BILL REQ. #:  Z-0566.2 

Read first time 02/08/2005.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to encouraging the ethical transfer of technology for the economic benefit of the state; amending RCW 42.52.010, 42.52.030, 42.52.200, and 42.52.360; and adding a new section to chapter 42.52 RCW.

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

Sec. 1   RCW 42.52.010 and 1998 c 7 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Agency" means any state board, commission, bureau, committee, department, institution, division, or tribunal in the legislative, executive, or judicial branch of state government. "Agency" includes all elective offices, the state legislature, those institutions of higher education created and supported by the state government, and those courts that are parts of state government.
     (2) "Head of agency" means the chief executive officer of an agency. In the case of an agency headed by a commission, board, committee, or other body consisting of more than one natural person, agency head means the person or board authorized to appoint agency employees and regulate their conduct.
     (3) "Assist" means to act, or offer or agree to act, in such a way as to help, aid, advise, furnish information to, or otherwise provide assistance to another person, believing that the action is of help, aid, advice, or assistance to the person and with intent so to assist such person.
     (4) "Beneficial interest" has the meaning ascribed to it under the Washington case law. However, an ownership interest in a mutual fund or similar investment pooling fund in which the owner has no management powers does not constitute a beneficial interest in the entities in which the fund or pool invests.
     (5) "Compensation" means anything of economic value, however designated, that is paid, loaned, granted, or transferred, or to be paid, loaned, granted, or transferred for, or in consideration of, personal services to any person.
     (6) "Confidential information" means (a) specific information, rather than generalized knowledge, that is not available to the general public on request or (b) information made confidential by law.
     (7) "Contract" or "grant" means an agreement between two or more persons that creates an obligation to do or not to do a particular thing. "Contract" or "grant" includes, but is not limited to, an employment contract, a lease, a license, a purchase agreement, or a sales agreement.
     (8) "Ethics boards" means the commission on judicial conduct, the legislative ethics board, and the executive ethics board.
     (9) "Family" has the same meaning as "immediate family" in RCW 42.17.020.
     (10) "Gift" means anything of economic value for which no consideration is given. "Gift" does not include:
     (a) Items from family members or friends where it is clear beyond a reasonable doubt that the gift was not made as part of any design to gain or maintain influence in the agency of which the recipient is an officer or employee;
     (b) Items related to the outside business of the recipient that are customary and not related to the recipient's performance of official duties;
     (c) Items exchanged among officials and employees or a social event hosted or sponsored by a state officer or state employee for coworkers;
     (d) Payments by a governmental or nongovernmental entity of reasonable expenses incurred in connection with a speech, presentation, appearance, or trade mission made in an official capacity. As used in this subsection, "reasonable expenses" are limited to travel, lodging, and subsistence expenses incurred the day before through the day after the event;
     (e) Items a state officer or state employee is authorized by law to accept;
     (f) Payment of enrollment and course fees and reasonable travel expenses attributable to attending seminars and educational programs sponsored by a bona fide governmental or nonprofit professional, educational, trade, or charitable association or institution. As used in this subsection, "reasonable expenses" are limited to travel, lodging, and subsistence expenses incurred the day before through the day after the event;
     (g) Items returned by the recipient to the donor within thirty days of receipt or donated to a charitable organization within thirty days of receipt;
     (h) Campaign contributions reported under chapter 42.17 RCW;
     (i) Discounts available to an individual as a member of an employee group, occupation, or similar broad-based group; and
     (j) Awards, prizes, scholarships, or other items provided in recognition of academic or scientific achievement.
     (11) "Honorarium" means money or thing of value offered to a state officer or state employee for a speech, appearance, article, or similar item or activity in connection with the state officer's or state employee's official role.
     (12) "Official duty" means those duties within the specific scope of employment of the state officer or state employee as defined by the officer's or employee's agency or by statute or the state Constitution.
     (13) "Participate" means to participate in state action or a proceeding personally and substantially as a state officer or state employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation, or otherwise but does not include preparation, consideration, or enactment of legislation or the performance of legislative duties.
     (14) "Person" means any individual, partnership, association, corporation, firm, institution, or other entity, whether or not operated for profit.
     (15) "Regulatory agency" means any state board, commission, department, or officer, except those in the legislative or judicial branches, authorized by law to conduct adjudicative proceedings, issue permits or licenses, or to control or affect interests of identified persons.
     (16) "Responsibility" in connection with a transaction involving the state, means the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or through subordinates, effectively to approve, disapprove, or otherwise direct state action in respect of such transaction.
     (17) "State action" means any action on the part of an agency, including, but not limited to:
     (a) A decision, determination, finding, ruling, or order; and
     (b) A grant, payment, award, license, contract, transaction, sanction, or approval, or the denial thereof, or failure to act with respect to a decision, determination, finding, ruling, or order.
     (18) "State officer" means every person holding a position of public trust in or under an executive, legislative, or judicial office of the state. "State officer" includes judges of the superior court, judges of the court of appeals, justices of the supreme court, members of the legislature together with the secretary of the senate and the chief clerk of the house of representatives, holders of elective offices in the executive branch of state government, chief executive officers of state agencies, members of boards, commissions, or committees with authority over one or more state agencies or institutions, and employees of the state who are engaged in supervisory, policy-making, or policy-enforcing work. For the purposes of this chapter, "state officer" also includes any person exercising or undertaking to exercise the powers or functions of a state officer.
     (19) "State employee" means an individual who is employed by an agency in any branch of state government. For purposes of this chapter, employees of the superior courts are not state officers or state employees.
     (20) "State university" has the meaning as defined in RCW 28B.10.016 and also includes any research or technology institute affiliated with a state university, including without limitation, the Spokane Intercollegiate Research and Technology Institute.
     (21) "State university research employee" means a state officer or state employee employed by a state university, but only to the extent the state officer or state employee is engaged in research, technology transfer, approved consulting activities related to research and technology transfer, or other incidental activities.
     (22) "Thing of economic value," in addition to its ordinary meaning, includes:
     (a) A loan, property interest, interest in a contract or other chose in action, and employment or another arrangement involving a right to compensation;
     (b) An option, irrespective of the conditions to the exercise of the option; and
     (c) A promise or undertaking for the present or future delivery or procurement.
     (((21))) (23)(a) "Transaction involving the state" means a proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other similar matter that the state officer, state employee, or former state officer or state employee in question believes, or has reason to believe:
     (i) Is, or will be, the subject of state action; or
     (ii) Is one to which the state is or will be a party; or
     (iii) Is one in which the state has a direct and substantial proprietary interest.
     (b) "Transaction involving the state" does not include the following: Preparation, consideration, or enactment of legislation, including appropriation of moneys in a budget, or the performance of legislative duties by an officer or employee; or a claim, case, lawsuit, or similar matter if the officer or employee did not participate in the underlying transaction involving the state that is the basis for the claim, case, or lawsuit.

