[atlas:bill]

AN ACT Relating to state information technology projects; amending RCW 43.105.095, 43.105.105, 43.105.170, 43.105.180, and 43.105.190; reenacting and amending RCW 43.105.020 and 43.79A.040; adding new sections to chapter 43.105 RCW; creating a new section; and providing an effective date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 43.105 RCW to read as follows:

INTENT. The legislature finds that major state information technology projects require additional oversight and review, along with a new funding approach. The legislature finds that public funds are used most efficiently when major state information projects are funded using a competitive approach that relies on incremental expenditures from a pooled fund to reward efficient and timely completion of projects. Incremental expenditures and increased, expert oversight of expenditures will promote sound agency planning, will ensure wise use of public funds, and will avoid delays that would otherwise result in increased costs to taxpayers and delayed implementation of state technology services. Such an approach will also permit prompt revision of expenditure plans to allow redeployment of public moneys to the projects that can be completed effectively. Additionally, the legislature finds that the funding system for information technology projects should encourage agencies to invest in technology projects that will result in future savings to the state.

Sec. 2. RCW 43.105.020 and 1999 c 285 s 1 and 1999 c 80 s 1 are each reenacted and amended to read as follows:

DEFINITIONS. As used in this chapter, unless the context indicates otherwise, the following definitions shall apply:

(1) "Department" means the department of information services;

(2) "Board" means the information services board;

(3) "Local governments" includes all municipal and quasi municipal corporations and political subdivisions, and all agencies of such corporations and subdivisions authorized to contract separately;

(4) "Director" means the director of the department;

(5) "Purchased services" means services provided by a vendor to accomplish routine, continuing, and necessary functions. This term includes, but is not limited to, services acquired for equipment maintenance and repair, operation of a physical plant, security, computer hardware and software installation and maintenance, data entry, keypunch services, programming services, and computer time-sharing;

(6) "Backbone network" means the shared high-density portions of the state's telecommunications transmission facilities. It includes specially conditioned high-speed communications carrier lines, multiplexors, switches associated with such communications lines, and any equipment and software components necessary for management and control of the backbone network;

(7) "Telecommunications" means the transmission of information by wire, radio, optical cable, electromagnetic, or other means;

(8) "Information processing" means the electronic capture, collection, storage, manipulation, transmission, retrieval, and presentation of information in the form of data, text, voice, or image and includes telecommunications and office automation functions;

(9) "Information services" means data processing, telecommunications, and office automation;

(10) "Equipment" means the machines, devices, and transmission facilities used in information processing, such as computers, word processors, terminals, telephones, and cables;

(11) "Information technology portfolio" or "portfolio" means a strategic management process documenting relationships between agency missions and information technology investments;

(12) "Oversight" means a process of comprehensive risk analysis and management designed to ensure optimum use of information technology resources;

(13) "Proprietary software" means that software offered for sale or license;

(14) "Video telecommunications" means the electronic interconnection of two or more sites for the purpose of transmitting and/or receiving visual and associated audio information. Video telecommunications shall not include existing public television broadcast stations as currently designated by the department of community, trade, and economic development under chapter 43.330 RCW;

(15) "K-20 educational network board" or "K-20 board" means the K-20 educational network board created in RCW 43.105.800;

(16) "K-20 network technical steering committee" or "committee" means the K-20 network technical steering committee created in RCW 43.105.810;

(17) "K-20 network" means the network established in RCW 43.105.820;

(18) "Educational sectors" means those institutions of higher education, school districts, and educational service districts that use the network for distance education, data transmission, and other uses permitted by the K-20 board;

(19) "Committee" means the funding and oversight committee of the board created in section 3 of this act;

(20) "Major project" means a state information technology project, the total cost of which is projected to exceed the lesser of either five million dollars or five percent of the total budgeted funding for the agency involved;

(21) "Fund" means the information technology pool fund created in section 12 of this act.

NEW SECTION. Sec. 3. A new section is added to chapter 43.105 RCW to read as follows:

FUNDING AND OVERSIGHT COMMITTEE. (1) The funding and oversight committee of the board is created. Members of the funding and oversight committee are the two board members appointed by the governor to represent the private sector, the two board members who represent the house of representatives, the two board members who represent the senate, and the director of financial management, or the director's designee.

(2) The funding and oversight committee has the following powers and duties:

(a) In consultation with the office of financial management, the committee shall develop and approve an expenditure plan for major projects to be funded from the information technology pool fund created in section 12 of this act.

(b) In consultation with the office of financial management, the committee shall monitor and oversee expenditures from the information technology pool fund in order to ensure compliance with expenditure plans and performance standards as described in section 4 of this act.

