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AN ACT Relating to ethics in public service; amending RCW 42.18.270, 42.18.217, 42.18.230, and 42.18.260; adding a new section to chapter 42.23 RCW; adding a new chapter to Title 42 RCW; creating a new section; recodifying RCW 42.18.217, 42.18.230, 42.18.260, 42.18.270, 42.18.330, and 42.22.050; repealing RCW 42.18.010, 42.18.020, 42.18.030, 42.18.040, 42.18.050, 42.18.060, 42.18.070, 42.18.080, 42.18.090, 42.18.100, 42.18.110, 42.18.120, 42.18.130, 42.18.140, 42.18.150, 42.18.170, 42.18.180, 42.18.190, 42.18.200, 42.18.210, 42.18.213, 42.18.215, 42.18.221, 42.18.240, 42.18.250, 42.18.280, 42.18.290, 42.18.300, 42.18.310, 42.18.320, 42.18.900, 42.20.010, 42.21.010, 42.21.020, 42.21.030, 42.21.040, 42.21.050, 42.21.080, 42.21.090, 42.22.010, 42.22.020, 42.22.030, 42.22.040, 42.22.060, 42.22.070, 42.22.120, 44.60.010, 44.60.020, 44.60.030, 44.60.040, 44.60.050, 44.60.070, 44.60.080, 44.60.090, 44.60.100, 44.60.110, 44.60.120, and 44.60.130; and prescribing penalties.

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

NEW SECTION. Sec. 1. Government derives its powers from the people. Ethics in government are the foundation on which the structure of government rests. State officials and employees of government hold a public trust that obligates them, in a special way, to honesty and integrity in fulfilling the responsibilities to which they are elected and appointed. Paramount in that trust is the principle that public office, whether elected or appointed, may not be used for personal gain or private advantage.

The citizens of the state expect all state officials and employees to perform their public responsibilities in accordance with the highest ethical and moral standards and to conduct the business of the state only in a manner that advances the public's interest. State officials and employees are subject to the sanctions of law and scrutiny of the media; ultimately, however, they are accountable to the people and must consider this public accountability as a particular obligation of the public service. Only when affairs of government are conducted, at all levels, with openness as provided by law and an unswerving commitment to the public good does government work as it should.

The obligations of government rest equally on the state's citizenry. The effectiveness of government depends, fundamentally, on the confidence citizens can have in the judgments and decisions of their elected representatives. Citizens, therefore, should honor and respect the principles and the spirit of representative democracy, recognizing that both elected and appointed officials, together with state employees, seek to carry out their public duties with professional skill and dedication to the public interest. Such service merits public recognition and support.

All who have the privilege of working for the people of Washington state can have but one aim: To give the highest public service to its citizens.

PART I

GENERAL ETHICS PROVISIONS

NEW SECTION. Sec. 101. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Agency" means any state board, commission, bureau, committee, department, institution, division, or tribunal in the legislative, executive, or judicial branch of state government. "Agency" includes all elective offices, the state legislature, those institutions of higher education created and supported by the state government, and those courts that are parts of state government.

(2) "Agency head" and "head of agency" mean the chief executive officer of an agency. In the case of an agency headed by a commission, board, committee, or other body consisting of more than one natural person, agency head means the person or board authorized to appoint agency employees and regulate their conduct. For the purposes of this chapter, the legislature is the agency head of all agencies in the legislative branch of state government, and the supreme court is the agency head of all agencies in the judicial branch of state government.

(3) "Assist" means to act, or offer or agree to act, in such a way as to help, aid, advise, furnish information to, or otherwise provide assistance to another person, believing that the action is of help, aid, advice, or assistance to the person and with intent so to assist such person.

(4) "Compensation" means anything of economic value, however designated, that is paid, loaned, granted, or transferred, or to be paid, loaned, granted, or transferred for, or in consideration of, personal services to any person.

(5) "Confidential information" means (a) specific information, rather than generalized knowledge, that is not available to the general public on request and (b) information made confidential by law.

(6) "Ethics boards" means the commission on judicial conduct, the legislative ethics board, and the executive ethics board.

(7) "Family" has the same meaning as "immediate family" in RCW 42.17.020.

(8) "Gift" means anything of economic value for which no consideration is given. "Gift" does not include:

(a) Items from family members or friends where it is clear beyond a reasonable doubt that the gift was not made as part of any design to gain or maintain influence in the agency of which the recipient is an officer or employee;

(b) Items related to the outside business of the recipient that are customary and not related to the recipient's performance of duties;

(c) Items exchanged among officials and employees or a social event hosted or sponsored by a state officer or state employee for coworkers;

(d) Payments by a governmental or nongovernmental entity of reasonable expenses incurred in connection with a speech, presentation, appearance, or trade mission made in an official capacity. As used in this subsection, "reasonable expenses" are limited to travel, lodging, and subsistence expenses incurred the day before through the day after the event;

(e) Items a state officer or state employee is authorized by law to accept;

(f) Payments for seminars and educational programs sponsored by a bona fide nonprofit professional, educational, or trade association, or charitable institution;

(g) Items returned by the recipient to the donor within thirty days of receipt or donated to a charitable organization within thirty days of receipt;

(h) Campaign contributions reported under chapter 42.17 RCW; and

(i) Discounts available to an individual as a member of an employee group, occupation, or similar broad-based group.

(9) "Honorarium" means money or thing of value offered to a state officer or state employee for a speech, appearance, article, or similar item or activity in connection with the state officer's or state employee's official role.

(10) "Participate," in connection with a transaction involving the state, means to participate in state action or a proceeding personally and substantially as a state officer or state employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation, or otherwise.

(11) "Person" means any individual, partnership, association, corporation, firm, institution, or other entity, whether or not operated for profit.

(12) "Regulatory agency" means any state board, commission, department, or officer, except those in the legislative or judicial branches, authorized by law to conduct adjudicative proceedings, issue permits or licenses, or to control or affect interests of identified persons.

