6037 AAS 3/15/95 S2711.1

6037 AAS 3/15/95 S2711.1

SB 6037 - S AMD - 275

By Senators Sheldon, A. Anderson, Hale, Loveland, Gaspard, Haugen, Wojahn, Snyder, Winsley, Quigley and Rinehart

ADOPTED 3/15/95

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature has enacted a large number of statutes conferring on boards, commissions, departments, and other agencies of the executive branch of government the authority to adopt rules to supplement and implement those statutes. The legislature has found that this delegation of its authority has resulted in rules being adopted without sufficient consideration of need, cost-effectiveness, conflict and duplication, and conformity with legislative intent. The legislature finds that it must provide a procedure for oversight and review of rules adopted under this delegation of legislative power to curtail excessive regulation and to establish a system of accountability so that a state agency must justify its use of regulatory authority before imposing undue costs on citizens that detrimentally affect the economy of Washington. It is the intent of sections 2 through 12 of this act to establish a method for early, continuing, and effective review, accountability, and oversight. It is the further intent of sections 2 through 12 of this act to provide for an initial thorough review by a commission with sufficient authority, expertise, independence, and time to perform that responsibility. It is the further intent of sections 2 through 12 of this act to provide review by the legislature of those rules disapproved by the commission. Sections 2 through 12 of this act are intended to provide a method of oversight and review of rules to assist the governor and the legislature in their supervisory and oversight functions.

NEW SECTION. Sec. 2. (1) The Washington independent regulatory review commission is created, to consist of five members to be known as commissioners. One member of the commission shall be appointed by the governor to serve at his or her pleasure, and one member each shall be appointed by the four caucuses of the legislature having the largest membership. No member of the legislature or any other officer or employee of state government may serve as a member of the commission. However, a commission member may serve on advisory boards and commissions, or on other boards and commissions that do not adopt any rules that may come before the commission for review under this chapter.

(2) Of the original members, the two members appointed by the house of representatives shall serve for initial terms of two years, and the two members appointed by the senate shall serve for initial terms of three years. Thereafter, each appointment is for a term of three years, and such appointments must be made in the same manner as the original appointments. From the time of original appointment to the commission, no commissioner may serve more than two full terms. A commissioner initially appointed to serve the remainder of an unexpired term is, in addition eligible to be appointed to, and to serve, two full terms.

(3) All vacancies must be filled, for the remainder of the unexpired term, in the same manner as original appointments. A commissioner, upon the expiration of his or her term, will continue to hold office until his or her successor is appointed.

(4) The commissioners shall be compensated in accordance with RCW 43.03.250. The commissioners are also entitled to reimbursement for travel and other necessary expenses incurred as a result of their duties as members of the commission. Commissioners are not eligible for state retirement under chapter 41.40 RCW by virtue of their service on the commission.

(5) Except as authorized under this section and except for the governor's appointee who serves at the governor's pleasure, no commissioner may be removed from office during his or her term. The governor may, with the approval by resolution of two‑thirds of the members of the senate, upon clear and convincing evidence of misfeasance or malfeasance in office or neglect of duty, remove a commissioner before the expiration of the term. The governor shall provide the commissioner so removed with a detailed written statement of the reasons for the removal.

(6) No commissioner may participate in deliberations regarding a rule that significantly affects the operation or activities of an organization (except a nonprofit organization certified under section 501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99‑514, 26 U.S.C. Sec. 501(c)(3)) in which the commissioner holds a nonsalaried position) in which the commissioner, or any member of his or her immediate family, has a substantial economic interest or serves as an officer, director, trustee, partner, or employee. Within ninety days of appointment, and annually thereafter, each commissioner shall file with the public disclosure commission a statement of financial affairs under RCW 42.17.240. Before a vote upon a rule in which a commissioner feels he or she or any other commissioner has a potential conflict of interest, the commissioner shall disclose the potential conflict and request a ruling from the chairman of the commission upon the question of whether the potential conflict disqualifies the commissioner from voting on the rule. Any commissioner may challenge the ruling of the chairman, and in such case the question must be resolved by majority vote of the commission. The chairman or a majority of the commissioners may request the executive ethics board under RCW 42.52.360 to provide advice regarding conflicts of interest, and such advice, when given, is binding upon the commission.

(7) The commission shall elect a chairman, who shall serve for a term of two years and until his or her successor is elected. The chairman shall preside at meetings of the commission and shall execute documents relating to the formal actions of the commission.

(8) The commission shall meet at least once a month at such times and places as set by the chairman. Meetings are subject to chapter 42.30 RCW. A commissioner who fails to attend three consecutive meetings without cause shall be removed as a commissioner by the authority appointing that commissioner.

(9) The commission shall annually file a report of its activities of the prior year with the governor, the chief clerk of the house of representatives, and the secretary of the senate.

NEW SECTION. Sec. 3. The commission shall appoint an executive director whose annual salary is determined under RCW 43.03.028. The executive director shall perform such duties and have such powers as the commission prescribes in order to implement and enforce sections 1 through 12 of this act. In addition to the performance of administrative duties, the commission may delegate to the executive director authority with respect to, but not limited to, determinations under sections 4 and 5 of this act. The delegation does not eliminate a party's right of appeal to the commission. In addition, the commission shall appoint a chief counsel who is not subject to the supervision of the attorney general and whose annual salary is determined under RCW 43.03.028. The commission shall employ or contract with such others as it may from time to time find necessary for the proper performance of its duties.

