percent of the "average weekly wage" for the calendar year preceding such June 30th or four hundred ninety-six dollars, whichever is greater. If sections 9 and 10 of this act are not enacted by July 1, 2003, this subsection (2)(b) is null and void.

(c) The minimum amount payable weekly shall be fifteen percent of the "average weekly wage" for the calendar year preceding such June 30th. If any weekly benefit, maximum benefit, or minimum benefit amount computed herein is not a multiple of one dollar, it shall be reduced to the next lower multiple of one dollar.

(3)(a) In addition to the amount payable weekly under subsection (2) of this section, an individual shall be paid a dependent allowance of ten dollars weekly for: (I) Each child who is a dependent of the individual for federal income tax exemptions; and (ii) each child for whom the individual owes child support obligations and for whom no other person is receiving dependent allowances under this subsection. The dependent allowance may not exceed thirty dollars weekly.

(b) For the purposes of this subsection:

(I) "Child" means a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis who is: (A) Under eighteen years of age; (B) eighteen years of age or older and incapable of self-care because of a mental or physical disability; or (c) under twenty-four years of age, enrolled as a student, and regularly attending classes, or is between two successive academic years or terms, at an institution of higher education.

(ii) "Institution of higher education" means an educational institution that: (A) Admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate; (B) is legally authorized to provide a program of education beyond high school; (c) provides an educational program for which it awards a bachelor's or higher degree, or provides a program which is acceptable for full credit toward such a degree, or offers a program of training to prepare students for gainful employment in a recognized occupation; and (D) is a public or other nonprofit institution.

(4) The sum of the amount payable weekly under subsection (2) of this section and the dependent allowance payable weekly under subsection (3) of this section may not exceed the maximum amount payable weekly specified in subsection (2) of this section.

Sec. 3. RCW 50.04.293 and 1993 c 483 s 1 are each amended to read as follows:

(1) "Misconduct" means an employee's act or failure to act in willful disregard of his or her employer's interest where the effect of the employee's act or failure to act is to harm the employer's business.

(2) "Gross misconduct" means a felony or gross misdemeanor by the employee that is connected with the employee's work which results in harm to the employer's business.

Sec. 4. RCW 50.20.065 and 1993 c 483 s 11 are each amended to read as follows:

(1) An individual who has been discharged from his or her work because of ((a felony or gross misdemeanor)) gross misconduct of which he or she has been convicted, or has admitted committing to a competent authority, ((and that is connected with his or her work)) shall have all hourly wage credits based on that employment or six hundred eighty hours of wage credits, whichever is greater, canceled.

(2) The employer shall notify the department of such an admission or conviction, not later than six months following the admission or conviction.

NEW SECTION. Sec. 5. A new section is added to chapter 50.20 RCW to read as follows:

An individual is disqualified for benefits for any day during which he or she is incarcerated in any federal, state, or municipal penal institution, jail, medical facility, public or private hospital, or in any other place because of a criminal violation of a federal, state, or municipal law or ordinance. For purposes of this section, "incarceration" includes any time spent in the custody of law enforcement authorities upon adjudication or conviction by a court of competent jurisdiction.

NEW SECTION. Sec. 6. A new section is added to chapter 50.20 RCW to read as follows:

An otherwise eligible individual may not be denied benefits for any week because the individual is available for, seeks, applies for, or accepts only work of at least fifteen hours per week by reason of the application of RCW 50.20.010(3), 50.20.015, 50.20.080, or 50.22.020(1) relating to availability for work and active search for work, or failure to apply for or refusal to accept suitable work.

Sec. 7. RCW 50.20.150 and 1970 ex.s. c 2 s 7 are each amended to read as follows:

(1) The applicant for initial determination, his most recent employing unit as stated by the applicant, and any other interested party which the commissioner by regulation prescribes, shall, if not previously notified within the same continuous period of unemployment, be given notice promptly in writing that an application for initial determination has been filed and such notice shall contain the reasons given by the applicant for his last separation from work. If, during his benefit year, the applicant becomes unemployed after having accepted subsequent work, and reports for the purpose of reestablishing his eligibility for benefits, a similar notice shall be given promptly to his then most recent employing unit as stated by him, or to any other interested party which the commissioner by regulation prescribes.

(2) Each base year employer shall be promptly notified of the filing of any application for initial determination which may result in a charge to his account.

(3) Any employer who receives a notice under this section and has information which might make the applicant ineligible or disqualify the applicant for benefits shall report this information to the employment security department at the address indicated on the notice within ten days of the date the notice was mailed. If the employer reports this information to the department more than ten days after the date the notice was mailed:

(a) The applicant may not be determined to be ineligible or disqualified based on the information for a claim period compensated before receipt of the information by the department; and

(b) The applicant is entitled to a rebuttable presumption of eligibility for a claim period after receipt of the information by the department.

Sec. 8. RCW 50.20.240 and 2002 c 8 s 3 are each amended to read as follows:

(1) To ensure that following the initial application for benefits, an individual is actively engaged in searching for work, ((effective July 1, 1999,)) the employment security department shall implement a job search monitoring program. Except for those individuals with employer attachment or union referral, individuals who qualify for unemployment compensation under RCW 50.20.050(2)(d), and individuals in commissioner-approved training, an individual who has received five or more weeks of benefits under this title must provide evidence of seeking work, as directed by the commissioner or the commissioner's agents, for each week beyond five in which a claim is filed. The evidence must demonstrate contacts with at least three employers per week or documented in-person job search activity at the local reemployment center. In developing the requirements for the job search monitoring program, the commissioner or the commissioner's agents shall utilize an existing advisory committee having equal representation of employers and workers.

(2) During any extended benefit period as defined in RCW 50.22.010, the department may: (a) Suspend the job search monitoring program under subsection (1) of this section; and (b) shift funding and staff from job search monitoring activities to eligibility determination and benefit payment activities.

PART II - UNEMPLOYMENT COMPENSATION CONTRIBUTIONS

Sec. 9. RCW 50.29.020 and 2002 c 149 s 6 and 2002 c 8 s 4 are each reenacted and amended to read as follows:

(1)(a) An experience rating account shall be established and maintained for each employer, except employers as described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers as described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, based on existing records of the employment security department.

(b) Benefits paid to ((any)) an eligible individual((s)) shall be charged to the experience rating accounts of each of such individual's employers during the individual's base year in the same ratio that the wages paid by each employer to the individual during the base year bear to the wages paid by all employers to that individual during that base year, except as otherwise provided in this section.

(c) Benefits paid to an eligible individual shall be charged to the experience rating account of only the individual's separating employer if the individual qualifies for benefits under: (I) RCW 50.20.050(2)(a) and became unemployed after having worked and earned wages in the bona fide work; or (ii) RCW 50.20.050(3).

(2) The legislature finds that certain benefit payments, in whole or in part, should not be charged to the experience rating accounts of employers except those employers described in RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, taxable local government employers described in RCW 50.44.035, and those employers who are required to make payments in lieu of contributions, as follows:

(a) Benefits paid to any individuals later determined to be ineligible shall not be charged to the experience rating account of any contribution paying employer.

(b) Benefits paid to an individual filing under the provisions of chapter 50.06 RCW shall not be charged to the experience rating account of any contribution paying employer only if:

(I) The individual files under RCW 50.06.020(1) after receiving crime victims' compensation for a disability resulting from a nonwork-related occurrence; or

(ii) The individual files under RCW 50.06.020(2).

(e) Individuals who qualify for benefits under RCW 50.20.050(2)(d) shall not have their benefits charged to the experience rating account of any contribution paying employer.

(3)(a) A contribution-paying base year employer, not otherwise eligible for relief of charges for benefits under this section, may receive such relief if the benefit charges result from payment to an individual who:

(I) Last left the employ of such employer voluntarily for reasons not attributable to the employer;

(ii) Was discharged for misconduct connected with his or her work not a result of inability to meet the minimum job requirements;

(iii) Is unemployed as a result of closure or severe curtailment of operation at the employer's plant, building, work site, or other facility. This closure must be for reasons directly attributable to a catastrophic occurrence such as fire, flood, or other natural disaster; or

Sec. 10. RCW 50.29.025 and 2003 c 4 (SHB 1832) s 1 are each amended to read as follows:

The contribution rate for each employer subject to contributions under RCW 50.24.010 shall be determined under this section.

(1) A fund balance ratio shall be determined by dividing the balance in the unemployment compensation fund as of the September 30th immediately preceding the rate year by the total remuneration paid by all employers subject to contributions during the second calendar year preceding the rate year and reported to the department by the following March 31st. The division shall be carried to the fourth decimal place with the remaining fraction, if any, disregarded. The fund balance ratio shall be expressed as a percentage.

(2) The interval of the fund balance ratio, expressed as a percentage, shall determine which tax schedule in subsection (5) of this section shall be in effect for assigning tax rates for the rate year, except that during rate year 2004 tax schedule B shall be in effect unless a lower tax schedule is determined to be in effect by the interval of the fund balance ratio. The intervals for determining the effective tax schedule shall be:

Interval of the Fund Balance Ratio Expressed as a Percentage		Effective Tax Schedule
	((2.90)) 2.86 and above	AA
	((2.10 to 2.89)) 2.06 to 2.85	A
	((1.70 to 2.09)) 1.66 to 2.05	B
	1.40 to ((1.69)) 1.65	C
	1.00 to 1.39	D
	0.70 to 0.99	E
	Less than 0.70	F

(3) An array shall be prepared, listing all qualified employers in ascending order of their benefit ratios. The array shall show for each qualified employer: (a) Identification number; (b) benefit ratio; (c) taxable payrolls for the four calendar quarters immediately preceding the computation date and reported to the department by the cut-off date; (d) a cumulative total of taxable payrolls consisting of the employer's taxable payroll plus the taxable payrolls of all other employers preceding him or her in the array; and (e) the percentage equivalent of the cumulative total of taxable payrolls.

(4) Each employer in the array shall be assigned to one of twenty rate classes according to the percentage intervals of cumulative taxable payrolls set forth in subsection (5) of this section: PROVIDED, That if an employer's taxable payroll falls within two or more rate classes, the employer and any other employer with the same benefit ratio shall be assigned to the lowest rate class which includes any portion of the employer's taxable payroll.

(5)(a) Except as provided in RCW 50.29.026, the contribution rate for each employer in the array shall be the rate specified in the following tables for the rate class to which he or she has been assigned, as determined under subsection (4) of this section, within the tax schedule which is to be in effect during the rate year:

((Percent of Cumulative Taxable Payrolls			Schedules of Contributions Rates for Effective Tax Schedule
From	To	Rate Class	AA	A	B	C	D	E	F
0.00	5.00	1	0.47	0.47	0.57	0.97	1.47	1.87	2.47
5.01	10.00	2	0.47	0.47	0.77	1.17	1.67	2.07	2.67
10.01	15.00	3	0.57	0.57	0.97	1.37	1.77	2.27	2.87
15.01	20.00	4	0.57	0.73	1.11	1.51	1.90	2.40	2.98
20.01	25.00	5	0.72	0.92	1.30	1.70	2.09	2.59	3.08
25.01	30.00	6	0.91	1.11	1.49	1.89	2.29	2.69	3.18
30.01	35.00	7	1.00	1.29	1.69	2.08	2.48	2.88	3.27
35.01	40.00	8	1.19	1.48	1.88	2.27	2.67	3.07	3.47
40.01	45.00	9	1.37	1.67	2.07	2.47	2.87	3.27	3.66
45.01	50.00	10	1.56	1.86	2.26	2.66	3.06	3.46	3.86
50.01	55.00	11	1.84	2.14	2.45	2.85	3.25	3.66	3.95
55.01	60.00	12	2.03	2.33	2.64	3.04	3.44	3.85	4.15
60.01	65.00	13	2.22	2.52	2.83	3.23	3.64	4.04	4.34
65.01	70.00	14	2.40	2.71	3.02	3.43	3.83	4.24	4.54
70.01	75.00	15	2.68	2.90	3.21	3.62	4.02	4.43	4.63
75.01	80.00	16	2.87	3.09	3.42	3.81	4.22	4.53	4.73
80.01	85.00	17	3.27	3.47	3.77	4.17	4.57	4.87	4.97
85.01	90.00	18	3.67	3.87	4.17	4.57	4.87	4.97	5.17
90.01	95.00	19	4.07	4.27	4.57	4.97	5.07	5.17	5.37
95.01	100.00	20	5.40	5.40	5.40	5.40	5.40	5.40	5.40))

Percent of Cumulative Taxable Payrolls			Schedules of Contributions Rates for Effective Tax Schedule
From	To	Rate Class	AA	A	B	C	D	E	F
0.00	5.00	1	0.54	0.55	0.63	1.00	1.50	1.90	2.50
5.01	10.00	2	0.54	0.55	0.82	1.25	1.70	2.10	2.70
10.01	15.00	3	0.60	0.60	1.05	1.45	1.80	2.30	2.90
15.01	20.00	4	0.70	0.80	1.17	1.57	1.93	2.43	3.01
20.01	25.00	5	0.72	0.92	1.30	1.70	2.09	2.59	3.08
25.01	30.00	6	0.91	1.03	1.44	1.89	2.29	2.69	3.18
30.01	35.00	7	1.00	1.17	1.61	2.08	2.48	2.88	3.27
35.01	40.00	8	1.19	1.35	1.79	2.27	2.67	3.07	3.47
40.01	45.00	9	1.37	1.52	1.97	2.47	2.87	3.27	3.66
45.01	50.00	10	1.56	1.69	2.15	2.66	3.06	3.46	3.86
50.01	55.00	11	1.84	1.95	2.33	2.85	3.25	3.66	3.95
55.01	60.00	12	2.03	2.12	2.51	3.04	3.44	3.85	4.15
60.01	65.00	13	2.22	2.29	2.69	3.23	3.64	4.04	4.34
65.01	70.00	14	2.40	2.47	2.87	3.43	3.83	4.24	4.54
70.01	75.00	15	2.64	2.68	3.05	3.62	4.02	4.43	4.63
75.01	80.00	16	2.81	2.87	3.25	3.81	4.22	4.53	4.73
80.01	85.00	17	3.27	3.47	3.77	4.17	4.57	4.87	4.97
85.01	90.00	18	3.67	3.87	4.17	4.57	4.87	4.97	5.17
90.01	95.00	19	4.10	4.30	4.60	5.00	5.10	5.20	5.40
95.01	100.00	20
		20A	5.40	5.40	5.40	5.45	5.50	5.55	5.60
		20B	5.40	5.45	5.50	5.55	5.60	5.65	5.70
		20C	5.50	5.55	5.60	5.65	5.70	5.75	5.80
		20D	5.60	5.65	5.70	5.75	5.80	5.85	5.90
		20E	5.70	5.75	5.80	5.85	5.90	5.95	6.00

(b) Employers assigned to rate class 20 shall be assigned to one of the rate classes 20A through E as follows:

(I) Employers with a benefit ratio of less than 0.054000 shall be assigned to rate class 20A;

(ii) Employers with a benefit ratio of at least 0.054000 but less than 0.063000 shall be assigned to rate class 20B;

(iii) Employers with a benefit ratio of at least 0.063000 but less than 0.068000 shall be assigned to rate class 20C;

(iv) Employers with a benefit ratio of at least 0.068000 but less than 0.075000 shall be assigned to rate class 20D; and

(v) Employers with a benefit ratio of 0.075000 or higher shall be assigned to rate class 20E.

(6) The contribution rate for each employer not qualified to be in the array shall be as follows:

(a) Employers who do not meet the definition of "qualified employer" by reason of failure to pay contributions when due shall be assigned a contribution rate two-tenths higher than that in rate class 20E for the applicable rate year, except employers who have an approved agency-deferred payment contract by September 30 of the previous rate year. If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to a contribution rate two-tenths higher than that in rate class 20E for the applicable rate year; and

(b) For all other employers not qualified to be in the array, the contribution rate shall be a rate equal to the average industry rate as determined by the commissioner, plus fifteen percent; however, the rate may not be less than one percent or more than the rate in rate class 20E for the applicable rate year. Assignment of employers by the commissioner to industrial classification, for purposes of this section, shall be in accordance with established classification practices found in the (("Standard Industrial Classification Manual")) North American industry classification system issued by the federal office of management and budget ((to the third digit provided in the standard industrial classification code, or in the North American industry classification system code)).

Sec. 11. RCW 50.29.062 and 1996 c 238 s 1 are each amended to read as follows:

Predecessor and successor employer contribution rates shall be computed in the following manner:

(2) For transfers before January 1, 2004, if the successor is not an employer at the time of the transfer, it shall pay contributions at the lowest rate determined under either of the following:

(a)(I) For transfers before January 1, 1997, the contribution rate of the rate class assigned to the predecessor employer at the time of the transfer for the remainder of that rate year and continuing until the successor qualifies for a different rate in its own right;

(3) For transfers before January 1, 2004, if the successor is not an employer at the time of the transfer and simultaneously acquires the business or a portion of the business of two or more employers in different rate classes, its rate from the date the transfer occurred until the end of that rate year and until it qualifies in its own right for a new rate, shall be the highest rate class applicable at the time of the acquisition to any predecessor employer who is a party to the acquisition, but not less than one percent.

(4) For transfers on or after January 1, 2004, the following applies if the successor is not an employer at the time of the transfer:

(a) Except as provided otherwise in this subsection, the successor shall pay contributions at the contribution rate of the rate class assigned to the predecessor employer at the time of the transfer for the remainder of that rate year. On and after January 1st following the transfer, the successor's contribution rate for each rate year shall be based on its experience with payrolls and benefits including the experience of the acquired business or portion of the business from the date of transfer.

(b) If the successor simultaneously acquires the business or a portion of the business of two or more employers in different rate classes, the successor's contribution rate from the date the transfer occurred until the end of that rate year shall be the rate in the highest rate class applicable at the time of the acquisition to any predecessor employer who is a party to the acquisition, but not less than one percent. On and after January 1st following the transfer, the successor's contribution rate for each rate year shall be based on its experience with payrolls and benefits including the experience of the acquired businesses from the date of transfer.

(c)(I) If there is a substantial continuity of ownership, control, or management by the successor of the business of the predecessor, the successor shall pay contributions at the contribution rate determined for the predecessor employer at the time of the transfer and continuing until such time as the successor satisfies the requirements of a "qualified employer" under RCW 50.29.010.

(ii) For purposes of this subsection:

(A) "Substantial continuity of ownership" means that a shareholder, officer, or other owner of a legal or equitable interest in the predecessor employer, or the spouse or a person within the first degree of consanguinity of affinity of the shareholder, officer, or other owner: (I) Is a shareholder, officer, or other owner of a legal or equitable interest in the successor; or (II) holds an option to purchase a legal or equitable interest in the successor.

(B) "Substantial continuity of control" exists if one or more persons, entities, or other organizations controlling the business remain in control of the business after an acquisition or change in form. Evidence of continuity of control shall include, but not be limited to: (I) Changes of an individual proprietorship to a corporation, partnership, limited liability company, association, or estate; (II) a partnership to an individual proprietorship, corporation, limited liability company, association, estate, or the addition, deletion, or change of partners; (III) a limited liability company to an individual proprietorship, partnership, corporation, association, estate, or to another limited liability company; and (IV) a corporation to an individual proprietorship, partnership, limited liability company, association, estate, or to another corporation or from any form to another form.

(5) The contribution rate on any payroll retained by a predecessor employer shall remain unchanged for the remainder of the rate year in which the transfer occurs.

(((5))) (6) In all cases, from and after January 1 following the transfer, the predecessor's contribution rate for each rate year shall be based on its experience with payrolls and benefits as of the regular computation date for that rate year including the experience of the acquired business or portion of business up to the date of transfer: PROVIDED, That if all of the predecessor's business is transferred to a successor or successors, the predecessor shall not be a qualified employer until it satisfies the requirements of a "qualified employer" as set forth in RCW 50.29.010.

Sec. 12. RCW 50.12.220 and 1987 c 111 s 2 are each amended to read as follows:

(1) If an employer fails to file in a timely and complete manner a report required by RCW 50.12.070 ((as now or hereafter amended)) or the rules adopted pursuant thereto, the employer shall be subject to a minimum penalty of ten dollars per violation.

(3) If any part of the delinquency for which an assessment is made is due to fraud or an intent to evade or defeat any contributions payable under this title, including any violation of RCW 50.12.070, a penalty of fifty percent of the amount of the contributions shall be added to the assessment. This penalty is in addition to other penalties provided by law.

(4) If any part of the delinquency for which an assessment is made is due to an intent to evade the successorship provisions of RCW 50.29.062, the department shall assign to the employer, and to any business found to be promoting the evasion of such provisions, the maximum tax rate provided for in RCW 50.29.025(5) for five calendar quarters, beginning with the calendar quarter in which the intent to evade such provisions is found.

(5) Penalties shall not accrue on contributions from an estate in the hands of a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer subsequent to the date when such receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer qualifies as such, but contributions accruing with respect to employment of persons by a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer shall become due and shall be subject to penalties in the same manner as contributions due from other employers.

(((4))) (6) Where adequate information has been furnished to the department and the department has failed to act or has advised the employer of no liability or inability to decide the issue, penalties shall be waived by the commissioner. Penalties may also be waived for good cause if the commissioner determines that the failure to timely file reports or pay contributions was not due to the employer's fault.

(((5))) (7) Any decision to assess a penalty as provided by this section shall be made by the chief administrative officer of the tax branch or his or her designee.

(((6))) (8) Nothing in this section shall be construed to deny an employer the right to appeal the assessment of any penalty. Such appeal shall be made in the manner provided in RCW 50.32.030.

