Z-1453.1  _______________________________________________

                         SENATE BILL 6409

          _______________________________________________

State of Washington      54th Legislature     1996 Regular Session

By Senators Bauer, Finkbeiner and Haugen; by request of Department of Information Services and Office of Financial Management

Read first time 01/15/96.  Referred to Committee on Government Operations.

Changing provisions relating to the department of information services.

    AN ACT Relating to the department of information services; amending RCW 43.105.032, 43.105.041, 43.105.041, 43.105.052, 43.105.080, 43.105.160, 43.105.170, 43.105.180, 43.105.190, 43.105.210, and 43.41.110; creating a new section; repealing RCW 43.131.353 and 43.131.354; providing an effective date; and providing an expiration date.

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

    Sec. 1.  RCW 43.105.032 and 1992 c 20 s 8 are each amended to read as follows:

    There is hereby created the Washington state information services board.  The board shall be composed of nine members.  ((Seven)) Five members shall be appointed by the governor, one of which shall be a representative of higher education, one of which shall be a representative of an agency under a state-wide elected official other than the governor, and one of which shall be a representative of the private sector.  One member shall represent the judicial branch and be appointed by the chief justice of the supreme court.  One member shall represent the legislative branch and shall be selected by the president of the senate and the speaker of the house of representatives.  The directors of the department of information services and financial management shall be members.  These members shall constitute the membership of the board with full voting rights.  Members of the board shall serve at the pleasure of the appointing authority.  ((The director shall be an ex officio, nonvoting member of the board.))  The board shall select a chairperson from among its members.

    Vacancies shall be filled in the same manner that the original appointments were made.

    A majority of the members of the board shall constitute a quorum for the transaction of business.

    Members of the board shall be compensated for service on the board in accordance with RCW 43.03.240 and shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

    Sec. 2.  RCW 43.105.041 and 1995 2nd sp.s. c 14 s 512 are each amended to read as follows:

    The board shall have the following powers and duties related to information services:

    (1) To ((develop)) establish standards governing the acquisition and disposition of equipment, proprietary software and purchased services, and confidentiality of computerized data;

    (2) To establish standards and policies governing the planning, implementation, evaluation, and oversight of major information technology projects.  The board may oversee projects meeting criteria developed under RCW 43.105.190;

(3) To purchase, lease, rent, or otherwise acquire, dispose of, and maintain equipment, proprietary software, and purchased services, or to delegate to other agencies and institutions of state government, under appropriate standards, the authority to purchase, lease, rent, or otherwise acquire, dispose of, and maintain equipment, proprietary software, and purchased services:  PROVIDED, That, agencies and institutions of state government, except as provided in RCW 43.105.017(5) and section 507, chapter 14, Laws of 1995 2nd sp. sess., are expressly prohibited from acquiring or disposing of equipment, proprietary software, and purchased services without such delegation of authority.  The acquisition and disposition of equipment, proprietary software, and purchased services is exempt from RCW 43.19.1919 and, as provided in RCW 43.19.1901, from the provisions of RCW 43.19.190 through 43.19.200.  This subsection does not apply to the legislative branch;

    (((3))) (4) To ((develop)) establish state-wide or interagency ((technical)) technology policies, standards, and procedures;

    (((4))) (5) To assure the cost-effective development and incremental implementation of a state-wide video telecommunications system to serve:  Public schools; educational service districts; vocational-technical institutes; community colleges; colleges and universities; state and local government; and the general public through public affairs programming;

    (((5))) (6) To provide direction concerning strategic planning goals and objectives for the state.  The board shall seek input from the legislature and the judiciary;

    (((6))) (7) To develop and implement a process for the resolution of appeals by:

    (a) Vendors concerning the conduct of an acquisition process by an agency or the department; or

    (b) A customer agency concerning the provision of services by the department or by other state agency providers;

    (((7))) (8) To establish policies for the periodic review ((by the department)) of agency performance which may include but are not limited to analysis of:

    (a) Planning, management, control, and use of information services;

    (b) Training and education; and

    (c) Project management;

    (((8))) (9) To set its meeting schedules and convene at scheduled times, or meet at the request of a majority of its members, the chair, or the director; and

    (((9))) (10) To review and approve that portion of the department's budget requests that provides for support to the board.