NEW SECTION. Sec. 4. (1) After receipt of the statement of inquiry under RCW 34.05.310, if the commission has reason to believe that the contemplated rule would violate the review criteria established in section 6(2) of this act, the commission shall notify the adopting agency of its concerns and the means whereby these concerns may be addressed.

(2) If an agency indicates in the statement of inquiry that it does not intend to provide an opportunity for interested parties to participate in the rule-making process before publication of the proposed rule under RCW 34.05.310(2), but the commission believes that such an opportunity may be appropriate, the commission shall so notify the agency. The notification does not create any obligation on the part of the agency. Upon request, the commission may assist an agency in facilitating the public participation.

NEW SECTION. Sec. 5. After the commission receives the notice of proposed rule adoption under RCW 34.05.320:

(1) If the commission has reason to believe that the proposed rule would violate the review criteria established in section 6(2) of this act, the commission shall notify the adopting agency in writing of its concerns and the means whereby these concerns may be addressed;

(2) If the commission has reason to believe that the proposed rule would not violate the review criteria established in section 6(2) of this act, or that review by the commission is otherwise not necessary to achieve the objectives of section 1 of this act, the commission may so notify the adopting agency. The commission shall submit a copy of this notification to the secretary of the senate and the chief clerk of the house of representatives, for distribution to the chairs of the appropriate standing committees.

The agency shall include any notification received under subsection (1) or (2) of this section, and any agency response in the rule‑making file.

NEW SECTION. Sec. 6. (1) The commission shall approve without review under subsection (2) of this section: (a) A rule filed with it for which a preproposal statement of inquiry was not required under RCW 34.05.310; (b) a rule developed through the use of negotiated rule making under RCW 34.05.310 or involving pilot rule making under RCW 34.05.313 where the commission finds review of the rule is not necessary to achieve the objectives of section 1 of this act; and (c) a rule not subject to review in accordance with the notification given the agency under section 5(2) of this act.

(2) The commission shall review all rules filed with it that are not approved without review under subsection (1) of this section to determine the following:

(a) Whether the rule is within the statutory authority of the agency as expressed by the legislature when it enacted the statute upon which the rule is based. In formulating its determination, the commission shall solicit and consider written comments from the appropriate standing committees of the legislature and current members of the legislature and any pertinent opinions of the Washington courts.

(b) Whether, in adopting the rule, the agency has complied with all applicable provisions of law, including chapter 19.85 RCW and section 9 of this act.

(3) In reviewing rules filed with it, the commission shall give priority to those rules it has reason to believe are not within the statutory authority of the agency or that conflict with an existing federal or state law.

(4) The commission shall adopt rules governing the procedures it uses in reviewing rules filed with it. The rules must provide for an orderly review and specify the methods, standards, presumptions, and principles the commission uses, and the limitations it observes, in reviewing rules for compliance with the standards in subsection (2) of this section. The rules adopted by the commission must attempt to ensure: (a) Adequate and equal opportunity for all interested parties to participate in the rule review process; and (b) that the commission does not substitute its judgment for that of the rule-making agency as expressed in the substantive content of the rule under review.

(5) The commission and staff shall not accept comments regarding a rule under review within seventy-two hours before a commission meeting on that rule. The commission and staff shall note all documents, telephone calls, personal visits, or other communication regarding a rule under review and make than a part of the commission's public record.

(6) The commission may establish ad hoc advisory boards, including but not limited to, ad hoc economic or science advisory boards to assist it in the review of a rule.

NEW SECTION. Sec. 7. (1) By a majority vote of its members, the commission shall either approve a rule filed with it for review, and transmit it to the code reviser for filing, or disapprove it within forty-five working days after the rule has been filed with it for review. If the commission fails to act within forty-five days, the rule is deemed to have been approved, and the adopting agency may transmit it to the code reviser for filing.

(2) If the commission disapproves a rule, it shall return the rule to the adopting agency within the forty-five-day period specified in subsection (1) of this section, accompanied by a statement specifying the reasons for disapproval. Within seven days of the issuance of the notice, the commission shall provide the adopting agency with a written decision detailing the specific regulatory review criteria that the rule failed to meet, and a summary of the documents and testimony relied on by the commission in reaching its final decision. The commission may not disapprove a rule except for failure to comply with the standards set forth in section 6(2) of this act.

(3) The commission shall file the notice of disapproval required by subsection (2) of this section with the code reviser for publication in the Washington State Register. The commission shall provide the written decision required by subsection (2) of this section to anyone requesting it, and shall submit it to the secretary of the senate and the chief clerk of the house of representatives for distribution to the chairs of the appropriate standing committees.

(4) If an agency determines on its own that a rule filed for review should be returned by the commission before the completion of the commission's review, it may request the return of the rule. The filing agency shall memorialize in writing all requests for the return of a rule no later than seven days after the request. The agency may refile the rule with the commission for review within one hundred eighty days as specified in RCW 34.05.335, or refile it in accordance with RCW 34.05.320.