PART III - MISCELLANEOUS

Sec. 13. RCW 50.22.140 and 2002 c 149 s 1 are each amended to read as follows:

(1) The employment security department is authorized to pay training benefits under RCW 50.22.150, but may not obligate expenditures beyond the limits specified in this section or as otherwise set by the legislature. For the fiscal year ending June 30, 2000, the commissioner may not obligate more than twenty million dollars for training benefits. For the two fiscal years ending June 30, 2002, the commissioner may not obligate more than sixty million dollars for training benefits. Any funds not obligated in one fiscal year may be carried forward to the next fiscal year. For each fiscal year beginning after June 30, 2002, the commissioner may not obligate more than twenty million dollars annually in addition to any funds carried forward from previous fiscal years. The department shall develop a process to ensure that expenditures do not exceed available funds and to prioritize access to funds when again available.

(2) After June 30, 2002, in addition to the amounts that may be obligated under subsection (1) of this section, the commissioner may obligate up to thirty-four million dollars for training benefits under RCW 50.22.150 for individuals in the aerospace industry assigned ((the standard industrial classification code "372" or)) the North American industry classification system code "336411" whose claims are filed before January 5, 2003. The funds provided in this subsection must be fully obligated for training benefits for these individuals before the funds provided in subsection (1) of this section may be obligated for training benefits for these individuals. Any amount of the funds specified in this subsection that is not obligated as permitted may not be carried forward to any future period.

Sec. 14. RCW 50.22.150 and 2002 c 149 s 2 are each amended to read as follows:

(1) Subject to availability of funds, training benefits are available for an individual who is eligible for or has exhausted entitlement to unemployment compensation benefits and who:

(a) Is a dislocated worker as defined in RCW 50.04.075;

(b) Except as provided under subsection (2) of this section, has demonstrated, through a work history, sufficient tenure in an occupation or in work with a particular skill set. This screening will take place during the assessment process;

(c) Is, after assessment of demand for the individual's occupation or skills in the individual's labor market, determined to need job-related training to find suitable employment in his or her labor market. Beginning July 1, 2001, the assessment of demand for the individual's occupation or skill sets must be substantially based on declining occupation or skill sets identified in local labor market areas by the local work force development councils, in cooperation with the employment security department and its labor market information division, under subsection (10) of this section;

(d) Develops an individual training program that is submitted to the commissioner for approval within sixty days after the individual is notified by the employment security department of the requirements of this section;

(e) Enters the approved training program by ninety days after the date of the notification, unless the employment security department determines that the training is not available during the ninety-day period, in which case the individual enters training as soon as it is available; and

(f) Is enrolled in training approved under this section on a full-time basis as determined by the educational institution, and is making satisfactory progress in the training as certified by the educational institution.

(2) Until June 30, 2002, the following individuals who meet the requirements of subsection (1) of this section may, without regard to the tenure requirements under subsection (1)(b) of this section, receive training benefits as provided in this section:

(a) An exhaustee who has base year employment in the aerospace industry assigned ((the standard industrial classification code "372" or)) the North American industry classification system code "336411";

(b) An exhaustee who has base year employment in the forest products industry, determined by the department, but including the industries assigned the ((major group standard industrial classification codes "24" and "26" or any)) equivalent codes in the North American industry classification system code, and the industries involved in the harvesting and management of logs, transportation of logs and wood products, processing of wood products, and the manufacturing and distribution of wood processing and logging equipment; or

(c) An exhaustee who has base year employment in the fishing industry assigned the ((standard industrial classification code "0912" or any)) equivalent codes in the North American industry classification system code.

(3) An individual is not eligible for training benefits under this section if he or she:

(a) Is a standby claimant who expects recall to his or her regular employer;

(b) Has a definite recall date that is within six months of the date he or she is laid off; or

(c) Is unemployed due to a regular seasonal layoff which demonstrates a pattern of unemployment consistent with the provisions of RCW 50.20.015. Regular seasonal layoff does not include layoff due to permanent structural downsizing or structural changes in the individual's labor market.

(4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Educational institution" means an institution of higher education as defined in RCW 28B.10.016 or an educational institution as defined in RCW 28C.04.410, including equivalent educational institutions in other states.

(b) "Sufficient tenure" means earning a plurality of wages in a particular occupation or using a particular skill set during the base year and at least two of the four twelve-month periods immediately preceding the base year.

(d) "Training program" means:

(I) An education program determined to be necessary as a prerequisite to vocational training after counseling at the educational institution in which the individual enrolls under his or her approved training program; or

(ii) A vocational training program at an educational institution:

(A) That is targeted to training for a high demand occupation. Beginning July 1, 2001, the assessment of high demand occupations authorized for training under this section must be substantially based on labor market and employment information developed by local work force development councils, in cooperation with the employment security department and its labor market information division, under subsection (10) of this section;

(B) That is likely to enhance the individual's marketable skills and earning power; and

(c) That meets the criteria for performance developed by the work force training and education coordinating board for the purpose of determining those training programs eligible for funding under Title I of P.L. 105-220.

"Training program" does not include any course of education primarily intended to meet the requirements of a baccalaureate or higher degree, unless the training meets specific requirements for certification, licensing, or for specific skills necessary for the occupation.

(5) Benefits shall be paid as follows:

(a)(I) Except as provided in (a)(iii) of this subsection, for exhaustees who are eligible under subsection (1) of this section, the total training benefit amount shall be fifty-two times the individual's weekly benefit amount, reduced by the total amount of regular benefits and extended benefits paid, or deemed paid, with respect to the benefit year; or

(ii) For exhaustees who are eligible under subsection (2) of this section, for claims filed before June 30, 2002, the total training benefit amount shall be seventy-four times the individual's weekly benefit amount, reduced by the total amount of regular benefits and extended benefits paid, or deemed paid, with respect to the benefit year; or

(iii) For exhaustees eligible under subsection (1) of this section from industries listed under subsection (2)(a) of this section, for claims filed on or after June 30, 2002, but before January 5, 2003, the total training benefit amount shall be seventy-four times the individual's weekly benefit amount, reduced by the total amount of regular benefits and extended benefits paid, or deemed paid, with respect to the benefit year.

(b) The weekly benefit amount shall be the same as the regular weekly amount payable during the applicable benefit year and shall be paid under the same terms and conditions as regular benefits. The training benefits shall be paid before any extended benefits but not before any similar federally funded program.

(c) Training benefits are not payable for weeks more than two years beyond the end of the benefit year of the regular claim.

(6) The requirement under RCW 50.22.010(10) relating to exhausting regular benefits does not apply to an individual otherwise eligible for training benefits under this section when the individual's benefit year ends before his or her training benefits are exhausted and the individual is eligible for a new benefit year. These individuals will have the option of remaining on the original claim or filing a new claim.

(7)(a) Except as provided in (b) of this subsection, individuals who receive training benefits under this section or under any previous additional benefits program for training are not eligible for training benefits under this section for five years from the last receipt of training benefits under this section or under any previous additional benefits program for training.

(b) With respect to claims that are filed before January 5, 2003, an individual in the aerospace industry assigned ((the standard industrial code "372" or)) the North American industry classification system code "336411" who received training benefits under this section, and who had been making satisfactory progress in a training program but did not complete the program, is eligible, without regard to the five-year limitation of this section and without regard to the requirement of subsection (1)(b) of this section, if applicable, to receive training benefits under this section in order to complete that training program. The total training benefit amount that applies to the individual is seventy-four times the individual's weekly benefit amount, reduced by the total amount of regular benefits paid, or deemed paid, with respect to the benefit year in which the training program resumed and, if applicable, reduced by the amount of training benefits paid, or deemed paid, with respect to the benefit year in which the training program commenced.

(8) An individual eligible to receive a trade readjustment allowance under chapter 2 of Title II of the Trade Act of 1974, as amended, shall not be eligible to receive benefits under this section for each week the individual receives such trade readjustment allowance. An individual eligible to receive emergency unemployment compensation, so called, under any federal law, shall not be eligible to receive benefits under this section for each week the individual receives such compensation.

(9) All base year employers are interested parties to the approval of training and the granting of training benefits.

(10) By July 1, 2001, each local work force development council, in cooperation with the employment security department and its labor market information division, must identify occupations and skill sets that are declining and occupations and skill sets that are in high demand. For the purposes of RCW 50.22.130 through 50.22.150 and section 9, chapter 2, Laws of 2000, "high demand" means demand for employment that exceeds the supply of qualified workers for occupations or skill sets in a labor market area. Local work force development councils must use state and locally developed labor market information. Thereafter, each local work force development council shall update this information annually or more frequently if needed.

(11) The commissioner shall adopt rules as necessary to implement this section.

Sec. 15. RCW 50.44.053 and 2001 c 99 s 2 are each amended to read as follows:

(1) The term "reasonable assurance," as used in RCW 50.44.050, means a written, verbal, or implied agreement that the employee will perform services in the same capacity during the ensuing academic year or term as in the first academic year or term. A person shall not be deemed to be performing services "in the same capacity" unless those services are rendered under the same terms or conditions of employment in the ensuing year as in the first academic year or term.

(2) An individual who is tenured or holds tenure track status is considered to have reasonable assurance, unless advised otherwise by the college. For the purposes of this section, tenure track status means a probationary faculty employee having an opportunity to be reviewed for tenure.

(3) In the case of community and technical colleges assigned ((the standard industrial classification code 8222 or)) the North American industry classification system code 611210 for services performed in a principal administrative, research, or instructional capacity, a person is presumed not to have reasonable assurance under an offer that is conditioned on enrollment, funding, or program changes. It is the college's burden to provide sufficient documentation to overcome this presumption. Reasonable assurance must be determined on a case-by-case basis by the total weight of evidence rather than the existence of any one factor. Primary weight must be given to the contingent nature of an offer of employment based on enrollment, funding, and program changes.

NEW SECTION. Sec. 16. The following acts or parts of acts are each repealed:

(1) RCW 50.20.125 (Maximum amount payable weekly) and 2002 c 149 s 3; and

(2) RCW 50.29.045 (Contribution rate--Insolvency surcharge) and 2002 c 149 s 9.

NEW SECTION. Sec. 17. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state or the eligibility of employers in this state for federal unemployment tax credits, the conflicting part of this act is inoperative solely to the extent of the conflict, and the finding or determination does not affect the operation of the remainder of this act. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state or the granting of federal unemployment tax credits to employers in this state.

NEW SECTION. Sec. 18. 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. 19. (1) Section 9 of this act applies to benefits charged to the experience rating accounts of employers with respect to claims that have an effective date on or after January 4, 2004.

(2) Section 10 of this act applies to rate years beginning on or after January 1, 2004.

NEW SECTION. Sec. 20. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2003."

POINT OF ORDER

Senator Sheahan: "A point of order, Mr. President. We have two amendments before by us Senator Keiser, one a striking amendment and the amendment on page 1, after line 28, where the 'strike everything after the enacting clause' language has been scratched out. I would suggest that this amendment that Senator Keiser just moved to the striking amendment by Senator Honeyford is actually a striking amendment since every single area of substantive law is the same in the striking amendment, so I would ask the President for a ruling as to whether the amendment before us is appropriate before the body."

REMARKS BY SENATOR KEISER

Senator Keiser: "Mr. President, earlier I asked you for advice when I inquired with a parliamentary inquiry on the two striking amendments before us. I was advised that you did not believe that we could consider the two striking amendments, so I worked with staff to redraft the proposal that I think merits discussion and that we can consider it as a body. I would urge us to move forward with that."

RULING BY THE PRESIDENT

President Own: "In ruling upon the point of order raised by Senator Sheahan, the President finds that the two amendments that you referred to--the striking amendment and the redrafted amendment by Senator Keiser--are not the same and, therefore, the amendment by Senator Keiser on page 1, line 28 is properly before us."

Further debate ensued.

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

The President declared the question before the Senate to be the roll call on the adoption of the amendment by Senator Keiser on page 1, line 28, to the striking amendment by Senator Honeyford to Senate Bill No. 6097.

ROLL CALL

The Secretary called the roll and the amendment to the striking amendment was not adopted by the following vote: Yeas, 19; Nays, 26; Absent, 0; Excused, 4.

Excused: Senators Deccio, McCaslin, Shin and West - 4.

The President declared the question to be the adoption of the striking amendment by Senator Honeyford, as amended, to Senate Bill No. 6097.

Debate ensued.

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

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

On page 1, line 3 of the title, after "rates;" strike the remainder of the title and insert "amending RCW 50.01.010, 50.20.010, 50.20.050, 50.04.293, 50.20.060, 50.20.065, 50.20.240, 50.20.120, 50.20.100, 50.29.025, 50.04.355, 50.29.026, 50.29.062, 50.29.070, 50.12.220, 50.16.010, 50.16.015, 50.24.014, 50.20.190, 50.04.206, 50.20.140, 50.20.043, 50.20.160, 50.32.040, and 28B.50.030; reenacting and amending RCW 50.29.020; adding new sections to chapter 50.04 RCW; adding new sections to chapter 50.20 RCW; adding new sections to chapter 50.29 RCW; creating new sections; repealing RCW 50.20.015, 50.20.045, 50.20.125, and 50.29.045; providing an expiration date; and declaring an emergency."

MOTION

On motion of Senator Sheahan, the rules were suspended, Engrossed Senate Bill No. 6097, under suspension of the rules, 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 Senate Bill No. 6097, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6097, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 33; Nays, 12; Absent, 0; Excused, 4.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, Kastama, McAuliffe, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, Winsley and Zarelli - 33.

Voting nay: Senators Brown, Fairley, Franklin, Fraser, Jacobsen, Keiser, Kline, Kohl-Welles, Regala, Sheldon, B., Spanel and Thibaudeau - 12.

Excused: Senators Deccio, McCaslin, Shin and West - 4.

ENGROSSED SENATE BILL NO. 6097, under suspension of the rules, 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 Sheahan, Engrossed Senate Bill No. 6097 was ordered to be immediately transmitted to the House of Representatives.

MOTION

On motion of Senator Sheahan, the Senate will immediately consider House Bill No. 2252.

SECOND READING

HOUSE BILL NO. 2252, by Representatives Sommers, Fromhold and Moeller

Revising eligibility requirements for general assistance.

The bill was read the second time.

MOTION

On motion of Senator Rossi, the rules were suspended, House Bill No. 2252 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. 2252, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of House Bill No. 2252, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 42; Nays, 3; Absent, 0; Excused, 4.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Spanel, Stevens, Swecker, Winsley and Zarelli - 42.

Voting nay: Senators Fraser, Reardon, and Thibaudeau - 3.

Excused: Senators Deccio, McCaslin, Shin and West - 4.

HOUSE BILL NO. 2252, under suspension of the rules, 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 Sheahan, House Bill No. 2252 was ordered to be immediately transmitted to the House of Representatives.

MOTION

At 4:50 p.m., on motion of Senator Sheahan, the Senate was declared to be at ease.

The Senate was called to order at 7:14 p.m. by President Owen.

MOTION

On motion of Senator Sheahan, the Senate returned to the fifth order of business.

MOTION

On motion of Senator Sheahan, the rules were suspended, Senate Bill No. 6093, which was held on the Introduction and First Reading Calendar June 6, 2003, was advanced to second reading and placed on the second reading calendar.

MOTION

On motion of Senator Hewitt, Senator Zarelli was excused.

MOTION

On motion of Senator Sheahan, the Senate advanced to the seventh order of business.

THIRD READING

ENGROSSED SUBSTITUTE SENATE BILL NO. 5071, by Committee on Ways and Means (originally sponsored by Senators Reardon, Schmidt, Shin, Stevens and Rasmussen)

Revising business and occupation taxation for certain aviation businesses.

The bill was read the third time.

Debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 5071.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5071 and the bill passed the Senate by the following vote: Yeas, 34; Nays, 10; Absent, 0; Excused, 5.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Keiser, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Parlette, Prentice, Rasmussen, Reardon, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Stevens, Swecker and Winsley - 34.

Voting nay: Senators Brown, Fairley, Franklin, Fraser, Kastama, Kline, Poulsen, Regala, Spanel and Thibaudeau - 10.

Excused: Senators Deccio, McCaslin, Shin, West and Zarelli - 5.

ENGROSSED SUBSTITUTE SENATE BILL NO. 5071, 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 Sheahan, Engrossed Substitute Senate Bill No. 5071 was ordered to be immediately transmitted to the House of Representatives.

PERSONAL PRIVILEGE

Senator Prentice: “Mr. President, I rise to a point of personal privilege. I would like to thank everyone in the Senate and all my colleagues and staff for all the support I have received in the past couple of months. As you know, the last several weeks of session were very difficult and l could certainly feel your support--as you could see what was going on. One of the things that has helped sustain me is to know that I am surrounded by such good friends--good thoughtful friends. There is one thing that I would like to say and that is please show and tell your spouses and significant others how much you love them. Truly, it is important. Don’t leave unsaid the things you should be saying now. Thank you all very much.”

PERSONAL PRIVILEGE

Senator Brandland: “A point of personal privilege, Mr. President. Today, this has been kind of unusual for me. We have had a Call of the Senate. I have to tell you it feels a whole lot like being incarcerated and it is pretty uncomfortable for a man, who for twenty-seven years, was on the other end of putting people in custody. I have to tell you I felt very uncomfortable doing that. Now, that being said, I would like, in the future, if we have to do this again, I would like to volunteer my services. I do have a set of handcuffs and I would dearly love to put them on some people that I know. Thank you very much.”

PERSONAL PRIVILEGE

Senator Benton: “A point of personal privilege, Mr. President. The only thing that scares me more than having Senator Brandland put a pair of handcuffs on somebody is somebody dearly loving to want him to put them on them.”

PERSONAL PRIVILEGE

Senator Carlson: “Mr. President, I rise to a point of personal privilege. Mr. President, and ladies and gentlemen of the Senate, as many of you know, there seems to be a dilemma of illness in legislative assistants, as well as legislators, during this particular session. My legislative assistant, Donna Sorrell, unfortunately, was diagnosed with cancer and was in the hospital last week for removal of a section of her colon for the cancer that she has. She is resting comfortably and recovering and will start chemotherapy soon. I appreciate the support that she has felt from the legislative assistants from the House and the Senate and from you who have cared about her. She is doing very well and has a terrific attitude. She is going to beat this thing and I thank you for your support for her.”

MOTION

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

SECOND READING

SENATE BILL NO. 5982, by Senators Prentice, Hewitt, Doumit, Horn and Reardon

Implementing the liquor control board’s retail business plan.

MOTION

On motion of Senator Hewitt, Substitute Senate Bill No 5982 was substituted for Senate Bill No. 5982 and the substitute bill was placed on second reading and read the second time.

MOTION

On motion of Senator Hewitt, the following striking amendment by Senators Hewitt, Prentice, Zarelli and Doumit was adopted:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1 A new section is added to chapter 66.08 RCW to read as follows:

The legislature finds that the liquor control board has developed a retail services business plan to provide greater efficiency of operations and to maximize revenues to the state. The legislature intends to examine whether expanding liquor store operations to include Sundays would provide additional revenue and provide increased customer convenience.

NEW SECTION. Sec. 2. A new section is added to chapter 66.08 RCW to read as follows:

The board shall devise a retail business plan, or amend an existing retail business plan, to implement strategies to improve the efficiency of retail sales operations and maximize revenue-generating opportunities. Strategies to be implemented shall include, but are not limited to:

(1) Expanding store operations to include Sunday sales in selected liquor stores. Sunday sales are optional for liquor vendors operating agency stores;

(2) Implementing a plan of in-store liquor merchandising, including point-of-sale advertising, and product specific point-of-sale promotional displays and carousels, including displays designed and provided by vendors; and

(3) Implementing a plan for in-store liquor merchandising of brands. The plan may not include provisions for selling liquor-related items other than those items previously authorized.

NEW SECTION. Sec.3. A new section is added to chapter 66.08 RCW to read as follows:

By September 1, 2003, the board shall expand operations in at least twenty state-operated retail stores to include Sundays. The board shall select the stores that are expected to gross the most revenues on Sunday by considering factors including, but not limited to, population density, proximity to shopping centers, and proximity to other businesses that are open on Sunday. The selected stores shall be open for retail business a minimum of five hours on Sunday. The board shall track gross sales and expenses of the selected stores and compare them to previous years' sales and projected sales and expenses before opening on Sunday. The board shall also examine the sales of state and contract liquor stores in proximity to those stores opened on Sundays to determine whether Sunday openings has reduced the sales of other state and contract liquor stores that are not open on Sundays. The board shall present this information to the appropriate policy and fiscal committees of the legislature by January 31, 2004.

Sec. 4. RCW 66.08.026 and 2001 c 313 s 1 are each amended to read as follows:

All administrative expenses of the board incurred on and after April 1, 1963, shall be appropriated and paid from the liquor revolving fund. These administrative expenses shall include, but not be limited to: The salaries and expenses of the board and its employees, the cost of establishing, leasing, maintaining, and operating state liquor stores and warehouses, legal services, pilot projects, annual or other audits, and other general costs of conducting the business of the board, and the costs of supplying, installing, and maintaining equipment used in state liquor stores and agency liquor vendor stores for the purchase of liquor ((by nonlicensees)) using debit or credit cards. The administrative expenses shall not, however, be deemed to include costs of liquor and lottery tickets purchased, the cost of transportation and delivery to the point of distribution, other costs pertaining to the acquisition and receipt of liquor and lottery tickets, packaging and repackaging of liquor, agency commissions for agency liquor vendor stores, transaction fees associated with credit or debit card purchases for liquor in state liquor stores and in the stores of agency liquor vendors pursuant to RCW 66.16.040 and 66.16.041, sales tax, and those amounts distributed pursuant to RCW 66.08.180, 66.08.190, 66.08.200, 66.08.210 and 66.08.220. Agency commissions for agency liquor vendor stores shall be established by the liquor control board after consultation with and approval by the director of the office of financial management. All expenditures and payment of obligations authorized by this section are subject to the allotment requirements of chapter 43.88 RCW.

Sec. 5. RCW 66.08.060 and 1933 ex.s. c 62 s 43 are each amended to read as follows:

(1) The board shall not advertise liquor in any form or through any medium whatsoever.

(2) In-store liquor merchandising is not advertising for the purposes of this section.

(3) The board shall have power to adopt any and all reasonable ((regulations)) rules as to the kind, character, and location of advertising of liquor.