    Sec. 3.  RCW 43.105.041 and 1990 c 208 s 6 are each amended to read as follows:

    The board shall have the following powers and duties related to information services:

    (1) To ((develop)) establish standards governing the acquisition and disposition of equipment, proprietary software and purchased services, and confidentiality of computerized data;

    (2) To establish standards and policies governing the planning, implementation, evaluation, and oversight of major information technology projects.  The board may oversee projects meeting criteria developed under RCW 43.105.190;

(3) To purchase, lease, rent, or otherwise acquire, dispose of, and maintain equipment, proprietary software, and purchased services, or to delegate to other agencies and institutions of state government, under appropriate standards, the authority to purchase, lease, rent, or otherwise acquire, dispose of, and maintain equipment, proprietary software, and purchased services:  PROVIDED, That, agencies and institutions of state government are expressly prohibited from acquiring or disposing of equipment, proprietary software, and purchased services without such delegation of authority.  The acquisition and disposition of equipment, proprietary software, and purchased services is exempt from RCW 43.19.1919 and, as provided in RCW 43.19.1901, from the provisions of RCW 43.19.190 through 43.19.200.  This subsection does not apply to the legislative branch;

    (((3))) (4) To ((develop)) establish state-wide or interagency ((technical)) technology policies, standards, and procedures;

    (((4))) (5) To assure the cost-effective development and incremental implementation of a state-wide video telecommunications system to serve:  Public schools; educational service districts; vocational-technical institutes; community colleges; colleges and universities; state and local government; and the general public through public affairs programming;

    (((5))) (6) To provide direction concerning strategic planning goals and objectives for the state.  The board shall seek input from the legislature and the judiciary;

    (((6))) (7) To develop and implement a process for the resolution of appeals by:

    (a) Vendors concerning the conduct of an acquisition process by an agency or the department; or

    (b) A customer agency concerning the provision of services by the department or by other state agency providers;

    (((7))) (8) To establish policies for the periodic review ((by the department)) of agency performance which may include but are not limited to analysis of:

    (a) Planning, management, control, and use of information services;

    (b) Training and education; and

    (c) Project management;

    (((8))) (9) To set its meeting schedules and convene at scheduled times, or meet at the request of a majority of its members, the chair, or the director; and

    (((9))) (10) To review and approve that portion of the department's budget requests that provides for support to the board.

    Sec. 4.  RCW 43.105.052 and 1993 c 281 s 53 are each amended to read as follows:

    The department shall:

    (1) Perform all duties and responsibilities the board delegates to the department, including but not limited to((:

    (a) The review of agency acquisition plans and requests; and

    (b))) implementation of state-wide and interagency technology policies, standards, and guidelines;

    (2) Make available information services to state ((agencies and)), local, federal, and tribal governments and political subdivisions and publicly funded nonprofit organizations on a full cost-recovery basis.  These services may include, but are not limited to:

    (a) Telecommunications services for voice, data, and video;

    (b) Mainframe computing services;

    (c) Support for departmental and microcomputer evaluation, installation, and use;

    (d) Equipment acquisition assistance, including leasing, brokering, and establishing master contracts;

    (e) Facilities management services for information technology equipment, equipment repair, and maintenance service;

    (f) Negotiation with local cable companies and local governments to provide for connection to local cable services to allow for access to these public and educational channels in the state;

    (g) Office automation services;

    (h) System development services; and

    (i) Training.

    These services are for discretionary use by customers and customers may elect other alternatives for service if those alternatives are more cost-effective or provide better service((.  Agencies may be required to use the backbone network portions of the telecommunications services during an initial start-up period not to exceed three years));

    (3) Establish rates and fees for services provided by the department to assure that the services component of the department is self-supporting.  A billing rate plan shall be developed for a two-year period to coincide with the budgeting process.  The rate plan shall be subject to review at least annually by the customer oversight committees.  The rate plan shall show the proposed rates by each cost center and will show the components of the rate structure as mutually determined by the department and the customer oversight committees.  The same rate structure will apply to all user agencies of each cost center.  The rate plan and any adjustments to rates shall be approved by the office of financial management.  The services component shall not subsidize the operations of the planning component;

    (4) With the advice of the information services board and agencies, develop a state strategic information technology plan and performance reports as required under RCW 43.105.160;

    (5) Develop plans for the department's achievement of state-wide goals and objectives set forth in the state strategic information technology plan required under RCW 43.105.160.  These plans shall address such services as telecommunications, central and distributed computing, local area networks, office automation, and end user computing.  The department shall seek the advice of customer oversight committees and the board in the development of these plans;

    (6) Under direction of the information services board and in collaboration with the department of personnel, and other agencies as may be appropriate, develop training plans and coordinate training programs that are responsive to the needs of agencies;

    (7) Identify opportunities for the effective use of information services and coordinate appropriate responses to those opportunities;