(13) "Responsibility" in connection with a transaction involving the state, means the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or through subordinates, effectively to approve, disapprove, or otherwise direct state action in respect of such transaction.

(14) "State action" means any action on the part of an agency, including, but not limited to:

(a) A decision, determination, finding, ruling, or order; and

(b) A grant, payment, award, license, contract, transaction, sanction, or approval, or the denial thereof, or failure to act with respect to a decision, determination, finding, ruling, or order.

(15) "State officer" means every person holding a position of public trust in or under an executive, legislative, or judicial office of the state. "State officer" includes judges of the superior court, judges of the court of appeals, justices of the supreme court, members of the legislature together with the secretary of the senate and the chief clerk of the house of representatives, holders of elective offices in the executive branch of state government, chief executive officers of state agencies, members of boards, commissions, or committees with authority over one or more state agencies or institutions, and employees of the state who are engaged in supervisory, policy-making, or policy-enforcing work. For the purposes of this chapter, "state officer" also includes any person exercising or undertaking to exercise the powers or functions of a state officer.

(16) "State employee" means an individual who is employed by an agency in any branch of state government. For purposes of this chapter, employees of the superior courts are not state officers or state employees.

(17) "Thing of economic value", in addition to its ordinary meaning, includes:

(a) A loan, property interest, interest in a contract or other chose in action, and employment or another arrangement involving a right to compensation;

(b) An option, irrespective of the conditions to the exercise of the option; and

(18) "Transaction involving the state" means a proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other similar matter that the state officer, state employee, or former state officer or state employee in question believes, or has reason to believe:

(a) Is, or will be, the subject of state action; or

(b) Is one to which the state is or will be a party; or

"Transaction involving the state" does not include legislation or proposed legislation.

NEW SECTION. Sec. 102. ACTIVITIES INCOMPATIBLE WITH PUBLIC DUTIES. No state officer or state employee may have an interest, financial or otherwise, direct or indirect, or engage in a business or transaction or professional activity, or incur an obligation of any nature, that is in conflict with the proper discharge of the state officer's or state employee's duties.

NEW SECTION. Sec. 103. FINANCIAL INTERESTS IN TRANSACTIONS. No state officer or state employee may be beneficially interested, directly or indirectly, in a contract, sale, lease, or purchase that may be made by, through, or under the supervision of the officer or employee, in whole or in part, or accept, directly or indirectly, any compensation, gratuity, or reward from any other person beneficially interested in the contract, sale, lease, or purchase.

(2) No state officer or state employee may transact business in his or her official capacity with a business entity of which the officer or employee is an officer, agent, employee, or member, or in which the officer or employee owns an interest.

NEW SECTION. Sec. 104. ASSISTING IN TRANSACTIONS. (1) Except in the course of official duties or incident to official duties, no state officer or state employee may assist another person, directly or indirectly, whether or not for compensation, in a transaction involving the state:

(a) In which the state officer or state employee has at any time participated; or

(b) If the transaction involving the state is or has been under the official responsibility of the state officer or state employee within a period of two years preceding such assistance.

(2) No state officer or state employee may share in compensation received by another for assistance that the officer or employee is prohibited from providing under subsection (1) or (3) of this section.

(3) A business entity of which a state officer or state employee is a partner, managing officer, or employee shall not assist another person in a transaction involving the state if the state officer or state employee is prohibited from doing so by subsection (1) of this section.

(4) This chapter does not prevent a state officer or state employee from assisting, in a transaction involving the state:

(a) The state officer's or state employee's parent, spouse, or child, or a child thereof for whom the officer or employee is serving as guardian, executor, administrator, trustee, or other personal fiduciary, if the state officer or state employee did not participate in the transaction; or

(b) Another state employee involved in disciplinary or other personnel administration proceedings.

NEW SECTION. Sec. 105. CONFIDENTIAL INFORMATION. No state officer or state employee may accept employment or engage in any business or professional activity that the officer or employee might reasonably expect would require or induce him or her to disclose confidential information acquired by the official or employee by reason of the official's or employee's official position.

(2) No state officer or state employee may disclose confidential information gained by reason of the officer's or employee's official position or otherwise use the information for his or her personal gain or benefit or the gain or benefit of another.

(3) No state officer or state employee may disclose confidential information to any person not entitled to receive the information.

(4) No state officer or state employee may intentionally conceal a record if the officer or employee knew the record was required to be released under chapter 42.17 RCW, was under a personal obligation to release the record, and failed to do so. This subsection does not apply where the decision to withhold the record was made in good faith.

NEW SECTION. Sec. 106. TESTIMONY OF STATE OFFICERS AND STATE EMPLOYEES. This chapter does not prevent a state officer or state employee from giving testimony under oath or from making statements required to be made under penalty of perjury or contempt.

NEW SECTION. Sec. 107. SPECIAL PRIVILEGES. Except as required to perform duties within the scope of employment, no state officer or state employee may use his or her position to secure special privileges or exemptions for himself or herself, or his or her spouse, child, parents, or other persons.

NEW SECTION. Sec. 108. POSTPUBLIC SERVICE EMPLOYMENT. (1) No former state officer or state employee may, within a period of one year from the date of termination of state employment, accept employment or receive compensation from an employer if:

(a) The officer or employee, during the two years immediately preceding termination of state employment, was engaged in the negotiation or administration on behalf of the state or agency of one or more contracts with that employer and was in a position to make discretionary decisions affecting the outcome of such negotiation or the nature of such administration;

(b) Such a contract or contracts have a total value of more than ten thousand dollars; and

(c) The duties of the employment by the employer or the activities for which the compensation would be received from the private business include fulfilling or implementing, in whole or in part, the provisions of such a contract or contracts or include the supervision or control of actions taken to fulfill or implement, in whole or in part, the provisions of such a contract or contracts. This subsection shall not be construed to prohibit a state officer or state employee from accepting employment with a state employee organization.

(2) No person who has served as a state officer or state employee may, within a period of two years following the termination of state employment, have a direct or indirect beneficial interest in a contract or grant that was expressly authorized or funded by specific legislative or executive action of the former state officer or state employee or the former state officer's or state employee's agency.