Sec. 6. RCW 66.16.041 and 1998 c 265 s 3 are each amended to read as follows:

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

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

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

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

NEW SECTION. Sec. 7. A new section is added to chapter 66.08 RCW to read as follows:

In addition to the criteria stated in section 3 of this act, when choosing which stores to open on Sundays, the board shall follow the same criteria and procedures with respect to places of worship as established in RCW 66.24.010(9) for retail licensees.

NEW SECTION. Sec. 8, The sum of nine hundred sixty-one thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 2005, from the liquor revolving account to the liquor control board for the purposes of implementing this act.

NEW SECTION. Sec. 9. RCW 66.16.080 (Sunday closing) and 1988 c 101 s 1 & 1933 ex.s. c 62 s 11 are each repealed.

NEW SECTION. Sec. 10.. 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. 11. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2003."

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

On page 1, line 2 of the title, after "plan;" strike the remainder of the title and insert "amending RCW 66.08.026, 66.08.060, and 66.16.041; adding new sections to chapter 66.08 RCW; creating a new section; repealing RCW 66.16.080; making an appropriation; providing an effective date; and declaring an emergency."

MOTION

On motion of Senator Hewitt, the rules were suspended, Engrossed Substitute Senate Bill No. 5982 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued

POINT OF INQUIRY

Senator Doumit: “Senator Hewitt, does this striking amendment contemplate a use for any increased revenues from Sunday liquor sales?”

Senator Hewitt: “Thank you, Senator Doumit. While the amendment does not specify the use of increase revenues, if increases are sufficient, they could be used as a source of funding for rural counties to use when carrying out state mandated programs.”

Senator Doumit: “If increased revenues were to be earmarked for use by rural counties, would this take additional legislation?”

Senator Hewitt: “Yes.”

Further debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Substitute Senate Bill No. 5982.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 5982 and the bill passed the Senate by the following vote: Yeas, 26; Nays, 18; Absent, 0; Excused, 5.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Doumit, Esser, Fairley, Finkbeiner, Hale, Hewitt, Horn, Johnson, Kastama, Keiser, Kline, Kohl-Welles, Poulsen, Prentice, Rasmussen, Reardon, Rossi, Schmidt, Sheahan, Sheldon, T., Spanel and Thibaudeau - 26.

Voting nay: Senators Eide, Franklin, Fraser, Hargrove, Haugen, Honeyford, Jacobsen, McAuliffe, Morton, Mulliken, Oke, Parlette, Regala, Roach, Sheldon, B.,Stevens, Swecker and Winsley -18.

Excused: Senators Deccio, McCaslin, Shin, West and Zarelli - 5.

ENGROSSED SUBSTITUTE SENATE BILL NO. 5982, 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 Sheahan, Engrossed Substitute Senate Bill No. 5982 was ordered to be immediately transmitted to the House of Representative.

MOTION

On motion of Senator Sheahan, the Senate advanced to the seventh order of business.

THIRD READING

ENGROSSED SUBSTITUTE SENATE BILL NO. 5659, by Committee on Government Operations and Elections (originally sponsored by Senators Winsley, Kastama, Oke, Franklin, Swecker, Rasmussen, Regala and Kohl-Welles)

Authorizing additional funding for local governments.

MOTION

On motion of Senator Winsley, the rules were suspended, Engrossed Substitute Senate Bill No. 5659 was returned to second reading and read the second time.

MOTION

Senator Winsley moved that the following striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that local governments in the state of Washington face enormous challenges in the area of criminal justice and public health. It is the legislature's intent to allow general local governments to raise revenues in order to better protect the health and safety of Washington state and its residents. It is further the intent of the legislature to provide such local governments relief from regulatory burdens that do not harm the public health and safety of the citizens of the state as a means of minimizing the need to generate new revenues authorized under this act.

NEW SECTION. Sec. 2. A new section is added to chapter 82.14 RCW to read as follows:

(1) A county legislative authority may submit an authorizing proposition to the county voters at a primary or general election and, if the proposition is approved by a majority of persons voting, impose a sales and use tax in accordance with the terms of this chapter. The title of each ballot measure must clearly state the purposes for which the proposed sales and use tax will be used. Funds raised under this tax shall not supplant existing funds used for these purposes. The rate of tax under this section shall not exceed three-tenths of one percent of the selling price in the case of a sales tax, or value of the article used, in the case of a use tax.

(2) The tax authorized in this section is in addition to any other taxes authorized by law and shall be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county.

(3) The retail sale or use of new motor vehicles, and the lease of new motor vehicles for up to the first thirty-six months of the lease, are exempt from tax imposed under this section.

(4) One-third of all money received under this section shall be used solely for criminal justice purposes. For the purposes of this subsection, "criminal justice purposes" means additional police protection, mitigation of congested court systems, or relief of overcrowded jails or other local correctional facilities.

(5) Money received under this section shall be shared between the county and the cities as follows: Sixty percent shall be retained by the county and forty percent shall be distributed on a per capita basis to cities in the county.

Sec. 3. RCW 36.70A.130 and 2002 c 320 s 1 are each amended to read as follows:

(1)(a) Each comprehensive land use plan and development regulations shall be subject to continuing review and evaluation by the county or city that adopted them. A county or city shall take legislative action to review and, if needed, revise its comprehensive land use plan and development regulations to ensure the plan and regulations comply with the requirements of this chapter according to the time periods specified in subsection (4) of this section. A county or city not planning under RCW 36.70A.040 shall take action to review and, if needed, revise its policies and development regulations regarding critical areas and natural resource lands adopted according to this chapter to ensure these policies and regulations comply with the requirements of this chapter according to the time periods specified in subsection (4) of this section. Legislative action means the adoption of a resolution or ordinance following notice and a public hearing indicating at a minimum, a finding that a review and evaluation has occurred and identifying the revisions made, or that a revision was not needed and the reasons therefore. The review and evaluation required by this subsection may be combined with the review required by subsection (3) of this section. The review and evaluation required by this subsection shall include, but is not limited to, consideration of critical area ordinances and, if planning under RCW 36.70A.040, an analysis of the population allocated to a city or county from the most recent ten-year population forecast by the office of financial management.

(b) Any amendment of or revision to a comprehensive land use plan shall conform to this chapter. Any amendment of or revision to development regulations shall be consistent with and implement the comprehensive plan.

(2)(a) Each county and city shall establish and broadly disseminate to the public a public participation program consistent with RCW 36.70A.035 and 36.70A.140 that identifies procedures and schedules whereby updates, proposed amendments, or revisions of the comprehensive plan are considered by the governing body of the county or city no more frequently than once every year. "Updates" means to review and revise, if needed, according to subsection (1) of this section, and the time periods specified in subsection (4) of this section. Amendments may be considered more frequently than once per year under the following circumstances:

(i) The initial adoption of a subarea plan that does not modify the comprehensive plan policies and designations applicable to the subarea;

(ii) The adoption or amendment of a shoreline master program under the procedures set forth in chapter 90.58 RCW; and

(iii) The amendment of the capital facilities element of a comprehensive plan that occurs concurrently with the adoption or amendment of a county or city budget.

(b) Except as otherwise provided in (a) of this subsection, all proposals shall be considered by the governing body concurrently so the cumulative effect of the various proposals can be ascertained. However, after appropriate public participation a county or city may adopt amendments or revisions to its comprehensive plan that conform with this chapter whenever an emergency exists or to resolve an appeal of a comprehensive plan filed with a growth management hearings board or with the court.

(3) Each county that designates urban growth areas under RCW 36.70A.110 shall review, at least every ten years, its designated urban growth area or areas, and the densities permitted within both the incorporated and unincorporated portions of each urban growth area. In conjunction with this review by the county, each city located within an urban growth area shall review the densities permitted within its boundaries, and the extent to which the urban growth occurring within the county has located within each city and the unincorporated portions of the urban growth areas. The county comprehensive plan designating urban growth areas, and the densities permitted in the urban growth areas by the comprehensive plans of the county and each city located within the urban growth areas, shall be revised to accommodate the urban growth projected to occur in the county for the succeeding twenty-year period. The review required by this subsection may be combined with the review and evaluation required by RCW 36.70A.215.

(4) The department shall establish a schedule for counties and cities to take action to review and, if needed, revise their comprehensive plans and development regulations to ensure the plan and regulations comply with the requirements of this chapter. The schedule established by the department shall provide for the reviews and evaluations to be completed as follows:

(a) On or before December 1, 2004, and every seven years thereafter, for ((Clallam,)) Clark, ((Jefferson,)) King, Kitsap, Pierce, Snohomish, Thurston, and Whatcom counties and the cities within those counties;

(b) On or before December 1, 2005, and every seven years thereafter, for Cowlitz, Island, Lewis, Mason, San Juan, Skagit, Clallam, Jefferson, and Skamania counties and the cities within those counties;

(c) On or before December 1, 2006, and every seven years thereafter, for Benton, Chelan, Douglas, Grant, Kittitas, Spokane, and Yakima counties and the cities within those counties; and

(d) On or before December 1, 2007, and every seven years thereafter, for Adams, Asotin, Columbia, Ferry, Franklin, Garfield, Grays Harbor, Klickitat, Lincoln, Okanogan, Pacific, Pend Oreille, Stevens, Wahkiakum, Walla Walla, and Whitman counties and the cities within those counties.

(5)(a) Nothing in this section precludes a county or city from conducting the review and evaluation required by this section before the time limits established in subsection (4) of this section. Counties and cities may begin this process early and may be eligible for grants from the department, subject to available funding, if they elect to do so.

(b) State agencies are encouraged to provide technical assistance to the counties and cities in the review of critical area ordinances, comprehensive plans, and development regulations.

(6) A county or city subject to the time periods in subsection (4)(a) of this section that, pursuant to an ordinance adopted by the county or city establishing a schedule for periodic review of its comprehensive plan and development regulations, has conducted a review and evaluation of its comprehensive plan and development regulations and, on or after January 1, 2001, has taken action in response to that review and evaluation shall be deemed to have conducted the first review required by subsection (4)(a) of this section. Subsequent review and evaluation by the county or city of its comprehensive plan and development regulations shall be conducted in accordance with the time periods established under subsection (4)(a) of this section.

(7) The requirements imposed on counties and cities under this section shall be considered "requirements of this chapter" under the terms of RCW 36.70A.040(1). Only those counties and cities in compliance with the schedules in this section shall have the requisite authority to receive grants, loans, pledges, or financial guarantees from those accounts established in RCW 43.155.050 and 70.146.030. Only those counties and cities in compliance with the schedules in this section shall receive preference for grants or loans subject to the provisions of RCW 43.17.250.

Sec. 4. RCW 84.55.050 and 1989 c 287 s 1 are each amended to read as follows:

(1) Subject to any otherwise applicable statutory dollar rate limitations, regular property taxes may be levied by or for a taxing district in an amount exceeding the limitations provided for in this chapter if such levy is authorized by a proposition approved by a majority of the voters of the taxing district voting on the proposition at a general election held within the district or at a special election within the taxing district called by the district for the purpose of submitting such proposition to the voters. Any election held pursuant to this section shall be held not more than twelve months prior to the date on which the proposed levy is to be made, except as provided in subsection (3)(b) of this section. The ballot of the proposition shall state the dollar rate proposed and shall clearly state any conditions which are applicable under subsection (3) of this section.

(2) After a levy authorized pursuant to this section is made, the dollar amount of such levy shall be used for the purpose of computing the limitations for subsequent levies provided for in this chapter, except as provided in subsections (3) and (4) of this section.

(3) A proposition placed before the voters under this section may:

(a) Limit the period for which the increased levy is to be made;

(b) Subject to statutory dollar limitations in RCW 84.52.043, authorize annual increases in levies for any county, city, or town for multiple consecutive years, up to six consecutive years, during which period each year's authorized maximum legal levy shall be used as the base upon which an increased levy limit for the succeeding year is computed, but the ballot proposition must state the dollar rate proposed only for the first year of the consecutive years and must state the limit factor, or a specified index to be used for determining a limit factor, such as the consumer price index, which need not be the same for all years, by which the regular tax levy for the district may be increased in each of the subsequent consecutive years. Elections for this purpose must be held at a primary or general election. The title of each ballot measure must state the specific purposes for which the proposed levy increase shall be used, and funds raised under this levy shall not supplant existing funds used for these purposes;

(c) Limit the purpose for which the increased levy is to be made, but if the limited purpose includes making redemption payments on bonds, the period for which the increased levies are made shall not exceed nine years;

(((c))) (d) Set the levy at a rate less than the maximum rate allowed for the district;

(e) Provide that the maximum allowable dollar amount of the final annual levy of the period specified in the measure shall be used to compute the limitations provided for in this chapter on levy increases occurring after the expiration of the period; or

(((d))) (f) Include any combination of the conditions in this subsection.

(4) Except as otherwise provided in an approved ballot measure under this section, after the expiration of a limited period or the satisfaction of a limited purpose, whichever comes first, subsequent levies shall be computed as if:

(a) The limited proposition under subsection (3) of this section had not been approved; and

(b) The taxing district had made levies at the maximum rates which would otherwise have been allowed under this chapter during the years levies were made under the limited proposition.

Sec. 5. RCW 36.70A.040 and 2000 c 36 s 1 are each amended to read as follows:

(1)(a) Each county that has both a population of fifty thousand or more and, until May 16, 1995, has had its population increase by more than ten percent in the previous ten years or, on or after May 16, 1995, has had its population increase by more than seventeen percent in the previous ten years, and the cities located within such county, and any other county regardless of its population that has had its population increase by more than twenty percent in the previous ten years, and the cities located within such county, shall conform with all of the requirements of this chapter. However, the county legislative authority of such a county with a population of less than fifty thousand population may adopt a resolution removing the county, and the cities located within the county, from the requirements of adopting comprehensive land use plans and development regulations under this chapter if this resolution is adopted and filed with the department by December 31, 1990, for counties initially meeting this set of criteria, or within sixty days of the date the office of financial management certifies that a county meets this set of criteria under subsection (((5))) (6) of this section. For the purposes of this subsection, a county not currently planning under this chapter is not required to include in its population count those persons confined in a correctional facility under the jurisdiction of the department of corrections that is located in the county.

(b) Once a county meets either of these sets of criteria and the county has not removed itself from the requirement to plan under this section pursuant to subsection (3) of this section, the requirement to conform with all of the requirements of this chapter remains in effect, even if the county no longer meets one of these sets of criteria.

(2) The county legislative authority of any county that does not meet either of the sets of criteria established under subsection (1) of this section may adopt a resolution indicating its intention to have subsection (1) of this section apply to the county. Each city, located in a county that chooses to plan under this subsection, shall conform with all of the requirements of this chapter. Once such a resolution has been adopted, the county and the cities located within the county remain subject to all of the requirements of this chapter unless the county removes itself from the requirement to plan under this section pursuant to subsection (3) of this section.

(3) A county that meets the requirements of this subsection, and a city located within the county, may be relieved from the requirement to plan under this section.

(a) A county may be relieved from the planning requirement of this section only if the county: (I) Has a population of less than ten thousand; (ii) has a privately owned taxable land base of less than twenty percent; and (iii) includes no more than one incorporated city.

(b) To be relieved from the planning requirement of this section, a county shall adopt a resolution that removes the county and the city from the requirement to plan and shall file the resolution with the department. Removal shall be deemed to occur on the date the resolution is filed with the department.

(4) Any county or city that is initially required to conform with all of the requirements of this chapter under subsection (1) of this section and has not removed itself under subsection (3) of this section shall take actions under this chapter as follows: (a) The county legislative authority shall adopt a county-wide planning policy under RCW 36.70A.210; (b) the county and each city located within the county shall designate critical areas, agricultural lands, forest lands, and mineral resource lands, and adopt development regulations conserving these designated agricultural lands, forest lands, and mineral resource lands and protecting these designated critical areas, under RCW 36.70A.170 and 36.70A.060; (c) the county shall designate and take other actions related to urban growth areas under RCW 36.70A.110; (d) if the county has a population of fifty thousand or more, the county and each city located within the county shall adopt a comprehensive plan under this chapter and development regulations that are consistent with and implement the comprehensive plan on or before July 1, 1994, and if the county has a population of less than fifty thousand, the county and each city located within the county shall adopt a comprehensive plan under this chapter and development regulations that are consistent with and implement the comprehensive plan by January 1, 1995, but if the governor makes written findings that a county with a population of less than fifty thousand or a city located within such a county is not making reasonable progress toward adopting a comprehensive plan and development regulations the governor may reduce this deadline for such actions to be taken by no more than one hundred eighty days. Any county or city subject to this subsection may obtain an additional six months before it is required to have adopted its development regulations by submitting a letter notifying the department of community, trade, and economic development of its need prior to the deadline for adopting both a comprehensive plan and development regulations.

(((4))) (5) Any county or city that is required to conform with all the requirements of this chapter, as a result of the county legislative authority adopting its resolution of intention under subsection (2) of this section and the county has not removed itself pursuant to subsection (3) of this section, shall take actions under this chapter as follows: (a) The county legislative authority shall adopt a county- wide planning policy under RCW 36.70A.210; (b) the county and each city that is located within the county shall adopt development regulations conserving agricultural lands, forest lands, and mineral resource lands it designated under RCW 36.70A.060 within one year of the date the county legislative authority adopts its resolution of intention; (c) the county shall designate and take other actions related to urban growth areas under RCW 36.70A.110; and (d) the county and each city that is located within the county shall adopt a comprehensive plan and development regulations that are consistent with and implement the comprehensive plan not later than four years from the date the county legislative authority adopts its resolution of intention, but a county or city may obtain an additional six months before it is required to have adopted its development regulations by submitting a letter notifying the department of community, trade, and economic development of its need prior to the deadline for adopting both a comprehensive plan and development regulations.

(((5))) (6) If the office of financial management certifies that the population of a county that previously had not been required to plan under subsection (1) or (2) of this section has changed sufficiently to meet either of the sets of criteria specified under subsection (1) of this section, and where applicable, the county legislative authority has not adopted a resolution removing the county from these requirements as provided in subsection (1) of this section, the county and each city within such county shall take actions under this chapter as follows: (a) The county legislative authority shall adopt a county-wide planning policy under RCW 36.70A.210; (b) the county and each city located within the county shall adopt development regulations under RCW 36.70A.060 conserving agricultural lands, forest lands, and mineral resource lands it designated within one year of the certification by the office of financial management; (c) the county shall designate and take other actions related to urban growth areas under RCW 36.70A.110; and (d) the county and each city located within the county shall adopt a comprehensive land use plan and development regulations that are consistent with and implement the comprehensive plan within four years of the certification by the office of financial management, but a county or city may obtain an additional six months before it is required to have adopted its development regulations by submitting a letter notifying the department of community, trade, and economic development of its need prior to the deadline for adopting both a comprehensive plan and development regulations.

(((6))) (7) A copy of each document that is required under this section shall be submitted to the department at the time of its adoption.

(((7))) (8) Cities and counties planning under this chapter must amend the transportation element of the comprehensive plan to be in compliance with this chapter and chapter 47.80 RCW no later than December 31, 2000.

NEW SECTION. Sec. 6. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2003.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected."

MOTION

Senator Mulliken moved that the following amendment by Senators Mulliken, Winsley and Prentice to the striking amendment be adopted:

On page 1, strike lines 28 through 30 and insert "(3) The county legislative authority may exempt the retail sale or use of new or used motor vehicles, and the lease of new or used motor vehicles for up to the first thirty-six months of the lease, from tax imposed under this section."

Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Mulliken, Winsley and Prentice on page 1, line 28, to the striking amendment by Senator Winsley to Engrossed Substitute Senate Bill No. 5659.

The motion by Senator Mulliken carried and the amendment to the striking amendment was adopted.

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Winsley, as amended, to Engrossed Substitute Senate Bill No. 5695.

The motion by Senator Winsley carried and the 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 "governments;" strike the remainder of the title and insert "amending RCW 36.70A.130, 84.55.050, and 36.70A.040; adding a new section to chapter 82.14 RCW; creating a new section; providing an effective date; and declaring an emergency."

MOTION

On motion of Senator Winsley, the rules were suspended, Second Engrossed Substitute Senate Bill No. 5659, under suspension of the rules, 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 Second Engrossed Substitute Senate Bill No. 5659, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Second Engrossed Substitute Senate Bill No. 5659, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 36; Nays, 9; Absent, 0; Excused, 4.

Voting yea: Senators Brandland, Brown, Carlson, Doumit, Eide, Fairley, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Poulsen, Prentice, Rasmussen, Reardon, Regala, Schmidt, Sheahan, Sheldon, B., Spanel, Swecker, Thibaudeau, West and Winsley - 36.

Voting nay: Senators Benton, Esser, Finkbeiner, Johnson, Parlette, Roach, Rossi, Sheldon, T. and Stevens - 9.

Excused: Senators Deccio, McCaslin, Shin and Zarelli - 4.

SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5659, under suspension of the rules, 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 Sheahan, Second Engrossed Substitute Senate Bill No. 5659 was ordered to be immediately transmitted to the House of Representatives.

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

SECOND READING

SENATE BILL NO. 6093, by Senators Kohl-Welles, Sheahan, Hale, Brown, T. Sheldon, Spanel, Rossi, Zarelli, Benton, B. Sheldon and Shin

Allowing soliciting to host official legislative conferences.

The bill was read the second time.

MOTION

Senator Kohl-Welles moved that the following amendment by Senator Kohl-Welles and Sheahan be adopted:

On page 3, on line 5, after "(I)", strike the remainder of line 5 and all of lines 6-8 and insert the following:

"Gifts, grants, conveyances, bequests and devises of real or personal property, or both, solicited on behalf of a national legislative association or host committee for the purpose of hosting an official conference under the circumstances specified in section 1 of this act. Anything solicited or accepted may only be received by the national association or host committee and may not be commingled with any funds or accounts that are the property of any person;"

Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senators Kohl-Welles and Sheahan on page 3, line 5, to Senate Bill No. 6093.

