S-4553.3  _______________________________________________

                         SENATE BILL 6671

          _______________________________________________

State of Washington      54th Legislature     1996 Regular Session

By Senators McDonald, Snyder, West, Rinehart, Loveland, Sellar, Oke and Kohl

Read first time 01/23/96.  Referred to Committee on Ways & Means.

Changing the name of the economic and revenue forecast council to the economic, revenue, and caseload forecast council, and amending its duties accordingly.

    AN ACT Relating to state revenue and caseload forecasts; amending RCW 82.33.010, 82.33.020, 82.33.030, 82.33.040, 7.68.085, 41.06.087, 41.45.020, 41.50.067, 43.88.020, 43.88.037, 43.88.120, 43.88.160, 50.38.050, 70.94.431, and 70.94.483; reenacting and amending RCW 43.88.030 and 70.94.650; adding a new section to chapter 82.33 RCW; and providing an effective date.

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

    Sec. 1.  RCW 82.33.010 and 1990 c 229 s 1 are each amended to read as follows:

    (1) The economic ((and)), revenue, and caseload forecast council is hereby created.  The council shall consist of two individuals appointed by the governor and four individuals, one of whom is appointed by the chairperson of each of the two largest political caucuses in the senate and house of representatives.  In making the two appointments to the council, the governor may designate two other persons to serve as members, in lieu of the two primary appointees, when the council is dealing with issues directly related to caseload forecasts.  The chair of the council shall be selected from among the four caucus appointees.  The council may select such other officers as the members deem necessary.

    (2) The council shall employ an economic and revenue forecast supervisor to supervise the preparation of all economic and revenue forecasts.  ((As used in this chapter, "supervisor" means the economic and revenue forecast supervisor.)) (3) The council shall employ a caseload forecast supervisor to supervise the preparation of all state caseload forecasts.  The caseload forecast supervisor should possess broad training and experience in the social sciences, which may include, but need not be limited or restricted to, quantitative analysis and forecasting methods, economics, labor market economics, and sociology.

(4) Approval by an affirmative vote of at least five members of the council is required for any decisions regarding employment of the supervisors.  Employment of the supervisors shall terminate after each term of three years.  At the end of the first year of each three-year term the council shall consider extension of the supervisor's term by one year.  The council may fix the compensation of the supervisors.  The supervisors shall employ staff sufficient to accomplish the purposes of this section.

    (((3))) (5) The economic ((and)), revenue, and caseload forecast council shall oversee the preparation of and approve, by an affirmative vote of at least four members, the official, optimistic, and pessimistic state economic ((and)), revenue, and caseload forecasts prepared under RCW 82.33.020.  If the council is unable to approve a forecast before a date required in RCW 82.33.020, the supervisors shall submit the forecast without approval and the forecast shall have the same effect as if approved by the council.

    (((4))) (6) A council member who does not cast an affirmative vote for approval of the official economic and revenue forecast or caseload forecast may request, and the supervisors shall provide, an alternative ((economic and revenue))forecast based on assumptions specified by the member.

    (((5))) (7) Members of the economic ((and)), revenue, and caseload forecast council shall serve without additional compensation but shall be reimbursed for travel expenses in accordance with RCW 44.04.120 while attending sessions of the council or on official business authorized by the council.  Nonlegislative members of the council shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

(8) "Caseload," as used in this chapter, means the number of persons expected to meet entitlement requirements and require the services of the aid to families with dependent children program, the psychiatric hospitalization programs, the medical assistance program, programs for long-term care for persons with functional disabilities, state correctional institutions, state institutions for juvenile offenders, the common school system, and other state-funded programs as determined by the council.

(9) Unless the context clearly requires otherwise, the definitions provided in RCW 43.88.020 apply to this chapter.

    Sec. 2.  RCW 82.33.020 and 1992 c 231 s 34 are each amended to read as follows:

    (1) Four times each year, the economic and revenue forecast supervisor shall prepare, subject to the approval of the economic ((and)), revenue, and caseload forecast council under RCW 82.33.010:

    (a) An official state economic and revenue forecast;

    (b) An unofficial state economic and revenue forecast based on optimistic economic and revenue projections; and

    (c) An unofficial state economic and revenue forecast based on pessimistic economic and revenue projections.

    (2) Four times each year, the caseload forecast supervisor shall prepare, subject to the approval of the economic, revenue, and caseload forecast council under RCW 82.33.010:

(a) An official state caseload forecast;

(b) An unofficial state caseload forecast based on optimistic caseload projections; and

(c) An unofficial state caseload forecast based on pessimistic caseload projections.

(3) The supervisors shall submit forecasts prepared under this section, along with any unofficial forecasts provided under RCW 82.33.010, to the governor and the members of the committees on ways and means and the chairs of the committees on transportation of the senate and house of representatives and the chair of the legislative transportation committee, including one copy to the staff of each of the committees, on or before November 20th, February 20th in the even-numbered years, March 20th in the odd-numbered years, June 20th, and September 20th.  All economic and revenue forecasts shall include both estimated receipts and estimated revenues, in conformance with generally accepted accounting principles as provided by RCW 43.88.037, for the current fiscal year and the next ensuing four fiscal years.

    (((3))) (4) All agencies of state government shall provide to the economic and revenue forecast supervisor and the caseload forecast supervisor immediate access to all information relating to economic ((and)), revenue, and caseload forecasts.  Revenue collection information shall be available to the economic and revenue forecast supervisor the first business day following the conclusion of each collection period.

    (((4))) (5) The economic and revenue forecast supervisor and staff shall co-locate and share information, data, and files with the tax research section of the department of revenue but shall not duplicate the duties and functions of one another.

    (((5))) (6) As part of its forecasts under subsection (1) of this section, the economic and revenue forecast supervisor shall provide estimated revenue from tuition fees as defined in RCW 28B.15.020.