(3) No former state officer or state employee may accept an offer of employment or receive compensation from an employer if the officer or employee knows or has reason to believe that the offer of employment or compensation was intended, in whole or in part, directly or indirectly, to influence the officer or employee or as compensation or reward for the performance or nonperformance of a duty by the officer or employee during the course of state employment.

(4) No former state officer or state employee may accept an offer of employment or receive compensation from an employer if the circumstances would lead a reasonable person to believe the offer has been made or would be made for the purpose of influencing the performance of duties.

(5) No former state officer or state employee may at any time subsequent to his or her state employment assist another person, whether or not for compensation, in any transaction involving the state in which the former state officer or state employee at any time participated during state employment. This subsection shall not be construed to prohibit any employee or officer of a state employee organization from rendering assistance to state officers or state employees in the course of employee organization business.

(6) As used in this section, "employer" includes a natural person, or public or private partnership, association, or corporation of any kind or description that is engaged in business activity in this state or elsewhere. If a natural person, closely associated or related group of natural persons, partnership, or corporation owns or controls two or more businesses, all of the businesses owned or controlled shall be defined as a single private business for the purposes of this section.

NEW SECTION. Sec. 109. FORMER STATE OFFICERS AND STATE EMPLOYEES. This chapter shall not be construed to prevent a former state officer or state employee from rendering assistance to others if the assistance is provided without compensation in any form and is limited to one or more of the following:

(1) Providing the names, addresses, and telephone numbers of state agencies or state employees;

(2) Providing free transportation to another for the purpose of conducting business with a state agency;

(3) Assisting a natural person or nonprofit corporation in obtaining or completing application forms or other forms required by a state agency for the conduct of a state business; or

(4) Providing assistance to the poor and infirm.

Sec. 110. RCW 42.18.270 and 1969 ex.s. c 234 s 27 are each amended to read as follows:

(1) The head of an agency, upon finding that any former state officer or state employee of such agency or any other person has violated any provision of this chapter or rules or policies adopted under it, may, in addition to any other powers the head of such agency may have, bar or impose reasonable conditions upon:

(a) The appearance before such agency of such former state officer or state employee or other person; and

(b) The conduct of, or negotiation or competition for, business with such agency by such former state officer or state employee or other person, such period of time as may reasonably be necessary or appropriate to effectuate the purposes of this chapter.

(2) Findings of violations referred to in subsection (1)(b) of this section shall be made on record after notice and hearing, conducted in accordance with the Washington Administrative Procedure Act, chapter 34.05 RCW. Such findings and orders are subject to judicial review.

(3) This section does not apply to the legislative or judicial branches of government.

NEW SECTION. Sec. 111. COMPENSATION FOR OFFICIAL DUTIES. No state officer or state employee may, directly or indirectly, ask for or give or receive or agree to receive any compensation, gift, reward, or gratuity from a source except the state of Washington or its political subdivisions for any matter connected with or related to performing or to omitting or deferring the performance of any official duty, unless otherwise provided for by law.

NEW SECTION. Sec. 112. COMPENSATION FOR PERSONAL SERVICES. (1) No state officer or state employee may receive any thing of economic value either from a contract or grant from agencies of state government or from local governments in connection with a program that receives a substantial portion of its funding from the state; or for or in consideration of the officer's or employee's personal services rendered, or to be rendered, to or for any person during the term of the officer's or employee's state service other than compensation from the state of Washington, unless the services meet each of the following qualifications:

(a) The services are bona fide and actually performed;

(b) The services are not within the course of the officer's or employee's official duties, or under the officer's or employee's supervision;

(c) The services are not prohibited by section 104 of this act or by applicable laws or rules governing outside employment for the officer or employee;

(d) The services are neither performed for nor compensated by any person from whom such officer or employee would be prohibited by section 115(4) of this act from receiving a gift;

(e) The contract or grant is not one expressly created or authorized by the officer or employee or his or her agency;

(f) The contract, grant, or other personal service would not require unauthorized disclosure of confidential information.

(2) In addition to satisfying the requirements of subsection (1) of this section, a state officer or state employee may have a beneficial interest in a grant or personal services contract with the state, a state agency, or a local government in connection with a program receiving substantial funding from the state only if:

(a) The contract or grant is issued as a result of an open and competitive bidding process; or

(b) The process for awarding the contract or grant is not open and competitive, the officer or employee has been advised by the appropriate ethics board that the contract, if awarded to the individual, will not present an unacceptable conflict with official duties; and

(c) The state officer or state employee is awarded a contract or grant after an open and competitive bidding process in which the officer's or employee's was the only bid received, the contract or grant may not be executed until the officer or employee has been advised by the appropriate ethics board that the contract will not present an unacceptable conflict with official duties.

(3) Personal services contracts awarded in compliance with subsection (2) of this section shall be filed with the appropriate ethics board.

(4) This section does not prevent a state officer or state employee from receiving compensation contributed from the treasury of the United States, another state, county, or municipality if the compensation is received pursuant to arrangements entered into between such state, county, municipality, or the United States and the officer's or employee's agency. This section does not prohibit a state officer or state employee from serving under an employment contract with a governmental entity.

(5) As used in this section, "officer" and "employee" do not include officers and employees who, in accordance with the terms of their employment or appointment, are serving without compensation from the state of Washington or are receiving from the state only reimbursement of expenses incurred or a predetermined allowance for such expenses.

NEW SECTION. Sec. 113. HONORARIA. (1) No state officer or state employee may receive honoraria unless specifically authorized by policies of their employing agency, subject to approval by the appropriate ethics board.

(2) An ethics board may disapprove a policy that permits honoraria under the following circumstances:

(a) The person offering the honoraria is seeking or is reasonably expected to seek contractual relations with or a grant from the employer of the state officer or state employee, and the officer or employee is in a position to participate in the terms or the award of the contract or grant;

(b) The person offering the honoraria is regulated by the employer of the state officer or state employee and the officer or employee is in a position to participate in the regulation; or

(c) The person offering the honoraria is seeking or opposing or is reasonably likely to seek or oppose legislation before a legislative authority of which the state officer or state employee is a member or employee.