The motion by Senator Kohl-Welles carried and the amendment was adopted.

MOTION

On motion of Senator Sheahan, the rules were suspended, Engrossed Senate Bill No. 6093, under suspension of the rules, 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 Senate Bill No. 6093, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6093, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 44; Nays, 1; Absent, 0; Excused, 4.

Voting yea: Senators Benton, Brandland, Brown, Carlson, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, 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., Spanel, Stevens, Swecker, Thibaudeau and Winsley - 44.

Voting nay: Senator West - 1.

Excused: Senators Deccio, McCaslin, Shin and Zarelli - 4.

ENGROSSED SENATE BILL NO. 6093, under suspension of the rules, 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 Sheahan, Engrossed Senate Bill No. 6093 was ordered to be immediately transmitted to the House of Representatives.

MOTION

On motion of Senator Sheahan, the Senate returned to the fourth order of business.

MESSAGE FROM THE HOUSE

June 10, 2003

MR. PRESIDENT:

The House has passed HOUSE BILL NO. 2294, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

MOTION

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

INTRODUCTION AND FIRST READING

SB 6098 by Senator Benton

“AN ACT Relating to transportation and financing; amending RCW 46.16.070, 46.68.035, 82.08.020, and 82.12.045; providing effective dates; and providing expiration dates.

Referred to Committee on Highways and Transportation.

SJM 8026 by Senators Roach, Benton, Mulliken, Oke, Rasmussen, Johnson, Morton, Honeyford, Swecker, Schmidt and Stevens

Asking local governments to recognized the yellow flag with thr4ee red stripes as the official flag of the Vietnamese American Community.

Referred to Committee on Government Operations and Elections.

INTRODUCTION AND FIRST READING OF HOUSE BILL

HB 2294 by Representatives Pettigrew, Priest, Morris and Hinkle (by request of Governor Locke)

Providing tax incentives for the retention and expansion of the aerospace industry in Washington State.

MOTION

On motion of Senator Sheahan, House Bill No. 2294 was held at the desk.

MOTION

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

MOTION

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

SENATE RESOLUTION 8684

By Senators Schmidt, Oke, Mulliken, Horn, Haugen, Fairley, B. Sheldon, Spanel, Rasmussen, T. Sheldon, Hargrove, Brandland, Fraser, Thibaudeau, Roach, Parlette, McAuliffe, Kohl-Welles, Regala, Hewitt, Sheahan and Stevens

WHEREAS, The U.S.S. Abraham Lincoln left Naval Station Everett for deployment to the Persian Gulf July 20, 2002; and

WHEREAS, The U.S.S. Abraham Lincoln and her crew left behind family and friends in Washington; and

WHEREAS, The U.S.S. Abraham Lincoln played a critical role in the campaign known as Operation Iraqi Freedom, with 12,700 takeoffs and landings during its voyage of 102,800 nautical miles; and

WHEREAS, The valiant efforts of the personnel aboard the U.S.S. Abraham Lincoln, the many support staff assigned to Naval Station Everett, their families, the United States Navy, and every branch of the Armed Forces protecting the citizens of this county inspire pride and patriotism in the residents of Washington State; and

WHEREAS, The return of the brave men and women of the U.S.S. Abraham Lincoln, after more than nine months of service to the American people, was met with immense joy by their families, friends, and loved ones; and

WHEREAS, Nearly 30,000 spectators, waving yellow pom poms and American flags, awaited the U.S.S. Abraham Lincoln as it arrived at Naval Station Everett May 6, 2003;

NOW, THEREFORE, BE IT RESOLVED, That the Washington State Senate welcome home the U.S.S. Abraham Lincoln and honor the crew and their families for the sacrifices they made; and

BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Secretary of the Senate to Captain Kendall Card and Executive Officer Ron Horton of the U.S.S. Abraham Lincoln and Captain Daniel Squires, Commander Naval Station Everett.

Senators Schmidt, Reardon and Haugen spoke to Senate Resolution 8684.

MOTION

At 8:12 p.m., on motion of Senator Sheahan, the Senate was declared to be at ease.

The Senate was called to order at 9:00 p.m. by President Owen.

MOTION

On motion of Senator Hewitt, Senator West was excused.

MOTION

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

MOTION

On motion of Senator Sheahan, the rules were suspended, Second Engrossed Second Substitute House Bill No. 1336 and Second Engrossed Second Substitute House Bill No. 1338, which were held on the Introduction and First Reading Calendar June 5, 2003, were advanced to second reading and placed on the second reading calendar.

MOTION

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

SECOND READING

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1336, by House Committee on Appropriations (originally sponsored by Representatives Linville, Kirby, Grant, Rockefeller, Quall, Hunt, Shabro, Jarrett, Delvin, Morris and Conway) (by request of Governor Locke)

Concerning watershed planning

The bill was read the second time.

MOTION

On motion of Senator Morton, the rules were suspended, Second Engrossed Second Substitute House Bill No. 1336, under suspension of the rules, 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 Second Engrossed Second Substitute House Bill No. 1336, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Second Engrossed Second Substitute House Bill No. 1336, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 31; Nays, 13; Absent, 0; Excused, 5.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, Kastama, Morton, Mulliken, Oke, Parlette, Poulsen, Rasmussen, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Stevens, Swecker and Winsley - 31.

Voting nay: Senators Brown, Fairley, Franklin, Fraser, Jacobsen, Keiser, Kline, Kohl-Welles, McAuliffe, Prentice, Reardon, Spanel and Thibaudeau - 13.

Excused: Senators Deccio, McCaslin, Shin, West and Zarelli - 5.

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1336, under suspension of the Rules, 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 Sheahan, Second Engrossed Second Substitute House Bill No.1336 was ordered to be immediately transmitted to the House of Representatives.

SECOND READING

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1338 (originally sponsored by Representatives Linville, Kirby, Lantz, Rockefeller, Shabro, Jarrett, Grant, Quall, Hunt, Delvin, Wallace, Woods, Benson, Morris and Conway) (by request of Governor Locke)

Providing additional certainty for municipal water rights.

The bill was read the second time.

MOTION

Senator Fraser moved that the following amendment be adopted:

On page 19, after line 32, insert the following:

"NEW SECTION. Sec. 19. A new section is added to chapter 43.21A RCW to read as follows:

Nothing in this act may be interpreted or administered in a manner that impairs or diminishes a water right."

Debate ensued.

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

The President declared the question before the Senate to be the roll call on the adoption of the amendment by Senator Fraser on page 19, after line 32, to Second Engrossed Second Substitute House Bill No. 1338.

ROLL CALL

The Secretary called the roll and the amendment was not adopted by the following vote: Yeas, 19; Nays, 25; Absent, 0; Excused, 5.

Voting yea: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Reardon, Regala, Sheldon, B., Spanel and Thibaudeau - 19.

Voting nay: Senators Benton, Brandland, Carlson, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, Morton, Mulliken, Oke, Parlette, Rasmussen, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker and Winsley - 25.

Excused: Senators Deccio, McCaslin, Shin, West and Zarelli - 5.

MOTION

On motion of Senator Morton, the rules were suspended, Second Engrossed Second Substitute House Bill No. 1338, under suspension of the rules, 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 Second Engrossed Second Substitute House Bill No. 1338.

POINT OF INQUIRY

Senator Hargrove: “Senator Honeyford, does this bill allow an automatic change in use to take place when a municipal water supplier acquires additional water rights that have a difference purpose of use?”

Senator Honeyford: “Thank you, Senator. The short answer to your question is ‘no.’ The provision you are speaking about is found in Section 3 of the bill. This section is crafted to make it clear that when a municipal water supplier acquires additional water rights, the water supplier must apply to the Department of Ecology for a change or transfer of the right and receive such approval before the purpose of use is changed. The simple act of acquisition does not change the purpose of a water right. The purpose of a right may only be made through the change or transfer process.”

Further debate ensued.

The President declared the question before the Senate to be the roll call on the final passage of Second Engrossed Second Substitute House Bill No. 1338, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Second Engrossed Second Substitute House Bill No. 1338, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 33; Nays, 11; Absent, 0; Excused, 5.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Kohl-Welles, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Stevens, Swecker and Winsley - 33.

Voting nay: Senators Brown, Fairley, Franklin, Fraser, Keiser, Kline, McAuliffe, Reardon, Regala, Spanel and Thibaudeau - 11.

Excused: Senators Deccio, McCaslin, Shin, West and Zarelli - 5.

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1338, under suspension of the rules, 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 Sheahan, Second Engrossed Second Substitute Senate Bill No.1338 was ordered to be immediately transmitted to the House of Representatives.

MOTION

At 9:13 p.m., on motion of Senator Sheahan, the Senate was declared to be at ease.

The Senate was called to order at 10:01 p.m. by President Owen.

MOTION

On motion of Senator Sheahan, the Senate advanced to the seventh order of business.

THIRD READING

SECOND SUBSTITUTE SENATE BILL NO. 5364, by Senate Committee on Ways and Means (originally sponsored by Senators Zarelli, T. Sheldon, Regala, B. Sheldon, Winsley, McAuliffe, Hale and Rasmussen) (by request of Governor Locke)

MOTION

On motion of Senator Zarelli, the rules were suspended, Second Substitute Senate Bill No. 5364 was returned to second reading and read the second time.

MOTION

Senator Zarelli moved that the following striking amendment by Senators Zarelli and Tim Sheldon be adopted:

Strike everything after the enacting clause and insert the following:

"PART I

COMMUNITY REVITALIZATION FINANCING--GENERAL PROVISIONS

NEW SECTION. Sec. 101. The legislature recognizes that the state as a whole benefits from investment in public infrastructure because it promotes community and economic development. Public investment stimulates business activity and helps create jobs; stimulates the redevelopment of brownfields and blighted areas in the inner city; lowers the cost of housing; and promotes efficient land use. The legislature finds that these activities generate revenue for the state and that it is in the public interest to invest in these projects through a credit against the state sales and use tax to those local governments that can demonstrate the expected returns to the state.

Sec. 102. RCW 39.89.020 and 2001 c 212 s 2 are each amended to read as follows:

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

(1) "Assessed value of real property" means the valuation of real property as placed on the last completed assessment roll.

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

(3) "Increment area" means the geographic area from which taxes are to be appropriated to finance public improvements authorized under this chapter.

(4) "Increment value" means seventy-five percent of any increase in the assessed value of real property in an increment area that is placed on the assessment rolls after the increment area is created. There is no increment value if the assessed value of real property in an increment area is less than or equal to the assessed value of real property in the increment area for taxes levied in the year in which the increment area was created for collection in the following year.

(5) "Local government" means any city, town, county, port district, or any combination thereof.

(((3))) (6) "Ordinance" means any appropriate method of taking legislative action by a local government.

(((4))) (7) "Participating taxing authority" means a taxing authority that has entered into a written agreement with a local government for the use of community revitalization financing to finance all or a portion of the costs of designated public improvements.

(8) "Participating taxing district" means all taxing districts within an increment area where a local government has obtained written agreement for the use of community revitalization financing to finance all or a portion of the costs of designated public improvements as provided in RCW 39.89.030(8). However, a fire protection district is not a participating taxing district unless it has entered into a signed, written agreement with a local government to provide limited funding under community revitalization financing as provided in RCW 39.89.030(8)(a).

(9) "Public improvements" means:

(a) Infrastructure improvements within the increment area that include:

(I) Street and road construction and maintenance;

(ii) Water and sewer system construction and improvements;

(iii) Sidewalks and streetlights;

(iv) Parking, terminal, and dock facilities;

(v) Park and ride facilities of a transit authority;

(vi) Park facilities and recreational areas; and

(vii) Storm water and drainage management systems; and

(b) Expenditures for any of the following purposes:

(I) Providing environmental analysis, professional management, planning, and promotion within the increment area, including the management and promotion of retail trade activities in the increment area;

(ii) Providing maintenance and security for common or public areas in the increment area; or

(iii) Historic preservation activities authorized under RCW 35.21.395.

(((5))) (10) "Public improvement costs" means the costs of: (a) Design, planning, acquisition, including land acquisition, site preparation including land clearing, construction, reconstruction, rehabilitation, improvement, and installation of public improvements; (b) demolishing, relocating, maintaining, and operating property pending construction of public improvements; (c) relocating utilities as a result of public improvements; (d) financing public improvements, including interest during construction, legal and other professional services, taxes, insurance, principal and interest costs on general indebtedness issued to finance public improvements, and any necessary reserves for general indebtedness; (e) assessments incurred in revaluing real property for the purpose of determining the tax allocation base value that are in excess of costs incurred by the assessor in accordance with the revaluation plan under chapter 84.41 RCW, and the costs of apportioning the taxes and complying with this chapter and other applicable law; and (f) administrative expenses and feasibility studies reasonably necessary and related to these costs, including related costs that may have been incurred before adoption of the ordinance authorizing the public improvements and the use of community revitalization financing to fund the costs of the public improvements.

(((6))) (11) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (a) Regular property taxes levied by port districts or public utility districts specifically for the purpose of making required payments of principal and interest on general indebtedness; ((and)) (b) regular property taxes levied by the state for the support of the common schools under RCW 84.52.065; and (c) regular property taxes levied under the authority of RCW 84.55.050 that are limited to a specific purpose as provided in RCW 84.55.050(3)(b). Regular property taxes do not include excess property tax levies that are exempt from the aggregate limits for junior and senior taxing districts as provided in RCW 84.52.043.

(((7))) (12) "Tax allocation base value" means the ((true and fair)) assessed value of real property located within an increment area for taxes ((imposed)) levied in the year in which the increment area is created for collection in the following year, plus twenty-five percent of any increase in the ((true and fair)) assessed value of real property located within an increment area that is placed on the assessment rolls after the increment area is created.

(((8))) (13) "Tax allocation revenues" means those tax revenues derived from the ((imposition of)) receipt of excess excise taxes under section 202 of this act and from regular property taxes levied on the increment value and distributed to finance public improvements.

(((9) "Increment area" means the geographic area from which taxes are to be appropriated to finance public improvements authorized under this chapter.

(10) "Increment value" means seventy-five percent of any increase in the true and fair value of real property in an increment area that is placed on the tax rolls after the increment area is created.

(11))) (14) "Taxing authority" means a governmental entity that imposes a sales or use tax under chapter 82.14 RCW upon the occurrence of any taxable event within a proposed or approved increment area.

(15) "Taxing district((s))" means a governmental entity that levies or has levied for it regular property taxes upon real property located within a proposed or approved increment area.

(((12))) (16) "Value of taxable property" means the value of the taxable property as defined in RCW 39.36.015.

Sec. 103. RCW 39.89.030 and 2002 c 12 s 1 are each amended to read as follows:

A local government may finance public improvements using community revitalization financing subject to the following conditions:

(1) The local government adopts an ordinance designating an increment area within its boundaries and specifying the public improvements proposed to be financed in whole or in part with the use of community revitalization financing;

(2) The public improvements proposed to be financed in whole or in part using community revitalization financing are expected to encourage private development within the increment area and to increase the fair market value of real property within the increment area;

(3) The local government has entered or expects to enter into a contract with a private developer relating to the development of private improvements within the increment area or has received a letter of intent from a private developer relating to the developer's plans for the development of private improvements within the increment area;

(4) Private development that is anticipated to occur within the increment area, as a result of the public improvements, will be consistent with the countywide planning policy adopted by the county under RCW 36.70A.210 and the local government's comprehensive plan and development regulations adopted under chapter 36.70A RCW;

(((4) Taxing districts, in the aggregate, that levy at least seventy-five percent of the regular property tax within which the increment area is located approves the community revitalization financing of the project under RCW 39.89.050(1); and

(5) In an increment area that includes any portion of a fire protection district as defined in Title 52 RCW, the fire protection district must agree to participate in the community revitalization financing of the project under chapter 212, Laws of 2001, for the project to proceed. Approval by the fire protection district shall be considered as part of the required participation by taxing districts under subsection (4) of this section)) (5) The local government may not use community revitalization financing to finance the costs associated with the financing, design, acquisition, construction, equipping, operating, maintaining, remodeling, repairing, and reequipping of public facilities funded with taxes collected under RCW 82.14.048;

(6) The governing body of the local government must make a finding that community revitalization financing: (a) Will not be used for the purpose of relocating a business from outside the increment area, but within this state, into the increment area; and (b) will improve the viability of existing business entities within the increment area; and (c) will be used exclusively in areas within the jurisdiction of the local government deemed in need of economic development and/or redevelopment and absent the financing available under this act that the proposed economic development and/or redevelopment would not occur;

(7) The governing body of the local government finds that the public improvements proposed to be financed in whole or in part using community revitalization financing are reasonably likely to:

(a) Increase private investment within the increment area;

(b) Increase employment within the increment area; and

(c) Generate, over the period of time that the local sales and use tax will be imposed under section 301 of this act, state and local property, sales, and use tax revenues that are equal to or greater than the respective state and local contributions made under this chapter;

(8) The local government obtains written agreement for the use of community revitalization financing to finance all or a portion of the costs of the designated public improvements from taxing districts that in the aggregate levy at least sixty percent of the regular property taxes on property within the increment area. The agreement must be authorized by the governing body of taxing districts that in the aggregate levy at least sixty percent of the regular property taxes on property within the increment area.

(a) A signed, written agreement from taxing districts that in the aggregate levy at least sixty percent of the regular property taxes within the increment area constitutes concurrence by all taxing districts in the increment area in the public improvements and participation in the public improvements to the extent of providing limited funding under community revitalization financing authorized under this chapter. However, a fire protection district may choose not to participate in the public improvements by providing written notice to the local government of its decision not to provide limited funding under community revitalization financing.

(b) For purposes of this subsection (8), "regular property taxes" means regular property taxes defined in RCW 84.04.140, except: (I) Regular property taxes levied by the state; and (ii) regular property taxes levied by a fire protection district if the fire protection district has not entered into a signed, written agreement with a local government to provide limited funding under community revitalization financing as provided in (a) of this subsection.

Sec. 104. RCW 39.89.050 and 2001 c 212 s 5 are each amended to read as follows:

(1) Before adopting an ordinance creating the increment area, a local government must:

(((1))) (a) Obtain written agreement for the use of community revitalization financing to finance all or a portion of the costs of the designated public improvements from taxing districts ((that, in the aggregate, levy at least seventy-five percent of the regular property tax on property within the increment area. A signed, written agreement from taxing districts that in the aggregate levy at least seventy-five percent of the regular property tax within the increment area, constitutes concurrence by all taxing districts in the increment area in the public improvement and participation in the public improvement to the extent of providing limited funding under community revitalization financing authorized under this chapter. The agreement must be authorized by the governing body of taxing districts that in the aggregate levy at least seventy-five percent of the regular property tax on property within the increment area)) as provided in RCW 39.89.030(8); and

(((2))) (b) Hold a public hearing on the proposed financing of the public improvement in whole or in part with community revitalization financing.

(I) Notice of the public hearing must be published in a legal newspaper of general circulation within the proposed increment area at least ten days before the public hearing and posted in at least six conspicuous public places located in the proposed increment area.

(ii) Notice must also be sent by United States mail to the property owners and the business enterprises located within the proposed increment area at least thirty days prior to the hearing. In implementing provisions under this act, the local governing body may also consult with business organizations, including the local chamber of commerce, and the office of minority and women's business enterprises to assist with providing appropriate notice to business enterprises and property owners for whom English is a second language.

(iii) Notices must describe the contemplated public improvements, estimate the costs of the public improvements, describe the portion of the costs of the public improvements to be borne by community revitalization financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed increment area, and estimate the period during which community revitalization financing is contemplated to be used. The public hearing may be held by either the governing body of the local government, or a committee of the governing body that includes at least a majority of the whole governing body((; and)).

(((3))) (2) In order to create an increment area, a local government must adopt an ordinance establishing the increment area that:

(a) Describes the public improvements((,));

(b) Describes the boundaries of the increment area((,));

(c) Estimates the cost of the public improvements and the portion of these costs to be financed by community revitalization financing((,));

(d) Estimates the time during which regular property taxes are to be apportioned((,)) and, if applicable, excess excise taxes are to be used to finance public improvement costs associated with the public improvements financed in whole or in part by community revitalization financing;

(e) Estimates the average amount of tax revenue to be received in all fiscal years through the imposition of a sales and use tax under section 301 of this act;

(f) Provides the date when the apportionment of the regular property taxes and, if applicable, the use of excess excise taxes will commence((,)); and

(g) Finds that the conditions of RCW 39.89.030 are met.

(3) For purposes of this section, "fiscal year" means the year beginning July 1st and ending the following June 30th.

Sec. 105. RCW 39.89.060 and 2001 c 212 s 6 are each amended to read as follows:

The local government shall:

(1) Publish notice in a legal newspaper of general circulation within the increment area that describes the public improvement, describes the boundaries of the increment area, and identifies the location and times where the ordinance and other public information concerning the public improvement may be inspected; and

(2) Deliver a certified copy of the ordinance to the county treasurer, the county assessor, and the governing body of each participating taxing district within which the increment area is located.

PART II

COMMUNITY REVITALIZATION FINANCING

USE OF TAX ALLOCATION REVENUES TO PAY THE COSTS OF PUBLIC IMPROVEMENTS

Sec. 201. RCW 39.89.070 and 2001 c 212 s 7 are each amended to read as follows:

(1) Commencing in the second calendar year following the passage of the ordinance creating an increment area and authorizing the use of community revitalization financing, the county treasurer shall distribute receipts from regular taxes imposed on real property located in the increment area as follows:

(a) Each participating taxing district and the local government that created the increment area shall receive that portion of its regular property taxes produced by the rate of tax levied by or for the taxing district on the tax allocation base value for that community revitalization financing project in the taxing district, or upon the total assessed value of real property in the taxing district, whichever is smaller; and

(b) The local government that created the increment area shall receive an additional portion of the regular property taxes levied by it and by or for each participating taxing district upon the increment value within the increment area. However, if there is no increment value, the local government shall not receive any additional regular property taxes under this subsection (1)(b). The local government that created the increment area may agree to receive less than the full amount of ((this)) the additional portion of regular property taxes under this subsection (1)(b) as long as bond debt service, reserve, and other bond covenant requirements are satisfied, in which case the balance of these tax receipts shall be allocated to the participating taxing districts that imposed regular property taxes, or have regular property taxes imposed for them, in the increment area for collection that year in proportion to their regular tax levy rates for collection that year. The local government may request that the treasurer transfer this additional portion of the property taxes to its designated agent. The portion of the tax receipts distributed to the local government or its agent under this subsection (1)(b) may only be expended to finance public improvement costs associated with the public improvements financed in whole or in part by community revitalization financing.

