BP BHEAD INT S

AN ACT Relating to the creation of the Washington independent regulatory affairs commission; amending RCW 34.05.010, 34.05.320, and 34.05.350; 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, and 34.05.650.

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

NEW SECTION. Sec. 1. (1) The Washington independent regulatory affairs 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, one by the majority leader of the senate, one by the speaker of the house of representatives, one by the minority leader of the senate, and one by the minority leader of the house of representatives. 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 speaker and the minority leader of the house of representatives, respectively, shall serve for initial terms of two years, and the two members appointed by the majority leader and the minority leader of the senate, respectively, shall serve for initial terms of three years. Thereafter, each appointment provided for by this section 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 consecutively. 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 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 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 such times and places as set by the chairman. A commissioner who fails to attend three consecutive meetings without cause shall be removed as a commissioner by the authority appointing that commissioner.

(9) For purposes of conducting official business, a quorum consists of three commissioners.

(10) The commission shall annually file a report of its activities of the prior year with the governor and the legislature.

(11) The commission shall carry out the duties of sections 2 through 8 of this act and any other activities directed by the legislature to improve the regulatory system in the state of Washington.

NEW SECTION. Sec. 2. 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 8 of this act. 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 such other employees as it may from time to time find necessary for the proper performance of its duties.

NEW SECTION. Sec. 3. (1) The commission shall review all administrative rules brought before it to determine the following:

(a) Whether the rule is within the statutory authority of the agency and the intention of the legislature when it enacted the statute upon which the rule is based. In formulating its determination, the commission shall 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 1, chapter . . ., Laws of 1995 (SB 5192).

(2) The commission shall adopt rules governing the procedures it uses in reviewing rules submitted to 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 (1) of this section. The rules adopted by the commission must 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. 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.

NEW SECTION. Sec. 4. (1) The commission shall either approve a rule submitted to it for review, and transmit it to the code reviser for filing, or disapprove it within thirty working days after the rule has been submitted to the commission for review. If the commission fails to act within thirty days, the rule is deemed to have been approved, and the commission shall transmit it to the office of the code reviser for filing.

(2) If the commission disapproves a rule, it shall return the rule to the adopting agency within the thirty-day period specified in subsection (1) of this section, accompanied by a notice 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 reasons for disapproval, as well as a description 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 3(1) 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.

(4) If an agency determines on its own that a rule submitted 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 submitting agency shall memorialize in writing all requests for the return of a rule no later than seven days after the request. The agency shall resubmit to the commission for review within one hundred eighty days as specified in RCW 34.05.335, or refile in accordance with RCW 34.05.320, a rule returned under this subsection.

(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. 5. (1) Within one hundred twenty days of an agency's receipt of the written decision required by section 4 of this act, the agency may rewrite and resubmit a rule returned to it under that section without complying with the notice and hearing requirements of RCW 34.05.320, unless the substantive provisions of the rule are significantly changed. If the rule is significantly changed or is not submitted 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 resubmission of a previously disapproved rule to the commission under subsection (1) of this section, the commission shall review the resubmitted rule only for those reasons expressly identified in the written decision required by section 4 of this act, or for those issues arising as a result of a significant change to a provision of the resubmitted rule or as a result of intervening statutory changes or intervening court orders or decisions.

(3) When an agency resubmits a withdrawn or disapproved rule to the commission, it shall identify the prior withdrawn or disapproved rule by date of submission to the commission, shall specify the portion of the prior rule-making record that should be included in the resubmission, 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) The commission shall expedite the review of a rule resubmitted without significant substantive changes.

(5) 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.

NEW SECTION. Sec. 6. The commission may require the attendance and testimony of witnesses and the production of documentary evidence relative to any investigation or hearing that the commission may conduct in accordance with the powers granted it under this chapter. The subpoena must be signed by the chairman or the executive director and it must be served by a person authorized to serve subpoenas under the laws of this state.

NEW SECTION. Sec. 7. 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 review an existing rule or administrative procedure. Whenever a committee of the senate or the house of representatives requests a review of a rule or administrative procedure, the commission shall make the review and assign it high priority. The commission may petition an agency requesting the adoption, amendment, or repeal of a rule under RCW 34.05.330. 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.

NEW SECTION. Sec. 8. 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 1 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.

Sec. 9. 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 Washington independent regulatory affairs commission created under section 1 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. 10. RCW 34.05.320 and 1994 c 249 s 14 are each amended to read as follows:

(1) 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 affairs 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. 11. 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 affairs 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. 12. 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 affairs 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 affairs 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. 13. 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; and

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

NEW SECTION. Sec. 14. Sections 1 through 8 of this act are added to chapter 34.05 RCW.

NEW SECTION. Sec. 15. 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.