NEW SECTION. Sec. 114. GIFTS. No state officer or state employee may receive, accept, take, seek, or solicit, directly or indirectly, any thing of economic value as a gift, gratuity, or favor from a person if it could be reasonably expected that the gift, gratuity, or favor would influence the vote, action, or judgment of the officer or employee, or be considered as part of a reward for action or inaction.

NEW SECTION. Sec. 115. LIMITATIONS ON GIFTS. (1) No state officer or state employee may accept gifts, other than those specified in subsections (2) and (5) of this section, with an aggregate value in excess of fifty dollars from a single source in a calendar year. The value of gifts given to an officer's or employee's family member shall be attributed to the official or employee for the purpose of determining whether the limit has been exceeded, unless an independent business, family, or social relationship exists between the donor and the family member.

(2) Except as provided in subsection (4) of this section, the following items are presumed not to influence under section 114 of this act, without regard to the limit established by subsection (1) of this section:

(a) Flowers, plants, floral arrangements, and similar items of nominal value;

(b) Unsolicited advertising or promotional items of nominal value, such as pens and note pads;

(c) Unsolicited tokens or awards of appreciation in the form of a plaque, trophy, desk item, wall memento, or similar item;

(d) Unsolicited items received by a state officer or state employee for the purpose of evaluation or review, if the officer or employee has no personal beneficial interest in the eventual use or acquisition of the item by the officer's or employee's agency;

(e) Informational material, publications, or subscriptions related to the recipient's performance of official duties;

(f) Food and beverages consumed at hosted receptions where attendance is related to the state officer's or state employee's official duties;

(g) Admission to, and the cost of food and beverages consumed at, events sponsored by or in conjunction with a civic, charitable, governmental, or community organization; and

(h) Gifts from dignitaries from another state or a foreign country that are intended to be personal in nature.

(3) The presumption in subsection (2) of this section may be overcome based on all of the circumstances surrounding the gifts.

(4) Notwithstanding subsections (2) and (5) of this section, a state officer or state employee of a regulatory agency or of an agency that seeks to acquire goods or services who participates in those regulatory or contractual matters may receive, accept, take, or seek, directly or indirectly, only the following items from a person regulated by the agency or from a person who seeks to provide goods or services to the agency:

(a) Unsolicited advertising or promotional items of nominal value, such as pens and note pads;

(b) Unsolicited tokens or awards of appreciation in the form of a plaque, trophy, desk item, wall memento, or similar item;

(c) Unsolicited items received by a state officer or state employee for the purpose of evaluation or review, if the officer or employee has no personal beneficial interest in the eventual use or acquisition of the item by the officer's or employee's agency;

(d) Informational material, publications, or subscriptions related to the recipient's performance of official duties;

(e) Food and beverages consumed at hosted receptions where attendance is related to the state officer's or state employee's official duties;

(f) Admission to, and the cost of food and beverages consumed at, events sponsored by or in conjunction with a civic, charitable, governmental, or community organization; and

(g) Those items excluded from the definition of gift in section 101 of this act except:

(i) Payments by a governmental or nongovernmental entity of reasonable expenses incurred in connection with a speech, presentation, appearance, or trade mission made in an official capacity;

(ii) Payments for seminars and educational programs sponsored by a bona fide nonprofit professional, educational, or trade association, or charitable institution; and

(iii) Flowers, plants, floral arrangements, and other similar items of nominal value.

(5) A state officer or state employee may accept gifts in the form of food and beverage on infrequent occasions in the ordinary course of meals where attendance by the officer or employee is related to the performance of official duties. Gifts in the form of food and beverage that exceed fifty dollars on a single occasion shall be reported as provided in chapter 42.17 RCW.

Sec. 116. RCW 42.18.217 and 1987 c 426 s 3 are each amended to read as follows:

(1) No state officer or state employee may employ or use any person, money, or property under the officer's or employee's official control or direction, or in his or her official custody, for the private benefit or gain of the officer, employee, or another.

(2) This section does not prohibit the use of public resources to benefit others as part of a state officer's or state employee's public duties.

(3) The appropriate ethics boards may adopt rules providing exceptions to this section for occasional use of the state officer or state employee, of de minimis cost and value, if the activity does not result in interference with the proper performance of public duties.

Sec. 117. RCW 42.18.230 and 1987 c 426 s 5 are each amended to read as follows:

((~~(1)~~)) No person shall give, pay, loan, transfer, or deliver, directly or indirectly, to any other person any thing of economic value believing or having reason to believe that there exist circumstances making the receipt thereof a violation of ((~~RCW 42.18.170, 42.18.190, and 42.18.213~~)) section 104, 111, 112, or 114 of this act.

((~~(2) No person shall give, transfer, or deliver, directly or indirectly, to a state employee, any thing of economic value as a gift, gratuity, or favor if either:~~

~~(a) Such person would not give the gift, gratuity, or favor but for such employee's office or position with the state; or~~

~~(b) Such person is in a status specified in clause (a), (b), or (c) of RCW 42.18.200(2).~~

~~Exceptions to this subsection (2) may be made by regulations issued pursuant to RCW 42.18.240 in situations referred to in RCW 42.18.200(3).~~))

NEW SECTION. Sec. 118. USE OF PUBLIC RESOURCES FOR POLITICAL CAMPAIGNS. No state officer or state employee may use or authorize the use of facilities of an agency, directly or indirectly, for the purpose of assisting a campaign for election of a person to an office or for the promotion of or opposition to a ballot proposition. Knowing acquiescence by a person with authority to direct, control, or influence the actions of the state officer or state employee using public resources in violation of this section constitutes a violation of this section. Facilities of an agency include, but are not limited to, use of stationery, postage, machines, and equipment, use of state employees of the agency during working hours, vehicles, office space, publications of the agency, and clientele lists of persons served by the agency. This section shall not apply to the following activities:

(1) Action taken at an open public meeting by members of an elected legislative body to express a collective decision, or to actually vote upon a motion, proposal, resolution, order, or ordinance, or to support or oppose a ballot proposition as long as (a) required notice of the meeting includes the title and number of the ballot proposition, and (b) members of the legislative body or members of the public are afforded an approximately equal opportunity for the expression of an opposing view;

(2) A statement by an elected official in support of or in opposition to any ballot proposition at an open press conference or in response to a specific inquiry. For the purposes of this subsection, it is not a violation of this section for an elected official to respond to an inquiry regarding a ballot proposition, to make incidental remarks concerning a ballot proposition in an official communication, or otherwise comment on a ballot proposition without an actual, measurable expenditure of public funds. The public disclosure commission shall, after consultation with the ethics boards, adopt by rule a definition of measurable expenditure;

(3) Activities that are part of the normal and regular conduct of the office or agency;

(4) Initiation of written and verbal communications by state-wide elected officials and legislators of their views on ballot propositions that foreseeably may affect a matter that falls within their constitutional or statutory responsibilities; and

(5) De minimis use of public facilities by state-wide elected officials and legislators incidental to the preparation or delivery of permissible communications.

NEW SECTION. Sec. 119. INVESTMENTS. (1) Except for permissible investments as defined in this section, no state officer or state employee of any agency responsible for the investment of funds, who acts in a decision-making, advisory, or policy-influencing capacity with respect to investments, may have a direct or indirect interest in any property, security, equity, or debt instrument of a person, without prior written approval of the agency.

(2) Agencies responsible for the investment of funds shall adopt policies governing approval of investments and establishing criteria to be considered in the approval process. Criteria shall include the relationship between the proposed investment and investments held or under consideration by the state, the size and timing of the proposed investment, access by the state officer or state employee to nonpublic information relative to the proposed investment, and the availability of the investment in the public market. Agencies responsible for the investment of funds also shall adopt policies consistent with this chapter governing use by their officers and employees of financial information acquired by virtue of their state positions. A violation of such policies adopted to implement this subsection shall constitute a violation of this chapter.

(3) As used in this section, "permissible investments" means any mutual fund, deposit account, certificate of deposit, or money market fund maintained with a bank, broker, or other financial institution, a security publicly traded in an organized market if the interest in the security at acquisition is ten thousand dollars or less, or an interest in real estate, except if the real estate interest is in or with a party in whom the agency holds an investment.

NEW SECTION. Sec. 120. AGENCY POLICIES. (1) Each agency may establish policies consistent with law, for use within the agency to protect against violations of this chapter.

(2) Policies adopted under this section are subject to approval by the appropriate ethics board.

NEW SECTION. Sec. 121. A new section is added to chapter 42.23 RCW to read as follows:

(1) No municipal officer may use his or her position to secure special privileges or exemptions for himself, herself, or others.

(2) No municipal officer may, directly or indirectly, give or receive or agree to receive any compensation, gift, reward, or gratuity from a source except the employing municipality, for a matter connected with or related to the officer's services as such an officer unless otherwise provided for by law.

(3) No municipal officer may accept employment or engage in business or professional activity that the officer might reasonably expect would require or induce him or her by reason of his or her official position.

(4) No municipal officer may disclose confidential information gained by reason of the officer's position, nor may the officer otherwise use such information for his or her personal gain or benefit.

PART II

ETHICS ENFORCEMENT BOARDS

NEW SECTION. Sec. 201. LEGISLATIVE ETHICS BOARD. (1) The legislative ethics board is created, composed of nine members, selected as follows:

(a) Two senators, one from each of the two largest caucuses, appointed by the president of the senate;

(b) Two members of the house of representatives, one from each of the two largest caucuses, appointed by the speaker of the house of representatives;

(i) One citizen member chosen by the governor from a list of three individuals submitted by each of the four legislative caucuses; and

(ii) One citizen member selected by three of the four other citizen members of the legislative ethics board.

(2) Except for initial members and members completing partial terms, nonlegislative members shall serve a single five-year term.

(3) No more than three of the public members may be identified with the same political party.

(4) Terms of initial nonlegislative board members shall be staggered as follows: One member shall be appointed to a one-year term; one member shall be appointed to a two-year term; one member shall be appointed to a three-year term; one member shall be appointed to a four-year term; and one member shall be appointed for a five-year term.

(5) A vacancy on the board shall be filled in the same manner as the original appointment.

(6) Legislative members shall serve two-year terms, from January 31st of an odd‑numbered year until January 31st of the next odd‑numbered year.

(7) Each member shall serve for the term of his or her appointment and until his or her successor is appointed.

(8) The citizen members shall annually select a chair from among themselves.

NEW SECTION. Sec. 202. AUTHORITY OF LEGISLATIVE ETHICS BOARD. (1) The legislative ethics board shall hear all matters related to the statutes, rules, and policies that establish standards of ethical conduct by members and employees of the legislature.

(2) The legislative ethics board shall:

(a) Develop educational materials and training with regard to legislative ethics for legislators and legislative employees;

(b) Issue advisory opinions;

(d) Investigate, hear, and determine complaints by any person or on its own motion;

(e) Impose sanctions including reprimands and monetary penalties;

(f) Recommend suspension or removal to the appropriate legislative entity, or recommend prosecution to the appropriate authority; and

(g) Establish criteria regarding the levels of civil penalties appropriate for different types of violations of this chapter and rules and policies adopted under it.

(3) The board may:

(a) Issue subpoenas for the attendance and testimony of witnesses and the production of documentary evidence relating to any matter under examination by the board or involved in any hearing;

(b) Administer oaths and affirmations;

(d) Receive evidence.

NEW SECTION. Sec. 203. EXECUTIVE ETHICS BOARD. (1) The executive ethics board is created, composed of five members, appointed by the governor as follows:

(a) One member shall be a classified service employee as defined in chapter 41.06 RCW;

(b) One member shall be a state officer or state employee in an exempt position;

(d) One member shall be a citizen selected from a list of three names submitted by the state auditor; and

(e) One member shall be a citizen selected at large by the governor.