(5) The commission shall not initiate the return of a rule under subsection (4) of this section as an alternative to disapproval under subsection (2) of this section.

NEW SECTION. Sec. 8. (1) Within one hundred twenty days of an agency's receipt of the written decision required by section 7 of this act, the agency may rewrite and refile a rule returned to it under that section without complying with the notice and hearing requirements of RCW 34.05.320, unless the provisions of the rule are substantially changed. If the rule is substantially changed or is not filed within one hundred twenty days of receipt of the written decision, the agency may start a new process to adopt the rule, in full compliance with this chapter. The commission may, upon a showing of good cause, grant an extension to the one hundred twenty-day period specified in this subsection.

(2) Upon refiling of a previously disapproved rule to the commission under subsection (1) of this section, the commission shall review the refiled rule only for those reasons expressly identified in the written decision required by section 7 of this act, or for those issues arising as a result of a substantial change to a provision of the rule or as a result of intervening statutory changes or intervening court orders or decisions. Review of the refiled rule must be done according to the same time limits as for review of a newly submitted rule.

(3) When an agency refiles a withdrawn or disapproved rule with the commission, it shall identify the prior withdrawn or disapproved rule by its date of filing with the commission, shall specify the portion of the prior rule-making record that should be included in the refiling, and shall submit to the commission a copy of the prior rule-making record if that record has been returned to the agency by the commission.

(4) When the commission disapproves a rule, the agency may nonetheless adopt the rule and file it with the code reviser within the sixty-day period after the last day of the next regular legislative session after the date on which the rule was disapproved, unless the statute cited by the agency as authorizing the rule is amended by the legislature.

NEW SECTION. Sec. 9. (1) Before adopting a rule subject to review by the commission, an agency shall:

(a) Clearly state in detail the general goals and specific objectives of the statute that the rule implements and the specific objectives the agency seeks to achieve;

(b) Determine that the rule is needed to achieve the general goals and specific objectives stated under (a) of this subsection, and analyze alternatives to rule making and the consequences of not adopting the rule;

(c) Determine that the probable benefits of the rule are greater than its probable costs, taking into account both the qualitative and quantitative benefits and costs and the specific directives of the statute being implemented;

(d) Determine, after considering alternative versions of the rule and the analysis required under (b) and (c) of this subsection, that the rule being adopted is the least burdensome alternative for those required to comply with the rule that will achieve the general goals and the specific objectives stated under (a) of this subsection;

(e) Determine that the rule does not require those to whom it applies to take an action that violates requirements of another federal or state law;

(f) Coordinate the rule, to the maximum extent practicable, with other federal, state, and local laws applicable to the same circumstances and list, by citation, duplicative, inconsistent, or conflicting laws;

(g) Determine that the rule does not impose more stringent performance requirements on private entities than on public entities unless required to do so by federal or state law;

(h) Determine if the rule differs from any applicable federal regulation or statute and, if so, determine that the difference is justified by the following:

(i) State statutory authority that explicitly allows the agency to differ from federal standards; or

(ii) Substantial evidence that the difference is necessary to achieve the specific objectives of the authorizing state statute;

(i) Describe how the agency will monitor and evaluate on an ongoing basis whether the rule in fact achieves the general goals and specific objectives stated under (a) of this subsection, including, to the maximum extent practicable, the use of interim milestones to assess progress and the use of objectively measurable outcomes;

(j) Describe how the agency will implement and enforce the rule and encourage voluntary compliance with the rule;

(k) Describe which resources the agency intends to use to implement the rule; and

(l) Document compliance with the requirements of this section in the rule-making file.

(2) Before adopting a rule subject to review by the commission, an agency shall include in the rule-making file a written plan that describes:

(a) The methods the agency will use in making a reasonable attempt to notify those to whom the rule applies of the adoption of the rule and how they may get more information on how to comply with the rule; and

(b) How the agency will provide adequate sources of information and technical assistance to those to whom the rule applies to assist them in voluntarily complying with the rule.

(3) For rules implementing statutes enacted after the effective date of this act, except emergency rules adopted under RCW 34.05.350, an agency may not rely solely on the statute's statement of intent or purpose, or on the enabling provisions of the statute establishing the agency, or on any combination of such provisions, for its statutory authority to adopt the rule. An agency may use the statement of intent or purpose or the agency enabling provisions to interpret ambiguities in a statute's other provisions.

NEW SECTION. Sec. 10. In the discharge of any duty imposed under this chapter, the commission or personnel under its authority may examine and inspect all properties, equipment, facilities, files, records, and accounts of any state office, department, institution, board, committee, commission, or agency, and administer oaths, issue subpoenas, compel the attendance of witnesses and the production of any papers, books, accounts, documents, and testimony, and cause the deposition of witnesses, either residing within or outside the state, to be taken in the manner prescribed by law for taking depositions in civil actions in the superior courts.