NEW SECTION. Sec. 3.  A new section is added to chapter 82.33 RCW to read as follows:

    In consultation with the office of financial management and upon the recommendation of the staff of the economic, revenue, and caseload forecast council, the council shall certify the undesignated fund balance and working capital and other reserves for the state general fund.  The certification shall be made in conjunction with the revenue forecasts adopted under RCW 82.33.020.

    The council shall review, and approve or reject, any interpretations and applications by the office of financial management of the comprehensive state budgeting, accounting, and reporting requirements that significantly affect the estimated revenues, receipts, and fund balances of the state general fund.

    Sec. 4.  RCW 82.33.030 and 1984 c 138 s 3 are each amended to read as follows:

    The administrator of the legislative evaluation and accountability program committee may request, and the supervisors shall provide, alternative economic ((and)), revenue, and caseload forecasts based on assumptions specified by the administrator.

    Sec. 5.  RCW 82.33.040 and 1986 c 158 s 23 are each amended to read as follows:

    (1) To promote the free flow of information and to promote legislative input in the preparation of forecasts, immediate access to all information relating to economic ((and)), revenue, and caseload forecasts shall be available to the economic and revenue and caseload forecast work groups, hereby created.  Revenue collection information shall be available to the economic and revenue forecast work group the first business day following the conclusion of each collection period.  Each state agency affected by caseloads shall submit caseload reports and data to the council as soon as the reports and data are available and shall provide to the council and the caseload forecast supervisor such additional raw, program-level data or information as may be necessary for discharge of their respective duties.

(2) The economic and revenue forecast work group shall consist of one staff member selected by the executive head or chairperson of each of the following agencies or committees:

    (a) Department of revenue;

    (b) Office of financial management;

    (c) Legislative evaluation and accountability program committee;

    (d) Ways and means committee, or its successor, of the senate; and

    (e) ((Ways and means)) Finance committee, or its successor, of the house of representatives.

    (((2))) (3) The caseload work group shall consist of one staff member selected by the executive head or chairperson of each of the following agencies, programs, or committees:

(a) Office of financial management;

(b) Ways and means committee, or its successor, of the senate;

(c) Appropriations committee, or its successor, of the house of representatives; and

(d) Each state program for which the council forecasts the caseload.

(4) The economic ((and)), revenue, and caseload forecast work groups shall provide technical support to the economic ((and)), revenue, and caseload forecast council.  Meetings of the economic ((and)), revenue, and caseload forecast work groups may be called by any member of the groups for the purpose of assisting the ((economic and revenue forecast)) council, reviewing ((the state economic and revenue)) forecasts, or reviewing monthly revenue collection data or for any other purpose which may assist the ((economic and revenue forecast)) council.

    Sec. 6.  RCW 7.68.085 and 1990 c 3 s 504 are each amended to read as follows:

    The director of labor and industries shall institute a cap on medical benefits of one hundred fifty thousand dollars per injury or death.  Payment for medical services in excess of the cap shall be made available to any innocent victim under the same conditions as other medical services and if the medical services are:

    (1) Necessary for a previously accepted condition;

    (2) Necessary to protect the victim's life or prevent deterioration of the victim's previously accepted condition; and

    (3) Not available from an alternative source.

    The director of financial management and the director of labor and industries shall monitor expenditures from the public safety and education account.  Once each fiscal quarter, the director of financial management shall determine if expenditures from the public safety and education account during the prior fiscal quarter exceeded allotments by more than ten percent.  Within thirty days of a determination that expenditures exceeded allotments by more than ten percent, the director of financial management shall develop and implement a plan to reduce expenditures from the account to a level that does not exceed the allotments.  Such a plan may include across-the-board reductions in allotments from the account to all nonjudicial agencies except for the crime victims compensation program.  In implementing the plan, the director of financial management shall seek the cooperation of judicial agencies in reducing their expenditures from the account.  The director of financial management shall notify the legislative fiscal committees prior to implementation of the plan.

    Development and implementation of the plan is not required if the director of financial management notifies the legislative fiscal committees that increases in the official revenue forecast for the public safety and education account for that fiscal quarter will eliminate the need to reduce expenditures from the account.  The official revenue forecast for the public safety and education account shall be prepared by the economic ((and)), revenue, and caseload forecast council ((pursuant to)) under RCW 82.33.020 and 82.33.010.

    For the purposes of this section, an individual will not be required to use his or her assets other than funds recovered as a result of a civil action or criminal restitution, for medical expenses or pain and suffering, in order to qualify for an alternative source of payment.

    The director shall, in cooperation with the department of social and health services, establish by October 1, 1989, a process to aid crime victims in identifying and applying for appropriate alternative benefit programs, if any, administered by the department of social and health services.

    Sec. 7.  RCW 41.06.087 and 1990 c 229 s 3 are each amended to read as follows:

    In addition to the exemptions set forth in RCW 41.06.070, this chapter does not apply to the economic and revenue forecast and caseload forecast supervisors and staff employed under RCW 82.33.010.

    Sec. 8.  RCW 41.45.020 and 1995 c 239 s 306 are each amended to read as follows:

    As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

    (1) "Council" means the economic ((and)), revenue, and caseload forecast council created in RCW 82.33.010.

    (2) "Department" means the department of retirement systems.

    (3) "Law enforcement officers' and fire fighters' retirement system plan I" and "law enforcement officers' and fire fighters' retirement system plan II" mean the benefits and funding provisions under chapter 41.26 RCW.

    (4) "Public employees' retirement system plan I" and "public employees' retirement system plan II" mean the benefits and funding provisions under chapter 41.40 RCW.

    (5) "Teachers' retirement system plan I," "teachers' retirement system plan II," and "teachers' retirement system plan III" mean the benefits and funding provisions under chapter 41.32 RCW.

    (6) "Washington state patrol retirement system" means the retirement benefits provided under chapter 43.43 RCW.

    (7) "Unfunded liability" means the unfunded actuarial accrued liability of a retirement system.

    (8) "Actuary" or "state actuary" means the state actuary employed under chapter 44.44 RCW.