    (8) ((Assess agencies' projects, acquisitions, plans, or overall information processing performance as requested by the board, agencies, the director of financial management, or the legislature.  Agencies may be required to reimburse the department for agency-requested reviews;

    (9) Develop planning, budgeting, and expenditure reporting requirements, in conjunction with the office of financial management, for agencies to follow;

    (10))) Assist the office of financial management with budgetary and policy review of agency plans for information services;

    (((11))) (9) Provide staff support from the planning component to the board for:

    (a) Meeting preparation, notices, and minutes;

    (b) Promulgation of policies, standards, and guidelines adopted by the board;

    (c) Supervision of studies and reports requested by the board;

    (d) Conducting reviews and assessments as directed by the board;

    (((12))) (e) Presenting to the board for its approval, policy issues that set precedent for the effective and efficient use of information technology.  These issues shall include, but not be limited to, state information technology architectures, implementation and use of state information technology infrastructures, and effective uses of information technology;

(10) Be the lead agency in coordinating video telecommunications services for all state agencies and develop, pursuant to board policies, standards and common specifications for leased and purchased telecommunications equipment.  The department shall not evaluate the merits of school curriculum, higher education course offerings, or other education and training programs proposed for transmission and/or reception using video telecommunications resources.  Nothing in this section shall abrogate or abridge the legal responsibilities of licensees of telecommunications facilities as licensed by the federal communication commission on March 27, 1990; and

    (((13))) (11) Perform all other matters and things necessary to carry out the purposes and provisions of this chapter.

    Sec. 5.  RCW 43.105.080 and 1992 c 235 s 6 are each amended to read as follows:

    There is created a revolving fund to be known as the data processing revolving fund in the custody of the state treasurer.  The revolving fund shall be used for the acquisition of equipment, software, supplies, and services and the payment of salaries, wages, and other costs incidental to the acquisition, development, operation, and administration of information services, telecommunications, systems, software, supplies and equipment, including the payment of principal and interest on bonds issued for capital projects, by the department, ((Washington State University's computer services center,)) the department of personnel's personnel information systems division, the office of financial management's financial systems management group to support the information technology project oversight functions of the office of financial management, and other users as jointly determined by the department and the office of financial management.  The revolving fund is subject to the allotment procedure provided under chapter 43.88 RCW.  Disbursements from the revolving fund for the services component of the department are not subject to appropriation.  Disbursements for the planning component of the department and for the office of financial management's information technology project oversight functions are subject to appropriation.  All disbursements from the fund are subject to the allotment procedures provided under chapter 43.88 RCW.  The department shall establish and implement a billing structure to assure all agencies pay an equitable share of the costs.

    As used in this section, the word "supplies" shall not be interpreted to delegate or abrogate the division of purchasing's responsibilities and authority to purchase supplies as described in RCW 43.19.190 and 43.19.200.

    Sec. 6.  RCW 43.105.160 and 1992 c 20 s 1 are each amended to read as follows:

    (1) The department shall prepare a state strategic information technology plan which shall establish a state-wide mission, goals, and objectives for the use of information technology.  The plan shall be developed in accordance with the standards and policies established by the board and shall be submitted to the board for review, modification as necessary, and approval.  The department shall seek the advice of the board in the development of this plan.

    The plan approved under this section shall be updated as necessary and submitted to the governor and the chairs and ranking minority members of the appropriations committees of the senate and the house of representatives.

    (2) The department, in consultation with the board and the office of financial management, shall prepare a biennial state performance report on information technology based on agency performance reports required under RCW 43.105.170 and other information deemed appropriate by the department.  The report shall include, but not be limited to:

    (a) An evaluation of performance relating to information technology;

    (b) An assessment of progress made toward implementing the state strategic information technology plan;

    (c) An analysis of the success or failure, feasibility, progress, costs, and timeliness of implementation of major information technology projects under RCW 43.105.190;

    (d) Identification of benefits, cost avoidance, and cost savings generated by major information technology projects developed under RCW 43.105.190; and

    (e) An inventory of state information services, equipment, and proprietary software.

    Copies of the report shall be distributed biennially to the governor and the chairs and ranking minority members of the appropriations committees of the senate and the house of representatives.

    Sec. 7.  RCW 43.105.170 and 1992 c 20 s 2 are each amended to read as follows:

    (1) Each agency shall develop an agency strategic information technology plan which establishes agency goals and objectives regarding the development and use of information technology.  Plans shall include, but not be limited to, the following:

    (a) A statement of the agency's mission, goals, and objectives for information technology;

    (b) An explanation of how the agency's mission, goals, and objectives for information technology support and conform to the state strategic information technology plan developed under RCW 43.105.160;

    (c) Projects and resources required to meet the objectives of the plan; and

    (d) Where feasible, estimated schedules and funding required to implement identified projects.

