Provides that, upon receiving a report of alleged abuse or neglect, the department shall: (1) Make reasonable efforts to learn the name, address, and telephone number of each person making a report of abuse or neglect under this act. The department shall provide assurances of appropriate confidentiality of the identification of persons reporting under this act. If the department is unable to learn the information required under this act, the department shall only investigate cases in which: (a) the department believes there is a serious threat of substantial harm to the child; (b) the report indicates conduct involving a criminal offense that has, or is about to occur, in which the child is the victim; or (c) the department has a prior founded report of abuse or neglect that is within three years of receipt of the referral;

(2) Unless the report is screened-out or being investigated by a law enforcement agency, conduct an investigation within time frames established by the department in rule, but in no case shall the investigation extend longer than ninety days from the date the report is received; and

(3) Make a finding that the report of child abuse or neglect is founded or unfounded at the completion of the investigation.

Declares that a care provider may not be found to have abused or neglected a child under chapter 26.44 RCW or be denied a license pursuant to chapter 74.15 RCW and RCW 74.13.031 for any allegations of failure to supervise wherein: (1) The allegations arise from the child's conduct that is substantially similar to prior behavior of the child; and

(2) The department failed to disclose that the child was a sexually reactive youth, had high-risk behaviors, or was physically assaultive or physically aggressive as required by RCW 74.13.280.

Provides that allegations of child abuse or neglect that meet the provisions of this act shall be designated as "unfounded" as defined in RCW 26.44.020.