In case of the failure on the part of a person to comply with any subpoena issued in behalf of the commission, or on the refusal of a witness to testify to matters regarding which he or she may be lawfully interrogated, the superior court of any county, or the judge thereof, shall, on application of the commission, compel obedience by proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify in court.

NEW SECTION. Sec. 11. The commission, either on its motion or on the request of an individual, agency, corporation, member of the legislature, or any other entity that may be affected by a rule, may also petition an agency requesting the adoption, amendment, or repeal of a rule under RCW 34.05.330. The commission shall petition an agency under RCW 34.05.330 requesting the adoption of a rule if it believes that the agency is using a policy statement or guidelines in place of a rule. The commission may also make recommendations to the legislature and the governor for statutory changes whenever it finds that an existing rule or procedure may be contrary to the public interest.

Where the commission finds that an existing rule is not being enforced as required by law, the commission shall notify the responsible agency and submit a copy of this notification to the chief clerk of the house of representatives and the secretary of the senate for distribution to the appropriate standing committees.

NEW SECTION. Sec. 12. The commission shall act as a clearinghouse for complaints, comments, and other input from members of the legislature and from the public regarding rules, proposed rules, and administrative procedures. The commission shall maintain accurate records regarding complaints and comments it receives and shall maintain the records according to departmental and subject matter categories. When the commission files its annual report under section 2 of this act, the commission shall include within it a summary of public complaint and comment along with any recommendations the commission may offer for statutory change as the result of public complaint and comment.

The commission shall develop and implement training programs and other aids to assist state agencies in complying with the review criteria in section 6(2) of this act.

NEW SECTION. Sec. 13. By January 31, 1997, and by January 31st of each odd-numbered year thereafter, the joint committee on performance audits, after consulting with state agencies and business, labor, and environmental organizations, shall report to the governor and the legislature regarding the impact of the independent regulatory review commission on the regulatory system in this state. The report shall document:

(1) If, and in what way, oversight and review by the commission affected the substance of rules that ultimately went into effect;

(2) Each rule that the commission disapproved, and the legislative action, if any, in response to the disapproval;

(3) The costs incurred by state agencies in complying with the legislative rule-making criteria and the requests of the commission;

(4) Any legal action maintained based upon the alleged failure of an agency to adopt a rule in compliance with the rule-making criteria, the costs to the state of the action, and the result;

(5) The extent to which the existence of the commission and the review process has resulted in the increased inappropriate use by the agencies of policy statements and guidelines in place of rules;

(6) The extent to which the efforts of the commission have led to increased use of negotiated rule making and pilot rules, and alternative dispute resolution techniques in the regulatory process;

(7) The extent to which agencies have responded to petitions from the commission to adopt, amend, or repeal a rule;

(8) The extent to which the commission's decisions and activities have adversely affected the capacity of agencies to fulfill their legislatively prescribed missions;

(9) The extent to which the commission's decisions and activities have improved the acceptability of state rules to those regulated; and

(10) Any other information considered by the joint committee on performance audits to be useful in evaluating the impact of the commission on the regulatory system in this state.

Sec. 14. RCW 34.05.010 and 1992 c 44 s 10 are each amended to read as follows:

The definitions set forth in this section shall apply throughout this chapter, unless the context clearly requires otherwise.

(1) "Adjudicative proceeding" means a proceeding before an agency in which an opportunity for hearing before that agency is required by statute or constitutional right before or after the entry of an order by the agency. Adjudicative proceedings also include all cases of licensing and rate making in which an application for a license or rate change is denied except as limited by RCW 66.08.150, or a license is revoked, suspended, or modified, or in which the granting of an application is contested by a person having standing to contest under the law.

(2) "Agency" means any state board, commission, department, institution of higher education, or officer, authorized by law to make rules or to conduct adjudicative proceedings, except those in the legislative or judicial branches, the governor, or the attorney general except to the extent otherwise required by law and any local governmental entity that may request the appointment of an administrative law judge under chapter 42.41 RCW.

(3) "Agency action" means licensing, the implementation or enforcement of a statute, the adoption or application of an agency rule or order, the imposition of sanctions, or the granting or withholding of benefits.

Agency action does not include an agency decision regarding (a) contracting or procurement of goods, services, public works, and the purchase, lease, or acquisition by any other means, including eminent domain, of real estate, as well as all activities necessarily related to those functions, or (b) determinations as to the sufficiency of a showing of interest filed in support of a representation petition, or mediation or conciliation of labor disputes or arbitration of labor disputes under a collective bargaining law or similar statute, or (c) any sale, lease, contract, or other proprietary decision in the management of public lands or real property interests, or (d) the granting of a license, franchise, or permission for the use of trademarks, symbols, and similar property owned or controlled by the agency.

(4) "Agency head" means the individual or body of individuals in whom the ultimate legal authority of the agency is vested by any provision of law. If the agency head is a body of individuals, a majority of those individuals constitutes the agency head.

(5) "Commission" means the independent regulatory review commission created under section 2 of this act.

(6) "Entry" of an order means the signing of the order by all persons who are to sign the order, as an official act indicating that the order is to be effective.

((~~(6)~~)) (7) "Filing" of a document that is required to be filed with an agency means delivery of the document to a place designated by the agency by rule for receipt of official documents, or in the absence of such designation, at the office of the agency head.

