"NEW SECTION.  Sec. 1   (1) The legislature finds that the department of social and health services has become so large that it: (a) Is difficult to administer; (b) needs to better focus on critical functions, such as protecting children and other vulnerable persons; (c) needs to improve the delivery of the services and programs it is responsible for; and (d) is difficult to measure the performance of the agency in meeting its goals and responsibilities.
     (2) The legislature finds that these problems are most visible in the delivery of children's services, a functional area that the legislature continues to address in a series of reform directives, including the implementation of performance-based contracts and redesigning the delivery of child welfare services as a result of legislation passed in 2009. The legislature also notes that the experience of best and promising practices strongly points to the importance of delivering social services on an integrated, coordinated basis and that modern information technologies and organizational strategies suggest that smaller functional units can perform better than large traditional hierarchical organizations. The legislature finds that although the effectiveness of the department of social and health services has continued to improve in recent years, further rapid and substantial improvement must be achieved. Two principal factors in this subsection compel this judgment.
     (a) Cost control. The department now absorbs about one-third of the state's operating budget, a share of state resources that has grown over the past decade despite a stated policy of investing in evidence-based and promising practices, each chosen to reduce net taxpayer costs. Further, both the number and proportion of the state's citizens receiving services from the department has continued to grow, in part because the state is now experiencing a historically severe recession. The legislature assumes that economic recovery will be very slow and that the concomitant demand for services will remain high while revenues remain extremely constrained.
     (b) Outcomes. Without exception, none of the department's major programs is achieving completely satisfactory outcomes despite a stated policy of employing only evidence-based and promising practices, each chosen to deliver measurable improvement in program effectiveness and to reduce gradually the dependency of the state's citizens on social and health services toward a reasonable, safety net minimum. Noting again that resources are expected to be severely limited for the foreseeable future, the legislature finds that immediate gains in program effectiveness are needed to achieve improvement in outcomes.
     (3) Therefore, the legislature finds that the state's overall delivery of health and human services through the department of social and health services and allied agencies must be restructured to respond to the current recession, to achieve cost-effectiveness of operations, and to organize the delivery of health and human services through an integrated services model which includes relevant agencies and organizations including those at the local service delivery level.

NEW SECTION.  Sec. 101   A new section is added to chapter 43.20A RCW to read as follows:
     (1)(a) The department of social and health services is renamed the social and health care authority. The authority is restructured and, except as otherwise provided in this section, its powers, duties, and functions are transferred to the new departments of mental health and chemical dependency services, long-term care and rehabilitative services, and children and family services as determined by the realignment team established under section 504 of this act. All references to the secretary or the department of social and health services in the Revised Code of Washington shall be construed to mean the director of the social and health care authority or the director of the appropriate department, or the social and health care authority or the appropriate department, created under this act.
     (b) The social and health care authority shall retain responsibilities described in section 102 of this act.
     (2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the department of social and health services pertaining to functions transferred under this section shall be delivered to the custody of the realignment team created under section 504 of this act to be transferred to the appropriate department created under this act. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the department of social and health services in carrying out the powers, duties, and functions transferred shall be made available to the realignment team to be transferred to the appropriate department. All funds, credits, or other assets held by the department of social and health services in connection with the powers, duties, and functions transferred shall be assigned to the appropriate department by the realignment team.
     (b) Any appropriations made to the department of social and health services in connection with the powers, duties, and functions transferred shall, on the effective date of this section, be transferred and credited to the appropriate department by the realignment team.
     (3) All employees of the department of social and health services performing the powers, duties, and functions transferred are transferred to the jurisdiction of the realignment team established under section 504 of this act to be transferred to the appropriate department. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to their respective departments to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.
     (4) All rules and all pending business before the department of social and health services pertaining to the powers, duties, and functions transferred shall be continued and acted upon by the appropriate department created under this act. All existing contracts and obligations shall remain in full force and shall be performed by the appropriate department.
     (5) The transfer of the powers, duties, functions, and personnel of the department of social and health services shall not affect the validity of any act performed before the effective date of this section.
     (6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.
     (7) Nothing contained in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the public employment relations commission as provided by law.