    (9) "State retirement systems" means the retirement systems listed in RCW 41.50.030.

    Sec. 9.  RCW 41.50.067 and 1993 c 519 s 21 are each amended to read as follows:

    The director shall inform all employers in writing as to the employer rates adopted by the economic ((and)), revenue, and caseload forecast council upon the notification of the council as prescribed in RCW 41.45.060.

    Sec. 10.  RCW 43.88.020 and 1995 c 155 s 1 are each amended to read as follows:

    (1) "Budget" means a proposed plan of expenditures for a given period or purpose and the proposed means for financing these expenditures.

    (2) "Budget document" means a formal statement, either written or provided on any electronic media or both, offered by the governor to the legislature, as provided in RCW 43.88.030.

    (3) "Director of financial management" means the official appointed by the governor to serve at the governor's pleasure and to whom the governor may delegate necessary authority to carry out the governor's duties as provided in this chapter.  The director of financial management shall be head of the office of financial management which shall be in the office of the governor.

    (4) "Agency" means and includes every state office, officer, each institution, whether educational, correctional or other, and every department, division, board and commission, except as otherwise provided in this chapter.

    (5) "Public funds", for purposes of this chapter, means all moneys, including cash, checks, bills, notes, drafts, stocks, and bonds, whether held in trust, for operating purposes, or for capital purposes, and collected or disbursed under law, whether or not such funds are otherwise subject to legislative appropriation, including funds maintained outside the state treasury.

    (6) "Regulations" means the policies, standards, and requirements, stated in writing, designed to carry out the purposes of this chapter, as issued by the governor or the governor's designated agent, and which shall have the force and effect of law.

    (7) "Ensuing biennium" means the fiscal biennium beginning on July 1st of the same year in which a regular session of the legislature is held during an odd-numbered year pursuant to Article II, section 12 of the Constitution and which biennium next succeeds the current biennium.

    (8) "Dedicated fund" means a fund in the state treasury, or a separate account or fund in the general fund in the state treasury, that by law is dedicated, appropriated or set aside for a limited object or purpose; but "dedicated fund" does not include a revolving fund or a trust fund.

    (9) "Revolving fund" means a fund in the state treasury, established by law, from which is paid the cost of goods or services furnished to or by a state agency, and which is replenished through charges made for such goods or services or through transfers from other accounts or funds.

    (10) "Trust fund" means a fund in the state treasury in which designated persons or classes of persons have a vested beneficial interest or equitable ownership, or which was created or established by a gift, grant, contribution, devise, or bequest that limits the use of the fund to designated objects or purposes.

    (11) "Administrative expenses" means expenditures for:  (a) Salaries, wages, and related costs of personnel and (b) operations and maintenance including but not limited to costs of supplies, materials, services, and equipment.

    (12) "Fiscal year" means the year beginning July 1st and ending the following June 30th.

    (13) "Lapse" means the termination of authority to expend an appropriation.

    (14) "Legislative fiscal committees" means the legislative budget committee, the legislative evaluation and accountability program committee, the ways and means committees of the senate and house of representatives, and, where appropriate, the legislative transportation committee.

    (15) "Fiscal period" means the period for which an appropriation is made as specified within the act making the appropriation.

    (16) "Primary budget driver" means the primary determinant of a budget level, other than a price variable, which causes or is associated with the major expenditure of an agency or budget unit within an agency, such as a caseload, enrollment, workload, or population statistic.

    (17) (("Stabilization account" means the budget stabilization account created under RCW 43.88.525 as an account in the general fund of the state treasury.

    (18) "State tax revenue limit" means the limitation created by chapter 43.135 RCW.

    (19))) "General state revenues" means the revenues defined by Article VIII, section 1(c) of the state Constitution.

    (((20))) (18) "Annual growth rate in real personal income" means the estimated percentage growth in personal income for the state during the current fiscal year, expressed in constant value dollars, as published by the office of financial management or its successor agency.

    (((21))) (19) "Estimated revenues" means estimates of revenue in the most recent official economic and revenue forecast prepared under RCW 82.33.020, and prepared by the office of financial management for those funds, accounts, and sources for which the office of the economic ((and)), revenue, and caseload forecast council does not prepare an official forecast including estimates of revenues to support financial plans under RCW 44.40.070, that are prepared by the office of financial management in consultation with the interagency task force.

    (((22))) (20) "Estimated receipts" means the estimated receipt of cash in the most recent official economic and revenue forecast prepared under RCW 82.33.020, and prepared by the office of financial management for those funds, accounts, and sources for which the office of the economic ((and)), revenue, and caseload forecast council does not prepare an official forecast.

    (((23))) (21) "State budgeting, accounting, and reporting system" means a system that gathers, maintains, and communicates fiscal information.  The system links fiscal information beginning with development of agency budget requests through adoption of legislative appropriations to tracking actual receipts and expenditures against approved plans.

    (((24))) (22) "Allotment of appropriation" means the agency's statement of proposed expenditures, the director of financial management's review of that statement, and the placement of the approved statement into the state budgeting, accounting, and reporting system.

    (((25))) (23) "Statement of proposed expenditures" means a plan prepared by each agency that breaks each appropriation out into monthly detail representing the best estimate of how the appropriation will be expended.

    (((26))) (24) "Undesignated fund balance (or deficit)" means unreserved and undesignated current assets or other resources available for expenditure over and above any current liabilities which are expected to be incurred by the close of the fiscal period.

    (((27))) (25) "Internal audit" means an independent appraisal activity within an agency for the review of operations as a service to management, including a systematic examination of accounting and fiscal controls to assure that human and material resources are guarded against waste, loss, or misuse; and that reliable data are gathered, maintained, and fairly disclosed in a written report of the audit findings.

    (((28))) (26) "Performance verification" means an analysis that (a) verifies the accuracy of data used by state agencies in quantifying intended results and measuring performance toward those results, and (b) verifies whether or not the reported results were achieved.