(2) The county assessor shall allocate twenty-five percent of any increased real property value occurring in the increment area to the tax allocation base value and seventy-five percent to the increment value. This section does not authorize revaluations of real property by the assessor for property taxation that are not made in accordance with the assessor's revaluation plan under chapter 84.41 RCW or under other authorized revaluation procedures.

(3) The apportionment of increases in assessed valuation in an increment area, and the associated distribution to the local government of receipts from regular property taxes that are imposed on the increment value, must cease when tax allocation revenues are no longer necessary or obligated to pay the costs of the public improvements. Any excess tax allocation revenues derived from regular property taxes and earnings on ((the)) such tax allocation revenues, remaining at the time the apportionment of tax receipts terminates, must be returned to the county treasurer and distributed to the participating taxing districts that imposed regular property taxes, or had regular property taxes imposed for it, in the increment area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.

NEW SECTION. Sec. 202. A new section is added to chapter 39.89 RCW to read as follows:

(1) A local government that creates an increment area and has received approval from the department of revenue under section 303 of this act to impose the local option sales and use tax authorized in section 301 of this act may use annually any excess excise taxes received by it from taxable activity within the increment area to finance public improvement costs associated with the public improvements financed in whole or in part by community revitalization financing. The use of excess excise taxes must cease when tax allocation revenues are no longer necessary or obligated to pay the costs of the public improvements. Any participating taxing authority is authorized to allocate excess excise taxes to the local government. The legislature declares that it is a proper purpose of a local government or participating taxing authority to allocate excess excise taxes for purposes of financing public improvements under this chapter.

(2) A local government consisting solely of a port district may use excess excise taxes as provided in this section only to the extent that any participating taxing authority allocates excess excise taxes to the local government.

(3) A local government consisting of a port district and any city, town, or county may use excess excise taxes as provided in this section only if:

(a) The city, town, or county realizes excess excise taxes from taxable activity within the increment area; or

(b) Any participating taxing authority allocates excess excise taxes to the local government.

(4) A local government shall provide the department accurate information describing the geographical boundaries of the increment area at least seventy-five days before the effective date of the ordinance creating the increment area. The local government shall ensure that the boundary information provided to the department is kept current.

(5) The department shall provide each local government that has provided boundary information to the department as provided in this section with the necessary information to calculate excess excise taxes.

(6) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Base year" means the first calendar year following the creation of an increment area.

(b) "Excess excise taxes" means the amount of excise taxes received by the local government during the measurement year from taxable activity within the increment area over and above the amount of excise taxes received by the local government during the base year from taxable activity within the increment area. However, if a local government creates an increment area and reasonably determines that no activity subject to tax under chapters 82.08 and 82.12 RCW occurred in the twelve months immediately preceding the creation of the increment area within the boundaries of the area that became the increment area, "excess excise taxes" means the entire amount of excise taxes received by the local government during a calendar year period beginning with the calendar year immediately following the creation of the increment area and continuing with each measurement year thereafter.

(d) "Measurement year" means a calendar year, beginning with the calendar year following the base year and each calendar year thereafter, that is used annually to measure the amount of excess excise taxes required to be used to finance public improvement costs associated with public improvements financed in whole or in part by community revitalization financing.

PART III

COMMUNITY REVITALIZATION FINANCING--STATE CONTRIBUTION

NEW SECTION. Sec. 301. A new section is added to chapter 82.14 RCW to read as follows:

(1) A city, town, or county that creates an increment area and finances public improvements pursuant to chapter 39.89 RCW may impose a sales and use tax in accordance with the terms of this chapter and subject to the criteria set forth in this section. Except as provided in this section, the tax is in addition to other taxes authorized by law and shall be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the taxing jurisdiction of the city, town, or county. The rate of tax shall not exceed the rate provided in RCW 82.08.020(1) in the case of a sales tax or the rate provided in RCW 82.12.020(5) in the case of a use tax, less the aggregate rates of any other taxes imposed on the same events that are credited against the state taxes imposed under chapters 82.08 and 82.12 RCW.

(2) The tax imposed under subsection (1) of this section shall be deducted from the amount of tax otherwise required to be collected or paid over to the department under chapter 82.08 or 82.12 RCW. The department shall perform the collection of such taxes on behalf of the city, town, or county at no cost to the city, town, or county.

(3) No tax may be imposed under this section before July 1, 2005. Before imposing a tax under this section, the city, town, or county shall first have received tax allocation revenues derived from either regular property taxes or excess excise taxes, or both, during the preceding calendar year. The tax imposed under this section shall expire when the bonds issued under the authority of chapter 39.89 RCW are retired, but not more than twenty-five years after the tax is first imposed.

(4) An ordinance adopted by the legislative authority of a city, town, or county imposing a tax under this section shall provide that:

(a) The tax shall first be imposed on the first day of a fiscal year.

(b) The amount of tax received by the local government in any fiscal year shall not exceed the amount of the state contribution;

(I) The amount of tax receipts totals the amount of the state contribution;

(ii) The amount of tax receipts totals the amount of "local public sources," as that term is used in section 302 of this act, dedicated in the previous calendar year to finance public improvements authorized under chapter 39.89 RCW; or

(iii) The amount of revenue from taxes imposed under this section by all cities, towns, and counties totals the annual state credit limit as provided in section 303(3) of this act;

(d) The tax shall be reimposed, should it cease to be imposed for any of the reasons provided in (c) of this subsection, at the beginning of the next fiscal year, subject to the restrictions in this section; and

(e) Any revenue generated by the tax in excess of the amounts specified in (a), (b), and (c) of this subsection shall belong to the state of Washington.

(5) If both a county and a city or town impose a tax under this section, the tax imposed by the city, town, or county shall be credited as follows:

(a) If the county has created an increment area before the city or town, the tax imposed by the county shall be credited against the tax imposed by the city or town, the purpose of such credit is to give priority to the county tax; and

(b) If the city or town has created an increment area before the county, the tax imposed by the city or town shall be credited against the tax imposed by the county, the purpose of such credit is to give priority to the city or town tax.

(6) The department shall determine the amount of tax receipts attributable to each city, town, and county imposing a sales and use tax under this section and shall advise a city, town, or county when it must cease imposing the tax for the remainder of the fiscal year as provided in subsection (4)(c) of this section. Determinations by the department of the amount of taxes attributable to a city, town, or county are final and shall not be used to challenge the validity of any tax imposed under this section. The department shall remit any tax receipts in excess of the amounts specified in subsection (4)(a), (b), and (c) of this section to the state treasurer who shall deposit the moneys in the general fund.

(7) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Base year" means the first calendar year following the creation of an increment area.

(b) "Excess state excise taxes" means the amount of excise taxes received by the state during the measurement year from taxable activity within the increment area over and above the amount of excise taxes received by the state during the base year from taxable activity within the increment area. However, if a local government creates an increment area and reasonably determines that no activity subject to tax under chapters 82.08 and 82.12 RCW occurred in the twelve months immediately preceding the creation of the increment area within the boundaries of the area that became the increment area, "excess state excise taxes" means the entire amount of excise taxes received by the state during a calendar year period beginning with the calendar year immediately following the creation of the increment area and continuing with each measurement year thereafter.

(d) "Fiscal year" has the same meaning as in RCW 39.89.050(3).

(e) "Increment area" has the same meaning as in RCW 39.89.020.

(f) "Measurement year" means a calendar year, beginning with the calendar year following the base year and each calendar year thereafter, that is used annually to measure the amount of excess excise taxes required to be used to finance public improvement costs associated with public improvements financed in whole or in part by community revitalization financing.

(g) "State contribution" means the lesser of one million dollars or an amount equal to:

(I) State property tax allocation revenues received by the state during the preceding calendar year; and

(ii) Excess state excise taxes received by the state during the preceding calendar year.

(h) "State property tax allocation revenues" means those tax revenues derived from the imposition of property taxes levied by the state on the increment value as defined in RCW 39.89.020.

(I) "Tax allocation revenues" has the same meaning as in RCW 39.89.020.

NEW SECTION. Sec. 302. A new section is added to chapter 82.14 RCW to read as follows:

(1) Moneys collected from the taxes imposed under section 301 of this act shall be used only for the purpose of principal and interest payments on bonds issued under the authority of RCW 39.89.080 and must be matched with an amount from local public sources dedicated through December 31st of the previous calendar year to finance public improvements authorized under chapter 39.89 RCW. Such local public sources include but are not limited to private monetary contributions and tax allocation revenues. Local public sources are dedicated to finance public improvements if they are actually expended to pay public improvement costs or are required by law or an agreement to be used exclusively to pay public improvement costs.

(2) A local government shall inform the department by the first day of March of the amount of:

(a) Local public sources dedicated in the preceding calendar year to finance public improvements authorized under chapter 39.89 RCW; and

(b) Tax allocation revenues derived in the preceding calendar year from the imposition of regular property taxes on the increment value and distributed to finance public improvements. Upon request of a local government, the county assessor shall assist the local government in determining the amount of tax allocation revenues derived in the preceding calendar year and distributed to finance public improvements.

(3) If a local government fails to comply with subsection (2) of this section, no tax may be imposed under section 301 of this act in the subsequent fiscal year.

(4) A local government shall provide a report to the department by March 1st of each year. The report shall contain the following information:

(a) The amount of tax allocation revenues, taxes under section 301 of this act, and local public sources received by the local government during the preceding calendar year, and a summary of how these revenues were expended;

(b) The names of any businesses locating within the increment area as a result of the public improvements undertaken by the local government and financed in whole or in part with community revitalization financing;

(c) The total number of permanent jobs created as a result of the public improvements undertaken by the local government and financed in whole or in part with community revitalization financing;

(d) The average wages and benefits received by all employees of businesses locating within the increment area as a result of the public improvements undertaken by the local government and financed in whole or in part with community revitalization financing;

(e) That the local government is in compliance with RCW 39.89.030(6)(c).

(5) The department shall make a report available to the public and the legislature by June 1st of each year. The report shall include a list of public improvements undertaken by local governments and financed in whole or in part with community revitalization financing, and it shall also include a summary of the information provided to the department by local governments under subsection (4) of this section.

(6) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Public improvement costs" has the same meaning as in RCW 39.89.020.

(b) "Tax allocation revenues" has the same meaning as in RCW 39.89.020.

NEW SECTION. Sec. 303. A new section is added to chapter 82.32 RCW to read as follows:

(1) As a condition to imposing a sales and use tax under section 301 of this act, a city, town, or county must apply to the department at least seventy-five days before the effective date of any such tax. The application shall be in a form and manner prescribed by the department and shall include but is not limited to information establishing that the applicant is eligible to impose such a tax, the anticipated effective date for imposing the tax, the estimated number of years that the tax will be imposed, and the estimated amount of tax revenue to be received in each fiscal year that the tax will be imposed. For purposes of this section, "fiscal year" means the year beginning July 1st and ending the following June 30th. The department shall make available forms to be used for this purpose. As part of the application, a city, town, or county must provide to the department a copy of the ordinance creating the increment area as required in RCW 39.89.050. The department shall rule on completed applications within sixty days of receipt. No new applications shall be considered by the department after the thirtieth day of September of the third year following the year in which the first application was received.

(2) The authority to impose the local option sales and use taxes under section 301 of this act is on a first-come basis. Priority for collecting the taxes authorized under section 301 of this act among approved applicants shall be based on the date that the approved application was received by the department. As a part of the approval of applications under this section, the department shall approve the amount of tax under section 301 of this act that an applicant may impose. The amount of tax approved by the department shall not exceed the lesser of one million dollars or the average amount of tax revenue that the applicant estimates that it will receive in all fiscal years through the imposition of a sales and use tax under section 301 of this act. A city, town, or county shall not receive, in any fiscal year, more revenues from taxes imposed under section 301 of this act than the amount approved by the department. The department shall not approve the receipt of more credit against the state sales and use tax than is authorized under subsection (3) of this section.

(3) The amount of credit against the state sales and use tax is limited as follows:

(a) Except as provided in this subsection (3), no more than five million dollars of credit against the state sales and use tax may be received by all cities, towns, and counties imposing a tax under section 301 of this act.

(b) During the fiscal years beginning July 1, 2006, through June 30, 2009, the total amount of credit against the state sales and use tax that may be received by all cities, towns, and counties imposing a tax under section 301 of this act shall be increased as follows:

(I) In the fiscal year beginning July 1, 2006, the limit in (a) of this subsection shall be increased by the same percentage as the percentage increase in the assessed value of all property within this state from calendar year 2003 through calendar year 2004, as determined by the department;

(ii) In the fiscal year beginning July 1, 2007, the limit in (a) of this subsection shall be increased by the same percentage as the percentage increase in the assessed value of all property within this state from calendar year 2003 through calendar year 2005, as determined by the department;

(iii) In the fiscal year beginning July 1, 2008, and for each subsequent fiscal year, the limit in (a) of this subsection shall be increased by the same percentage as the percentage increase in the assessed value of all property within this state from calendar year 2003 through calendar year 2006, as determined by the department.

(4) The credit against the state sales and use tax shall be available to any city, town, or county imposing a tax under section 301 of this act only as long as the city, town, or county has outstanding indebtedness under RCW 39.89.080.

(5) The department may adopt any rules under chapter 34.05 RCW it considers necessary for the administration of sections 202 through 303 of this act.

PART IV

BOND AUTHORIZATION

Sec. 401. RCW 39.89.080 and 2001 c 212 s 8 are each amended to read as follows:

(1) A local government designating an increment area and authorizing the use of community revitalization financing may incur general indebtedness, and issue general obligation bonds, to finance the public improvements and retire the indebtedness in whole or in part from tax allocation revenues it receives, subject to the following requirements:

(a) The ordinance adopted by the local government creating the increment area and authorizing the use of community revitalization financing indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated; and

(b) The local government includes this statement of the intent in all notices required by RCW 39.89.050.

(2) The general indebtedness incurred under subsection (1) of this section may be payable from other tax revenues, the full faith and credit of the local government, and nontax income, revenues, fees, and rents from the public improvements, as well as contributions, grants, and nontax money available to the local government for payment of costs of the public improvements or associated debt service on the general indebtedness.

(3) In addition to the requirements in subsection (1) of this section, a local government designating an increment area and authorizing the use of community revitalization financing may require the nonpublic participant to provide adequate security to protect the public investment in the public improvement within the increment area.

(4) Bonds issued under this section shall be authorized by ordinance of the local governing body and may be issued in one or more series and shall bear such date or dates, be payable upon demand or mature at such time or times, bear interest at such rate or rates, be in such denomination or denominations, be in such form either coupon or registered as provided in RCW 39.46.030, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption with or without premium, be secured in such manner, and have such other characteristics, as may be provided by such ordinance or trust indenture or mortgage issued pursuant thereto.

(5) The local government may annually pay into a fund to be established for the benefit of bonds issued under this section a fixed proportion or a fixed amount of any tax allocation revenues derived from property or business activity within the increment area containing the public improvements funded by the bonds, such payment to continue until all bonds payable from the fund are paid in full. The local government may also annually pay into the fund established in this section a fixed proportion or a fixed amount of any revenues derived from taxes imposed under section 301 of this act, such payment to continue until all bonds payable from the fund are paid in full. Revenues derived from taxes imposed under section 301 of this act are subject to the use restriction in section 302 of this act.

(6) In case any of the public officials of the local government whose signatures appear on any bonds or any coupons issued under this chapter shall cease to be such officials before the delivery of such bonds, such signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if such officials had remained in office until such delivery. Any provision of any law to the contrary notwithstanding, any bonds issued under this chapter are fully negotiable.

(7) Notwithstanding subsections (4) through (6) of this section, bonds issued under this section may be issued and sold in accordance with chapter 39.46 RCW.

NEW SECTION. Sec. 402. A new section is added to chapter 39.89 RCW to read as follows:

A local government that issues bonds under RCW 39.89.080 to finance public improvements may pledge for the payment of such bonds all or part of any tax allocation revenues derived from the public improvements. The local government may also pledge all or part of any revenues derived from taxes imposed under section 301 of this act and held in connection with the public improvements. All of such tax revenues are subject to the use restriction in section 302 of this act.

NEW SECTION. Sec. 403. A new section is added to chapter 39.89 RCW to read as follows:

The bonds issued by a local government under RCW 39.89.080 to finance public improvements shall not constitute an obligation of the state of Washington, either general or special.

PART V

MISCELLANEOUS

NEW SECTION. Sec. 501. 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. 502. Part headings used in this act do not constitute any part of the law.

NEW SECTION. Sec. 503. Nothing in this act shall be construed to give port districts the authority to impose a sales or use tax under chapter 82.14 RCW."

Debate ensued.

The President declared the question before the Senate to be the adoption of the striking amendment by Senators Zarelli and Tim Sheldon to Second Substitute Senate Bill No. 5364, under suspension of the rules.

The motion by Senator Zarelli carried and the striking amendment, under suspension of the rules, was adopted.

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

On page 1, line 1 of the title, after "revitalization;" strike the remainder of the title and insert "amending RCW 39.89.020, 39.89.030, 39.89.050, 39.89.060, 39.89.070, and 39.89.080; adding new sections to chapter 39.89 RCW; adding new sections to chapter 82.14 RCW; adding a new section to chapter 82.32 RCW; and creating new sections."

MOTION

On motion of Senator Zarelli, the rules were suspended, Engrossed Second Substitute Senate Bill No. 5364, under suspension of the rules, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

Debate ensued.

POINT OF INQUIRY

Senator Jacobsen: “Senator Zarelli, I am curious to know what impact this legislation is going to have on the counties and cities incorporated, using this type of taxing authority.”

Senator Zarelli: “First of all, the increment that we are talking about to finance bonds for these improvements would be the increase in the economic activity due to sales tax collection. It would recoup seventy-five percent of that to retire the bonds in the increment district and the other twenty-five percent would go to the spread on the other levy tax base, whether it be cities or counties. The bill is very clear, Senator Jacobsen, that they must demonstrate--the entity that is trying to put the increment together--that there is no other way, and there would be no other way, to accomplish this economic development. So, in the end, counties, cities, whomever, would gather together and the increment district would see an improvement in their tax base from the economic growth at twenty-five percent, but the other seventy-five percent would go towards the bonds on the increment that is being suggested.”

The President declared the question before the Senate to be the roll call on the final passage of Engrossed Second Substitute Senate Bill No. 5364, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Second Substitute Senate Bill No. 5364, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 39; Nays, 7; Absent, 0; Excused, 3.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Horn, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Poulsen, Prentice, Rasmussen, Reardon, Regala, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Spanel, Swecker, Thibaudeau, West, Winsley and Zarelli - 39.

Voting nay: Senators Brown, Esser, Honeyford, Jacobsen, Parlette, Roach and Stevens - 7.

Excused: Senators Deccio, McCaslin and Shin - 3.

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5364, under suspension of the rules, 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 Sheahan, Engrossed Second Substitute Senate Bill No. 5364 was ordered to be immediately transmitted to the House of Representatives.

THIRD READING

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5012, by Senate Committee on Education (originally sponsored by Senators Johnson, Finkbeiner, Esser and Oke)

Authorizing charter schools

MOTION

On motion of Senator Johnson, the rules were suspended, Engrossed Substitute Senate Bill No. 5012 was returned to second reading and read the second time.

MOTION

Senator Johnson moved that the following striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. INTENT. The legislature intends to authorize the establishment of public charter schools within the general and uniform system of public schools for the primary purpose of providing more, high quality learning environments to assist educationally disadvantaged students and other students in meeting the state's academic standards. The legislature intends for charter schools to function as an integral element of the public school system maintained at public expense, free from discrimination, and open to all students in the state, and to be subject to the same academic standards and performance outcomes as other public schools. The legislature intends to encourage school districts to consider using the chartering process as an optional tool for achieving state and federal accountability goals. The legislature finds that in addition to providing more, high quality public school choices for families, teachers, and students, public charter schools may be a tool for the improvement of schools in which significant numbers of students persistently fail to meet state standards. The legislature also intends to authorize the use of the chartering process as a state intervention strategy, consistent with the provisions of the federal no child left behind act of 2001, to provide assistance to schools in which significant numbers of students persistently fail to meet state standards.

NEW SECTION. Sec. 2. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Alternate sponsor" means either: (a) The board of directors of the educational service district in which the proposed charter school will be located; or (b) the governing board of a state or regional university as defined in RCW 28B.10.016 or of The Evergreen State College, when such board has approved a charter.

(2) "Applicant" means a nonprofit corporation that has submitted an application to a sponsor or an alternate sponsor to obtain approval to operate a charter school. The nonprofit corporation must be either a public benefit nonprofit corporation as defined in RCW 24.03.490, or a nonprofit corporation as defined in RCW 24.03.005 that has applied for tax-exempt status under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3)). The nonprofit corporation may not be a sectarian or religious organization and must meet all of the requirements for a public benefit nonprofit corporation before receiving any funding under section 12 of this act.

(3) "Board of directors" means the board of directors appointed or elected by the applicant to manage and operate the charter school.

(4) "Charter" means a five-year contract between an applicant and a sponsor or an alternate sponsor. The charter establishes, in accordance with this chapter, the terms and conditions for the management, operation, and educational program of the charter school.

(5) "Charter school" means a public school managed by an applicant's board of directors and operating independently of any school district board under a charter approved in accordance with this chapter.