NEW SECTION.  Sec. 102   A new section is added to chapter 43.20A RCW to read as follows:
     The social and health care authority has the following responsibilities that were previously the responsibility of the department of social and health services.
     (1) Economic services activities. The social and health care authority shall make eligibility determinations for assistance programs; coordinate child support recovery and enforcement activities; manage federal and state food assistance programs; administer federal and state cash assistance programs for needy families and individuals; and administer payment programs that provide child care services.
     (2) State health care purchasing functions. The social and health care authority shall administer the medical assistance, medical care services, and children's health programs under chapter 74.09 RCW, the basic health plan under chapter 70.47 RCW, and health benefit programs for public employees under chapter 41.05 RCW; coordinate the purchase of health care services under the programs that it administers using cost control and service delivery strategies; and establish common billing, purchasing, and auditing practices, including the development of practices related to pharmacy audits and billing in consultation with the Washington state pharmacy association and other interested parties.
     (3) Systems oversight functions. The social and health care authority has oversight responsibility for the new departments of mental health and chemical dependency services, children and family services, and long-term care and rehabilitative services pertaining to systems oversight, including performance and quality management; performance and financial audits; investigations and enforcement; and client advocacy. The authority must ensure that quality management plans, including Washington state quality award assessments, are put in place by the new departments.

NEW SECTION.  Sec. 201   There is created a department of state government to be known as the department of mental health and chemical dependency services. The department is vested with all powers and duties transferred to it under this chapter, section 504 of this act, and such other powers and duties as may be authorized by law.

NEW SECTION.  Sec. 202   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of mental health and chemical dependency services.
     (2) "Director" means the director of mental health and chemical dependency services.

NEW SECTION.  Sec. 203   The executive head and appointing authority of the department is the director. The director shall be appointed by the governor, with the consent of the senate, and shall serve at the pleasure of the governor. The director shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040. If a vacancy occurs in the position while the senate is not in session, the governor shall make a temporary appointment until the next meeting of the senate.

NEW SECTION.  Sec. 204   It is the intent of the legislature wherever possible, except as provided in sections 101 and 102 of this act, to place the internal affairs of the department under the control of the director in order that the director may institute therein the flexible, alert, and intelligent management of its business that changing contemporary circumstances require. Therefore, whenever the director's authority is not specifically limited by law, the director has complete charge and supervisory powers over the department. The director may create such administrative structures as the director considers appropriate, except as otherwise specified by law. The director may employ such assistants and personnel as necessary for the general administration of the department. This employment shall be in accordance with the state civil service law, chapter 41.06 RCW, except as otherwise provided.

NEW SECTION.  Sec. 205   The director shall appoint a deputy director and such assistant directors as may be needed to administer the department. The deputy director shall have charge and general supervision of the department in the absence or disability of the director and, in case of a vacancy in the office of director, shall continue in charge of the department until a successor is appointed and qualified, or until the governor appoints an acting director.

NEW SECTION.  Sec. 206   Any power or duty vested in or transferred to the director by law or executive order may be delegated by the director to the deputy director or to any other assistant or subordinate; but the director shall be responsible for the official acts of the officers and employees of the department.

NEW SECTION.  Sec. 207   In furtherance of the policy of the state to cooperate with the federal government in all of the programs under the jurisdiction of the department, such rules as may become necessary to entitle the state to participate in federal funds may be adopted, unless expressly prohibited by law. Any internal reorganization carried out under the terms of this chapter shall meet federal requirements that are a necessary condition to state receipt of federal funds. Any section or provision of law dealing with the department that may be susceptible to more than one construction shall be interpreted in favor of the construction most likely to comply with federal laws entitling this state to receive federal funds for the various programs of the department. If any law dealing with the department is ruled to be in conflict with federal requirements that are a prescribed condition of the allocation of federal funds to the state, or to any departments or agencies thereof, the conflicting part is declared to be inoperative solely to the extent of the conflict.

NEW SECTION.  Sec. 208   A new section is added to chapter 41.06 RCW to read as follows:
     In addition to the exemptions under RCW 41.06.070, the provisions of this chapter shall not apply in the department of mental health and chemical dependency services to the director, the director's personal secretary, the deputy director, all division directors and assistant directors, and one confidential secretary for each of these officers.

NEW SECTION.  Sec. 301   There is created a department of state government to be known as the department of children and family services. The department is vested with all powers and duties transferred to it under this chapter, section 504 of this act, and such other powers and duties as may be authorized by law.