(2) Except for initial members and members completing partial terms, members shall serve a single five-year term.

(3) No more than three members may be identified with the same political party.

(4) Terms of initial board members shall be staggered as follows: One member shall be appointed to a one-year term; one member shall be appointed to a two-year term; one member shall be appointed to a three-year term; one member shall be appointed to a four-year term; and one member shall be appointed to a five-year term.

(5) A vacancy on the board shall be filled in the same manner as the original appointment.

(6) Each member shall serve for the term of his or her appointment and until his or her successor is appointed.

(7) The members shall annually select a chair from among themselves.

(8) Staff shall be provided by the state auditor's office.

NEW SECTION. Sec. 204. AUTHORITY OF EXECUTIVE ETHICS BOARD. (1) The executive ethics board shall hear all matters related to the statutes, rules, and policies that establish standards of ethical conduct for state-wide elected officers and all other officers and employees in the executive branch, boards and commissions, and institutions of higher education.

(2) The executive ethics board shall:

(a) Develop educational materials and training;

(b) Adopt rules or policies, including but not limited to defining working hours;

(d) Investigate, hear, and determine complaints by any person or on its own motion;

(e) Impose sanctions including reprimands and monetary penalties;

(f) Recommend to the appropriate authorities suspension, removal from position, prosecution, or other appropriate remedy; and

(g) Establish criteria regarding the levels of civil penalties appropriate for violations of this chapter and rules and policies adopted under it.

(3) The board may:

(a) Issue subpoenas for the attendance and testimony of witnesses and the production of documentary evidence relating to any matter under examination by the board or involved in any hearing;

(b) Administer oaths and affirmations;

(d) Receive evidence.

(4) The executive ethics board may review and approve agency policies as provided for in this chapter.

(5) This section does not apply to state officers and state employees of the judicial branch.

NEW SECTION. Sec. 205. AUTHORITY OF COMMISSION ON JUDICIAL CONDUCT. The commission on judicial conduct shall enforce this chapter and rules and policies adopted under it with respect to state officers and employees of the judicial branch.

NEW SECTION. Sec. 206. HEARING AND SUBPOENA AUTHORITY. Except as otherwise provided by law, the ethics boards may hold hearings, subpoena witnesses, compel their attendance, administer oaths, take the testimony of a person under oath, and in connection therewith, to require the production for examination of any books or papers relating to any matter under investigation or in question before the ethics board. The ethics board may make rules as to the issuance of subpoenas by individual members, as to service of complaints, decisions, orders, recommendations, and other process or papers of the ethics board.

NEW SECTION. Sec. 207. ENFORCEMENT OF SUBPOENA AUTHORITY. In case of refusal to obey a subpoena issued to a person, the superior court of a county within the jurisdiction of which the investigation, proceeding, or hearing under this chapter is carried on or within the jurisdiction of which the person refusing to obey is found or resides or transacts business, upon application by the appropriate ethics board shall have jurisdiction to issue to the person an order requiring the person to appear before the ethics board or its member to produce evidence if so ordered, or to give testimony touching the matter under investigation or in question. Failure to obey such order of the court may be punished by the court as contempt.

NEW SECTION. Sec. 208. FILING COMPLAINT. (1) A person may, personally or by his or her attorney, make, sign, and file with the appropriate ethics board a complaint on a form provided by the appropriate ethics board. The complaint shall state the name of the person alleged to have violated this chapter or rules or policies adopted under it and the particulars thereof, and contain such other information as may be required by the appropriate ethics board.

(2) If it has reason to believe that any person has been engaged or is engaging in a violation of this chapter or rules or policies adopted under it, an ethics board may issue a complaint.

NEW SECTION. Sec. 209. INVESTIGATION. After the filing of any complaint, except as provided in section 212 of this act, the staff of the appropriate ethics board shall investigate the complaint. The investigation shall be limited to the alleged facts contained in the complaint. The results of the investigation shall be reduced to writing and a determination shall be made that there is or that there is not reasonable cause to believe that a violation of this chapter or rules or policies adopted under it has been or is being committed. A copy of the written determination shall be provided to the complainant and to the person named in such complaint.

NEW SECTION. Sec. 210. PUBLIC HEARING‑-FINDINGS. (1) If the ethics board determines there is reasonable cause under section 209 of this act that a violation of this chapter or rules or policies adopted under it occurred, a public hearing on the merits of the complaint shall be held.

(2) The ethics board shall designate the location of the hearing. The case in support of the complaint shall be presented at the hearing by staff of the ethics board.

(3) The respondent shall file a written answer to the complaint and appear at the hearing in person or otherwise, with or without counsel, and submit testimony and be fully heard. The respondent has the right to cross-examine witnesses.

(4) Testimony taken at the hearing shall be under oath and recorded.

(5) If, based upon a preponderance of the evidence, the ethics board finds that the respondent has violated this chapter or rules or policies adopted under it, the board shall file an order stating findings of fact and enforcement action as authorized under this chapter.

(6) If, upon all the evidence, the ethics board finds that the respondent has not engaged in an alleged violation of this chapter or rules or policies adopted under it, the ethics board shall state findings of fact and shall similarly issue and file an order dismissing the complaint.

NEW SECTION. Sec. 211. REVIEW OF ORDER. Except as otherwise provided by law, reconsideration or judicial review of an ethics board's order that a violation of this chapter or rules or policies adopted under it has occurred shall be governed by the provisions of chapter 34.05 RCW applicable to review of adjudicative proceedings.

NEW SECTION. Sec. 212. COMPLAINT AGAINST LEGISLATOR OR STATE-WIDE ELECTED OFFICIAL. (1) If a complaint alleges a violation of section 118 of this act by a legislator or state-wide elected official other than the attorney general, the attorney general shall conduct the investigation under section 209 of this act and recommend action to the appropriate ethics board.