((~~(7)~~)) (8) "Institutions of higher education" are the University of Washington, Washington State University, Central Washington University, Eastern Washington University, Western Washington University, The Evergreen State College, the various community colleges, and the governing boards of each of the above, and the various colleges, divisions, departments, or offices authorized by the governing board of the institution involved to act for the institution, all of which are sometimes referred to in this chapter as "institutions."

((~~(8)~~)) (9) "Interpretive statement" means a written expression of the opinion of an agency, entitled an interpretive statement by the agency head or its designee, as to the meaning of a statute or other provision of law, of a court decision, or of an agency order.

((~~(9)~~)) (10)(a) "License" means a franchise, permit, certification, approval, registration, charter, or similar form of authorization required by law, but does not include (i) a license required solely for revenue purposes, or (ii) a certification of an exclusive bargaining representative, or similar status, under a collective bargaining law or similar statute, or (iii) a license, franchise, or permission for use of trademarks, symbols, and similar property owned or controlled by the agency.

(b) "Licensing" includes the agency process respecting the issuance, denial, revocation, suspension, or modification of a license.

((~~(10)~~)) (11)(a) "Order," without further qualification, means a written statement of particular applicability that finally determines the legal rights, duties, privileges, immunities, or other legal interests of a specific person or persons.

(b) "Order of adoption" means the official written statement by which an agency adopts, amends, or repeals a rule.

((~~(11)~~)) (12) "Party to agency proceedings," or "party" in a context so indicating, means:

(a) A person to whom the agency action is specifically directed; or

(b) A person named as a party to the agency proceeding or allowed to intervene or participate as a party in the agency proceeding.

((~~(12)~~)) (13) "Party to judicial review or civil enforcement proceedings," or "party" in a context so indicating, means:

(a) A person who files a petition for a judicial review or civil enforcement proceeding; or

(b) A person named as a party in a judicial review or civil enforcement proceeding, or allowed to participate as a party in a judicial review or civil enforcement proceeding.

((~~(13)~~)) (14) "Person" means any individual, partnership, corporation, association, governmental subdivision or unit thereof, or public or private organization or entity of any character, and includes another agency.

((~~(14)~~)) (15) "Policy statement" means a written description of the current approach of an agency, entitled a policy statement by the agency head or its designee, to implementation of a statute or other provision of law, of a court decision, or of an agency order, including where appropriate the agency's current practice, procedure, or method of action based upon that approach.

((~~(15)~~)) (16) "Rule" means any agency order, directive, or regulation of general applicability (a) the violation of which subjects a person to a penalty or administrative sanction; (b) which establishes, alters, or revokes any procedure, practice, or requirement relating to agency hearings; (c) which establishes, alters, or revokes any qualification or requirement relating to the enjoyment of benefits or privileges conferred by law; (d) which establishes, alters, or revokes any qualifications or standards for the issuance, suspension, or revocation of licenses to pursue any commercial activity, trade, or profession; or (e) which establishes, alters, or revokes any mandatory standards for any product or material which must be met before distribution or sale. The term includes the amendment or repeal of a prior rule, but does not include (i) statements concerning only the internal management of an agency and not affecting private rights or procedures available to the public, (ii) declaratory rulings issued pursuant to RCW 34.05.240, (iii) traffic restrictions for motor vehicles, bicyclists, and pedestrians established by the secretary of transportation or his designee where notice of such restrictions is given by official traffic control devices, or (iv) rules of institutions of higher education involving standards of admission, academic advancement, academic credit, graduation and the granting of degrees, employment relationships, or fiscal processes.

(((16) "Rules review committee" or "committee" means the joint administrative rules review committee created pursuant to RCW 34.05.610 for the purpose of selectively reviewing existing and proposed rules of state agencies.))

(17) "Rule making" means the process for formulation and adoption of a rule.

(18) "Service," except as otherwise provided in this chapter, means posting in the United States mail, properly addressed, postage prepaid, or personal service. Service by mail is complete upon deposit in the United States mail. Agencies may, by rule, authorize service by electronic telefacsimile transmission, where copies are mailed simultaneously, or by commercial parcel delivery company.

Sec. 15. RCW 34.05.310 and 1994 c 249 s 1 are each amended to read as follows:

(1) To meet the intent of providing greater public access to administrative rule making and to promote consensus among interested parties, agencies shall solicit comments from the public on a subject of possible rule making before ((~~publication of~~)) filing with the code reviser a notice of proposed rule adoption under RCW 34.05.320. The agency shall prepare a statement of ((~~intent~~)) inquiry that:

(a) ((~~States the specific statutory authority for the new rule;~~

~~(b) Identifies the reasons the new rule is needed;~~

~~(c) Identifies the goals of the new rule;~~

~~(d) Describes~~)) Identifies the specific statute or statutes authorizing the agency to adopt rules on this subject;

(b) Discusses why rules on this subject may be needed and what they might accomplish;

(c) Discusses the process by which the rule ((~~will~~)) might be developed, including, but not limited to, negotiated rule making, pilot rule making, or agency study; ((~~and~~

~~(e)~~)) (d) Specifies the process by which interested parties can effectively participate in the ((~~formulation of the~~)) decision to adopt a new rule and formulation of a proposed rule before its publication.