NEW SECTION.  Sec. 302   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of children and family services.
     (2) "Director" means the director of children and family services.

NEW SECTION.  Sec. 303   The executive head and appointing authority of the department is the director. The director shall be appointed by the governor, with the consent of the senate, and shall serve at the pleasure of the governor. The director shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040. If a vacancy occurs in the position while the senate is not in session, the governor shall make a temporary appointment until the next meeting of the senate.

NEW SECTION.  Sec. 304   It is the intent of the legislature wherever possible, except as provided in sections 101 and 102 of this act, to place the internal affairs of the department under the control of the director in order that the director may institute therein the flexible, alert, and intelligent management of its business that changing contemporary circumstances require. Therefore, whenever the director's authority is not specifically limited by law, the director has complete charge and supervisory powers over the department. The director may create such administrative structures as the director considers appropriate, except as otherwise specified by law. The director may employ such assistants and personnel as necessary for the general administration of the department. This employment shall be in accordance with the state civil service law, chapter 41.06 RCW, except as otherwise provided.

NEW SECTION.  Sec. 305   The director shall appoint a deputy director and such assistant directors as may be needed to administer the department. The deputy director shall have charge and general supervision of the department in the absence or disability of the director and, in case of a vacancy in the office of director, shall continue in charge of the department until a successor is appointed and qualified, or until the governor appoints an acting director.

NEW SECTION.  Sec. 306   Any power or duty vested in or transferred to the director by law or executive order may be delegated by the director to the deputy director or to any other assistant or subordinate; but the director shall be responsible for the official acts of the officers and employees of the department.

NEW SECTION.  Sec. 307   In furtherance of the policy of the state to cooperate with the federal government in all of the programs under the jurisdiction of the department, such rules as may become necessary to entitle the state to participate in federal funds may be adopted, unless expressly prohibited by law. Any internal reorganization carried out under the terms of this chapter shall meet federal requirements that are a necessary condition to state receipt of federal funds. Any section or provision of law dealing with the department that may be susceptible to more than one construction shall be interpreted in favor of the construction most likely to comply with federal laws entitling this state to receive federal funds for the various programs of the department. If any law dealing with the department is ruled to be in conflict with federal requirements that are a prescribed condition of the allocation of federal funds to the state, or to any departments or agencies thereof, the conflicting part is declared to be inoperative solely to the extent of the conflict.

NEW SECTION.  Sec. 308   A new section is added to chapter 41.06 RCW to read as follows:
     In addition to the exemptions under RCW 41.06.070, the provisions of this chapter shall not apply in the department of children and family services to the director, the director's personal secretary, the deputy director, all division directors and assistant directors, and one confidential secretary for each of these officers.

NEW SECTION.  Sec. 401   There is created a department of state government to be known as the department of long-term care and rehabilitative services. The department is vested with all powers and duties transferred to it under this chapter, section 504 of this act, and such other powers and duties as may be authorized by law.

NEW SECTION.  Sec. 402   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of long-term care and rehabilitative services.
     (2) "Director" means the director of long-term care and rehabilitative services.

NEW SECTION.  Sec. 403   The executive head and appointing authority of the department is the director. The director shall be appointed by the governor, with the consent of the senate, and shall serve at the pleasure of the governor. The director shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040. If a vacancy occurs in the position while the senate is not in session, the governor shall make a temporary appointment until the next meeting of the senate.

NEW SECTION.  Sec. 404   It is the intent of the legislature wherever possible, except as provided in sections 101 and 102 of this act, to place the internal affairs of the department under the control of the director in order that the director may institute therein the flexible, alert, and intelligent management of its business that changing contemporary circumstances require. Therefore, whenever the director's authority is not specifically limited by law, the director has complete charge and supervisory powers over the department. The director may create such administrative structures as the director considers appropriate, except as otherwise specified by law. The director may employ such assistants and personnel as necessary for the general administration of the department. This employment shall be in accordance with the state civil service law, chapter 41.06 RCW, except as otherwise provided.

NEW SECTION.  Sec. 405   The director shall appoint a deputy director and such assistant directors as may be needed to administer the department. The deputy director shall have charge and general supervision of the department in the absence or disability of the director and, in case of a vacancy in the office of director, shall continue in charge of the department until a successor is appointed and qualified, or until the governor appoints an acting director.