(6) "Conversion charter school" means a public school converted to a charter public school through the chartering process in accordance with this chapter.

(7) "Educationally disadvantaged students" includes students with limited English proficiency; students with special needs, including students with disabilities; economically disadvantaged students, including students who qualify for free and reduced priced meals; students exercising choice options under the federal no child left behind act of 2001; and other students who may be at risk of failing to meet state and federal academic performance standards.

(8) "Sponsor" means the board of directors of the school district in which the proposed charter school will be located, when such board has approved a charter.

NEW SECTION. Sec. 3. CHARTER SCHOOLS--POWERS. (1) In carrying out its duty to manage and operate the charter school, the board of directors of a charter school may:

(a) Hire, manage, and discharge any charter school employee in accordance with the terms of this chapter and that school's charter;

(b) Enter into a contract with any school district, or any other public or private entity, also empowered to enter into contracts, for any and all real property, equipment, goods, supplies, and services, including educational instructional services;

(c) Rent, lease, or own property, but may not acquire property by eminent domain. All charters and charter school contracts with other public and private entities must include provisions regarding the disposition of the property if the charter school fails to open as planned, closes, or the charter is revoked or not renewed;

(d) Issue secured and unsecured debt to manage cash flow, improve operations, or finance the acquisition of real property or equipment. Such an issuance does not constitute an obligation, either general, special, or moral of the state, the charter school sponsor, the school district in which the charter school is located or any other political subdivision or agency of the state. Neither the full faith and credit nor the taxing power of the state, the charter school sponsor, the school district in which the charter school is located, or any other political subdivision or agency of the state may be pledged for the payment of such debt;

(e) Accept and administer for the benefit of the charter school and its students gifts, grants, and donations from other governmental and private entities, excluding sectarian or religious organizations. Charter schools may not accept any gifts or donations the conditions of which violate this chapter.

(2) A charter school may not charge tuition, levy taxes, or issue tax-backed bonds, however it may charge fees for optional noncredit extracurricular events.

(3) Neither a charter school sponsor, an alternate sponsor, nor the school district in which the charter school is located is liable for acts or omissions of a charter school, including but not limited to acts or omissions related to the application, the charter, the operation, the performance, and the closure of the charter school.

NEW SECTION. Sec. 4. LEGAL STATUS. A charter school is a public school including one or more of grades kindergarten through twelve, operated by a board of directors appointed or elected by a charter school applicant, according to the terms of a renewable five-year contract granted by a sponsor or an alternate sponsor. A charter school may offer any program or course of study that another public school may offer.

NEW SECTION. Sec. 5. CHARTER SCHOOLS--EXEMPTIONS. (1) A charter school shall operate independently of any school district board, under a charter approved by a sponsor or an alternate sponsor under this chapter.

(2) Charter schools are exempt from all state statutes and rules applicable to school districts and school district boards of directors except those statutes and rules as provided for and made applicable to charter schools in accordance with this chapter and in the school's approved charter.

(3) A charter school's board of directors is encouraged to implement a quality management system and to conduct an annual self-assessment.

(4) All approved charter schools shall:

(a) Comply with state and federal health, safety, parents' rights, civil rights, and nondiscrimination laws, including, but not limited to, chapter 28A.640 RCW (sexual equality) and Title IX of the education amendments of 1972 (20 U.S.C. Sec. 1681 et seq.) applicable to school districts, and to the same extent as school districts;

(b) Participate in free and reduced priced meal programs to the same extent as is required for other public schools;

(c) Participate in nationally normed standardized achievement tests as required in RCW 28A.230.190, 28A.230.193, and 28A.230.230 and the elementary, middle school, and high school standards, requirements, and assessment examinations as required in chapter 28A.655 RCW;

(d) Employ certificated instructional staff as required in RCW 28A.410.010, however charter schools may hire noncertificated instructional staff of unusual competence and in exceptional cases as specified in RCW 28A.150.260;

(e) Comply with the employee record check requirements in RCW 28A.400.303;

(f) Be subject to the same financial and audit requirements as a school district, as determined by the state auditor, including annual audits for legal and fiscal compliance;

(g) Be subject to periodic independent performance audits conducted by or at the direction of a competent state authority to the same extent as other public agencies, however, a charter school is not required to bear the expense of such a performance audit;

(h) Comply with the annual performance report under RCW 28A.655.110;

(I) Follow the performance improvement goals and requirements adopted by the academic achievement and accountability commission by rule under RCW 28A.655.030;

(j) Be subject to the accountability requirements of the federal no child left behind act of 2001, including Title I requirements;

(k) Comply with and be subject to the requirements under the individuals with disabilities education act, as amended in 1997;

(l) Report at least annually to the board of directors of the school district in which the charter school is located, to the school's alternate sponsor if the school is not sponsored by a school district, and to parents of children enrolled at the charter school on progress toward the student performance goals specified in the charter;

(m) Comply with the open public meetings act in chapter 42.30 RCW and open public records requirements in RCW 42.17.250; and

(n) Be subject to and comply with legislation enacted after the effective date of this section governing the operation and management of charter schools.

(5) A member of a board of directors of a charter school shall be considered the equivalent of a board member of a school district for the purposes of public disclosure requirements and must comply with the reporting requirements in RCW 42.17.240.

NEW SECTION. Sec. 6. ADMISSION REQUIREMENTS. (1) To effectuate the primary purpose for which the legislature established charter schools, a charter school must be willing to enroll educationally disadvantaged students and may not limit admission on any basis other than age group and grade level. Consistent with the legislative intent of this chapter, a charter school shall conduct timely outreach and marketing efforts to educationally disadvantaged students in the school district in which the charter school will be located.

(2) A conversion charter school must be structured to provide sufficient capacity to enroll all students who wish to remain enrolled in the school after its conversion to a charter school, and may not displace students enrolled before the chartering process. If, after enrollment of these students, capacity is insufficient to enroll all other students remaining who have submitted a timely application, the charter school must give enrollment priority to siblings of students who are currently enrolled in the school. Students selected to fill any remaining spaces must be selected only through an equitable selection process, such as a lottery.

(3) A new charter school must enroll all students who submit a timely application if capacity is sufficient. If capacity is insufficient to enroll all students who apply, students must be selected to fill any remaining spaces only through an equitable selection process, such as a lottery. Siblings of enrolled students and of students selected through an equitable selection process must be given priority in enrollment if requested by a parent.

NEW SECTION. Sec. 7. CHARTER APPLICATION--CHARTERING PROCESS.

(1) An applicant may apply to a sponsor or an alternate sponsor to establish a charter school in accordance with this section.

(2) An application for a charter school must be submitted first to the board of directors of the school district in which the proposed charter school will be located, allowing for the board's consideration of the application in accordance with subsections (3) and (4) of this section, before the application may be submitted to an alternate sponsor.

(3) The school district board of directors must decide, within forty-five days of receipt of the application, whether to hold a public hearing in the school district for the purpose of taking public comment on the application and, if a hearing is to be held, must schedule such a hearing within seventy-five days of receipt of the application. If the school board intends to accept the application, one or more public hearings must be held prior to the granting of a charter; however a school board is not required to hold a public hearing prior to rejecting an application. The school board must either accept or reject the application within one hundred five days after receipt of the application. The one hundred five-day deadline for acceptance or rejection of the charter school application may be extended for an additional thirty days if both parties agree in writing.

(4) If the school board elects not to hold a public hearing or rejects the application after holding one or more public hearings, the school board must notify the applicant in writing of the reasons for that decision. The applicant may submit a revised application for the school board's reconsideration and the school board may provide assistance to improve the application. If the school board rejects the application after submission of a revised application, the school board must notify the applicant in writing of the reasons for the rejection.

(5) Applications for the conversion of a public school to a charter public school may not be submitted to an alternate sponsor without the prior consent of the school district board of directors. At the request of the applicant, the sponsor, or the alternate sponsor, the superintendent of public instruction may review the charter application and provide technical assistance.

(6) Alternate sponsors must comply with the procedures in subsections (1) through (4) of this section for consideration of the charter application. An alternate sponsor is not bound by a school district's or another alternate sponsor's findings or decision to deny the application.

(7) The governing board of an institution of higher education that has approved a charter application may, after exercising due diligence, assign authority for the administration of the charter and the oversight and monitoring of the charter school to an agency or official designated by and accountable to the governing board of the institution. In all cases, the governing board of the institution is responsible for ensuring that the duties of the alternate sponsor under this chapter are fulfilled.

(8) The superintendent of public instruction shall maintain copies of all approved charter applications. An applicant may obtain copies of those applications from the office of the superintendent of public instruction.

(9) Educational service districts and the superintendent of public instruction are encouraged to assist schools and school districts in which significant numbers of students persistently fail to meet state standards with completing the chartering process. Assistance from an educational service district or from the superintendent of public instruction may include, but is not limited to, identifying potential eligible applicants and assisting with the charter application and approval processes.

(10) Consistent with the corrective action provisions in the federal no child left behind act of 2001, the superintendent of public instruction may use the chartering process as an intervention strategy for the purpose of meeting federal student achievement and accountability requirements. The superintendent may require a local school district board of directors to convert a public school to a charter public school or, if the superintendent determines it would be more appropriate, may require a local school district board of directors to consent to conversion of the school to a charter school by the board of directors of the local educational service district.

NEW SECTION. Sec. 8. APPLICATION REQUIREMENTS. The charter school application is a proposed contract and must include:

(1) The identification and description of the nonprofit corporation submitting the application, including the names, descriptions, curriculum vitae, and qualifications, which shall be subject to verification and review, of the individuals who will operate the school;

(2) The nonprofit corporation's proposed articles of incorporation, bylaws, and most recent financial statement and balance sheet;

(3) A mission statement for the proposed school, consistent with the description of legislative intent in this chapter, including a statement of whether the proposed charter school's primary purpose is to serve educationally disadvantaged students;

(4) A description of the school's educational program, curriculum, and instructional strategies, including but not limited to how the charter school will assist its students, including educationally disadvantaged students, in meeting the state's academic standards;

(5) A description of the school's admissions policy and marketing program, and its deadlines for applications and admissions, including its program for community outreach to families of educationally disadvantaged students;

(6) A description of the school's student performance standards and requirements that must meet those determined under chapter 28A.655 RCW, and be measured according to the assessment system determined under chapter 28A.655 RCW;

(7) A description of the school's plan for evaluating student performance and the procedures for taking corrective action in the event that student performance at the charter school falls below standards established in its charter;

(8) A description of the financial plan for the school. The plan shall include: (a) A proposed five-year budget of projected revenues and expenditures; (b) a plan for starting the school; (c) a five-year facilities plan; (d) evidence supporting student enrollment projections of at least twenty students; and (e) a description of major contracts planned for administration, management, equipment, and services, including consulting services, leases, improvements, purchases of real property, and insurance;

(9) A description of the proposed financial management procedures and administrative operations, which shall meet or exceed generally accepted standards of management and public accounting;

(10) An assessment of the school's potential legal liability and a description of the types and limits of insurance coverage the nonprofit corporation plans to obtain. For purposes of this subsection, a liability insurance policy of five million dollars is required;

(11) A description of the procedures to discipline, suspend, and expel students;

(12) A description of procedures to assure the health and safety of students, employees, and guests of the school and to comply with applicable federal and state health and safety laws and regulations;

(13) A description of the school's program for parent involvement in the charter school;

(14) Documentation sufficient to demonstrate that the charter school will have the liquid assets available to operate the school on an ongoing and sound financial basis; and

(15) Supporting documentation for any additional requirements that are appropriate and reasonably related to the operation of a charter school that a sponsor or alternate sponsor may impose as a condition of approving the charter.

NEW SECTION. Sec. 9. APPROVAL CRITERIA. A sponsor or alternate sponsor may approve an application for a charter school, if in the sponsor's or alternate sponsor's reasonable judgment, after exercising due diligence and good faith, the sponsor or alternate sponsor finds:

(1) The applicant is an eligible public benefit nonprofit corporation and the individuals it proposes to manage and operate the school are qualified to operate a charter school and implement the proposed educational program that is free from religious or sectarian influence;

(2) The public benefit nonprofit corporation has been approved or conditionally approved by the internal revenue service for tax exempt status under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3));

(3) The mission statement is consistent with the description of legislative intent and restrictions on charter school operations in this chapter. The sponsor or alternate sponsor must make a finding of whether or not the charter school's primary purpose is to serve educationally disadvantaged students;

(4) The school's educational program, including its curriculum and instructional strategies, is likely to assist its students, including its educationally disadvantaged students, in meeting the state's academic standards;

(5) The school's admissions policy and marketing program is consistent with state and federal law, and includes community outreach to families of educationally disadvantaged students;

(6) The school's proposed educational program includes student academic performance standards and requirements that meet those determined under chapter 28A.655 RCW and are measured according to the assessment system determined under chapter 28A.655 RCW;

(7) The application includes a viable plan for evaluating pupil performance and procedures for taking appropriate corrective action in the event that pupil performance at the charter school falls below standards established in its charter;

(8) The financial plan for the school is designed to reasonably support the charter school's educational program based on a review of the proposed five-year budget of projected revenues, expenditures, and facilities;

(9) The school's financial and administrative operations, including its audits, meet or exceed generally accepted standards of accounting and management;

(10) The assessment of the school's potential legal liability, and the types and limits of insurance coverage the school plans to obtain, are adequate. For purposes of this subsection, a liability insurance policy of five million dollars is required;

(11) The procedures the school plans to follow for discipline, suspension, and expulsion of students are reasonable and comply with state and federal law;

(12) The procedures the school plans to follow to assure the health and safety of students, employees, and guests of the school comply with applicable state and federal health and safety laws and regulations;

(13) The school has developed a program for parent involvement in the charter school;

(14) The charter school will have the liquid assets available to operate the school on an ongoing and sound financial basis; and

(15) The applicant has met any additional requirements that are appropriate and reasonably related to the operation of a charter school that a sponsor or alternate sponsor imposed as a condition for approval of the charter.

NEW SECTION. Sec. 10. CHARTER AGREEMENT--AMENDMENT. (1) A charter application approved by a sponsor or an alternate sponsor with any changes or additions, and signed by an authorized representative of the applicant and the sponsor or alternate sponsor, constitutes a charter. A charter for the conversion of a public school must include provisions for the disposition, including assignment or reassignment, of the employees of the school prior to its conversion and after conversion.

(2) A charter may be amended during its term at the request of the charter school board of directors and on the approval of the sponsor or alternate sponsor.

(3) A charter may not prohibit and must provide for application of laws applicable to charter schools or to charter school boards of directors enacted after the effective date of this section.

NEW SECTION. Sec. 11. CHARTER RENEWAL AND REVOCATION. (1) An approved plan to establish a charter school is effective for five years from the first day of operation. At the conclusion of the first three years of operation, the charter school may apply to the original sponsor or alternate sponsor for renewal. A request for renewal must be submitted no later than six months before the expiration of the charter.

(2) A charter school renewal application must include:

(a) A report on the progress of the charter school in achieving the goals; student performance standards, including the student performance standards adopted by rule by the academic achievement and accountability commission in accordance with RCW 28A.655.030; the number and percentage of educationally disadvantaged students served; and other terms of the charter;

(b) A financial statement that discloses the costs of administration, instruction, and other expenditure objects and activities of the charter school; and

(3) The sponsor or alternate sponsor shall reject the application for renewal if the academic progress of students in the charter school, as measured by the standards and assessments in chapter 28A.655 RCW, is inferior, for the most recent two consecutive years, to the average progress of students in the district in which the charter school is located when similar student populations are compared.

(4) The sponsor or alternate sponsor may reject the application for renewal if any of the following occurred:

(a) The charter school materially violated its charter with the sponsor or alternate sponsor;

(b) The students enrolled in the charter school failed to meet student performance standards identified in the charter, including the student performance standards adopted by rule by the academic achievement and accountability commission in accordance with RCW 28A.655.030;

(d) The charter school violated provisions in law that have not been waived in accordance with this chapter.

(5) A sponsor or alternate sponsor shall give written notice of its intent not to renew the charter school's request for renewal to the charter school within three months of the request for renewal to allow the charter school an opportunity to correct identified deficiencies in its operation. At the request of the board of directors of the charter school, the sponsor or alternate sponsor shall review its decision for nonrenewal within forty-five days of receiving a request for review and supporting documentation sufficient to demonstrate that any deficiencies have been corrected from the board of directors of the charter school.

(6)(a) The sponsor or alternate sponsor may revoke a previously approved charter before the expiration of the term of the charter, and before application for renewal, if any of the following occurred:

(I) The charter school materially violated its charter with the sponsor or alternate sponsor;

(ii) The charter school failed to meet generally accepted standards of fiscal management; or

(iii) The charter school violated provisions in law that have not been waived in accordance with this chapter.

(b) Except in cases of emergency where the health and safety of children are at risk, a charter may not be revoked unless the sponsor or alternate sponsor first provides:

(I) Written notice to the charter school of the specific violations alleged;

(ii) One or more public hearings in the school district in which the charter school is located; and

(iii) A reasonable opportunity and a sufficient period of time for the charter school to correct the identified deficiencies.

(c) If, after following the procedures in (b) of this subsection, the sponsor or alternate sponsor determines that revocation of the charter is necessary to further the intent of this chapter, the sponsor or alternate sponsor may revoke the charter. The sponsor or alternate sponsor shall provide for an appeal process upon such a determination.

(d) If a sponsor or alternate sponsor elects to revoke the charter, the sponsor or alternate sponsor, upon a request by the charter school, shall provide technical assistance to the charter school in completing the plan required and carrying out the tasks identified in subsection (7) of this section.

(7) A charter school planning to close or anticipating revocation or nonrenewal of its charter shall provide a plan setting forth a timeline and the responsible parties for disposition of students and student records and disposition of finances.

(a) Immediately following the decision to close a school, the school must:

(I) Submit to the sponsor or alternate sponsor a list of parent addresses and proof that the school has communicated the impending closure of the school to all parents and staff;

(ii) Assign staff responsible for transition of student records and for providing assistance to students and parents in transferring from the charter school to the district public, private, or home school chosen by the family;

(iii) Provide the names and contact information for staff responsible for transfer of student records, as well as the projected transition tasks and timelines to the sponsor or alternate sponsor, and upon completion of student transition, provide a list of students and a brief description of the disposition of their student records to the sponsor or alternate sponsor.

(b) Prior to closing the charter school the charter school board of directors shall:

(I) Identify a trustee who will, through the process of closing the school and for a term of ten years thereafter, assume responsibility for school and student records, and notify the sponsor or alternate sponsor of the name and contact information for the trustee;

(ii) Determine the amount of anticipated revenue due to the school as well as anticipated liabilities, and provide a complete asset and liability report to the sponsor or alternate sponsor;

(iii) Create a current and projected payroll and payroll benefits commitment;

(iv) List each employee, job, and the funds necessary to complete the educational calendar balance of the year, the transition of students and records, and the administrative close-down tasks;

(v) Determine the total moneys required to complete contracts;

(vi) Schedule an audit and set aside funds to cover costs; and

(vii) Provide the sponsor or alternate sponsor with a plan for the closure of the school and final disposition of all property owned by the charter school.

NEW SECTION. Sec. 12. FUNDING. (1) For charter schools sponsored by a school district:

(a) For purposes of funding, students in charter schools shall be considered students of the sponsoring district for state apportionment purposes. Without violating section 13 of this act, the sponsoring school district shall provide prompt and timely funding for charter schools in amounts the schools would have generated if the students were enrolled in a noncharter public school in the district except that a charter school shall not generate eligibility for small school assistance. Funding for charter schools shall include regular apportionment, categorical, student achievement, and nonbasic education moneys, as appropriate and shall be based on enrollment, staffing, and other financial information submitted by the charter school to the school district as required to determine state apportionment amounts;

(b) Local levy moneys approved by the voters before the effective date of a charter between a school district and an applicant shall not be allocated to a new charter school; however, the school district shall allocate levy moneys to a conversion charter school. For levies approved after the effective date of a charter, charter schools shall be included in levy planning, budgets, and funding distribution in the same manner as other district-sponsored public schools in the district; and

(c) A charter school is eligible for state matching funds for common school construction if a sponsoring school district determines it has received voter approval of local capital funds for the project.

(2) For charter schools sponsored by an educational service district or an institution of higher education:

(a) For purposes of funding, the charter school shall be considered a separate school district only for state apportionment purposes and safety net eligibility. Without violating section 13 of this act, the superintendent of public instruction shall provide prompt and timely funding for charter schools through the apportionment funding formulas in amounts the schools would have generated if the students were enrolled in a school district except that a charter school shall not generate eligibility for small school assistance. The funding shall include regular apportionment, categorical, student achievement, and nonbasic education moneys and shall be based on enrollment, staffing, and other financial information submitted by the charter school to the superintendent of public instruction, as required to determine state apportionment amounts. Those allocations to charter schools that are included in RCW 84.52.0531(3) (a) through (c) shall be included in the levy base of the district in which the charter school is located.

(b) No local levy money may be allocated to a charter school if the charter school is sponsored by an educational service district or an institution of higher education.

(3) To be eligible to receive state categorical program funding, a charter school must serve students who would be eligible for program funding if served by the school district.

(4) Sponsors and alternate sponsors shall submit, by November 1st of each year, to the office of the superintendent of public instruction annual year-end financial information, as prescribed by the superintendent, for each charter school sponsored in the previous school year.

(5) A conversion charter school shall be entitled to the continued rent-free use of its existing facility, regardless of whether the conversion school is sponsored by the local school district, or by an alternate sponsor if the district has consented to such alternate sponsorship. The district shall remain responsible for major repairs and safety upgrades that may be required for the continued use of the facility as a public school. The charter school shall be responsible for routine maintenance of the facility, including but not limited to cleaning, painting, gardening, and landscaping.

NEW SECTION. Sec. 13. ADMINISTRATION FEE. To offset costs of oversight and administering the charter, a sponsor or an alternate sponsor may retain up to three percent of state funding and local excess levy funding, if applicable, that is being driven to the charter school. Except for the administration fee in this section, no other offsets or deductions are allowed, whether for central administration or other off-site support services, from a charter school's per-pupil share of state appropriations, local levies, or other funds, unless the charter school has contracted with a school district to obtain specific additional services.