    (((29))) (27) "Program evaluation" means the use of a variety of policy and fiscal research methods to (a) determine the extent to which a program is achieving its legislative intent in terms of producing the effects expected, and (b) make an objective judgment of the implementation, outcomes, and net cost or benefit impact of programs in the context of their goals and objectives.  It includes the application of systematic methods to measure the results, intended or unintended, of program activities.

    Sec. 11.  RCW 43.88.030 and 1994 c 247 s 7 and 1994 c 219 s 2 are each reenacted and amended to read as follows:

    (1) The director of financial management shall provide all agencies with a complete set of instructions for submitting biennial budget requests to the director at least three months before agency budget documents are due into the office of financial management.  The director shall provide agencies that are required under RCW 44.40.070 to develop comprehensive six-year program and financial plans with a complete set of instructions for submitting these program and financial plans at the same time that instructions for submitting other budget requests are provided.  The budget document or documents shall consist of the governor's budget message which shall be explanatory of the budget and shall contain an outline of the proposed financial policies of the state for the ensuing fiscal period, as well as an outline of the proposed six-year financial policies where applicable, and shall describe in connection therewith the important features of the budget.  The message shall set forth the reasons for salient changes from the previous fiscal period in expenditure and revenue items and shall explain any major changes in financial policy.  Attached to the budget message shall be such supporting schedules, exhibits and other explanatory material in respect to both current operations and capital improvements as the governor shall deem to be useful to the legislature.  The budget document or documents shall set forth a proposal for expenditures in the ensuing fiscal period, or six-year period where applicable, based upon the estimated revenues, undesignated fund balances, and caseloads as approved by the economic ((and)), revenue, and caseload forecast council or upon the estimated revenues, undesignated fund balances, and caseloads of the office of financial management for those funds, accounts, ((and)) sources, and programs for which the office of the economic ((and)), revenue, and caseload forecast council does not prepare an official forecast, including those revenues anticipated to support the six-year programs and financial plans under RCW 44.40.070.  In estimating revenues to support financial plans under RCW 44.40.070, the office of financial management shall rely on information and advice from the interagency revenue task force.  Revenues shall be estimated for such fiscal period from the source and at the rates existing by law at the time of submission of the budget document, including the supplemental budgets submitted in the even-numbered years of a biennium.  However, the estimated revenues, fund balances, and caseloads for use in the governor's budget document may be adjusted to reflect budgetary revenue transfers and revenue estimates dependent upon budgetary assumptions of enrollments, workloads, and caseloads.  All adjustments to the approved estimated revenues, fund balances, and caseloads must be set forth in the budget document.  The governor may additionally submit, as an appendix to each supplemental, biennial, or six-year agency budget or to the budget document or documents, a proposal for expenditures in the ensuing fiscal period from revenue sources derived from proposed changes in existing statutes.

    Supplemental and biennial documents shall reflect a six-year expenditure plan consistent with estimated revenues from existing sources and at existing rates for those agencies required to submit six-year program and financial plans under RCW 44.40.070.  Any additional revenue resulting from proposed changes to existing statutes shall be separately identified within the document as well as related expenditures for the six-year period.

    The budget document or documents shall also contain:

    (a) Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, those anticipated for the ensuing biennium, and those anticipated for the ensuing six-year period to support the six-year programs and financial plans required under RCW 44.40.070;

    (b) The undesignated fund balance or deficit, by fund;

    (c) Such additional information dealing with expenditures, revenues, workload, performance, and personnel as the legislature may direct by law or concurrent resolution;

    (d) Such additional information dealing with revenues and expenditures as the governor shall deem pertinent and useful to the legislature;

    (e) Tabulations showing expenditures classified by fund, function, activity and object;

    (f) A delineation of each agency's activities, including those activities funded from nonbudgeted, nonappropriated sources, including funds maintained outside the state treasury;

    (g) Identification of all proposed direct expenditures to implement the Puget Sound water quality plan under chapter 90.70 RCW, shown by agency and in total; and

    (h) Tabulations showing each postretirement adjustment by retirement system established after fiscal year 1991, to include, but not be limited to, estimated total payments made to the end of the previous biennial period, estimated payments for the present biennium, and estimated payments for the ensuing biennium.

    (2) The budget document or documents shall include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and shall also include all proposed operating or capital expenditures.  The total of beginning undesignated fund balance and estimated revenues less working capital and other reserves shall equal or exceed the total of proposed applicable expenditures.  The budget document or documents shall further include:

    (a) Interest, amortization and redemption charges on the state debt;

    (b) Payments of all reliefs, judgments and claims;

    (c) Other statutory expenditures;

    (d) Expenditures incident to the operation for each agency;

    (e) Revenues derived from agency operations;

    (f) Expenditures and revenues shall be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium, as well as those required to support the six-year programs and financial plans required under RCW 44.40.070;

    (g) A showing and explanation of amounts of general fund and other funds obligations for debt service and any transfers of moneys that otherwise would have been available for appropriation;

    (h) Common school expenditures on a fiscal-year basis;

    (i) A showing, by agency, of the value and purpose of financing contracts for the lease/purchase or acquisition of personal or real property for the current and ensuing fiscal periods; and

    (j) A showing and explanation of anticipated amounts of general fund and other funds required to amortize the unfunded actuarial accrued liability of the retirement system specified under chapter 41.45 RCW, and the contributions to meet such amortization, stated in total dollars and as a level percentage of total compensation.