(d) The committee may review proposals, establish repayment schedules, and authorize expenditures from the information technology pool fund under the agency technology initiative program created in section 5 of this act.

NEW SECTION. Sec. 4. A new section is added to chapter 43.105 RCW to read as follows:

INCREMENTAL FUNDING AND OVERSIGHT OF MAJOR TECHNOLOGY PROJECTS. Major projects shall be funded from the information technology pool fund on an incremental basis and shall be overseen by the committee as set forth in this section.

(1) The committee may authorize expenditures from the fund for major projects after the legislature has authorized funding for the project. The legislature may authorize funding for major projects by:

(a) In the omnibus operating appropriations act, providing an appropriation to be deposited in the fund for a particular project; or

(b) In the omnibus operating appropriations act, including the project in a prioritized list of projects to be funded by the committee according to available moneys in the fund.

(2) After the legislature directs that a major project be funded from the information technology pool fund, the committee, in consultation with the agency and the office of financial management, shall prepare an expenditure and oversight plan for the project.

The expenditure and oversight plan shall:

(a) Include specific goals, progress schedules, and performance standards;

(b) 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 committee determines that the previous phase has been or will be satisfactorily completed;

(d) Consider the feasibility study, project management plan, and quality assurance plan developed by the agency under section 11 of this act. However, the oversight and expenditure plan need not follow the feasibility study, project management plan, or quality assurance plan if the committee concludes that different requirements are necessary; and

(e) Incorporate acceptance testing of products to assure that products perform satisfactorily before they are accepted and incremental or final payment is made.

(3) After approving the expenditure and oversight plan, the committee shall authorize expenditures for major projects from the information technology pool fund in accordance with the expenditure and oversight plan for each project.

(4) On at least a quarterly basis, the committee shall review agency progress for each project under the expenditure and oversight plan to determine whether incremental funds for the following phases of the project should be released. Depending on the progress made by individual projects, the committee, in consultation with the office of financial management, may reallocate funding among approved projects, or it may approve new projects, either from the priority list under subsection (1)(b) of this section or under the agency technology initiative program in section 5 of this act. However, when reallocating funding from the legislative priority list under subsection (1)(b) of this section, the committee shall give first consideration to other projects on that priority list.

(5) If a project is not meeting, or expected to meet, performance standards or schedules as provided in the project's expenditure and oversight plan, the committee may:

(a) Assess monetary penalties against the agency in an amount to be determined by the committee; or

(b) Terminate the project. Prior to terminating a project, the committee shall consult with the office of financial management and shall notify the appropriate fiscal committees of the senate and the house of representatives.

NEW SECTION. Sec. 5. A new section is added to chapter 43.105 RCW to read as follows:

AGENCY TECHNOLOGY INITIATIVE PROGRAM. In addition to funding major information projects from the information technology pool fund as set forth in section 4 of this act, the committee may also authorize expenditures from the fund under the agency technology initiative program established in this section. The agency technology initiative program is created and it is intended to encourage agencies to make near-term technology investments that will result in future savings to the agency.

(1) An agency may apply to the committee for funding from the fund for a technology project that the agency can demonstrate will result in future savings to the agency.

(2) If the committee concludes that funding an agency's proposed information technology project will result in future savings to the agency, the committee may authorize funding of a loan for the project from unexpended moneys in the information technology pool fund. In considering applications, the committee shall give priority to applications that will improve customer service while reducing future agency costs.

(3) Prior to authorizing release of the loan funding from the fund, the committee and the agency, in consultation with the board and the office of financial management, shall agree to a repayment schedule under which the agency will repay the amount of the loan, or another agreed-upon amount, to the fund from the agency's current or future appropriations. To permit the agency's loan payments to be funded wholly from future savings achieved by the agency as a result of the project, the repayment schedule set by the committee shall reflect the timing and amount of agency savings expected to result from the project.

Sec. 6. RCW 43.105.095 and 1999 c 80 s 3 are each amended to read as follows:

COMMITTEE INCLUSION IN POLICY DEVELOPMENT. (1) Under the direction of the board, the department shall develop policies and procedures to implement a management and oversight structure based on the use of information technology portfolios.

(2) These policies and procedures shall support and conform to:

(a) The state strategic information technology plan developed under RCW 43.105.160(1) and 43.105.172; ((~~and~~))

(b) Technology standards established by the board; and

Sec. 7. RCW 43.105.105 and 1999 c 80 s 4 are each amended to read as follows:

AGENCY TECHNOLOGY PORTFOLIOS. An agency information technology portfolio shall serve as the basis for making information technology decisions and plans including:

(1) System refurbishment, acquisitions, and development efforts;

(2) Setting goals and objectives for using information technology;

(3) Assessments of information processing performance, resources, and capabilities;

(4) Ensuring the appropriate transfer of technological expertise for the operation of new systems developed using external resources; ((~~and~~))

(5) Progress toward providing electronic access to public information; and

(6) Establishment of expenditure and oversight plans for projects funded from the information technology pool fund under sections 4 and 5 of this act.