NEW SECTION. Sec. 14. LEAVES OF ABSENCE. If a school district employee makes a written request for an extended leave of absence to work at a charter school, the school district shall grant the request. The school district may require that the request for a leave be made up to ninety days before the employee would otherwise have to report for duty. The leave shall be granted for any request for up to two years. If the employee returns to the school district within the two-year period, the employee shall be hired before the district hires anyone else with fewer years of statewide service, with respect to any position for which the returning employee is certificated or otherwise qualified.

NEW SECTION. Sec. 15. STUDY OF CHARTER SCHOOLS. Subject to funding, the Washington institute for public policy shall study the implementation and effectiveness of this act. The institute shall report to the legislature on the effectiveness of charter schools in raising student achievement and the impact of charter schools. The institute also shall examine and discuss whether and how charter schools have enhanced education reform efforts and recommend whether relaxing or eliminating certain regulatory requirements for other public schools could result in improved school performance at those schools. The institute shall recommend changes to this chapter including improvements that could be made to the application and approval process. A preliminary report of the study is due to the legislature by March 1, 2006, and a final report is due September 1, 2007.

NEW SECTION. Sec. 16. NUMBER OF CHARTER SCHOOLS. (1) Applications for charter schools may begin on the effective date of this section. The maximum number of new charter schools that may be established under a charter approved in accordance with this chapter is:

(a) In the first year commencing July 1, 2003, and in the second year commencing July 1, 2004, not more than five per year; and

(b) In each of the next four years, commencing July 1st of each year beginning in 2005 and ending in 2008, not more than fifteen per year.

(2) These annual allocations shall be cumulative so that if the maximum number of allowable new charters is not reached in any given year the maximums shall be increased accordingly for the successive years.

(3) Consistent with the legislative intent of this chapter, a majority of the annual allowable new charter schools that may be established under subsection (1) of this section shall be reserved until the 31st day after the effective date of this section, and until April 1st of each year beginning in 2004 and ending in 2008, for the implementation of charter schools established for the primary purpose of serving educationally disadvantaged students, and that are located in, or accessible to students who live in, geographic areas in which a large proportion of the students have difficulty meeting state academic content and student achievement standards, or geographic areas, including urban and rural areas, in which a large proportion or number of public schools have been identified for improvement, corrective action, or restructuring under the federal no child left behind act of 2001.

(4) Sponsors and alternate sponsors shall promptly notify the superintendent of public instruction when a charter is approved, and shall indicate whether the charter school's primary purpose is to serve educationally disadvantaged students. In order to ensure compliance with the annual limits for the establishment of new charter schools, authorization from the superintendent of public instruction must be obtained before implementing an approved charter for a new school. If the maximum number of new charters under subsections (1) and (3) of this section has not been reached when the sponsor notifies the superintendent of the approval, the superintendent shall authorize the implementation of the approved charter and the establishment of the school. If the charters reserved under subsection (3) of this section are not authorized within thirty days of the effective date of this section, or by March 31st of each year thereafter and ending in 2008, the superintendent of public instruction shall notify the sponsors and alternate sponsors of any other approved charters for which authorization has not been granted, and shall authorize the implementation of those charters within the annual limits, regardless of whether those charters meet the requirements of subsection (3) of this section.

(5) The superintendent of public instruction shall notify eligible sponsors and eligible alternate sponsors when the maximum allowable number of new charters is approved each year. If the maximum number is not reached by the 31st day after the effective date of this section, or by March 31st of each year thereafter, the superintendent shall report on the number of charters approved.

(6) If the superintendent receives simultaneous notification of approved charters that exceed the annual allowable limits in subsections (1) and (3) of this section, the superintendent shall select approved charters for authorization under subsection (4) of this section through a lottery process, and shall assign implementation dates accordingly.

(7) The maximum number of charter schools allowed under this section does not include public schools converting to charter public schools; however, conversion charter schools shall be considered charter schools for the purpose of notice to the superintendent of public instruction required under subsection (4) of this section.

NEW SECTION. Sec. 17. A new section is added to chapter 41.56 RCW to read as follows:

This section applies to charter schools as defined in section 2 of this act and the charter school's employees included in the bargaining unit. The bargaining unit of employees of charter schools must be limited to the employees of the charter school and must be separate from other bargaining units in the school district or educational service district unless the charter school is a public school that has converted to a charter school. The employees of public schools that have converted to a charter school shall remain members of the bargaining units in the school district.

This section, designating charter schools as employers and charter school employees as members under the teachers' retirement systems, the school employees' retirement systems, and the public employees' retirement systems, applies only if the department of retirement systems receives determinations from the internal revenue service and the United States department of labor that such participation does not jeopardize the status of these retirement systems as governmental plans under the federal employees' retirement income security act and the internal revenue code.

NEW SECTION. Sec. 18. A new section is added to chapter 41.59 RCW to read as follows:

(1) This section applies to collective bargaining agreements between charter schools and the employees of charter schools included in the bargaining unit.

(a) The bargaining unit of employees of conversion charter schools must be limited to the employees of the charter school and must be separate from other bargaining units in the school district or educational service district for at least the first five years of operation of the charter school, after which the employees of a conversion charter school may indicate by a majority vote they desire to become members of the bargaining unit in the school district in which the charter school is located.

(b) The bargaining unit of employees of new charter schools must be limited to the employees of the charter school and must be separate from other bargaining units in the school district or educational service district for at least the first five years of operation of the charter school, after which the employees of a new charter school may indicate by a majority vote they desire to become members of the bargaining unit in the school district in which the charter school is located.

(2) This section, designating charter schools as employers and charter school employees as members under the teachers' retirement systems, the school employees' retirement systems, and the public employees' retirement systems, takes effect only if the department of retirement systems receives determinations from the internal revenue service and the United States department of labor that such participation does not jeopardize the status of these retirement systems as governmental plans under the federal employees' retirement income security act and the internal revenue code.

Sec. 19. RCW 41.59.080 and 1998 c 244 s 11 are each amended to read as follows:

The commission, upon proper application for certification as an exclusive bargaining representative or upon petition for change of unit definition by the employer or any employee organization within the time limits specified in RCW 41.59.070(3), and after hearing upon reasonable notice, shall determine the unit appropriate for the purpose of collective bargaining. In determining, modifying or combining the bargaining unit, the commission shall consider the duties, skills, and working conditions of the educational employees; the history of collective bargaining; the extent of organization among the educational employees; and the desire of the educational employees; except that:

(1) A unit including nonsupervisory educational employees shall not be considered appropriate unless it includes all such nonsupervisory educational employees of the employer; and

(2) A unit that includes only supervisors may be considered appropriate if a majority of the employees in such category indicate by vote that they desire to be included in such a unit; and

(3) A unit that includes only principals and assistant principals may be considered appropriate if a majority of such employees indicate by vote that they desire to be included in such a unit; and

(4) A unit that includes both principals and assistant principals and other supervisory employees may be considered appropriate if a majority of the employees in each category indicate by vote that they desire to be included in such a unit; and

(5) A unit that includes supervisors and/or principals and assistant principals and nonsupervisory educational employees may be considered appropriate if a majority of the employees in each category indicate by vote that they desire to be included in such a unit; and

(6) A unit that includes only employees in vocational-technical institutes or occupational skill centers may be considered to constitute an appropriate bargaining unit if the history of bargaining in any such school district so justifies; and

(7) Notwithstanding the definition of collective bargaining, a unit that contains only supervisors and/or principals and assistant principals shall be limited in scope of bargaining to compensation, hours of work, and the number of days of work in the annual employment contracts; and

(8) The bargaining unit of certificated employees of school districts, educational service districts, or institutions of higher education that are education providers under chapter 28A.193 RCW must be limited to the employees working as education providers to juveniles in each adult correctional facility maintained by the department of corrections and must be separate from other bargaining units in school districts, educational service districts, or institutions of higher education; and

(9) Except as provided in sections 17 and 18 of this act, the bargaining unit for employees of charter schools as defined in section 2 of this act must be limited to the employees of the charter school and must be separate from other bargaining units in the school district or educational service district.

Sec. 20. RCW 28A.150.010 and 1969 ex.s. c 223 s 28A.01.055 are each amended to read as follows:

Public schools shall mean the common schools as referred to in Article IX of the state Constitution and those schools and institutions of learning having a curriculum below the college or university level as now or may be established by law and maintained at public expense, including charter schools under chapter 28A.-- RCW (sections 1 through 16 and 21 of this act).

NEW SECTION. Sec. 21. CAPTIONS NOT LAW. Captions used in this chapter do not constitute any part of the law.

NEW SECTION. Sec.22. Sections 1 through 16 and 21 of this act constitute a new chapter in Title 28A RCW.

NEW SECTION. Sec. 23. 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."

Debate ensued.

Senators Sheahan, Hale, and Hewitt demanded the previous question and the demand was sustained

The President declared the question before the Senate to be shall the main question be now put.

The demand for the previous question carried on a rising vote.

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Johnson to Engrossed Substitute Senate Bill No. 5012.

The motion by Senator Johnson carried and the amendment was adopted on a rising vote.

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

On page 1, line 1 of the title, after "schools;" strike the remainder of the title and insert "amending RCW 41.59.080 and 28A.150.010; adding a new section to chapter 41.56 RCW; adding a new section to chapter 41.59 RCW; and adding a new chapter to Title 28A RCW."

MOTION

On motion of Senator Johnson, the rules were suspended, Second Engrossed Substitute Senate Bill No. 5012, under suspension of the rules, 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 Second Engrossed Substitute Senate Bill No. 5012, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Second Engrossed Substitute Senate Bill No. 5012, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 27; Nays, 19; Absent, 0; Excused, 3.

Voting yea: Senators Benton, Brandland, Carlson, Esser, Finkbeiner, Hale, Hewitt, Honeyford, Horn, Johnson, Kohl-Welles, Morton, Mulliken, Oke, Parlette, Poulsen, Reardon, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West, Winsley and Zarelli - 27.

Voting nay: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kastama, Keiser, Kline, McAuliffe, Prentice, Rasmussen, Regala, Sheldon, B., Spanel and Thibaudeau - 19.

Excused: Senators Deccio, McCaslin and Shin - 3.

SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5012, under suspension of the rules, 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 Sheahan, Second Engrossed Substitute Senate Bill No. 5012 was ordered to be immediately transmitted to the House of Representatives.

THIRD READING

SENATE BILL NO. 5271, by Senators Honeyford, Hewitt and Parlette (by request of Department of Labor and Industries)

Regarding industrial insurance hearing loss.

MOTION

Senator Keiser moved that the rules be suspended and Senate Bill No. 5271 be returned to second reading and read the second time.

OBJECTION

Senator Sheahan objected to returning Senate Bill No. 5271 to second reading.

The President declared the question before the Senate to be the motion by Senator Keiser to suspend the rules and return Senate Bill No. 5271 to second reading.

The motion by Senator Keiser to suspend the rules and return Senate Bill No. 5271 to second reading carried on a rising vote, the President voting ‘aye.’

POINT OF ORDER

Senator Carlson: “A point of order, Mr. President. I thought we were under the Call of the Senate and you said the vote was 23 to 23. That is three short.”

REPLY BY THE PRESIDENT

President Owen: “There are three excused, Senator.”

Senator Carlson: “Thank you.”

MOTION

Senator Keiser moved that the following striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 51.28.055 and 1984 c 159 s 2 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, claims for occupational disease or infection to be valid and compensable must be filed within two years following the date the worker had written notice from a physician: (((1))) (a) Of the existence of his or her occupational disease, and (((2))) (b) that a claim for disability benefits may be filed. The notice shall also contain a statement that the worker has two years from the date of the notice to file a claim. The physician shall file the notice with the department. The department shall send a copy to the worker and to the self-insurer if the worker's employer is self-insured. However, a claim is valid if it is filed within two years from the date of death of the worker suffering from an occupational disease.

(2)(a) To be valid and compensable, claims for hearing loss due to occupational noise exposure must be filed within the earlier of the following:

(I) The time limits specified in subsection (1) of this section; or

(ii) The later of two years after the date that the worker retires or one year after the effective date of this section. A worker is deemed retired when he or she no longer receives income, salary, or wages from any employment that is regular, continuous, and gainful.

(b) A claim for hearing loss due to occupational noise exposure that is not timely filed under (a) of this subsection may be allowed only for medical aid benefits under chapter 51.36 RCW.

(3) For purposes of this section, hearing loss is due to occupational noise exposure when the hearing loss results from prolonged exposure to injurious noise in employment. A part of such exposure may not be construed to be a sudden and tangible traumatic happening for purposes of RCW 51.28.050.

(4) The department may adopt rules to implement this section.

Sec. 2. RCW 51.36.020 and 1999 c 395 s 1 are each amended to read as follows:

(1) When the injury to any worker is so serious as to require his or her being taken from the place of injury to a place of treatment, his or her employer shall, at the expense of the medical aid fund, or self-insurer, as the case may be, furnish transportation to the nearest place of proper treatment.

(2) Every worker whose injury results in the loss of one or more limbs or eyes shall be provided with proper artificial substitutes and every worker, who suffers an injury to an eye producing an error of refraction, shall be once provided proper and properly equipped lenses to correct such error of refraction and his or her disability rating shall be based upon the loss of sight before correction.

(3) Every worker whose accident results in damage to or destruction of an artificial limb, eye, or tooth, shall have same repaired or replaced.

(4) Every worker whose hearing aid or eyeglasses or lenses are damaged, destroyed, or lost as a result of an industrial accident shall have the same restored or replaced. The department or self-insurer shall be liable only for the cost of restoring damaged hearing aids or eyeglasses to their condition at the time of the accident.

(5)(a) All mechanical appliances necessary in the treatment of an injured worker, such as braces, belts, casts, and crutches, shall be provided and all mechanical appliances required as permanent equipment after treatment has been completed shall continue to be provided or replaced without regard to the date of injury or date treatment was completed, notwithstanding any other provision of law.

(b) The department shall assess the benefits to workers and the costs of emerging technologies in determining which hearing devices are provided to workers under this title. Such new technology shall be made available to workers requiring new or replacement devices as deemed appropriate based on the department's assessment.

(6) A worker, whose injury is of such short duration as to bring him or her within the time limit provisions of RCW 51.32.090, shall nevertheless receive during the omitted period medical, surgical, and hospital care and service and transportation under the provisions of this chapter.

(7) Whenever in the sole discretion of the supervisor it is reasonable and necessary to provide residence modifications necessary to meet the needs and requirements of the worker who has sustained catastrophic injury, the department or self-insurer may be ordered to pay an amount not to exceed the state's average annual wage for one year as determined under RCW 50.04.355, as now existing or hereafter amended, toward the cost of such modifications or construction. Such payment shall only be made for the construction or modification of a residence in which the injured worker resides. Only one residence of any worker may be modified or constructed under this subsection, although the supervisor may order more than one payment for any one home, up to the maximum amount permitted by this section.

(8)(a) Whenever in the sole discretion of the supervisor it is reasonable and necessary to modify a motor vehicle owned by a worker who has become an amputee or becomes paralyzed because of an industrial injury, the supervisor may order up to fifty percent of the state's average annual wage for one year, as determined under RCW 50.04.355, to be paid by the department or self-insurer toward the costs thereof.

(b) In the sole discretion of the supervisor after his or her review, the amount paid under this subsection may be increased by no more than four thousand dollars by written order of the supervisor.

(9) The benefits provided by subsections (7) and (8) of this section are available to any otherwise eligible worker regardless of the date of industrial injury.

Sec. 3. RCW 51.32.080 and 1993 c 520 s 1 are each amended to read as follows:

(1)(a) Until July 1, 1993, for the permanent partial disabilities here specifically described, the injured worker shall receive compensation as follows:

LOSS BY AMPUTATION
Of leg above the knee joint with short thigh stump (3" or less below the tuberosity of ischium). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$54,000.00
Of leg at or above knee joint with functional stump. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	48,600.00
Of leg below knee joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	43,200.00
Of leg at ankle (Syme). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37,800.00
Of foot at mid-metatarsals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18,900.00
Of great toe with resection of metatarsal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,340.00
Of great toe at metatarsophalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,804.00
Of great toe at interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,600.00
Of lesser toe (2nd to 5th) with resection of metatarsal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,140.00
Of lesser toe at metatarsophalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,016.00
Of lesser toe at proximal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,494.00
Of lesser toe at distal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	378.00
Of arm at or above the deltoid insertion or by disarticulation at the shoulder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54,000.00
Of arm at any point from below the deltoid insertion to below the elbow joint at the insertion of the biceps tendon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	51,300.00
Of arm at any point from below the elbow joint distal to the insertion of the biceps tendon to and including mid-metacarpal amputation of the hand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	48,600.00
Of all fingers except the thumb at metacarpophalangeal joints. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29,160.00
Of thumb at metacarpophalangeal joint or with resection of carpometacarpal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19,440.00
Of thumb at interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9,720.00
Of index finger at metacarpophalangeal joint or with resection of metacarpal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12,150.00
Of index finger at proximal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9,720.00
Of index finger at distal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,346.00
Of middle finger at metacarpophalangeal joint or with resection of metacarpal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9,720.00
Of middle finger at proximal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7,776.00
Of middle finger at distal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,374.00
Of ring finger at metacarpophalangeal joint or with resection of metacarpal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,860.00
Of ring finger at proximal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,888.00
Of ring finger at distal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,430.00
Of little finger at metacarpophalangeal joint or with resection of metacarpal bone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,430.00
Of little finger at proximal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,944.00
Of little finger at distal interphalangeal joint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	972.00
MISCELLANEOUS
Loss of one eye by enucleation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21,600.00
Loss of central visual acuity in one eye. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18,000.00
Complete loss of hearing in both ears. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	43,200.00
Complete loss of hearing in one ear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7,200.00

(b) Beginning on July 1, 1993, compensation under this subsection shall be computed as follows:

(I) Beginning on July 1, 1993, the compensation amounts for the specified disabilities listed in (a) of this subsection shall be increased by thirty-two percent; and

(ii) Beginning on July 1, 1994, and each July 1 thereafter, the compensation amounts for the specified disabilities listed in (a) of this subsection, as adjusted under (b)(I) of this subsection, shall be readjusted to reflect the percentage change in the consumer price index, calculated as follows: The index for the calendar year preceding the year in which the July calculation is made, to be known as "calendar year A," is divided by the index for the calendar year preceding calendar year A, and the resulting ratio is multiplied by the compensation amount in effect on June 30 immediately preceding the July 1st on which the respective calculation is made. For the purposes of this subsection, "index" means the same as the definition in RCW 2.12.037(1).

(2) Compensation for amputation of a member or part thereof at a site other than those specified in subsection (1) of this section, and for loss of central visual acuity and loss of hearing other than complete, shall be in proportion to that which such other amputation or partial loss of visual acuity or hearing most closely resembles and approximates. Compensation shall be calculated based on the adjusted schedule of compensation in effect for the respective time period as prescribed in subsection (1) of this section. However, beginning with claims filed on or after the effective date of this section, compensation for permanent partial disabilities for hearing loss due to occupational noise exposure shall be paid at an amount equal to seventy-five percent of the monetary value of such disability under this section.

(3)(a) Compensation for any other permanent partial disability not involving amputation shall be in the proportion which the extent of such other disability, called unspecified disability, shall bear to the disabilities specified in subsection (1) of this section, which most closely resembles and approximates in degree of disability such other disability, and compensation for any other unspecified permanent partial disability shall be in an amount as measured and compared to total bodily impairment. To reduce litigation and establish more certainty and uniformity in the rating of unspecified permanent partial disabilities, the department shall enact rules having the force of law classifying such disabilities in the proportion which the department shall determine such disabilities reasonably bear to total bodily impairment. In enacting such rules, the department shall give consideration to, but need not necessarily adopt, any nationally recognized medical standards or guides for determining various bodily impairments.

(b) Until July 1, 1993, for purposes of calculating monetary benefits under (a) of this subsection, the amount payable for total bodily impairment shall be deemed to be ninety thousand dollars. Beginning on July 1, 1993, for purposes of calculating monetary benefits under (a) of this subsection, the amount payable for total bodily impairment shall be adjusted as follows:

(I) Beginning on July 1, 1993, the amount payable for total bodily impairment under this section shall be increased to one hundred eighteen thousand eight hundred dollars; and

(ii) Beginning on July 1, 1994, and each July 1 thereafter, the amount payable for total bodily impairment prescribed in (b)(I) of this subsection shall be adjusted as provided in subsection (1)(b)(ii) of this section.

(c) Until July 1, 1993, the total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed the sum of ninety thousand dollars. Beginning on July 1, 1993, total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed a sum calculated as follows:

(I) Beginning on July 1, 1993, the sum shall be increased to one hundred eighteen thousand eight hundred dollars; and

(ii) Beginning on July 1, 1994, and each July 1 thereafter, the sum prescribed in (b)(I) of this subsection shall be adjusted as provided in subsection (1)(b)(ii) of this section.

(4) If permanent partial disability compensation is followed by permanent total disability compensation, any portion of the permanent partial disability compensation which exceeds the amount that would have been paid the injured worker if permanent total disability compensation had been paid in the first instance, shall be deducted from the pension reserve of such injured worker and his or her monthly compensation payments shall be reduced accordingly.

(5) Should a worker receive an injury to a member or part of his or her body already, from whatever cause, permanently partially disabled, resulting in the amputation thereof or in an aggravation or increase in such permanent partial disability but not resulting in the permanent total disability of such worker, his or her compensation for such partial disability shall be adjudged with regard to the previous disability of the injured member or part and the degree or extent of the aggravation or increase of disability thereof.

