S-3361

AN ACT Relating to government; adding a new chapter to Title 43 RCW; and adding a new section to chapter 43.09.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the role of government is to provide public service to the people of the state by providing an organizational framework for the orderly conduct of society, services to promote the well-being of society as a whole, and opportunity for all citizens to participate in directing the development of their surroundings. The legislature further finds that it is not the role of government or within its statutory authority to enter the free market in competition with private enterprise for the purpose of raising funds for government services or enlarging services beyond the scope of the state legislative authority as expressed in its statutes and budget allocations. It is therefore, the intent of the legislature to prohibit, where appropriate and otherwise regulate the role of government in commercial activities. It is the further intent of the legislature that issues and complaints regarding the commercial activities of government and private enterprise be addressed.

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

(1) "Commercial activity" includes the manufacturing, processing, sale, offering for sale, rental, leasing, delivery, dispensing, distributing, or advertising of goods or services in commerce for a price, fee or charge.

(2) "Private enterprise" means an individual, firm, partnership, joint venture, corporation, association, or other legal entity properly registered with the state of Washington that engages in commercial activity for profit.

(3) "Government agency" includes all agencies, departments, and institutions of the state of Washington.

NEW SECTION. Sec. 3. It is the policy of the state of Washington that a government agency may not engage in commercial activities, except as provided by this chapter.

NEW SECTION. Sec. 4. (1) This chapter does not apply to:

(a) Transfers of goods or the providing of services by one state agency to another that is integral to the day-to-day and efficient operation of state government.

(b) The development, operation, and management of state parks, historical monuments, and recreational facilities.

(d) Activities of the department of transportation that are specifically authorized by state law.

(e) Printing and distributing information to the public as authorized by state law and printing or copying public records or other material relating to the public agency's public business and recovering where authorized fees and charges for that service.

(f) Providing health services to eligible persons.

(g) Providing health care coverage for persons.

(h) The harvesting and raising of fish.

(i) The promotion and marketing of agricultural commodities.

(j) The promotion of the arts.

(k) Performing audits.

(l) Providing services for the blind and deaf.

(m) Providing community assistance.

(n) Providing convention and trade center facilities.

(o) Operating gambling functions.

(p) Assisting with financing for residential housing.

(q) Providing for workers' compensation insurance coverage as provided for in Title 51 RCW.

(2) A government agency engaged in a commercial activity that is not specifically exempted by this section but believes that its activity is vital to the safety, health, and welfare of the citizens of Washington state, may continue the activity until July 1, 1994, if:

(a) The agency requests a waiver from the governor and submits copies of the request to the house of representatives government committee and senate government operations committee; and publishes a notice in the state register that advises how interested persons may submit comments to the governor; and

(b) Within thirty days after the request is published in the state register, the governor determines that there is compelling evidence that a waiver should be granted to protect the health, safety, and welfare of the state's citizens, and does grant the waiver.

NEW SECTION. Sec. 5. (1) If a government agency is providing goods or services for a price or fee on the effective date of this section to cities, counties, municipal corporations, and other units of government that are not government agencies, the agency:

(a) May continue those activities until July 1, 1994; and

(b) May not continue those activities after July 1, 1994, unless the agency prepares a competitive pricing impact statement meeting the requirements of section 6 of this act, and transmits the statement to the office of financial management by January 1, 1994.

(2) After July 1, 1994, a state agency may not provide goods and services for a fee or price to a city, county, municipal corporation, or other units of government that are not government agencies unless the agency has prepared a competitive pricing impact statement meeting the requirements of section 6 of this act, and transmitted the statement to the office of financial management thirty days prior to providing goods or services.

(3) A government agency may provide goods or services under subsection (2) of this section for a period of ninety days without preparing a competitive pricing impact statement if the office of financial management issues a written authorization that identifies compelling reasons to protect the safety, health, and welfare of the state's citizens.

NEW SECTION. Sec. 6. (1) A government agency with specific authority to engage in commercial activity shall impose a price, fee, or charge that is fair and reasonable, unless specifically restricted by law.