The statement of ((~~intent~~)) inquiry shall be filed with the code reviser for publication in the state register and shall be sent to the commission and any party that has requested receipt of the agency's statements of ((~~intent~~)) inquiry.

(2) Agencies are encouraged to develop and use new procedures for reaching agreement among interested parties before publication of notice and the adoption hearing on a proposed rule. Examples of new procedures include, but are not limited to:

(a) Negotiated rule making which includes:

(i) Identifying individuals and organizations that have a recognized interest in or will be significantly affected by the adoption of the proposed rule;

(ii) Soliciting participation by persons who are capable, willing, and appropriately authorized to enter into such negotiations;

(iii) Assuring that participants fully recognize the consequences of not participating in the process, are committed to negotiate in good faith, and recognize the alternatives available to other parties;

(iv) Establishing guidelines to encourage consideration of all pertinent issues, to set reasonable completion deadlines, and to provide fair and objective settlement of disputes that may arise;

(v) Agreeing on a reasonable time period during which the agency will be bound to the rule resulting from the negotiations without substantive amendment; and

(vi) Providing a mechanism by which one or more parties may withdraw from the process or the negotiations may be terminated if it appears that consensus cannot be reached on a draft rule that accommodates the needs of the agency, interested parties, and the general public and conforms to the legislative intent of the statute that the rule is intended to implement; and

(b) Pilot rule making which includes testing the draft of a proposed rule through the use of volunteer pilot study groups in various areas and circumstances.

(3)(a) An agency must make a determination whether negotiated rule making, pilot rule making, or another process for generating participation from interested parties prior to development of the rule is appropriate.

(b) An agency must include a written justification in the rule-making file if an opportunity for interested parties to participate in the rule-making process prior to publication of the proposed rule has not been provided.

(4) This section does not apply to:

(a) Emergency rules adopted under RCW 34.05.350;

(b) Rules relating only to internal governmental operations that are not subject to violation by a nongovernment party;

(c) Rules adopting or incorporating by reference without material change federal statutes or rules, rules of other Washington state agencies, shoreline master programs other than those governing shorelines of state-wide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule;

(d) Rules that only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect;

(e) Rules whose content is explicitly and specifically dictated by statute;

(f) Rules that establish, alter, or repeal (i) a procedure, practice, or requirement relating to agency hearings, or (ii) a filing or related process requirement for applying to an agency for a license.

Sec. 16. RCW 34.05.320 and 1994 c 249 s 14 are each amended to read as follows:

(1) No sooner than thirty days after publication of the statement of inquiry under RCW 34.05.310, and at least twenty days before the rule-making hearing at which the agency receives public comment regarding adoption of a rule, the agency shall cause notice of the hearing to be published in the state register. The publication constitutes the proposal of a rule. The notice shall include all of the following:

(a) A title, a description of the rule's purpose, and any other information which may be of assistance in identifying the rule or its purpose;

(b) Citations of the statutory authority for adopting the rule and the specific statute the rule is intended to implement;

(d) The agency personnel, with their office location and telephone number, who are responsible for the drafting, implementation, and enforcement of the rule;

(e) The name of the person or organization, whether private, public, or governmental, proposing the rule;

(f) Agency comments or recommendations, if any, regarding statutory language, implementation, enforcement, and fiscal matters pertaining to the rule;

(g) Whether the rule is necessary as the result of federal law or federal or state court action, and if so, a copy of such law or court decision shall be attached to the purpose statement;

(h) When, where, and how persons may present their views on the proposed rule;

(i) The date on which the agency intends to adopt the rule;

(j) A short explanation of the rule, its purpose, and anticipated effects, including in the case of a proposal that would modify existing rules, a short description of the changes the proposal would make; and

(k) A statement indicating how a person can obtain a copy of the small business economic impact statement prepared under chapter 19.85 RCW, or an explanation for why the agency did not prepare the statement.

(2) Upon filing notice of the proposed rule with the code reviser, the adopting agency shall have copies of the notice on file and available for public inspection and shall forward three copies of the notice to the ((~~rules review committee~~)) regulatory review commission.

(3) No later than three days after its publication in the state register, the agency shall cause a copy of the notice of proposed rule adoption to be mailed to each person who has made a request to the agency for a mailed copy of such notices. An agency may charge for the actual cost of providing individual mailed copies of these notices.

(4) In addition to the notice required by subsections (1) and (2) of this section, an institution of higher education shall cause the notice to be published in the campus or standard newspaper of the institution at least seven days before the rule-making hearing.

Sec. 17. RCW 34.05.335 and 1989 c 175 s 8 are each amended to read as follows:

(1) A proposed rule may be withdrawn by the proposing agency at any time before adoption. A withdrawn rule may not be adopted unless it is again proposed in accordance with RCW 34.05.320.

(2) Before adopting a rule, an agency shall consider the written and oral submissions, or any memorandum summarizing oral submissions.