    (3) A separate capital budget document or schedule shall be submitted that will contain the following:

    (a) A statement setting forth a long-range facilities plan for the state that identifies and includes the highest priority needs within affordable spending levels;

    (b) A capital program consisting of proposed capital projects for the next biennium and the two biennia succeeding the next biennium consistent with the long-range facilities plan.  Insomuch as is practical, and recognizing emergent needs, the capital program shall reflect the priorities, projects, and spending levels proposed in previously submitted capital budget documents in order to provide a reliable long-range planning tool for the legislature and state agencies;

    (c) A capital plan consisting of proposed capital spending for at least four biennia succeeding the next biennium;

    (d) A statement of the reason or purpose for a project;

    (e) Verification that a project is consistent with the provisions set forth in chapter 36.70A RCW;

    (f) A statement about the proposed site, size, and estimated life of the project, if applicable;

    (g) Estimated total project cost;

    (h) For major projects valued over five million dollars, estimated costs for the following project components:  Acquisition, consultant services, construction, equipment, project management, and other costs included as part of the project.  Project component costs shall be displayed in a standard format defined by the office of financial management to allow comparisons between projects;

    (i) Estimated total project cost for each phase of the project as defined by the office of financial management;

    (j) Estimated ensuing biennium costs;

    (k) Estimated costs beyond the ensuing biennium;

    (l) Estimated construction start and completion dates;

    (m) Source and type of funds proposed;

    (n) Estimated ongoing operating budget costs or savings resulting from the project, including staffing and maintenance costs;

    (o) For any capital appropriation requested for a state agency for the acquisition of land or the capital improvement of land in which the primary purpose of the acquisition or improvement is recreation or wildlife habitat conservation, the capital budget document, or an omnibus list of recreation and habitat acquisitions provided with the governor's budget document, shall identify the projected costs of operation and maintenance for at least the two biennia succeeding the next biennium.  Omnibus lists of habitat and recreation land acquisitions shall include individual project cost estimates for operation and maintenance as well as a total for all state projects included in the list.  The document shall identify the source of funds from which the operation and maintenance costs are proposed to be funded;

    (p) Such other information bearing upon capital projects as the governor deems to be useful;

    (q) Standard terms, including a standard and uniform definition of maintenance for all capital projects;

    (r) Such other information as the legislature may direct by law or concurrent resolution.

    For purposes of this subsection (3), the term "capital project" shall be defined subsequent to the analysis, findings, and recommendations of a joint committee comprised of representatives from the house capital appropriations committee, senate ways and means committee, legislative transportation committee, legislative evaluation and accountability program committee, and office of financial management.

    (4) No change affecting the comparability of agency or program information relating to expenditures, revenues, workload, performance and personnel shall be made in the format of any budget document or report presented to the legislature under this section or RCW 43.88.160(1) relative to the format of the budget document or report which was presented to the previous regular session of the legislature during an odd-numbered year without prior legislative concurrence.  Prior legislative concurrence shall consist of (a) a favorable majority vote on the proposal by the standing committees on ways and means of both houses if the legislature is in session or (b) a favorable majority vote on the proposal by members of the legislative evaluation and accountability program committee if the legislature is not in session.

    Sec. 12.  RCW 43.88.037 and 1987 c 502 s 3 are each amended to read as follows:

    (1) Subject to the provisions of chapter 82.33 RCW, the director of financial management shall devise and maintain a comprehensive budgeting, accounting, and reporting system in conformance with generally accepted accounting principles applicable to state governments, as published in the accounting procedures manual pursuant to RCW 43.88.160(1).

    (2) The director of financial management shall submit a budget document in conformance with generally accepted accounting principles applicable to state governments, as published in the accounting procedures manual pursuant to RCW 43.88.160(1).

    Sec. 13.  RCW 43.88.120 and 1991 c 358 s 3 are each amended to read as follows:

    Each agency engaged in the collection of revenues shall prepare estimated revenues and estimated receipts for the current and ensuing biennium and shall submit the estimates to the director of financial management and the director of revenue at times and in the form specified by the directors, along with any other information which the directors may request.  For those agencies required to develop six-year programs and financial plans under RCW 44.40.070, six-year revenue estimates shall be submitted to the director of financial management and the legislative transportation committee unless the responsibility for reporting these revenue estimates is assumed elsewhere.

    A copy of ((such)) the revenue estimates shall be simultaneously submitted to the economic and revenue forecast work group when required by the office of the economic ((and)), revenue, and caseload forecast council.

    Sec. 14.  RCW 43.88.160 and 1994 c 184 s 11 are each amended to read as follows:

    This section sets forth the major fiscal duties and responsibilities of officers and agencies of the executive branch.  The regulations issued by the governor pursuant to this chapter shall provide for a comprehensive, orderly basis for fiscal management and control, including efficient accounting and reporting therefor, for the executive branch of the state government and may include, in addition, such requirements as will generally promote more efficient public management in the state.

    (1) Governor; director of financial management.  Subject to the provisions of chapter 82.33 RCW, the governor, through the director of financial management, shall devise and supervise a modern and complete accounting system for each agency to the end that all revenues, expenditures, receipts, disbursements, resources, and obligations of the state shall be properly and systematically accounted for.  The accounting system shall include the development of accurate, timely records and reports of all financial affairs of the state.  The system shall also provide for central accounts in the office of financial management at the level of detail deemed necessary by the director to perform central financial management.  The director of financial management shall adopt and periodically update an accounting procedures manual.  Any agency maintaining its own accounting and reporting system shall comply with the updated accounting procedures manual and the rules of the director adopted under this chapter.  An agency may receive a waiver from complying with this requirement if the waiver is approved by the director.  Waivers expire at the end of the fiscal biennium for which they are granted.  The director shall forward notice of waivers granted to the appropriate legislative fiscal committees.  The director of financial management may require such financial, statistical, and other reports as the director deems necessary from all agencies covering any period.

    (2) Except as provided in chapter 82.33 RCW, the director of financial management is responsible for quarterly reporting of primary operating budget drivers such as applicable workloads, caseload estimates, and appropriate unit cost data.  These reports shall be transmitted to the legislative fiscal committees or by electronic means to the legislative evaluation and accountability program committee.  Quarterly reports shall include actual monthly data and the variance between actual and estimated data to date.  The reports shall also include estimates of these items for the remainder of the budget period.