(6) When the compensation provided for in subsections (1) through (3) of this section exceeds three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, payment shall be made in monthly payments in accordance with the schedule of temporary total disability payments set forth in RCW 51.32.090 until such compensation is paid to the injured worker in full, except that the first monthly payment shall be in an amount equal to three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, and interest shall be paid at the rate of eight percent on the unpaid balance of such compensation commencing with the second monthly payment. However, upon application of the injured worker or survivor the monthly payment may be converted, in whole or in part, into a lump sum payment, in which event the monthly payment shall cease in whole or in part. Such conversion may be made only upon written application of the injured worker or survivor to the department and shall rest in the discretion of the department depending upon the merits of each individual application. Upon the death of a worker all unpaid installments accrued shall be paid according to the payment schedule established prior to the death of the worker to the widow or widower, or if there is no widow or widower surviving, to the dependent children of such claimant, and if there are no such dependent children, then to such other dependents as defined by this title.

(7) Except as otherwise provided in this section, awards payable under this section are governed by the schedule in effect on the date of injury.

NEW SECTION. Sec. 4. Section 1 of this act applies to all claims filed on or after the effective date of this section for hearing loss due to occupational noise exposure regardless of the date of injurious exposure."

Debate ensued.

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

The President declared the question before the Senate to be the roll call on the adoption of the striking amendment by Senator Keiser to Senate Bill No. 5271.

ROLL CALL

The Secretary called the roll and the striking amendment was not adopted by the following vote: Yeas, 21; Nays, 25; Absent, 0; Excused, 3.

Voting yea: Senators Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Rasmussen, Reardon, Regala, Sheldon, B., Spanel and Thibaudeau - 21.

Voting nay: Senators Benton, Brandland, Carlson, Esser, Finkbeiner, Hale, Haugen, Hewitt, Honeyford, Horn, Johnson, Morton, Mulliken, Oke, Parlette, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West, Winsley and Zarelli - 25.

Excused: Senators Deccio, McCaslin and Shin - 3.

MOTION

On motion of Senator Honeyford, the rules were suspended, Senate Bill No. 5271, under suspension of the rules, was advanced to third reading, the second reading considered the third and the bill was place on final passage.

The President declared the question before the Senate to be the roll call on the final passage of Senate Bill No. 5271, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Substitute Senate Bill No. 5271, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 27; Nays, 19; Absent, 0; Excused, 3.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Esser, Finkbeiner, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Johnson, Morton, Mulliken, Oke, Parlette, Roach, Rossi, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, West, Winsley and Zarelli - 27.

Voting nay: Senators Brown, Eide, Fairley, Franklin, Fraser, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Rasmussen, Reardon, Regala, Sheldon, B., Spanel and Thibaudeau - 19.

Excused: Senators Deccio, McCaslin and Shin - 3.

SENATE BILL NO. 5271, under suspension of the rules, 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 Sheahan, Senate Bill No. 5271 was ordered to be immediately transmitted to the House of Representatives.

MOTION

On motion of Senator Sheahan, Senators Honeyford, West, Brown, Keiser were excused.

MOTION

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

INTRODUCTION AND FIRST READING

On motion of Senator Sheahan, the rules were suspended, Senate Bill No. 6094, Engrossed House Bill No. 1989 and Second Engrossed Substitute House Bill No. 2195, which were held on the Introduction and First Reading Calendar June 6, 2003, were advanced to second reading and placed on the second reading calendar.

MOTION

At 11:01 p.m. on motion of Senator Sheahan, the Senate was declared to be at ease.

The Senate was called to order at 11:08 p.m. by President Owen.

There being no objection, the President advanced the Senate to the sixth order of business

SECOND READING

SENATE BILL NO. 6094, by Senators Carlson and Jacobsen

Changing the school district levy base calculation

The bill was read the second time.

MOTION

Senator Carlson moved that the following striking amendment be adopted:

Strike everything after the enacting clause and insert the following:

Sec. 1. RCW 84.52.0531 and 1997 c 259 s 2 are each amended to read as follows:

The maximum dollar amount which may be levied by or for any school district for maintenance and operation support under the provisions of RCW 84.52.053 shall be determined as follows:

(1) For excess levies for collection in calendar year 1997, the maximum dollar amount shall be calculated pursuant to the laws and rules in effect in November 1996.

(2) For excess levies for collection in calendar year 1998 and thereafter, the maximum dollar amount shall be the sum of (a) plus or minus (b) and (c) of this subsection minus (d) of this subsection:

(a) The district's levy base as defined in subsections (3) and (4) of this section multiplied by the district's maximum levy percentage as defined in subsection (((4))) (5) of this section;

(b) For districts in a high/nonhigh relationship, the high school district's maximum levy amount shall be reduced and the nonhigh school district's maximum levy amount shall be increased by an amount equal to the estimated amount of the nonhigh payment due to the high school district under RCW 28A.545.030(3) and 28A.545.050 for the school year commencing the year of the levy;

(c) For districts in an interdistrict cooperative agreement, the nonresident school district's maximum levy amount shall be reduced and the resident school district's maximum levy amount shall be increased by an amount equal to the per pupil basic education allocation included in the nonresident district's levy base under subsection (3) of this section multiplied by:

(I) The number of full-time equivalent students served from the resident district in the prior school year; multiplied by:

(ii) The serving district's maximum levy percentage determined under subsection (((4))) (5) of this section; increased by:

(iii) The percent increase per full-time equivalent student as stated in the state basic education appropriation section of the biennial budget between the prior school year and the current school year divided by fifty-five percent;

(d) The district's maximum levy amount shall be reduced by the maximum amount of state matching funds for which the district is eligible under RCW 28A.500.010.

(3) For excess levies for collection in calendar year 1998 and thereafter, a district's levy base shall be the sum of allocations in (a) through (c) of this subsection received by the district for the prior school year, including allocations for compensation increases, plus the sum of such allocations multiplied by the percent increase per full time equivalent student as stated in the state basic education appropriation section of the biennial budget between the prior

school year and the current school year and divided by fifty-five percent. A district's levy base shall not include local school district property tax levies or other local revenues, or state and federal allocations not identified in (a) through (c) of this subsection.

(a) The district's basic education allocation as determined pursuant to RCW 28A.150.250, 28A.150.260, and 28A.150.350;

(b) State and federal categorical allocations for the following programs:

(I) Pupil transportation;

(ii) Special education;

(iii) Education of highly capable students;

(iv) Compensatory education, including but not limited to learning assistance, migrant education, Indian education, refugee programs, and bilingual education;

(v) Food services; and

(vi) Statewide block grant programs; ((and))

(c) Any other federal allocations for elementary and secondary school programs, including direct grants, other than federal impact aid funds and allocations in lieu of taxes;

(d) Beginning with calendar year 2005 calculations, the federal allocations received directly by a district for purposes of this subsection (3) shall be the allocations from the second prior school year. The federal revenues shall be adjusted by inflation as determined by the office of the superintendent of public instruction. For purposes of this subsection, "second prior school year" means the school year completed two years prior to the year in which the levies are to be collected; and

(e) Beginning with calendar year 2005 calculations, revenues included in the levy base shall be reduced for revenues received as a fiscal agent. The office of the superintendent of public instruction shall adopt rules defining "revenues received as a fiscal agent".

(4) For excess levies for collection in calendar years 2004 and 2005, in addition to the allocations included under subsection (3)(a) through (c) of this section, a district's levy base shall also include the difference between the state allocations under subsection (3)(a) and (b) of this section and the amount the district would have received if (a) the district's base salary for certificated instructional staff for purposes of determining state basic education allocations had been the same as the highest base salary for that school year on the supporting LEAP salary document referenced in the omnibus appropriations act; and (b) the district's salaries for certificated administrators and classified staff for purposes of determining state basic education allocations had been the same as the highest certificated administrator and classified staff salaries for that school year on the supporting LEAP salary document referenced in the omnibus appropriations act. For calendar years 2004 and 2005, the additional amounts provided under this subsection shall not be used in the calculation of levy base for the purpose of determining local effort assistance allocations under chapter 28A.500 RCW.

(5) A district's maximum levy percentage shall be twenty-two percent in 1998 and twenty-four percent in 1999 and every year thereafter; plus, for qualifying districts, the grandfathered percentage determined as follows:

(a) For 1997, the difference between the district's 1993 maximum levy percentage and twenty percent; and

(b) For 1998 and thereafter, the percentage calculated as follows:

(I) Multiply the grandfathered percentage for the prior year times the district's levy base determined under subsection (3) of this section;

(ii) Reduce the result of (b)(I) of this subsection by any levy reduction funds as defined in subsection (((5))) (6) of this section that are to be allocated to the district for the current school year;

(iii) Divide the result of (b)(ii) of this subsection by the district's levy base; and

(iv) Take the greater of zero or the percentage calculated in (b)(iii) of this subsection.

(((5))) (6) "Levy reduction funds" shall mean increases in state funds from the prior school year for programs included under subsections (3) and (4) of this section: (a) That are not attributable to enrollment changes, compensation increases, or inflationary adjustments; and (b) that are or were specifically identified as levy reduction funds in the appropriations act. If levy reduction funds are dependent on formula factors which would not be finalized until after the start of the current school year, the superintendent of public instruction shall estimate the total amount of levy reduction funds by using prior school year data in place of current school year data. Levy reduction funds shall not include moneys received by school districts from cities or counties.

(((6))) (7) For the purposes of this section, "prior school year" means the most recent school year completed prior to the year in which the levies are to be collected.

(((7))) (8) For the purposes of this section, "current school year" means the year immediately following the prior school year.

(((8))) (9) Funds collected from transportation vehicle fund tax levies shall not be subject to the levy limitations in this section.

(((9))) (10) The superintendent of public instruction shall develop rules and regulations and inform school districts of the pertinent data necessary to carry out the provisions of this section."

Debate ensued.

POINT OF INQUIRY

Senator Spanel: “Senator McAuliffe, does this bill have any affect on levy equalization?”

Senator McAuliffe: “No, it does not.”

Senator Spanel: “It mentions that. Maybe the other proponent knows. It mentions levy equalization in the summary and that is why I wanted to know.”

Senator McAuliffe: “To my knowledge, it does not affect levy equalization.”

POINT OF INQUIRY

Senator Spanel: “Senator Carlson, does this bill affect levy equalization? I ask, because usually that is the mediation for those districts --the haves and have nots. I am wondering if the have nots are going to gain anything and they probably won’t, because we don’t have any state dollars to do it.”

Senator Carlson: “That is correct. Thank you, Senator Spanel, for the question. The answer is found on page 3, lines 20 to 22, where it specifically says, ‘the subsection shall not be used for the calculation of levy base for the purpose of determining local effort assistance allocation under Chapter 28A.500 RCW.’ The House, which understood this particularly--especially--in our rural areas asked that this be included in an amendment that they had in a bill that was originally called 2044. This bill, in fact, is a response, by the striker, to not deal with levy equalization.”

Senator Spanel: “Thank you.”

The President declared the question before the Senate to be the adoption of the striking amendment by Senator Carlson to Senate Bill No. 6094.

The motion by Senator Carlson carried and the striking amendment was adopted.

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

On page 1, line 1 of the title, after "calculations;" strike the remainder of the title and insert "amending RCW 84.52.0531."

MOTION

On motion of Senator Carlson, the rules were suspended, Engrossed Senate Bill No. 6094, 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 Senate Bill No. 6094, under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Senate Bill No. 6094, under suspension of the rules, and the bill passed the Senate by the following vote: Yeas, 33; Nays, 9; Absent, 0; Excused, 7.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Haugen, Hewitt, Horn, Jacobsen, Johnson, Kline, Kohl-Welles, Mulliken, Oke, Parlette, Poulsen, Prentice, Reardon, Roach, Rossi, Schmidt, Sheahan, Stevens, Swecker, Thibaudeau, Winsley and Zarelli - 33.

Voting nay: Senators Hargrove, Kastama, McAuliffe, Morton, Rasmussen, Regala, Sheldon, B., Sheldon, T. and Spanel - 9.

Excused: Senators Brown, Deccio, Honeyford, Keiser, McCaslin, Shin and West - 7.

ENGROSSED SENATE BILL NO. 6094, under suspension of the rules, 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 Sheahan, Engrossed Senate Bill No. 6094 was ordered to be immediately transmitted to the House of Representatives.

SECOND READING

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1989, by House Committee on Education (originally sponsored by Representatives McDermott, Talcott, Quall, Hunter, Kenney and Rockefeller) ( by request of Governor Locke)

Learning Assistance Program

The bill was read the second time.

MOTION

On motion of Senator Johnson, the following amendment was adopted:

On page 2, line 7, after "grade", strike "twelve" and insert "eleven".

Renumber the sections consecutively and correct any internal references accordingly.

MOTION

Senator Johnson moved that the following amendment be adopted:

On page 4, line 23, after "only." strike all material down and through "factor."

Renumber the sections consecutively and correct any internal references accordingly.

Debate ensued.

The President declared the question before the Senate to be the adoption of the amendment by Senator Johnson on page 4, line 23, to Engrossed Substitute House Bill No. 1989.

MOTION

On motion of Senator Johnson, the rules were suspended, Engrossed Substitute House Bill No. 1989, 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 Substitute House Bill No. 1989, as amended by the Senate under suspension of the rules.

ROLL CALL

The Secretary called the roll on the final passage of Engrossed Substitute House Bill No. 1989, as amended by the Senate under suspension of the rules, and the bill passed the Senate by the following vote :Yeas, 40; Nays, 2; Absent, 0; Excused, 7.

Voting yea: Senators Benton, Brandland, Carlson, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Horn, Jacobsen, Johnson, Kastama, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Parlette, Poulsen, Prentice, Rasmussen, Reardon, Regala, Roach, Rossi, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Spanel, Stevens, Swecker, Winsley and Zarelli - 40.

Voting nay: Senators Kline and Thibaudeau - 2.

Excused: Senators Brown, Deccio, Honeyford, Keiser, McCaslin, Shin and West - 7.

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1989, as amended by the Senate under suspension of the rules, 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 Sheahan, Engrossed Substitute House Bill No. 1989 was ordered to be immediately transmitted to the House of Representatives.

MOTION

On motion of Senator Sheahan, the Senate returned to the fourth order of business.

MESSAGE FROM THE HOUSE

June 10, 2003

MR. PRESIDENT:

The House has passed SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5659 with the following amendment(s)

On page 2, after line 12, strike all of subsection (3) and insert the following:

"(3) The retail sale or use of motor vehicles, and the lease of motor vehicles for up to the first thirty-six months of the lease, are exempt from tax imposed under this section.", and the same are herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

MOTION

Senator Sheahan moved that the Senate concur in the House amendment to Second Engrossed Substitute Senate Bill No. 5659.

Debate ensued.

POINT OF INQUIRY

Senator Benton: “Senator Winsley, the version that we are voting to concur on, is that exactly the same as the bill that we sent over with the exception of the new car–or used car–amendment?”

Senator Winsley: “Yes.”

Senator Benton: “Or are there other provisions that were changed, as well?”

Senator Winsley: “This is the only one–the used cars.”

Senator Benton: “So, the only change to the bill is the used card amendment?”

Senator Winsley: “Yes, just the amendment on page 2, line 12 by Representatives Ericksen and others. That’s it.”

Senator Benton: “His amendment removed the used cars?”

Senator Winsley: “Exempted the used cars--removed the word ‘may’ that was in Senator Mulliken’s amendment.”

Senator Benton: “Okay.”

Senator Winsley: “So they have equal status with new cars.”

Senator Benton: “Oh, Okay. Thank you.”

The President declared the question before the Senate to be the adoption of the House amendment on page 2, after line 12, to Second Engrossed Substitute Senate Bill No. 5659.

The motion by Senator Sheahan carried and the Senate concurred in the House amendment to Second Engrossed Substitute Senate Bill No. 5659.

The President declared the question before the Senate to be the roll call on the final passage of Second Engrossed Substitute Senate Bill No. 5659, as amended by the House.

ROLL CALL

The Secretary called the roll on the final passage of Second Engrossed Substitute Senate Bill No. 5659, as amended by the House, and the bill passed the Senate by the following vote: Yeas, 32; Nays, 10; Absent, 0; Excused, 7.

Voting yea: Senators Brandland, Carlson, Doumit, Eide, Fairley, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Horn, Jacobsen, Kastama, Kline, Kohl-Welles, McAuliffe, Morton, Mulliken, Oke, Poulsen, Prentice, Rasmussen, Reardon, Regala, Schmidt, Sheahan, Sheldon, B., Spanel, Swecker, Thibaudeau and Winsley - 32.

Voting nay: Senators Benton, Esser, Finkbeiner, Johnson, Parlette, Roach, Rossi, Sheldon, T., Stevens and Zarelli - 10.

Excused: Senators Brown, Deccio, Honeyford, Keiser, McCaslin, Shin and West - 7.

SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5659, as amended by the House, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

On motion of Senator Sheahan, Second Engrossed Substitute Senate Bill No. 5659 was ordered to be immediately transmitted to the House of Representatives.

MESSAGES FROM THE HOUSE

June 10, 2003

MR. PRESIDENT:

The House has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 5028, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003

MR. PRESIDENT:

The House has passed ENGROSSED SUBSTITUTE SENATE BILL NO. 5071, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003

MR. PRESIDENT:

The House has passed SENATE BILL NO. 6093, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003

MR. PRESIDENT:

The Speaker has signed:

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1336,

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1338,

HOUSE BILL NO. 2252,

HOUSE BILL NO. 2266, and the same are herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

SIGNED BY THE PRESIDENT

The President signed:

SENATE BILL NO. SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5659.

SIGNED BY THE PRESIDENT

The President signed:

ENGROSSED SUBSTITUTE SENATE BILL NO. 5028,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5071,

ENGROSSED SENATE BILL NO. 6093.

SIGNED BY THE PRESIDENT

The President signed:

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1336,

SECOND ENGROSSED SECOND SUBSTITUTE HOUSE BILL NO. 1338,

HOUSE BILL NO. 2252,

HOUSE BILL NO. 2266.

At 11:46 p.m., the President declared the Senate to be at ease.

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

PARLIAMENTARY INQUIRY

Senator Jacobsen: “A point of parliamentary inquiry, Mr. President. Now, that we have gone after midnight, is the Call of the Senate still on?”

REPLY BY THE PRESIDENT

President Owen: “No.”

Senator Jacobsen: “Thank you, Mr. President.”

At 12:08 a.m., the President declared the Senate to be at ease.

The Senate was called to order at 12:51 a.m. by President Owen.

MOTION

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

MOTIONS

On motion of Senator Sheahan, the following bills, which were held on the Introduction and First Reading Calendar were referred to the following committees: Senate Bill No. 6095, Referred to Committee on Education; Senate Bill No. 6085, Referred to Committee on Technology and Communications; Senate Concurrent Resolution 8412, Referred to Committee on Government Operations and Elections; Senate Concurrent Resolution 8413, Referred to Committee on Ways and Means.

MOTION

On motion of Senator Sheahan, the Senate returned to the fourth order of business.

MESSAGE FROM THE HOUSE

June 10, 2003

MR. PRESIDENT:

The House has adopted HOUSE CONCURRENT RESOLUTION NO. 4410, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

INTRODUCTION AND FIRST READING OF HOUSE BILL

HCR 4410 By Representatives Kessler and DeBolt

Adjourning SINE DIE.

MOTION

On motion of Senator Sheahan, the rules were suspended House Concurrent Resolution No. 4410 was advanced to second reading and placed on the second reading calendar.

MOTION

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

SECOND READING

HOUSE CONCURRENT RESOLUTION NO. 4410, by Representatives Kessler and DeBolt

Adjourning SINE DIE

The concurrent resolution was read the second time.

MOTION

On motion of Senator Sheahan, the rules were suspended House Concurrent Resolution No. 4410 was advanced to third reading, the second reading considered the third and the concurrent resolution was placed on final passage and adopted.

HOUSE CONCURRENT RESOLUTION NO. 4410 was adopted by voice vote.

MESSAGES FROM THE HOUSE

June 10, 2003

MR. PRESIDENT:

The Speaker has signed:

ENGROSSED SUBSTITUTE SENATE BILL NO. 5028,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5071,

ENGROSSED SENATE BILL NO. 6093, and the same are herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003

MR. PRESIDENT:

The Speaker has signed:

ENGROSSED SUBSTITUTE SENATE BILL NO. 5908,

SENATE BILL NO. 6059,

SENATE BILL NO. 6087,

SENATE BILL NO. 6092, and the same are herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003,

MR. PRESIDENT:The Speaker has signed SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5659, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003

MR. PRESIDENT:

The Speaker has signed HOUSE CONCURRENT RESOLUTION NO. 4410, and the same is herewith transmitted.

CYNTHIA ZEHNDER, Chief Clerk

June 10, 2003

MR. PRESIDENT:

On motion, the House herewith returns the following Senate Bills to the Senate:

SECOND ENGROSSED SUBSTITUTE SENATE BILL NO. 5012,

SENATE BILL NO. 5271,

ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5364,

ENGROSSED SUBSTITUTE SENATE BILL NO. 5982,

ENGROSSED SENATE BILL NO. 6084.

ENGROSSED SENATE BILL NO. 6097. CYNTHIA ZEHNDER, Chief Clerk

SIGNED BY THE PRESIDENT

The President signed HOUSE CONCURRENT RESOLUTION NO. 4410.

MOTION

On motion of Senator Sheahan, the following House Bills were returned to the House of Representatives.

SUBSTITUTE HOUSE BILL NO. 1013,

SECOND ENGROSSED SUBSTITUTE HOUSE BILL NO. 1053.

SECOND ENGROSSED SUBSTITUTE HOUSE BILL NO. 2195,

HOUSE BILL NO 2294.

MOTION

On motion of Senator Sheahan, the Senate Journal for the thirtieth day of the First Special Session of the Fifty-eighth Legislature was approved.

MOTION

At 12:56 a.m., on motion of Senator Sheahan, the 2003 First Special Session of the Fifty-eighth Legislature adjourned SINE DIE.

BRAD OWEN, President of the Senate

MILTON H. DOUMIT, Jr., Secretary of the Senate