(2) If a complaint alleges a violation of section 118 of this act by the attorney general, the state auditor shall conduct the investigation under section 209 of this act and recommend action to the appropriate ethics board.

NEW SECTION. Sec. 213. CITIZEN ACTIONS. Any person who has notified the appropriate ethics board and the attorney general in writing that there is reason to believe that some provision of this chapter is being or has been violated may, in the name of the state, bring a citizen action any of the actions authorized under this chapter. A citizen action may be brought only if the appropriate ethics board or the attorney general have failed to commence an action under this chapter within forty-five days after notice from the person, the person has thereafter notified the appropriate ethics board and the attorney general that the person will commence a citizen's action within ten days upon their failure to commence an action, and the appropriate ethics board and the attorney general have in fact failed to bring an action within ten days of receipt of the second notice.

If the person who brings the citizen's action prevails, the judgment awarded shall escheat to the state, but the person shall be entitled to be reimbursed by the state of Washington for costs and attorneys' fees incurred. If a citizen's action that the court finds was brought without reasonable cause is dismissed, the court may order the person commencing the action to pay all costs of trial and reasonable attorneys' fees incurred by the defendant.

NEW SECTION. Sec. 214. REFERRAL FOR ENFORCEMENT. As appropriate, an ethics board may refer a complaint:

(1) To an agency for initial investigation and proposed resolution which shall be referred back to the appropriate ethics board for action; or

(2) To the attorney general's office or prosecutor for appropriate action.

NEW SECTION. Sec. 215. ACTION BY BOARDS. (1) Except as otherwise provided by law, an ethics board may order payment of the following amounts if it finds a violation of this chapter or rules or policies adopted under it after a hearing under section 205 of this act or other applicable law:

(a) Any damages sustained by the state that are caused by the conduct constituting the violation;

(b) From each such person, a civil penalty of up to five thousand dollars per violation or three times the economic value of any thing received or sought in violation of this chapter or rules or policies adopted under it, whichever is greater; and

(c) Costs, including reasonable investigative costs, which shall be included as part of the limit under (b) of this subsection.

(2) Damages under this section may be enforced in the same manner as a judgment in a civil case.

NEW SECTION. Sec. 216. ACTION BY ATTORNEY GENERAL. Upon a written determination by the attorney general that the action of an ethics board was clearly erroneous or if requested by an ethics board, the attorney general may bring a civil action in the superior court of the county in which the violation is alleged to have occurred against a state officer, state employee, former state officer, former state employee, or other person who has violated or knowingly assisted another person in violating any of the provisions of this chapter or the rules or policies adopted under it. In such action the attorney general may recover the following amounts on behalf of the state of Washington:

(1) Any damages sustained by the state that are caused by the conduct constituting the violation;

(2) From each such person, a civil penalty of up to five thousand dollars per violation or three times the economic value of any thing received or sought in violation of this chapter or the rules or policies adopted under it, whichever is greater; and

(3) Costs, including reasonable investigative costs, which shall be included as part of the limit under subsection (2) of this section.

NEW SECTION. Sec. 217. HEARINGS CONDUCTED BY ADMINISTRATIVE LAW JUDGE. If the appropriate ethics board determines that a civil penalty exceeding five hundred dollars is possible, at the option of the ethics board enforcing this chapter or at the request of the person subject to the enforcement action, an administrative law judge shall be requested by the appropriate ethics board to conduct the hearing and rule on procedural and evidentiary matters.

NEW SECTION. Sec. 218. RESCISSION OF STATE ACTION. (1) The attorney general may, on request of the governor or the appropriate agency, and in addition to other available rights of rescission, bring an action in the superior court of Thurston county to cancel or rescind state action taken by a state officer or state employee, without liability to the state of Washington, contractual or otherwise, if the governor or ethics board has reason to believe that: (a) A violation of this chapter or rules or policies adopted under it has substantially influenced the state action, and (b) the interest of the state requires the cancellation or rescission. The governor may suspend state action pending the determination of the merits of the controversy under this section. The court may permit persons affected by the governor's actions to post an adequate bond pending such resolution to ensure compliance by the defendant with the final judgment, decree, or other order of the court.

(2) This section does not limit other available remedies.

Sec. 219. RCW 42.18.260 and 1969 ex.s. c 234 s 26 are each amended to read as follows:

(1) ((The head of an agency may dismiss, suspend, or take such other action as may be appropriate in the circumstances in respect to any state employee of his agency upon finding that such employee has violated this chapter or regulations promulgated hereunder. Such action may include the imposition of conditions of the nature described in RCW 42.18.270(1))) A violation of this chapter or rules or policies adopted under it is grounds for disciplinary action.

(2) The procedures for any such action shall correspond to those applicable for disciplinary action for employee misconduct generally; for those state officers and state employees not specifically exempted ((~~therein~~)) in chapter 41.06 RCW, the rules set forth in ((~~the state civil service law,~~)) chapter 41.06 RCW((,)) shall apply. Any action against the state officer or state employee shall be subject to judicial review to the extent provided by law for disciplinary action for misconduct of state officers and state employees of the same category and grade.

NEW SECTION. Sec. 220. ADDITIONAL INVESTIGATIVE AUTHORITY. In addition to other authority under this chapter, the attorney general may investigate persons not under the jurisdiction of an ethics board whom the attorney general has reason to believe were involved in transactions in violation of this chapter or rules or policies adopted under it.

NEW SECTION. Sec. 221. LIMITATIONS PERIOD. Any action taken under this chapter must be commenced within the later of (1) five years from the date of the alleged violation or (2) two years from the date the alleged violation was discovered or reasonably should have been discovered by the agency head.

PART III

MISCELLANEOUS PROVISIONS

NEW SECTION. Sec. 301. LIBERAL CONSTRUCTION. This chapter shall be construed liberally to effectuate its purposes and policy and to supplement existing laws as may relate to the same subject.

NEW SECTION. Sec. 302. PARTS AND CAPTIONS NOT LAW. Parts and captions used in this act do not constitute any part of the law.