    (3) The director of financial management shall report at least annually to the appropriate legislative committees regarding the status of all appropriated capital projects, including transportation projects, showing significant cost overruns or underruns.  If funds are shifted from one project to another, the office of financial management shall also reflect this in the annual variance report.  Once a project is complete, the report shall provide a final summary showing estimated start and completion dates of each project phase compared to actual dates, estimated costs of each project phase compared to actual costs, and whether or not there are any outstanding liabilities or unsettled claims at the time of completion.

    (4) In addition, the director of financial management, as agent of the governor, shall:

    (a) Develop and maintain a system of internal controls and internal audits comprising methods and procedures to be adopted by each agency that will safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies for accounting and financial controls.  The system developed by the director shall include criteria for determining the scope and comprehensiveness of internal controls required by classes of agencies, depending on the level of resources at risk.

    Each agency head or authorized designee shall be assigned the responsibility and authority for establishing and maintaining internal audits following the standards of internal auditing of the institute of internal auditors;

    (b) Make surveys and analyses of agencies with the object of determining better methods and increased effectiveness in the use of manpower and materials; and the director shall authorize expenditures for employee training to the end that the state may benefit from training facilities made available to state employees;

    (c) Establish policies for allowing the contracting of child care services;

    (d) Report to the governor with regard to duplication of effort or lack of coordination among agencies;

    (e) Review any pay and classification plans, and changes thereunder, developed by any agency for their fiscal impact:  PROVIDED, That none of the provisions of this subsection shall affect merit systems of personnel management now existing or hereafter established by statute relating to the fixing of qualifications requirements for recruitment, appointment, or promotion of employees of any agency.  The director shall advise and confer with agencies including appropriate standing committees of the legislature as may be designated by the speaker of the house and the president of the senate regarding the fiscal impact of such plans and may amend or alter said plans, except that for the following agencies no amendment or alteration of said plans may be made without the approval of the agency concerned:  Agencies headed by elective officials;

    (f) Fix the number and classes of positions or authorized man years of employment for each agency and during the fiscal period amend the determinations previously fixed by the director except that the director shall not be empowered to fix said number or said classes for the following:  Agencies headed by elective officials;

    (g) ((Provide for transfers and repayments between the budget stabilization account and the general fund as directed by appropriation and RCW 43.88.525 through 43.88.540;

    (h))) Adopt rules to effectuate provisions contained in (a) through (((g))) (f) of this subsection.

    (5) The treasurer shall:

    (a) Receive, keep, and disburse all public funds of the state not expressly required by law to be received, kept, and disbursed by some other persons:  PROVIDED, That this subsection shall not apply to those public funds of the institutions of higher learning which are not subject to appropriation;

    (b) Receive, disburse, or transfer public funds under the treasurer's supervision or custody;

    (c) Keep a correct and current account of all moneys received and disbursed by the treasurer, classified by fund or account;

    (d) Coordinate agencies' acceptance and use of credit cards and other payment methods, if the agencies have received authorization under RCW 43.41.180;

    (e) Perform such other duties as may be required by law or by regulations issued pursuant to this law.

    It shall be unlawful for the treasurer to disburse public funds in the treasury except upon forms or by alternative means duly prescribed by the director of financial management.  These forms or alternative means shall provide for authentication and certification by the agency head or the agency head's designee that the services have been rendered or the materials have been furnished; or, in the case of loans or grants, that the loans or grants are authorized by law; or, in the case of payments for periodic maintenance services to be performed on state owned equipment, that a written contract for such periodic maintenance services is currently in effect and copies thereof are on file with the office of financial management; and the treasurer shall not be liable under the treasurer's surety bond for erroneous or improper payments so made.  When services are lawfully paid for in advance of full performance by any private individual or business entity other than as provided for by RCW 42.24.035, such individual or entity other than central stores rendering such services shall make a cash deposit or furnish surety bond coverage to the state as shall be fixed in an amount by law, or if not fixed by law, then in such amounts as shall be fixed by the director of the department of general administration but in no case shall such required cash deposit or surety bond be less than an amount which will fully indemnify the state against any and all losses on account of breach of promise to fully perform such services.  No payments shall be made in advance for any equipment maintenance services to be performed more than three months after such payment.  Any such bond so furnished shall be conditioned that the person, firm or corporation receiving the advance payment will apply it toward performance of the contract.  The responsibility for recovery of erroneous or improper payments made under this section shall lie with the agency head or the agency head's designee in accordance with regulations issued pursuant to this chapter.  Nothing in this section shall be construed to permit a public body to advance funds to a private service provider pursuant to a grant or loan before services have been rendered or material furnished.

    (6) The state auditor shall:

    (a) Report to the legislature the results of current post audits that have been made of the financial transactions of each agency; to this end the auditor may, in the auditor's discretion, examine the books and accounts of any agency, official or employee charged with the receipt, custody or safekeeping of public funds.  Where feasible in conducting examinations, the auditor shall utilize data and findings from the internal control system prescribed by the office of financial management.  The current post audit of each agency may include a section on recommendations to the legislature as provided in (c) of this subsection.

    (b) Give information to the legislature, whenever required, upon any subject relating to the financial affairs of the state.

    (c) Make the auditor's official report on or before the thirty-first of December which precedes the meeting of the legislature.  The report shall be for the last complete fiscal period and shall include determinations as to whether agencies, in making expenditures, complied with the laws of this state.  The state auditor is authorized to perform or participate in performance verifications only as expressly authorized by the legislature in the omnibus biennial appropriations acts.  The state auditor, upon completing an audit for legal and financial compliance under chapter 43.09 RCW or a performance verification, may report to the legislative budget committee or other appropriate committees of the legislature, in a manner prescribed by the legislative budget committee, on facts relating to the management or performance of governmental programs where such facts are discovered incidental to the legal and financial audit or performance verification.  The auditor may make such a report to a legislative committee only if the auditor has determined that the agency has been given an opportunity and has failed to resolve the management or performance issues raised by the auditor.  If the auditor makes a report to a legislative committee, the agency may submit to the committee a response to the report.  This subsection (6) shall not be construed to authorize the auditor to allocate other than de minimis resources to performance audits except as expressly authorized in the appropriations acts.