Sec. 2   RCW 42.52.030 and 1996 c 213 s 3 are each amended to read as follows:
     (1) No state officer or state employee, except as provided in subsection((s)) (2) ((and (3))) of this section, may be beneficially interested, directly or indirectly, in a contract, sale, lease, purchase, or grant that may be made by, through, or is under the supervision of the officer or employee, in whole or in part, or accept, directly or indirectly, any compensation, gratuity, or reward from any other person beneficially interested in the contract, sale, lease, purchase, or grant.
     (2) ((No officer or employee of an institution of higher education or of the Spokane intercollegiate research and technology institute, except as provided in subsection (3) of this section, may be beneficially interested, directly or indirectly, in a contract or grant that may be made by, through, or is under the supervision of the officer or employee, in whole or in part, or accept, directly or indirectly, any compensation, gratuity, or reward from any other person beneficially interested in the contract or grant, unless the institution of higher education or the Spokane intercollegiate research and technology institute has in effect a written administrative process to identify and manage, reduce, or eliminate conflicting interests with respect to such transactions as adopted pursuant to the national science investigator financial disclosure (GPM 510) 1995 and the public health service regulations, 42 C.F.R. Part 50 and 45 C.F.R. Subtitle A as each of those regulations existed on June 6, 1996, and the state employee or state officer has complied with such policy.
     (3))) No state officer or state employee may participate in a transaction involving the state in his or her official capacity with a person of which the officer or employee is an officer, agent, employee, or member, or in which the officer or employee owns a beneficial interest, except that an officer or employee of an institution of higher education or the Spokane intercollegiate research and technology institute may serve as an officer, agent, employee, or member, or on the board of directors, board of trustees, advisory board, or committee or review panel for any nonprofit institute, foundation, or fundraising entity; and may serve as a member of an advisory board, committee, or review panel for a governmental or other nonprofit entity.

Sec. 3   RCW 42.52.200 and 1994 c 154 s 120 are each amended to read as follows:
     (1) Each agency may adopt rules consistent with law, for use within the agency to protect against violations of this chapter.
     (2) Each agency proposing to adopt rules under this section shall forward the rules to the appropriate ethics board before they may take effect. The board may submit comments to the agency regarding the proposed rules.
     (3) This section applies to state universities only to the extent their activities are not subject to section 4 of this act.

NEW SECTION.  Sec. 4   A new section is added to chapter 42.52 RCW to read as follows:
     (1) Consistent with the state policy to encourage basic and applied scientific research by the state's research universities as stated in RCW 28B.140.005, each state university may develop, adopt, and implement one or more written administrative processes that shall, upon approval by the governor, apply in place of the obligations imposed on state universities and state university research employees under RCW 42.52.030, 42.52.040, 42.52.080, 42.52.110, 42.52.120, 42.52.130, 42.52.140, 42.52.150, and 42.52.160. A state university research employee in compliance with the processes authorized in this section shall be deemed to be in compliance with RCW 42.52.030, 42.52.040, 42.52.080, 42.52.110, 42.52.120, 42.52.130, 42.52.140, 42.52.150, and 42.52.160.
     (2) The executive ethics board shall enforce activity subject to the written approval processes under this section, as provided in RCW 42.52.360.

Sec. 5   RCW 42.52.360 and 1994 c 154 s 206 are each amended to read as follows:
     (1) The executive ethics board shall enforce this chapter and rules adopted under it with respect to statewide elected officers and all other officers and employees in the executive branch, boards and commissions, and institutions of higher education.
     (2) The executive ethics board shall enforce this chapter with regard to the activities of state university research employees as provided in this subsection.
     (a) With respect to compliance with RCW 42.52.030, 42.52.110, 42.52.130, 42.52.140, and 42.52.150, the administrative process shall be consistent with and adhere to no less than the current standards in regulations of the United States public health service and the office of the secretary of the department of health and human services in Title 42 C.F.R. Part 50, Subpart F relating to promotion of objectivity in research.
     (b) With respect to compliance with RCW 42.52.040, 42.52.080, and 42.52.120, the administrative process shall include a comprehensive system for the disclosure, review, and approval of outside work activities by state university research employees while assuring that such employees are fulfilling their employment obligations to the state university.
     (c) With respect to compliance with RCW 42.52.160, the administrative process shall include a reasonable determination by the state university of acceptable private uses having de minimis costs to the state university and a method for establishing fair and reasonable reimbursement charges for private uses the costs of which are in excess of de minimis.
     (3) The executive ethics board shall:
     (a) Develop educational materials and training;
     (b) Adopt rules and policies governing the conduct of business by the board, and adopt rules defining working hours for purposes of RCW 42.52.180 and where otherwise authorized under chapter 154, Laws of 1994;
     (c) Issue advisory opinions;
     (d) Investigate, hear, and determine complaints by any person or on its own motion;
     (e) Impose sanctions including reprimands and monetary penalties;
     (f) Recommend to the appropriate authorities suspension, removal from position, prosecution, or other appropriate remedy; and
     (g) Establish criteria regarding the levels of civil penalties appropriate for violations of this chapter and rules adopted under it.
     (((3))) (4) The board may:
     (a) Issue subpoenas for the attendance and testimony of witnesses and the production of documentary evidence relating to any matter under examination by the board or involved in any hearing;
     (b) Administer oaths and affirmations;
     (c) Examine witnesses; and
     (d) Receive evidence.
     (((4))) (5) Except as provided in section 4 of this act, the executive ethics board may review and approve agency policies as provided for in this chapter.
     (((5))) (6) This section does not apply to state officers and state employees of the judicial branch.