NEW SECTION. Sec. 303. The following sections are each recodified as sections in chapter 42.-- RCW (sections 101 through 109, 111 through 115, 118 through 120, 201 through 218, 220, 221, 301, and 302 of this act):

RCW 42.18.217

RCW 42.18.230

RCW 42.18.260

RCW 42.18.270

RCW 42.18.330

RCW 42.22.050

NEW SECTION. Sec. 304. The following acts or parts of acts are each repealed:

(1) RCW 42.18.010 and 1969 ex.s. c 234 s 1;

(2) RCW 42.18.020 and 1969 ex.s. c 234 s 2;

(3) RCW 42.18.030 and 1969 ex.s. c 234 s 3;

(4) RCW 42.18.040 and 1969 ex.s. c 234 s 4;

(5) RCW 42.18.050 and 1969 ex.s. c 234 s 5;

(6) RCW 42.18.060 and 1969 ex.s. c 234 s 6;

(7) RCW 42.18.070 and 1969 ex.s. c 234 s 7;

(8) RCW 42.18.080 and 1969 ex.s. c 234 s 8;

(9) RCW 42.18.090 and 1969 ex.s. c 234 s 9;

(10) RCW 42.18.100 and 1969 ex.s. c 234 s 10;

(11) RCW 42.18.110 and 1969 ex.s. c 234 s 11;

(12) RCW 42.18.120 and 1969 ex.s. c 234 s 12;

(13) RCW 42.18.130 and 1973 c 137 s 1 & 1969 ex.s. c 234 s 13;

(14) RCW 42.18.140 and 1969 ex.s. c 234 s 14;

(15) RCW 42.18.150 and 1969 ex.s. c 234 s 15;

(16) RCW 42.18.170 and 1969 ex.s. c 234 s 17;

(17) RCW 42.18.180 and 1969 ex.s. c 234 s 18;

(18) RCW 42.18.190 and 1969 ex.s. c 234 s 19;

(19) RCW 42.18.200 and 1969 ex.s. c 234 s 20;

(20) RCW 42.18.210 and 1969 ex.s. c 234 s 21;

(21) RCW 42.18.213 and 1987 c 426 s 1;

(22) RCW 42.18.215 and 1987 c 426 s 2;

(23) RCW 42.18.221 and 1989 c 96 s 6 & 1987 c 426 s 4;

(24) RCW 42.18.240 and 1969 ex.s. c 234 s 24;

(25) RCW 42.18.250 and 1969 ex.s. c 234 s 25;

(26) RCW 42.18.280 and 1969 ex.s. c 234 s 28;

(27) RCW 42.18.290 and 1973 c 137 s 2 & 1969 ex.s. c 234 s 29;

(28) RCW 42.18.300 and 1973 c 137 s 3 & 1969 ex.s. c 234 s 30;

(29) RCW 42.18.310 and 1969 ex.s. c 234 s 31;

(30) RCW 42.18.320 and 1969 ex.s. c 234 s 32;

(31) RCW 42.18.900 and 1969 ex.s. c 234 s 40;

(32) RCW 42.20.010 and 1969 ex.s. c 234 s 34 & 1909 c 249 s 82;

(33) RCW 42.21.010 and 1965 ex.s. c 150 s 1;

(34) RCW 42.21.020 and 1989 c 175 s 93, 1971 c 81 s 106, & 1965 ex.s. c 150 s 2;

(35) RCW 42.21.030 and 1965 ex.s. c 150 s 3;

(36) RCW 42.21.040 and 1965 ex.s. c 150 s 4;

(37) RCW 42.21.050 and 1965 ex.s. c 150 s 5;

(38) RCW 42.21.080 and 1965 ex.s. c 150 s 8;

(39) RCW 42.21.090 and 1969 ex.s. c 234 s 36;

(40) RCW 42.22.010 and 1959 c 320 s 1;

(41) RCW 42.22.020 and 1959 c 320 s 2;

(42) RCW 42.22.030 and 1961 c 268 s 8 & 1959 c 320 s 3;

(43) RCW 42.22.040 and 1989 c 11 s 13 & 1959 c 320 s 4;

(44) RCW 42.22.060 and 1959 c 320 s 6;

(45) RCW 42.22.070 and 1959 c 320 s 7;

(46) RCW 42.22.120 and 1969 ex.s. c 234 s 37;

(47) RCW 44.60.010 and 1977 ex.s. c 218 s 1 & 1967 ex.s. c 150 s 1;

(48) RCW 44.60.020 and 1980 c 87 s 43, 1977 ex.s. c 218 s 2, & 1967 ex.s. c 150 s 2;

(49) RCW 44.60.030 and 1967 ex.s. c 150 s 3;

(50) RCW 44.60.040 and 1977 ex.s. c 218 s 3 & 1967 ex.s. c 150 s 4;

(51) RCW 44.60.050 and 1984 c 287 s 92, 1979 c 151 s 159, 1977 ex.s. c 218 s 4, 1975-'76 2nd ex.s. c 34 s 135, & 1967 ex.s. c 150 s 5;

(52) RCW 44.60.070 and 1980 c 165 s 1, 1977 ex.s. c 218 s 5, & 1967 ex.s. c 150 s 6;

(53) RCW 44.60.080 and 1977 ex.s. c 218 s 6 & 1967 ex.s. c 150 s 8;

(54) RCW 44.60.090 and 1967 ex.s. c 150 s 9;

(55) RCW 44.60.100 and 1977 ex.s. c 218 s 7;

(56) RCW 44.60.110 and 1980 c 165 s 2 & 1977 ex.s. c 218 s 8;

(57) RCW 44.60.120 and 1977 ex.s. c 218 s 9; and

(58) RCW 44.60.130 and 1977 ex.s. c 218 s 10.

NEW SECTION. Sec. 305. Sections 101 through 109, 111 through 115, 118 through 120, 201 through 218, 220, 221, 301, and 302 of this act shall constitute a new chapter in Title 42 RCW.

NEW SECTION. Sec. 306. 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.