Sec. 8. RCW 43.105.170 and 1999 c 80 s 10 are each amended to read as follows:

TECHNOLOGY PORTFOLIOS. (1) Each agency shall develop an information technology portfolio consistent with RCW ((~~43.105.095~~)) 43.105.172. The superintendent of public instruction shall develop its portfolio in conjunction with educational service districts and statewide or regional providers of K-12 education information technology services.

(2) Agency portfolios shall include, but not be limited to, the following:

(a) A baseline assessment of the agency's information technology resources and capabilities that will serve as the benchmark for subsequent planning and performance measures;

(b) A statement of the agency's mission, goals, and objectives for information technology, including goals and objectives for achieving electronic access to agency records, information, and services;

(c) 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;

(d) An implementation strategy to provide electronic access to public records and information. This implementation strategy must be assembled to include:

(i) Compliance with Title 40 RCW;

(ii) Adequate public notice and opportunity for comment;

(iii) Consideration of a variety of electronic technologies, including those that help transcend geographic locations, standard business hours, economic conditions of users, and disabilities;

(iv) Methods to educate both state employees and the public in the effective use of access technologies;

(e) Projects and resources required to meet the objectives of the portfolio; ((~~and~~))

(f) Where feasible, estimated schedules and funding required to implement identified projects; and

(g) An explanation linking the agency's technology mission, goals, and objectives to any oversight and expenditure plan adopted by the committee for the agency's major projects.

(3) Portfolios developed under subsection (1) of this section shall be submitted to the department for review and forwarded along with the department's recommendations to the board for review and approval. The board may reject, require modification to, or approve portfolios as deemed appropriate by the board. Portfolios submitted under this subsection shall be updated and submitted for review and approval as necessary.

(4) Each agency shall prepare and submit to the department a biennial performance report that evaluates progress toward the objectives articulated in its information technology portfolio. The superintendent of public instruction shall develop its portfolio in conjunction with educational service districts and statewide or regional providers of K-12 education information technology services. 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 information technology portfolio;

(c) Progress toward electronic access to public information and enabling citizens to have two-way interaction for obtaining information and services from agencies; and

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

(5) The department, with the approval of the board, shall establish standards, elements, form, and format for plans and reports developed under this section.

(6) Agency activities to increase electronic access to public records and information, as required by this section, must be implemented within available resources and existing agency planning processes.

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

Sec. 9. RCW 43.105.180 and 1999 c 80 s 11 are each amended to read as follows:

EVALUATION OF BUDGET REQUESTS. Upon request of the office of financial management, the department and the committee shall evaluate agency budget requests for major information technology projects identified under RCW 43.105.190, including those proposed by the superintendent of public instruction, in conjunction with educational service districts, or statewide or regional providers of K-12 education information technology services. 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 and in consultation with the committee, shall establish criteria, consistent with portfolio-based information technology management, for the evaluation of agency budget requests under this section. These budget requests shall be made in the context of an agency's information technology portfolio; technology initiatives underlying budget requests are subject to board review. Criteria shall include, but not be limited to: Feasibility of the proposed projects, consistency with the state strategic information technology plan, consistency with information technology portfolios, appropriate provision for public electronic access to information and services, costs, and benefits, and for major projects, information that will be needed to develop the expenditure and oversight plan required under section 4 of this act.

Sec. 10. RCW 43.105.190 and 1999 c 80 s 12 are each amended to read as follows:

STANDARDS AND POLICIES. (1) The department, with the approval of the board and the committee, shall establish standards and policies governing the planning, implementation, and evaluation of major information technology projects, including those proposed by the superintendent of public instruction, in conjunction with educational service districts, or statewide or regional providers of K-12 education information technology services. In addition to the requirements of this section, major projects are subject to the oversight and expenditure plan requirements of section 4 of this act. 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 statewide significance of the project; and

(b) Establish a model process and procedures which agencies shall follow in developing and implementing projects within their information technology portfolios. Agencies may propose, for approval by the department, a process and procedures unique to the agency. The department may accept or require modification of such agency proposals or the department 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.

((~~The director may terminate a major project if the director determines that the project is not meeting or is not expected to meet anticipated performance standards.~~

(2) The office of financial management shall establish policies and standards consistent with portfolio-based information technology management to govern the funding of projects developed under 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)~~)) (2) The department shall evaluate projects based on the demonstrated business needs and benefits; cost; technology scope and feasibility; impact on the agency's information technology portfolio and on the statewide infrastructure; and 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 and the chairs, ranking minority members, and staff coordinators of the appropriations committees of the senate and house of representatives.