(2) For the purposes of this section, "fair and reasonable" means that the price, fee, or charge includes the true and total cost to the agency plus imputed costs for providing goods, services, or facilities, utilizing a recognized professional accounting standard that is commonly used in private enterprise. The price, fee, or charge must take into account:

(a) Labor expenses, including direct wage and salary costs, training, overtime, and supervisory overhead;

(b) The total value of employee benefits and other personnel expenses;

(c) Operating costs including vehicle maintenance and repair, marketing, advertising, and other sales expenses, office expenses, billing, and insurance expenses;

(d) All direct costs for goods, merchandise, and materials that are used in the course of the commercial activity;

(e) Real estate and equipment costs, debt service costs, and a proportionate amount of other agency overhead and capital expense which includes depreciation of vehicles and other fixed assets;

(f) Contract management costs;

(g) The imputed tax impact of the activity as if a private business were to conduct the activity, including employment taxes under federal, state, and local laws; and

(h) Other costs particular to the business or industry supplying the goods or services.

(3) Prior to July 1, 1993, a government agency engaged in a commercial activity shall file a competitive pricing impact statement with the office of financial management that demonstrates the basis for the agency's fair and reasonable price, fee, or charge. Thereafter, the agency shall update the statement at least every six months.

(4) The office of financial management shall maintain a record of competitive pricing impact statements and make those records available for public inspection during regular business hours. The office shall provide copies of the statements upon request and may charge a ten-dollar fee for copying and mailing the statements, and a one-dollar additional fee for each additional statement requested at the same time as the first statement is requested.

NEW SECTION. Sec. 7. State institutions of higher education, including the state's community and technical colleges, may not engage in a commercial activity except as authorized by sections 4 through 6 of this act. The institutions may not:

(1) Provide a course of study that is reasonably available from private enterprises and at a fee exceeding one hundred twenty percent of a fair and reasonable fee as determined under section 6 of this act. However, an institution may contract with a private enterprise to provide a course of study on the institution's behalf.

(2) Provide to persons other than registered students, faculty, staff, and invited guests goods, services, or facilities that are reasonably available from private enterprise unless the provision of goods, services, or facilities offers a valuable educational or research experience or fulfills the public service mission of the institution. This subsection does not apply to sponsoring or providing facilities for recreational, cultural, and athletic events, or to facilities providing food services and sales associated with those events.

(3) Participate in competitive bidding for a commercial activity unless a clear educational or research advantage would accrue to the state of Washington. If an institution submits a bid, the bid must be in an amount that represents a fair and reasonable price as determined under section 6 of this act.

(4) Provide goods, services, or facilities for a fee or charge for or through another government agency except as allowed by this section.

NEW SECTION. Sec. 8. (1) A person may bring an action in the superior court where they reside or of Thurston county alleging that a government agency is in violation of sections 2 through 7 of this act. The court shall prohibit the government agency from engaging in the activity if it determines that the activity is in violation and may award the plaintiff reasonable attorneys fees' and court costs.

(2) Prior to trial on the plaintiff's complaint, the court shall order the state auditor to conduct a competitive pricing impact statement under section 6 of this act for the violating activity. The auditor shall complete the statement within sixty days of receiving the court's order. The court may grant the auditor an extension on a written motion by the auditor.

(3) Upon receiving the competitive pricing impact statement from the state auditor, the court shall schedule a trial as soon as is reasonably possible.

NEW SECTION. Sec. 9. A new section is added to chapter 43.09 RCW to read as follows:

(1) Within sixty days of receiving an order from a superior court of Washington under section 8 of this act, the state auditor shall complete a competitive pricing impact statement under section 6 of this act concerning the government agency action that is at issue. The auditor may request an extension by written motion served on the court issuing the order that contains a date on which the statement will be completed.

(2) The auditor may use the investigatory powers of his or her office to the fullest extent allowed by law to complete the competitive pricing impact statement.

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. Sections 1 through 8 and 10 of this act shall constitute a new chapter in Title 43 RCW.