(3) Rules not adopted and filed with the ((~~code reviser~~)) commission within one hundred eighty days after publication of the text as last proposed in the register shall be regarded as withdrawn. An agency may not thereafter adopt the proposed rule without refiling it in accordance with RCW 34.05.320. The ((~~code reviser~~)) commission shall give notice of the withdrawal to the code reviser for publication in the register.

(4) An agency may not adopt a rule before the time established in the published notice, or such later time established on the record or by publication in the state register.

Sec. 18. RCW 34.05.350 and 1994 c 249 s 3 are each amended to read as follows:

(1) If an agency for good cause finds:

(a) That immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest; or

(b) That state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule,

the agency may dispense with those requirements and adopt, amend, or repeal the rule on an emergency basis. The agency's finding and a concise statement of the reasons for its finding shall be incorporated in the order for adoption of the emergency rule or amendment filed with the office of the code reviser under RCW 34.05.380 and with the ((~~rules review committee~~)) regulatory review commission.

(2) An emergency rule adopted under this section takes effect upon filing with the code reviser, unless a later date is specified in the order of adoption, and may not remain in effect for longer than one hundred twenty days after filing. Identical or substantially similar emergency rules may not be adopted in sequence unless conditions have changed or the agency has filed notice of its intent to adopt the rule as a permanent rule, and is actively undertaking the appropriate procedures to adopt the rule as a permanent rule. This section does not relieve any agency from compliance with any law requiring that its permanent rules be approved by designated persons or bodies before they become effective.

(3) Within seven days after the rule is adopted, any person may petition the governor requesting the immediate repeal of a rule adopted on an emergency basis by any department listed in RCW 43.17.010. Within seven days after submission of the petition, the governor shall either deny the petition in writing, stating his or her reasons for the denial, or order the immediate repeal of the rule. In ruling on the petition, the governor shall consider only whether the conditions in subsection (1) of this section were met such that adoption of the rule on an emergency basis was necessary. If the governor orders the repeal of the emergency rule, any sanction imposed based on that rule is void. This subsection shall not be construed to prohibit adoption of any rule as a permanent rule.

((~~(4) In adopting an emergency rule, the agency shall comply with section 4 of this act or provide a written explanation for its failure to do so.~~))

Sec. 19. RCW 34.05.370 and 1994 c 249 s 2 are each amended to read as follows:

(1) Each agency shall maintain an official rule-making file for each rule that it (a) proposes by publication in the state register, or (b) adopts. The file and materials incorporated by reference shall be available for public inspection. Each agency shall provide a copy of all materials in its file to the commission upon its request.

(2) The agency rule-making file shall contain all of the following:

(a) Copies of all publications in the state register with respect to the rule or the proceeding upon which the rule is based;

(b) Copies of any portions of the agency's public rule-making docket containing entries relating to the rule or the proceeding on which the rule is based;

(c) All written petitions, requests, submissions, and comments received by the agency and all other written material regarded by the agency as important to adoption of the rule or the proceeding on which the rule is based;

(d) Any official transcript of oral presentations made in the proceeding on which the rule is based or, if not transcribed, any tape recording or stenographic record of them, and any memorandum prepared by a presiding official summarizing the contents of those presentations;

(e) The concise explanatory statement required by RCW 34.05.355;

(f) All petitions for exceptions to, amendment of, or repeal or suspension of, the rule;

(g) Citations to data, factual information, studies, or reports on which the agency relies in the adoption of the rule, indicating where such data, factual information, studies, or reports are available for review by the public;

(h) The written summary and response required by RCW 34.05.325(6); and

(i) Any other material placed in the file by the agency.

(3) Internal agency documents are exempt from inclusion in the rule-making file under subsection (2) of this section to the extent they constitute preliminary drafts, notes, recommendations, and intra-agency memoranda in which opinions are expressed or policies formulated or recommended, except that a specific document is not exempt from inclusion when it is publicly cited by an agency in connection with its decision.

(4) Upon judicial review, the file required by this section constitutes the official agency rule-making file with respect to that rule. Unless otherwise required by another provision of law, the official agency rule-making file need not be the exclusive basis for agency action on that rule.

Sec. 20. RCW 34.05.380 and 1989 c 175 s 11 are each amended to read as follows:

(1) Each agency shall file ((~~in the office of the code reviser~~)) with the commission a certified copy of all rules it adopts, except for rules contained in tariffs filed with or published by the Washington utilities and transportation commission. Upon its approval of a rule, the commission shall file the rule with the code reviser. The code reviser shall place upon each rule a notation of the time and date of filing and shall keep a permanent register of filed rules open to public inspection. In filing a rule, each agency shall use the standard form prescribed for this purpose by the code reviser.

(2) Emergency rules adopted under RCW 34.05.350 become effective upon filing unless a later date is specified in the order of adoption. All other rules become effective upon the expiration of thirty days after the date of filing, unless a later date is required by statute or specified in the order of adoption.

(3) A rule may become effective immediately upon its filing with the code reviser or on any subsequent date earlier than that established by subsection (2) of this section, if the agency establishes that effective date in the adopting order and finds that:

(a) Such action is required by the state or federal Constitution, a statute, or court order;

(b) The rule only delays the effective date of another rule that is not yet effective; or

The finding and a brief statement of the reasons therefor required by this subsection shall be made a part of the order adopting the rule.