If there are projects that receive funding from a transportation fund or account, copies of those projects' evaluations conducted under this subsection must be submitted, during the legislative session, to the chairs and ranking minority members of the transportation committees of the senate and the house of representatives. During the legislative interim, the project evaluations must be submitted to the legislative transportation committee.

NEW SECTION. Sec. 11. A new section is added to chapter 43.105 RCW to read as follows:

AGENCY PLANNING. (1) Agency planning and decisions concerning information technology shall be made in the context of its information technology portfolio so that: Technology efforts are linked to agency objectives and business plans; the impact of new investments on existing infrastructure and business functions are assessed and understood before implementation; and agency activities are consistent with the development of an integrated, nonduplicative statewide infrastructure.

(2) Agencies shall use their information technology portfolios in making decisions on matters related to the following:

(a) System refurbishment, acquisitions, and development efforts;

(b) Setting goals and objectives for using information technology in meeting legislatively mandated missions and business needs;

(d) Ensuring appropriate transfer of technological expertise for the operation of any new systems developed using external resources; and

(e) Progress toward enabling electronic access to public information.

(3) Each project will be planned and designed to take optimal advantage of internet technologies and protocols. Agencies shall ensure that the project is in compliance with the architecture, infrastructure, principles, policies, and standards of digital government as maintained by the board.

(4) The agency shall produce a feasibility study for information technology projects at the direction of the board and in accordance with published department policies and guidelines. At a minimum, these studies shall include a statement of: (a) The purpose or impetus for change; (b) the business value to the agency, including an examination and evaluation of benefits, advantages, and cost; (c) a comprehensive risk assessment based on the proposed project's impact on both citizens and state operations, its visibility, and the consequences of doing nothing; (d) the impact on agency and statewide information infrastructure; and (e) the impact of the proposed enhancements to an agency's information technology capabilities on meeting service delivery demands.

(5) The agency shall produce a comprehensive management plan for each project. The plan or plans shall address all factors critical to successful completion of each project. A plan shall include, but is not limited to, the following elements: A description of the problem or opportunity that the information technology project is intended to address; a statement of project objectives and assumptions; a definition and schedule of phases, tasks, and activities to be accomplished; and the estimated cost of each phase. The planning for the phased approach shall be such that the business case justification for a project needs to demonstrate how the project recovers cost or adds measurable value or positive cost benefit to the agency's business functions within each development cycle.

(6) The agency shall produce quality assurance plans for information technology projects. Consistent with the direction of the board and the published policies and guidelines of the department, the quality assurance plan shall address all factors critical to successful completion of the project and successful integration with the agency and state information technology infrastructure. At a minimum, quality assurance plans shall provide time and budget benchmarks against which project progress can be measured, a specification of quality assurance responsibilities, and a statement of reporting requirements. The quality assurance plans shall set out the functionality requirements for each phase of a project.

(7) A copy of each feasibility study, project management plan, and quality assurance plan shall be provided to the department, the committee, the office of financial management, and legislative fiscal committees.

(8) For major projects, the feasibility study, project management plan, and quality assurance plan shall be considered by the committee when the committee develops its oversight and expenditure plan under section 4 of this act.

NEW SECTION. Sec. 12. A new section is added to chapter 43.105 RCW to read as follows:

INFORMATION TECHNOLOGY POOL FUND CREATED. The information technology pool fund is created in the custody of the state treasurer. All appropriations provided for deposit in the information technology pool fund and all repayments received under the agency technology initiative program established in section 5 of this act must be deposited in the information technology pool fund. All moneys appropriated to the fund shall not lapse upon the close of the fiscal biennium and shall remain available for expenditure without an additional appropriation. Only the committee may authorize expenditures from the account. An appropriation is not required for expenditure, but the fund is subject to allotment procedures under chapter 43.88 RCW.

Sec. 13. RCW 43.79A.040 and 2001 c 201 s 4 and 2001 c 184 s 4 are each reenacted and amended to read as follows:

INFORMATION TECHNOLOGY POOL FUND RETAINS ITS OWN INTEREST EARNINGS. (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

(2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

(3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

(b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the basic health plan self-insurance reserve account, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the game farm alternative account, the grain inspection revolving fund, the information technology pool fund, the juvenile accountability incentive account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, and the children's trust fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.

(5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION. Sec. 14. CAPTIONS. Captions used in this act are not any part of the law.

NEW SECTION. Sec. 15. EFFECTIVE DATE. This act takes effect July 1, 2003.