    (d) Be empowered to take exception to specific expenditures that have been incurred by any agency or to take exception to other practices related in any way to the agency's financial transactions and to cause such exceptions to be made a matter of public record, including disclosure to the agency concerned and to the director of financial management.  It shall be the duty of the director of financial management to cause corrective action to be taken promptly, such action to include, as appropriate, the withholding of funds as provided in RCW 43.88.110.

    (e) Promptly report any irregularities to the attorney general.

    (f) Investigate improper governmental activity under chapter 42.40 RCW.

    (7) The legislative budget committee may:

    (a) Make post audits of the financial transactions of any agency and management surveys and program reviews as provided for in RCW 44.28.085 as well as performance audits and program evaluations.  To this end the committee may in its discretion examine the books, accounts, and other records of any agency, official, or employee.

    (b) Give information to the legislature or any legislative committee whenever required upon any subject relating to the performance and management of state agencies.

    (c) Make a report to the legislature which shall include at least the following:

    (i) Determinations as to the extent to which agencies in making expenditures have complied with the will of the legislature and in this connection, may take exception to specific expenditures or financial practices of any agencies; and

    (ii) Such plans as it deems expedient for the support of the state's credit, for lessening expenditures, for promoting frugality and economy in agency affairs and generally for an improved level of fiscal management.

    Sec. 15.  RCW 50.38.050 and 1993 c 62 s 5 are each amended to read as follows:

    The department shall have the following duties:

    (1) Oversight and management of a state-wide comprehensive labor market and occupational supply and demand information system, including development of a five-year employment forecast for state and labor market areas;

    (2) Produce local labor market information packages for the state's counties, including special studies and job impact analyses in support of state and local employment, training, education, and job creation programs, especially activities that prevent job loss, reduce unemployment, and create jobs;

    (3) Coordinate with the office of financial management and the office of the forecast council to improve employment estimates by enhancing data on corporate officers, improving business establishment listings, expanding sample for employment estimates, and developing business entry/exit analysis relevant to the generation of occupational and economic forecasts; and

    (4) In cooperation with the office of financial management, produce long-term industry and occupational employment forecasts.  These forecasts shall be consistent with the official economic ((and)), revenue, and caseload forecast council biennial economic and revenue forecasts.

    Sec. 16.  RCW 70.94.431 and 1995 c 403 s 630 are each amended to read as follows:

    (1) Except as provided in RCW 43.05.060 through 43.05.080 and 43.05.150, and in addition to or as an alternate to any other penalty provided by law, any person who violates any of the provisions of chapter 70.94 RCW, chapter 70.120 RCW, or any of the rules in force under such chapters may incur a civil penalty in an amount not to exceed ten thousand dollars per day for each violation.  Each such violation shall be a separate and distinct offense, and in case of a continuing violation, each day's continuance shall be a separate and distinct violation.

    Any person who fails to take action as specified by an order issued pursuant to this chapter shall be liable for a civil penalty of not more than ten thousand dollars for each day of continued noncompliance.

    (2) Penalties incurred but not paid shall accrue interest, beginning on the ninety-first day following the date that the penalty becomes due and payable, at the highest rate allowed by RCW 19.52.020 on the date that the penalty becomes due and payable.  If violations or penalties are appealed, interest shall not begin to accrue until the thirty-first day following final resolution of the appeal.

    The maximum penalty amounts established in this section may be increased annually to account for inflation as determined by the state office of the economic ((and)), revenue, and caseload forecast council.

    (3) Each act of commission or omission which procures, aids or abets in the violation shall be considered a violation under the provisions of this section and subject to the same penalty.  The penalties provided in this section shall be imposed pursuant to RCW 43.21B.300.

    (4) All penalties recovered under this section by the department shall be paid into the state treasury and credited to the air pollution control account established in RCW 70.94.015 or, if recovered by the authority, shall be paid into the treasury of the authority and credited to its funds.  If a prior penalty for the same violation has been paid to a local authority, the penalty imposed by the department under subsection (1) of this section shall be reduced by the amount of the payment.

    (5) To secure the penalty incurred under this section, the state or the authority shall have a lien on any vessel used or operated in violation of this chapter which shall be enforced as provided in RCW 60.36.050.

    (6) Public or private entities that are recipients or potential recipients of department grants, whether for air quality related activities or not, may have such grants rescinded or withheld by the department for failure to comply with provisions of this chapter.

    (7) In addition to other penalties provided by this chapter, persons knowingly under-reporting emissions or other information used to set fees, or persons required to pay emission or permit fees who are more than ninety days late with such payments may be subject to a penalty equal to three times the amount of the original fee owed.

    (8) By January 1, 1992, the department shall develop rules for excusing excess emissions from enforcement action if such excess emissions are unavoidable.  The rules shall specify the criteria and procedures for the department and local air authorities to determine whether a period of excess emissions is excusable in accordance with the state implementation plan.

    Sec. 17.  RCW 70.94.483 and 1991 sp.s. c 13 ss 64, 65 are each amended to read as follows:

    (1) The wood stove education and enforcement account is hereby created in the state treasury.  Money placed in the account shall include all money received under subsection (2) of this section and any other money appropriated by the legislature.  Money in the account shall be spent for the purposes of the wood stove education program established under RCW 70.94.480 and for enforcement of the wood stove program, and shall be subject to legislative appropriation.