(4) With respect to a rule made effective pursuant to subsection (3) of this section, each agency shall make reasonable efforts to make the effective date known to persons who may be affected by it.

Sec. 21. RCW 42.17.2401 and 1993 sp.s. c 2 s 18, 1993 c 492 s 488, and 1993 c 281 s 43 are each reenacted and amended to read as follows:

For the purposes of RCW 42.17.240, the term "executive state officer" includes:

(1) The chief administrative law judge, the director of agriculture, the administrator of the office of marine safety, the administrator of the Washington basic health plan, the director of the department of services for the blind, the director of the state system of community and technical colleges, the director of community, trade, and economic development, the secretary of corrections, the director of ecology, the commissioner of employment security, the chairman of the energy facility site evaluation council, the director of the energy office, the secretary of the state finance committee, the director of financial management, the director of fish and wildlife, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of general administration, the secretary of health, the administrator of the Washington state health care authority, the executive secretary of the health care facilities authority, the executive secretary of the higher education facilities authority, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the executive director of the independent regulatory review commission, the executive secretary of the indeterminate sentence review board, the director of the department of information services, the director of the interagency committee for outdoor recreation, the executive director of the state investment board, the director of labor and industries, the director of licensing, the director of the lottery commission, the director of the office of minority and women's business enterprises, the director of parks and recreation, the director of personnel, the executive director of the public disclosure commission, the director of retirement systems, the director of revenue, the secretary of social and health services, the chief of the Washington state patrol, the executive secretary of the board of tax appeals, ((~~the director of trade and economic development,~~)) the secretary of transportation, the secretary of the utilities and transportation commission, the director of veterans affairs, the president of each of the regional and state universities and the president of The Evergreen State College, each district and each campus president of each state community college;

(2) Each professional staff member of the office of the governor;

(3) Each professional staff member of the legislature; and

(4) Central Washington University board of trustees, board of trustees of each community college, each member of the state board for community and technical colleges, state convention and trade center board of directors, committee for deferred compensation, Eastern Washington University board of trustees, Washington economic development finance authority, The Evergreen State College board of trustees, forest practices appeals board, forest practices board, gambling commission, Washington health care facilities authority, each member of the Washington health services commission, higher education coordinating board, higher education facilities authority, horse racing commission, state housing finance commission, human rights commission, independent regulatory review commission, indeterminate sentence review board, board of industrial insurance appeals, information services board, interagency committee for outdoor recreation, state investment board, liquor control board, lottery commission, marine oversight board, ((~~oil and gas conservation committee,~~)) Pacific Northwest electric power and conservation planning council, parks and recreation commission, personnel appeals board, board of pilotage commissioners, pollution control hearings board, public disclosure commission, public pension commission, shorelines hearing board, public employees' benefits board, board of tax appeals, transportation commission, University of Washington board of regents, utilities and transportation commission, Washington state maritime commission, Washington personnel resources board, Washington public power supply system executive board, Washington State University board of regents, Western Washington University board of trustees, and fish and wildlife commission.

NEW SECTION. Sec. 22. The following acts or parts of acts are each repealed:

(1) RCW 34.05.610 and 1988 c 288 s 601, 1983 c 53 s 1, & 1981 c 324 s 5;

(2) RCW 34.05.620 and 1994 c 249 s 17, 1988 c 288 s 602, 1987 c 451 s 1, & 1981 c 324 s 6;

(3) RCW 34.05.630 and 1993 c 249 s 18, 1993 c 277 s 1, 1988 c 288 s 603, 1987 c 451 s 2, & 1981 c 324 s 7;

(4) RCW 34.05.640 and 1994 c 249 s 19, 1993 c 277 s 2, 1988 c 288 s 604, 1987 c 451 s 3, & 1981 c 324 s 8;

(5) RCW 34.05.650 and 1988 c 288 s 605, 1987 c 451 s 4, & 1981 c 324 s 9; and

(6) RCW 34.05.660 and 1988 c 288 s 606 & 1981 c 324 s 10.

NEW SECTION. Sec. 23. Sections 1 through 13 of this act are added to chapter 34.05 RCW.

NEW SECTION. Sec. 24. If specific funding for the purposes of this act, referencing this act by bill number, is not provided by June 30, 1995, in the omnibus appropriations act, this act is null and void."

SB 6037 - S AMD - 275

By Senators Sheldon, A. Anderson, Hale, Loveland, Gaspard, Haugen, Wojahn, Snyder, Winsley, Quigley and Rinehart

ADOPTED 3/15/95

On page 1, line 2 of the title, after "commission;" strike the remainder of the title and insert "amending RCW 34.05.010, 34.05.310, 34.05.320, 34.05.335, 34.05.350, 34.05.370, and 34.05.380; reenacting and amending RCW 42.17.2401; adding new sections to chapter 34.05 RCW; creating a new section; and repealing RCW 34.05.610, 34.05.620, 34.05.630, 34.05.640, 34.05.650, and 34.05.660."