NEW SECTION.  Sec. 406   Any power or duty vested in or transferred to the director by law or executive order may be delegated by the director to the deputy director or to any other assistant or subordinate; but the director shall be responsible for the official acts of the officers and employees of the department.

NEW SECTION.  Sec. 407   In furtherance of the policy of the state to cooperate with the federal government in all of the programs under the jurisdiction of the department, such rules as may become necessary to entitle the state to participate in federal funds may be adopted, unless expressly prohibited by law. Any internal reorganization carried out under the terms of this chapter shall meet federal requirements that are a necessary condition to state receipt of federal funds. Any section or provision of law dealing with the department that may be susceptible to more than one construction shall be interpreted in favor of the construction most likely to comply with federal laws entitling this state to receive federal funds for the various programs of the department. If any law dealing with the department is ruled to be in conflict with federal requirements that are a prescribed condition of the allocation of federal funds to the state, or to any departments or agencies thereof, the conflicting part is declared to be inoperative solely to the extent of the conflict.

NEW SECTION.  Sec. 408   A new section is added to chapter 41.06 RCW to read as follows:
     In addition to the exemptions under RCW 41.06.070, the provisions of this chapter shall not apply in the department of long-term care and rehabilitative services to the director, the director's personal secretary, the deputy director, all division directors and assistant directors, and one confidential secretary for each of these officers.

Sec. 501   RCW 43.17.010 and 2009 c 565 s 25 are each amended to read as follows:
     There shall be departments of the state government which shall be known as (1) the ((department of)) social and health ((services)) care authority, (2) the department of ecology, (3) the department of labor and industries, (4) the department of agriculture, (5) the department of fish and wildlife, (6) the department of transportation, (7) the department of licensing, (8) the department of general administration, (9) the department of commerce, (10) the department of veterans affairs, (11) the department of revenue, (12) the department of retirement systems, (13) the department of corrections, (14) the department of health, (15) the department of financial institutions, (16) the department of archaeology and historic preservation, (17) the department of early learning, ((and)) (18) the Puget Sound partnership, (19) the department of mental health and chemical dependency services, (20) the department of children and family services, and (21) the department of long-term care and rehabilitative services, which shall be charged with the execution, enforcement, and administration of such laws, and invested with such powers and required to perform such duties, as the legislature may provide.

Sec. 502   RCW 43.17.020 and 2009 c 565 s 26 are each amended to read as follows:
     There shall be a chief executive officer of each department to be known as: (1) The ((secretary)) director of the social and health ((services)) care authority, (2) the director of ecology, (3) the director of labor and industries, (4) the director of agriculture, (5) the director of fish and wildlife, (6) the secretary of transportation, (7) the director of licensing, (8) the director of general administration, (9) the director of commerce, (10) the director of veterans affairs, (11) the director of revenue, (12) the director of retirement systems, (13) the secretary of corrections, (14) the secretary of health, (15) the director of financial institutions, (16) the director of the department of archaeology and historic preservation, (17) the director of early learning, ((and)) (18) the executive director of the Puget Sound partnership, (19) the director of mental health and chemical dependency services, (20) the director of children and family services, and (21) the director of long-term care and rehabilitative services.
     Such officers, except the director of fish and wildlife, shall be appointed by the governor, with the consent of the senate, and hold office at the pleasure of the governor. The director of fish and wildlife shall be appointed by the fish and wildlife commission as prescribed by RCW 77.04.055.