    (2) Plans developed under subsection (1) of this section shall be submitted to the department and the office of financial management for joint review and forwarded along with ((the department's)) their joint recommendations to the board for review and approval.  The board may reject, require modification to, or approve plans as deemed appropriate by the board.  Plans submitted under this subsection shall be updated and submitted for review and approval as necessary.

    (3) Each agency shall prepare and submit to the department and the office of financial management a biennial performance report.  The report shall include:

    (a) An evaluation of the agency's performance relating to information technology;

    (b) An assessment of progress made toward implementing the agency strategic information technology plan; and

    (c) An inventory of agency information services, equipment, and proprietary software.

    (4) The department, with the approval of the board and in collaboration with the office of financial management, shall establish standards, elements, form, and format for plans and reports developed under this section.

    (5) The board may exempt any agency from any or all of the requirements of this section.

    Sec. 8.  RCW 43.105.180 and 1992 c 20 s 3 are each amended to read as follows:

    ((Upon request of)) The office of financial management((, the department)) shall:

(1) Evaluate agency budget requests for major information technology projects identified under RCW 43.105.190((.  The department shall submit recommendations for funding all or part of such requests to the office of financial management.));

    ((The department, with the advice and approval of the office of financial management, shall))

(2) Establish, with the approval of the board, criteria for the evaluation of agency budget requests under this section.  Criteria shall include, but not be limited to:  Feasibility of the proposed projects, consistency with state and agency strategic information technology plans, consistency with agency goals and objectives, costs, and benefits, an appropriate measure of return on investment, generated from cost-benefit analysis, and a review of proposed projects as investments by taxpayers of the state.  Agencies proposing major information technology projects shall quantify life-cycle costs and benefits of a proposed project and of alternatives to a proposed project.

A summary of the evaluation results for each proposed project shall be transmitted to the fiscal committees of the legislature concurrently with submission of the governor's budget proposals;

(3) Assess agencies' projects, acquisitions, plans, or overall information processing performance as requested by the board, agencies, or the legislature.  Agencies may be required to reimburse the office of financial management for agency-requested reviews; and

(4) Establish budgeting and expenditure reporting requirements for agencies to follow when submitting budget requests for major information technology projects.

    Sec. 9.  RCW 43.105.190 and 1992 c 20 s 4 are each amended to read as follows:

    (1) The ((department)) office of financial management, with the approval of the board, shall establish standards and policies governing the planning, implementation, ((and)) evaluation, and oversight of major information technology projects.  The standards and policies shall:

    (a) Establish criteria to identify projects which are subject to this section.  Such criteria shall include, but not be limited to, significant anticipated cost, complexity, or state-wide significance of the project; and

    (b) Establish a model process and procedures which agencies shall follow in developing and implementing project plans.  Agencies may propose, for approval by the ((department)) office of financial management, a process and procedures unique to the agency.  The ((department)) office of financial management may accept or require modification of such agency proposals or the ((department)) office of financial management may reject such agency proposals and require use of the model process and procedures established under this subsection.  Any process and procedures developed under this subsection shall require (i) distinct and identifiable phases upon which funding may be based, (ii) user validation of products through system demonstrations and testing of prototypes and deliverables, and (iii) other elements identified by the board.

    Project plans and any agreements established under such plans shall be approved and mutually agreed upon by ((the director,)) the director of financial management((,)) and the head of the agency proposing the project.

    The director of financial management may terminate a major project if ((the director)) he or she determines that the project is not meeting or is not expected to meet anticipated performance standards.

    (2) The office of financial management, with the approval of the board, shall establish policies and standards governing the funding of projects ((developed under)) subject to this section.  The policies and standards shall provide for:

    (a) Funding of a project under terms and conditions mutually agreed to by ((the director,)) the director of financial management((,)) and the head of the agency proposing the project.  However, the office of financial management may require incremental funding of a project on a phase-by-phase basis whereby funds for a given phase of a project may be released only when the office of financial management determines((, with the advice of the department,)) that the previous phase is satisfactorily completed;

    (b) Acceptance testing of products to assure that products perform satisfactorily before they are accepted and final payment is made; and

    (c) Other elements deemed necessary by the office of financial management.

    (3) The ((department)) office of financial management shall evaluate projects at three stages of development as follows:  (a) Initial needs assessment; (b) feasibility study including definition of scope, development of tasks and timeliness, and estimated costs and benefits; and (c) final project implementation plan based upon available funding.

    Copies of project evaluations conducted under this subsection shall be submitted to the ((office of financial management)) board and the chairs, ranking minority members, and staff coordinators of the appropriations committees of the senate and house of representatives.

    Sec. 10.  RCW 43.105.210 and 1993 sp.s. c 1 s 903 are each amended to read as follows:

    No state agency may expend any moneys for major information technology projects subject to review by the ((department of information services)) office of financial management under RCW 43.105.190 unless specifically authorized by the legislature.  An intentional or negligent violation of this section constitutes a violation of RCW 43.88.290 and shall subject the head of the agency to forfeiture of office and other civil penalties as provided under RCW 43.88.300.

    If the director of ((information services)) financial management intentionally or negligently approved an expenditure in violation of this section, then all sanctions described in this section and RCW 43.88.300 shall also apply to the director of ((information services)) financial management.

    Sec. 11.  RCW 43.41.110 and 1981 2nd ex.s. c 4 s 13 are each amended to read as follows:

    The office of financial management shall:

    (1) Provide technical assistance to the governor and the legislature in identifying needs and in planning to meet those needs through state programs and a plan for expenditures.

    (2) Perform the comprehensive planning functions and processes necessary or advisable for state program planning and development, preparation of the budget, inter-departmental and inter-governmental coordination and cooperation, and determination of state capital improvement requirements.

    (3) Perform all duties and responsibilities delegated by the board including but not limited to:

(a) Technical assistance, evaluation, and oversight of major information technology projects, budget requests, and plans;

(b) Review of agency acquisition plans and requests;

(c) Development of evaluation, oversight, and acquisition policies, standards, and procedures;

(d) Supervision of studies and reports requested by the board; and

(e) Conducting reviews and assessments.

(4) Provide assistance and coordination to state agencies and departments in their preparation of plans and programs.

    (((4))) (5) Provide general coordination and review of plans in functional areas of state government as may be necessary for receipt of federal or state funds.

    (((5))) (6) Participate with other states or subdivisions thereof in interstate planning.

    (((6))) (7) Encourage educational and research programs that further planning and provide administrative and technical services therefor.

    (((7))) (8) Carry out the provisions of RCW 43.62.010 through 43.62.050 relating to the state census.

    (((8))) (9) Be the official state participant in the federal-state cooperative program for local population estimates and as such certify all city and county special censuses to be considered in the allocation of state and federal revenues.

    (((9))) (10) Be the official state center for processing and dissemination of federal decennial or quinquennial census data in cooperation with other state agencies.

    (((10))) (11) Be the official state agency certifying annexations, incorporations, or disincorporations to the United States bureau of the census.

    (((11))) (12) Review all United States bureau of the census population estimates used for federal revenue sharing purposes and provide a liaison for local governments with the United States bureau of the census in adjusting or correcting revenue sharing population estimates.

     (((12))) (13) Provide fiscal notes depicting the expected fiscal impact of proposed legislation in accordance with chapter 43.88A RCW.

    (((13))) (14) Be the official state agency to estimate and manage the cash flow of all public funds as provided in chapter 43.88 RCW.  To this end, the office shall adopt such rules as are necessary to manage the cash flow of public funds.

NEW SECTION. Sec. 12.  (1) All powers, duties, and functions of the department of information services pertaining to the evaluation and oversight of major information technology projects are transferred to the office of financial management.  All references to the director or the department of information services in the Revised Code of Washington shall be construed to mean the director or the office of financial management when referring to the functions transferred in this section.

    (2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the department of information services pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the office of financial management.  All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the department of information services in carrying out the powers, functions, and duties transferred shall be made available to the office of financial management.  All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the office of financial management.

    (b) Any appropriations made to the department of information services for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred and credited to the office of financial management.

    (c) Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

    (3) All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the office of financial management to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

    (4) All rules and all pending business before the department of information services pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the office of financial management.  All existing contracts and obligations shall remain in full force and shall be performed by the office of financial management.

    (5) The transfer of the powers, duties, functions, and personnel of the department of information services shall not affect the validity of any act performed before the effective date of this section.

    (6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer.  Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

    (7) Nothing contained in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the personnel board as provided by law.

NEW SECTION. Sec. 13.  The following acts or parts of acts are each repealed:

(1) RCW 43.131.353 and 1992 c 20 s 12 & 1987 c 504 s 22; and

(2) RCW 43.131.354 and 1992 c 20 s 13 & 1987 c 504 s 24.

NEW SECTION. Sec. 14.  Section 2 of this act expires June 30, 1997.

NEW SECTION. Sec. 15.  Section 3 of this act takes effect June 30, 1997.

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