    (2) The department of ecology, with the advice of the advisory committee, shall set a flat fee of thirty dollars, on the retail sale, as defined in RCW 82.04.050, of each solid fuel burning device after January 1, 1992.  The fee shall be imposed upon the consumer and shall not be subject to the retail sales tax provisions of chapters 82.08 and 82.12 RCW.  The fee may be adjusted annually above thirty dollars to account for inflation as determined by the state office of the economic ((and)), revenue, and caseload forecast council.  The fee shall be collected by the department of revenue in conjunction with the retail sales tax under chapter 82.08 RCW.  If the seller fails to collect the fee herein imposed or fails to remit the fee to the department of revenue in the manner prescribed in chapter 82.08 RCW, the seller shall be personally liable to the state for the amount of the fee.  The collection provisions of chapter 82.32 RCW shall apply.  The department of revenue shall deposit fees collected under this section in the wood stove education and enforcement account.

    Sec. 18.  RCW 70.94.650 and 1995 c 362 s 1 and 1995 c 58 s 1 are each reenacted and amended to read as follows:

    (1) Any person who proposes to set fires in the course of:

    (a) Weed abatement;

    (b) Instruction in methods of fire fighting, except training to fight structural fires as provided in RCW 52.12.150 or training to fight aircraft crash rescue fires as provided in subsection (5) of this section, and except forest fire training; or

    (c) Agricultural activities,

shall obtain a permit from an air pollution control authority, the department of ecology, or a local entity delegated permitting authority under RCW 70.94.654.  General permit criteria of state-wide applicability shall be established by the department, by rule, after consultation with the various air pollution control authorities.  Permits shall be issued under this section based on seasonal operations or by individual operations, or both.  All permits shall be conditioned to insure that the public interest in air, water, and land pollution and safety to life and property is fully considered.  In addition to any other requirements established by the department to protect air quality pursuant to other laws, applicants for permits must show that the setting of fires as requested is the most reasonable procedure to follow in safeguarding life or property under all circumstances or is otherwise reasonably necessary to successfully carry out the enterprise in which the applicant is engaged, or both.  All burning permits will be designed to minimize air pollution insofar as practical.  Nothing in this section shall relieve the applicant from obtaining permits, licenses, or other approvals required by any other law.  An application for a permit to set fires in the course of agricultural burning for controlling diseases, insects, weed abatement or development of physiological conditions conducive to increased crop yield, shall be acted upon within seven days from the date such application is filed.  The department of ecology and local air authorities shall provide convenient methods for issuance and oversight of agricultural burning permits.  The department and local air authorities shall, through agreement, work with counties and cities to provide convenient methods for granting permission for agricultural burning, including telephone, facsimile transmission, issuance from local city or county offices, or other methods.  A local air authority administering the permit program under this subsection (1)(c) shall not limit the number of days of allowable agricultural burning, but may consider the time of year, meteorological conditions, and other criteria specified in rules adopted by the department to implement this subsection (1)(c).

    (2) Permit fees shall be assessed for burning under this section and shall be collected by the department of ecology, the appropriate local air authority, or a local entity delegated permitting authority pursuant to RCW 70.94.654 at the time the permit is issued.  All fees collected shall be deposited in the air pollution control account created in RCW 70.94.015, except for that portion of the fee necessary to cover local costs of administering a permit issued under this section.  Fees shall be set by rule by the permitting agency at the level determined by the task force created by subsection (4) of this section, but shall not exceed two dollars and fifty cents per acre to be burned.  After fees are established by rule, any increases in such fees shall be limited to annual inflation adjustments as determined by the state office of the economic ((and)), revenue, and caseload forecast council.

    (3) Conservation districts and the Washington State University agricultural extension program in conjunction with the department shall develop public education material for the agricultural community identifying the health and environmental effects of agricultural outdoor burning and providing technical assistance in alternatives to agricultural outdoor burning.

    (4) An agricultural burning practices and research task force shall be established under the direction of the department.  The task force shall be composed of a representative from the department who shall serve as chair; one representative of eastern Washington local air authorities; three representatives of the agricultural community from different agricultural pursuits; one representative of the department of agriculture; two representatives from universities or colleges knowledgeable in agricultural issues; one representative of the public health or medical community; and one representative of the conservation districts.  The task force shall identify best management practices for reducing air contaminant emissions from agricultural activities and provide such information to the department and local air authorities.  The task force shall determine the level of fees to be assessed by the permitting agency pursuant to subsection (2) of this section, based upon the level necessary to cover the costs of administering and enforcing the permit programs, to provide funds for research into alternative methods to reduce emissions from such burning, and to the extent possible be consistent with fees charged for such burning permits in neighboring states.  The fee level shall provide, to the extent possible, for lesser fees for permittees who use best management practices to minimize air contaminant emissions.  The task force shall identify research needs related to minimizing emissions from agricultural burning and alternatives to such burning.  Further, the task force shall make recommendations to the department on priorities for spending funds provided through this chapter for research into alternative methods to reduce emissions from agricultural burning.

    (5) A permit is not required under this section, or under RCW 70.94.743 through 70.94.780, from an air pollution control authority, the department, or any local entity with delegated permit authority, for aircraft crash rescue fire training activities meeting the following conditions:

    (a) Fire fighters participating in the training fires must be limited to those who provide fire fighting support to an airport that is either certified by the federal aviation administration or operated in support of military or governmental activities;

    (b) The fire training may not be conducted during an air pollution episode or any stage of impaired air quality declared under RCW 70.94.715 for the area where training is to be conducted;

    (c) The number of training fires allowed per year without a permit shall be the minimum number necessary to meet federal aviation administration or other federal safety requirements; and

    (d) Prior to the commencement of the aircraft fire training, the organization conducting training shall notify both the:  (i) Local fire district or fire department; and (ii) air pollution control authority, department of ecology, or local entity delegated permitting authority under RCW 70.94.654, having jurisdiction within the area where training is to be conducted.

    Aircraft crash rescue fire training activities conducted in compliance with this subsection are not subject to the prohibition, in RCW 70.94.775(1), of outdoor fires containing petroleum products.

    (6) Subsection (5) of this section shall expire on the earlier of the following dates:  (a) July 1, 1998; or (b) the date upon which the North Bend fire training center is fully operational for aircraft crash rescue fire training activities.

NEW SECTION. Sec. 19.  This act shall take effect July 1, 1996.

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