Sec. 503   RCW 42.17.2401 and 2009 c 565 s 24 are each amended to read as follows:
     For the purposes of RCW 42.17.240, the term "executive state officer" includes:
     (1) The chief administrative law judge, the director of agriculture, the administrator of the Washington basic health plan, the director of the department of services for the blind, the director of the state system of community and technical colleges, the director of commerce, the secretary of corrections, the director of early learning, the director of ecology, the commissioner of employment security, the chair of the energy facility site evaluation council, the secretary of the state finance committee, the director of financial management, the director of fish and wildlife, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of general administration, the secretary of health, the administrator of the Washington state health care authority, the executive secretary of the health care facilities authority, the executive secretary of the higher education facilities authority, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the executive secretary of the indeterminate sentence review board, the director of the department of information services, the executive director of the state investment board, the director of labor and industries, the director of licensing, the director of the lottery commission, the director of the office of minority and women's business enterprises, the director of parks and recreation, the director of personnel, the executive director of the public disclosure commission, the executive director of the Puget Sound partnership, the director of the recreation and conservation office, the director of retirement systems, the director of revenue, the ((secretary)) director of the social and health ((services)) care authority, the chief of the Washington state patrol, the executive secretary of the board of tax appeals, the secretary of transportation, the secretary of the utilities and transportation commission, the director of veterans affairs, the president of each of the regional and state universities and the president of The Evergreen State College, ((and)) each district and each campus president of each state community college, the director of mental health and chemical dependency services, the director of children and family services, and the director of long-term care and rehabilitative services;
     (2) Each professional staff member of the office of the governor;
     (3) Each professional staff member of the legislature; and
     (4) Central Washington University board of trustees, the boards of trustees of each community college and each technical college, each member of the state board for community and technical colleges, state convention and trade center board of directors, committee for deferred compensation, Eastern Washington University board of trustees, Washington economic development finance authority, The Evergreen State College board of trustees, executive ethics board, forest practices appeals board, forest practices board, gambling commission, life sciences discovery fund authority board of trustees, Washington health care facilities authority, each member of the Washington health services commission, higher education coordinating board, higher education facilities authority, horse racing commission, state housing finance commission, human rights commission, indeterminate sentence review board, board of industrial insurance appeals, information services board, recreation and conservation funding board, state investment board, commission on judicial conduct, legislative ethics board, liquor control board, lottery commission, marine oversight board, Pacific Northwest electric power and conservation planning council, parks and recreation commission, board of pilotage commissioners, pollution control hearings board, public disclosure commission, public pension commission, shorelines hearings board, public employees' benefits board, salmon recovery funding board, board of tax appeals, transportation commission, University of Washington board of regents, utilities and transportation commission, Washington state maritime commission, Washington personnel resources board, Washington public power supply system executive board, Washington State University board of regents, Western Washington University board of trustees, and fish and wildlife commission.

NEW SECTION.  Sec. 504   (1) A realignment team shall be formed by July 1, 2010, to direct the details of administration of this act. The governor shall appoint representatives from the office of financial management, the divisions of the department of social and health services, and other agency representatives as warranted. Leadership from each of the two major caucuses in the house of representatives and the senate shall appoint a member to the realignment team.
     (2) The realignment team shall determine which functions of the department of social and health services shall be transferred into the new departments under this act after the effective date of this section. The realignment team may propose an alternative structural plan if it finds that such a change would be more efficient and effective.
     (3) The realignment team shall fully involve the office of the state auditor and relevant stakeholders, including local government and community service providers. The realignment team shall consult regularly with the chairs and ranking minority members, or their designees of the relevant policy and fiscal committees in the house of representatives and the senate.

NEW SECTION.  Sec. 505   (1) The realignment team created in section 504 of this act shall, by December 1, 2010, submit a plan and necessary implementing legislation to the legislature for the restructuring of the department of social and health services. During the development of the plan, consideration shall be given to the restructuring of the state's medical assistance programs pursuant to chapter . . . (House Bill No. 3048), Laws of 2010. The plan shall be designed so that the department of children and family services will be operating by July 1, 2011, and the department of mental health and chemical dependency services and the department of long-term care and rehabilitative services, or similar structure will be operating by July 1, 2012.
     (2) The plan shall include, but is not limited to, the following elements:
     (a) Strategies for dividing the functions and responsibilities of the department into the appropriate new agencies including a strategic plan for each new agency created in this act that includes implementation steps, performance measures, evaluation measures, and methods for functional collaboration among programs and agencies;
     (b) Recommendations for changes in existing programs and functions of the department of social and health services; and
     (c) Implementation steps necessary to bring about operation of the new agencies.

NEW SECTION.  Sec. 506   Sections 201 through 207 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 507   Sections 301 through 307 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 508   Sections 401 through 407 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 509   Section 504 of this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.

NEW SECTION.  Sec. 510   Sections 101, 102, 301 through 308, and 501 through 503 of this act take effect July 1, 2011.

NEW SECTION.  Sec. 511   Sections 201 through 208 and 401 through 408 of this act take effect July 1, 2012.

NEW SECTION.  Sec. 512   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected."